Thursday, December 16, 2010

The Invisible Hand, Why Not Let It Work?

There was a revolution of thought that sprang forth in 1776 with two great writings that changed the face of the world forever. One we are hearing a great deal about today, once again, The Declaration of Independence,by Thomas Jefferson and edited by John Adams and Benjamin Franklin. The other, not quite as well known, not as short and succinct, but equally earth shattering in its implementation was "An Inquiry Into the Nature and Causes of the Wealth of Nations," by Adam Smith, most commonly known as "The Wealth of Nations."

In Wealth of Nations, Smith passionately promotes the simple, yet revolutionary idea that individuals are fully capable of setting and regulating prices for their own goods and services. He argued for free trade, yet stood up for the little guy. The Wealth of Nations gave us the very first, and frankly still the best description of the workings of a market economy. Smith's writing is witty, readable, yet a work of genius. It is filled with the significant theories that form the basis for our own capitalist system. His ideas were embraced by his contemporaries across the pond in places like Boston, Braintree, Philadelphia, New York, and throughout Virginia by those with names like Washington, Adams, Franklin, Jefferson, Hamilton, and others, and became the foundation of our own system of government and economic engine. They revolutionized the way our government, and later many governments and individuals viewed the creation and dispersion of wealth, and continues to do so today.

Smith's core principle can be found in his reference to the "Invisible Hand" of competition. He believed that if left alone, and not interfered with, the invisible hand of competition would correct all wrongs eventually. If a business owner was producing shoddy products, charging too much, and ripping off his customers, it would only be a matter of time in a totally free market society that someone would see an opportunity to go into competition with him and serve those customers a better product, at a more fair price, with integrity and run the crook either out of business, or back onto the straight and narrow way to save his own business from ruin.

This same theory extends to employees as well. If a business owner is mistreating, cheating, and abusing his employees, in a totally free market society, someone else, likely one of his better employees, to compete against the tyrant and will lure away the best and brightest employees to his company, leaving only the poorest employees to the bad employer dooming him to failure.

You may ask, if this theory is so great, why doesn't it always work today? The biggest problem with "The Invisible Hand" is that it has very rarely been tried without restraints and without intervention and manipulation. Governments are constantly stepping in with regulations, rules, and programs of all kinds to manipulate the system to try to make it "fairer" less dog eat dog, whatever. What it does is muddy the water and won't allow the competition to actually do it's job of shifting the business and wealth from the weak, or bad company to the strong and or good company. Government wants to level the playing field, by doing so, you don't get the best, you promote mediocrity and keep the weak alive.

Corporations are often somewhat Socialistic as well, they too try to level the playing field, make it safe and protect those who are not strong enough to survive on their own at the expense of those who could be even better if their wings were not continually clipped for the "greater good."

We as a society are so focused on protecting the weaker from failing that we hold down the strong from reaching the levels of success they could. Prince Charles in one of his most lucid moments once commented on the state of economic affairs in England before Margaret Thatcher employed Reagan's supply side economics, that "England became so enamored with the poor and downtrodden, that all of England became poor and downtrodden."

The only time in history where these principle were actually allowed to work was during the time of the great Robber Barons. History has tried to paint them as evil capitalists and selfish megalomaniacs. However, if you truly study the history of the times, those impressions we have been fed don't fit the reality nearly as well. To socialize America, progressives like Teddy Roosevelt, Woodrow Wilson, and Franklin D. Roosevelt had to demonize the tycoons, but it was those same tycoons who created the explosive growth and innovations that made the richest nation on earth for all to be attained. It was the unrestrained freedom they enjoyed that changed the world through better and cheaper steel, transportation, fuel, and more, and in some cases financially carried America through some rough spots.

If you want to see another economic explosion unlike anything in any of our lifetimes, take government's and corporation's feet off the brakes, release the creative juices of our entrepreneurs and let them dream their dreams, and chase them without roadblocks. You would see more new innovations, more growth, more success, and more wealth, not just for a few, but for our nation. In other words, let's let Adam Smith's ideas truly release The Wealth of Nations!!

Saturday, December 11, 2010

Has Your Cheese Moved?

These are the times that try men's souls. For the first time in many lives people are dealing with real challenges, personal, financial, and career battles. We all grew up listing to our parents or grandparents tell us we didn't know what it was like for them as they navigated through the Great Depression. We would often make fun of the conservative habits that our grand parents continued, washing and reusing "disposable" products etc.

Many folks today are now learning first hand the realities our grandparents knew, or at least a pretty good taste of it. If we gauge unemployment numbers using the same formula we use today since changed during the Clinton Administration, we would see that around 17% of Americans are now unemployed. Who knows how many would fall into underemployed as well.

One of the hardest hit industries, and the one that first took the blunt of this economic tsunami is the housing industry, specifically the new home construction industry and in its wake all of those surrounding industries that supported it, and were supported by it. Those like developers, lumber, flooring, plumbing, drywall, cabinets, lenders, advertisers, printers,and dozens of others, all have faced the same hits. With each leaving hundreds of qualified, talented, hard working employees and business owners cast out in the wake.

When things like this happen, many find it difficult to come to terms with the reality of their world. That they can send out all the resumes they can print without getting a call if their position is simply not needed today.

In 1991 I was interviewing a gentleman for a position with a company I was building. I met him at his home at Geist Reservoir, a beautiful lakes side home, with two Mercedes sitting in the driveway, each with for sale signs. We sat at his breakfast table as we talked. He told me that he was the National sales manager for a high tech company that sold their service of testing microchips. His company was falling apart around him, he had gone from 140 sales people reporting to him down to 12, with his income dropping accordingly. He had his resume out to every competitor he could trying to find an escape hatch. He blamed the economy on George H.W. Bush, I simply asked, is the industry not making the devices that use these microchips? His response will forever burn into my memory. "No, they are making more and more all the time. It is just that where they used to use 10-15 microchips on a board, now technology has increased where one can do what all of them could before, and many of these self-test." All I could think was, did he hear what he just said? He just explained why his resumes were falling on deaf ears, he worked for the very best buggy whip manufacturer in his industry, but buggy whips they were.

The problem that gentleman had, and so many of us find, is we get emotionally involved and can't see the truth that is right in front of us. The book "Who Moved Your Cheese" points this out, and the solution. We have to come to grips emotionally first, then realized we may have to reinvent ourselves to move to our next adventure.

People as a species hate change, we are creatures of habit, we want to stay in our comfort zone and when it is taken away many freeze in an emotional panic like deer in headlights.

One of my favorite economists, Paul Pilzer, speaks of the ever present and ever more rapid pace of change in our society and economy today. He points to the historic ages were named for their dominant technology of their time. The Stone Age, Bronze Age, Iron Age, Manufacturing Age, and now Information Age. Until recently it moved slowly, most people were born, lived, and died in one age, under one dominant technology. However, since the 80's when Reagan gave tax incentives for companies to retool and reinvest in themselves creating the desktop computer explosion starting at work, and then as people used them at work bought them for home things have been happening at an ever faster pace. Now entire industries come and go in just a handful of years, like our friend at Geist.

Pilzer points to how in 1930 there were 30 million American farmers barely raising enough food for American. By 1980 with increased technology in agriculture sciences there were only 3 million farmers raising such a surplus they were being paid by the government not to plant crops to cut down on oversupplies. This worked because many farmers got old and retired, and their kids, seeing no future in farming, went to town to get jobs. Many of them ended up in the Rust Belt making carberators for cars where in 1980 in Indiana and Michigan 250,000 people were employed doing so. By 1985 there were none doing so because fuel injection was invented. Many of those displaced workers went to work in Indiana and Pennsylvania stamping out vinyl records. In fact 1989 was the biggest selling year in history of vinyl records, but by 1990 those jobs disappeared due to the invention of Compact Discs.

Pilzer tries to teach us that the old idea of learning to be the best, and most expert of anyone in any job or industry is not the way to succeed in today's fast pace change. Today, we must learn to be able to learn new technology and techniques quickly, it is the quick and the dead today. We must embrace change or be swallowed up by it.

With that said, I am working with Ron Weaver from Tampa, who has started a resource program for those displaced by the economic tsunami of the building industry. His program is called Real Estate Lives. They are a reaching out to those who have been damaged, whose careers have hit the rocky shore, and need help getting back in the game. It is for those who have successfully navigated through the storm but are still dealing with reduced incomes, and the frustrations that come with that. They offer support for the spouses as well. I believe that this can be a very positive group to offer all of those in Greater Indianapolis Area from all types of jobs that supported the new home industry. We want to reach out to sales people, construction workers, managers, drafting, you name it, we want you.

Please if this touches your heart, give me a call, or email, let's talk about how to get our team together to start offering support. Mr. Weaver suggested that I target retired stars from the industry who want to reach out and help, people who have been through it and have navigated to a successful new venture, those who have recently been cast aside and are going crazy at home who would love to have something to do while they are looking for something new, and those who have been out for a long time and have given up looking. Those last group he said often find having something to get excited about and working to help others creates in them a new fire that often finds them getting a job again quickly.

If you are interested, don't worry about not knowing how you can help, we can figure that out. Let's make a difference together!!!!

Call me Jim Morgan 317-574-6659 or email me at

Tuesday, December 7, 2010

How Can You Make Your Business And You Stand Out, and Stand Apart?

If your business is one where attracting talented people to join your team to succeed, how do you make it stand out and stand apart from the crowd?

Business owners see their companies, their offices, and their opportunities through their own eyes. How do those who already work with you see them? What’s more, how do those who you would like to join your firm see them?

Today, let’s explore together our own visions of what makes a great opportunity, and let’s look at what we believe our current team, and future team members want to see. Then let’s look at what makes something stand out, or stand apart from our competitors. Let’s look for, and discuss, just what is that magic bullet that everyone is always looking for might be.

Let's play in my world in Real Estate, how would you describe the ideal Real Estate Office? When you are reading this, just change out what better fits your own industry for these questions.

What would it have? What would it look like? How would it work? What would the personality be? What would the culture be?

If you could wave a magic wand and have anything you would love to have at your office, in your business, what would it be? Why? What would that mean to you? To your agents? To your recruiting?

• Describe your ideal Real Estate office.
• Where would it be?
• How would it look?
• What would it be like?
• What would the corporate culture be?
• What would it look like?
• What features would it have?
• How would these features benefit your agents?
• How would they entice other agents to want to join you?
• What do you like best about your current office? Why?
• What do you like least? Why?
• What would be the first thing you would change if you could? Why?
• How would your agents answer these questions? Why?
• Have you ever asked them?

Now, looking at all of the things about your ideal office, how do you stack up? How does your competition?

What separates you? What is special about your office, your business that makes you stand out over your competition? Why? Can you agents pick this out? Can your potential recruits see it, or feel it? Does the market place know it? If not, is it really there?

What is that magic bullet? If you can do this change, or add that feature, or make this available, will that magically make your company stand apart, and stand out?

Too often we find ourselves treating the symptoms, and not the cause. Let’s look at what actually brings magic into the office. It isn’t any one feature or benefit; in fact no feature has a benefit if there is not first a diagnosed need that it fills.

The magic is found in this question, “Are you working your business, or chasing your dream?” If you are only working your business, there is no passion in it, just the daily grind, and the daily rut, focused on the problems that pop up daily. There is no inspiration, no passion, and no burning desire, without that; there is nothing to draw the right people to you and your company.

People follow passion; they see your dream and just want to be part of it. They may not articulate it, but they simply feel something is happening and don’t want to miss out. You become a magnet for others who want to be excited about chasing their own dreams. When you create that atmosphere of success, that air of expectancy, it creates a buzz; it creates a culture where people want to be a part of it. It is easier to find 100 people who want to run with you toward a dream than it is to drag one who doesn’t want to go.

When it comes to not reaching your goals the problem is not the problem, never has been, and never will be.

What do I mean? What I mean is that we like to find something, or someone, to blame when we miss our goals. Often we choose not to set goals because too often we have been disappointed by not reaching them in past attempts. So, those "obstacles" we want to believe are our "problems" that keep us from reaching our objectives. Are they really the problem or are they excuses? Or is there something else that is the true "problem" that we have never before identified, to they seem to be the problem?

The truth is that those things can't possibly be the true problem. If they were there would never be anyone who has accomplished similar goals with similar situations. We may say "I'm too young, or too old, too educated, or not educated enough, too this or too that." It might be "If I had more money, more supportive parents, a better spouse, better health", you name it there are at least as many excuses as there are people. So if others have accomplished such goals and dreams with such obstacles, how can those obstacles actually be "the problem?"

It was explained to me in this way, let's say we're sitting at a diner and we take a salt shaker and a sugar dispenser and separate them with a napkin holder, (think old school stuff.) Now say you are the salt shaker and your dream or goal is the sugar dispenser but you are too short to see it over the napkin holder, if you can't see it, how can you focus on it?

What I am saying is that your dream isn't big enough to keep you focused on it. You need to find something that moves you, something that excites you, and makes your passion come alive. What you need is a big enough dream or goal to be able to "see" it over the obstacles. Your focus needs to be on that dream, and not on the obstacles or problems. They are always going to be there, but what you focus on, you will get more of. If the dream is big enough, the facts simply don't matter.

Consider this, if you are standing at one end of an auditorium full of tables, chairs, and other obstacles, and your goal was a flag at the other end, and all the lights are out, but there is a spot shining on the flag. If you just keep focused on that flag and walk toward it you will run into tables, and chairs, step on conference attendees, maybe even fall down. However, if you never take your eyes off that flag you know that you will reach it. How many times have you heard of stories of people climbing mountains who came just short of the peak, or swimmers swimming the English Channel, because they "couldn't go on" when fog set in? They lost sight of their goal or dream and couldn't go further.

"A double minded man is unstable in all his ways," and what does that mean? "You can't hold two diverse and opposing thoughts on any subject at the same time." In other words, you can't as a sales person talk to your clients about how this is the greatest product, home, neighborhood, widget, whatever in the world, and then talk to your co-workers, spouse, friends, and bartender, whoever what a dog it is. You can't hold two opinions at the same time. If you try, and many do, then you are double minded, and unstable, and your clients will instinctively know it. They feel it at a subconscious level; it is if they smell it on you.

My belief has long been that sales is nothing but the transference of emotions. I believe a sale is made in every meeting; either they are sold to believe about your product, or business, just as you do, or you were sold to believe their reason for not buying, or joining just as they do.

Do you want your prospect to believe the same way about your product or business as you do? Do you? I hope so, if not maybe the next sale you need to make is to you, or find something else to do. Unless you have the emotional disconnect of a con-man, which I hope you don't, what you really believe is what will be the guiding force in each transaction.

Let’s look at your Dream Office, your Dream Business once again. What would your Dream office or business look like? What would make you excited again, what would make your juices flow, your passions burn, where you find it hard to sleep and not by worry, but by excitement? What is it that truly excites you, how would you dream your business to be? Keep in mind, spiritually the Bible says we were created in God's own image. Those are powerful words, if we were formed in God's image, who is God? He is a Creator, so wouldn't that make us creators? How did God Create? He spoke the world into existence, so will you.

People will follow you, when you are following your passion. There is no practice that is a magic bullet; no one is going to get fired up over a new feature that you are offering in your office, if you are not passionate about it. You have to be the thermostat for your business, not a thermometer; you need to set the temperature not just report it.

The movie Field of Dreams said “If you build it they will come.” I believe that if you Believe it, and are sold yourself, and are chasing your dream passionately, they will come.

Remember, The Problem isn't the Problem. The Problem is that you are focusing on the obstacles not the dream. Focus on your Dreams!

Monday, November 22, 2010

Gary Doyle Gives Us A Different TSA Perspective.

I want to thank Gary Doyle for this blog tonight. He shared this with me today and offered to allow me to post it on my blog. I thought he made some very good points, from someone with knowledge that few of us share.

Gary Doyle:
Dear Jim,

I used to be an Explosive Ordnance Disposal Technician in the USAF. During that time, in addition to my regular duties, I was tasked to teach about i.e.d.s (improvised explosive devices) plus various scenarios for making, planting, and detonating them with and without booby traps, as well as, how to safely locate, disarm, and dispose of them. I said all that to say this.

The terrorists have already succeeded in part of their plan:

1. They have instilled terror.
2. They have partially crippled our economy by slowing down air travel through this inadequate, costly, and time consuming process of searching people.
3. They have caused us to bunch up in long lines where all that is necessary is for a suicide bomber to get in the middle of the line and blow themselves up inflicting mass causalities without ever getting on a plane.
4. The very expensive x-ray machines emit harmful radiation especially to the operators and are only as good as the operators training and experience is. From what I have seen and read about the overall training of the TSA agents, I would not bet my life on their capabilities.

Let us use some common sense through:

1. Teach the TSA people to criminally profile like El Al Israel Airlines, which requires every passenger to be interviewed by a well-trained agent before check-in. Agents then perform electronic body scans or searches only on those who arouse suspicions during the interview.
El Al is considered the most secure airline in the world, and has experienced only one hijacking in its history. Technology in general can never replace a qualified and well-trained human being.
2. Train pound dogs to sniff out explosives and use them at the airports. You get several benefits from using these dogs, they are very effective at smelling out explosives, you will save a dogs from being euthanized, you will save money, and speed up they process.
3. Handicapped need to be treated in a humane and caring manner by specially trained agents who will have regard for their particular for their situation.

We have given up our 4th Amendment rights in the name of safety and given more power to our government to regulate our lives.

They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.
Benjamin Franklin

You have my permission to post this or use it in your blog , all or in part.

Your Servant And Friend in Christ,


P.S. I have, also, received advanced training at Sandia Laboratories on Special (Nuclear) Weapons. You may not use this P.S.

Saturday, November 20, 2010

A Message To Garcia

One of my favorite stories, a true one, is the story of Getting a Message to Garcia. If you want to know the secret of what makes one person succeed overcoming the same obstacles that hold most people back, the answer is found in this story.

The telling of this story began around the dinner table of Elbert Hubbard, the editor of the Philistine Magazine, in March 1899. The topic of the dinner conversation surrounded the Spanish-American War, with different people suggesting the most significant contribution by different heroes of that war. Most were giving the expected leaders, generals, and politicians, but one of Hubbard's son suggested someone quite different. He suggested that a young Army lieutenant, Andrew Summers Rowan, was the one person most deserving of that title. Rowan's story, captivated Hubbard, who later that evening retired to his den and wrote a little filler story on Rowan and his getting A Message To Garcia as an untitled addition to his magazine that still had a hole that needed to be filled before printing.

Frankly, Hubbard didn't think much more about it, until his magazine's office was inundated with calls and letters requesting a reprint of that little untitled filler article on Rowan and Garcia. The requests were coming so rapidly that they reprinted it as a pamphlet and then a book. It sold more than 40 million copies and was published in 37 different languages. It seemed the world was hungry to hear this message, and should still be today.

Rather than trying to tell you what Hubbard said in his brilliant little filler article that took off like a wild-fire. I want to share it with you exactly as he wrote it. So, you too can embrace it as your own, to remind you daily, what separates those who do, from those who make excuses for not doing. When you read this you will see that the more things change in the world, the more people have always been the same. Each generation seems to have the same excuses, the same weaknesses, and the same rare individuals who show us willing to learn the way.

Enjoy Mr. Elbert Hubbard's article, I hope you find it life-changing!!!


A Message to Garcia

By Elbert Hubbard

In all this Cuban business there is one man stands out on the horizon of my memory like Mars at perihelion. When war broke out between Spain & the United States, it was very necessary to communicate quickly with the leader of the Insurgents. Garcia was somewhere in the mountain vastness of Cuba- no one knew where. No mail nor telegraph message could reach him. The President must secure his cooperation, and quickly.

What to do!

Some one said to the President, "There’s a fellow by the name of Rowan will find Garcia for you, if anybody can."

Rowan was sent for and given a letter to be delivered to Garcia. How "the fellow by the name of Rowan" took the letter, sealed it up in an oil-skin pouch, strapped it over his heart, in four days landed by night off the coast of Cuba from an open boat, disappeared into the jungle, & in three weeks came out on the other side of the Island, having traversed a hostile country on foot, and delivered his letter to Garcia, are things I have no special desire now to tell in detail.

The point I wish to make is this: McKinley gave Rowan a letter to be delivered to Garcia; Rowan took the letter and did not ask, "Where is he at?" By the Eternal! there is a man whose form should be cast in deathless bronze and the statue placed in every college of the land. It is not book-learning young men need, nor instruction about this and that, but a stiffening of the vertebrae which will cause them to be loyal to a trust, to act promptly, concentrate their energies: do the thing- "Carry a message to Garcia!"

General Garcia is dead now, but there are other Garcias.

No man, who has endeavored to carry out an enterprise where many hands were needed, but has been well nigh appalled at times by the imbecility of the average man- the inability or unwillingness to concentrate on a thing and do it. Slip-shod assistance, foolish inattention, dowdy indifference, & half-hearted work seem the rule; and no man succeeds, unless by hook or crook, or threat, he forces or bribes other men to assist him; or mayhap, God in His goodness performs a miracle, & sends him an Angel of Light for an assistant. You, reader, put this matter to a test: You are sitting now in your office- six clerks are within call.

Summon any one and make this request: "Please look in the encyclopedia and make a brief memorandum for me concerning the life of Correggio".

Will the clerk quietly say, "Yes, sir," and go do the task?

On your life, he will not. He will look at you out of a fishy eye and ask one or more of the following questions:

Who was he?

Which encyclopedia?

Where is the encyclopedia?

Was I hired for that?

Don’t you mean Bismarck?

What’s the matter with Charlie doing it?

Is he dead?

Is there any hurry?

Shan’t I bring you the book and let you look it up yourself?

What do you want to know for?

And I will lay you ten to one that after you have answered the questions, and explained how to find the information, and why you want it, the clerk will go off and get one of the other clerks to help him try to find Garcia- and then come back and tell you there is no such man. Of course I may lose my bet, but according to the Law of Average, I will not.

Now if you are wise you will not bother to explain to your "assistant" that Correggio is indexed under the C’s, not in the K’s, but you will smile sweetly and say, "Never mind," and go look it up yourself.

And this incapacity for independent action, this moral stupidity, this infirmity of the will, this unwillingness to cheerfully catch hold and lift, are the things that put pure Socialism so far into the future. If men will not act for themselves, what will they do when the benefit of their effort is for all? A first-mate with knotted club seems necessary; and the dread of getting "the bounce" Saturday night, holds many a worker to his place.

Advertise for a stenographer, and nine out of ten who apply, can neither spell nor punctuate- and do not think it necessary to.

Can such a one write a letter to Garcia?

"You see that bookkeeper," said the foreman to me in a large factory.

"Yes, what about him?"

"Well he’s a fine accountant, but if I’d send him up town on an errand, he might accomplish the errand all right, and on the other hand, might stop at four saloons on the way, and when he got to Main Street, would forget what he had been sent for."

Can such a man be entrusted to carry a message to Garcia?

We have recently been hearing much maudlin sympathy expressed for the "downtrodden denizen of the sweat-shop" and the "homeless wanderer searching for honest employment," & with it all often go many hard words for the men in power.

Nothing is said about the employer who grows old before his time in a vain attempt to get frowsy ne’er-do-wells to do intelligent work; and his long patient striving with "help" that does nothing but loaf when his back is turned. In every store and factory there is a constant weeding-out process going on. The employer is constantly sending away "help" that have shown their incapacity to further the interests of the business, and others are being taken on. No matter how good times are, this sorting continues, only if times are hard and work is scarce, the sorting is done finer- but out and forever out, the incompetent and unworthy go.

It is the survival of the fittest. Self-interest prompts every employer to keep the best- those who can carry a message to Garcia.

I know one man of really brilliant parts who has not the ability to manage a business of his own, and yet who is absolutely worthless to any one else, because he carries with him constantly the insane suspicion that his employer is oppressing, or intending to oppress him. He cannot give orders; and he will not receive them. Should a message be given him to take to Garcia, his answer would probably be, "Take it yourself."

Tonight this man walks the streets looking for work, the wind whistling through his threadbare coat. No one who knows him dare employ him, for he is a regular fire-brand of discontent. He is impervious to reason, and the only thing that can impress him is the toe of a thick-soled No. 9 boot.

Of course I know that one so morally deformed is no less to be pitied than a physical cripple; but in our pitying, let us drop a tear, too, for the men who are striving to carry on a great enterprise, whose working hours are not limited by the whistle, and whose hair is fast turning white through the struggle to hold in line dowdy indifference, slip-shod imbecility, and the heartless ingratitude, which, but for their enterprise, would be both hungry & homeless.

Have I put the matter too strongly? Possibly I have; but when all the world has gone a-slumming I wish to speak a word of sympathy for the man who succeeds- the man who, against great odds has directed the efforts of others, and having succeeded, finds there’s nothing in it: nothing but bare board and clothes.

I have carried a dinner pail & worked for day’s wages, and I have also been an employer of labor, and I know there is something to be said on both sides. There is no excellence, per se, in poverty; rags are no recommendation; & all employers are not rapacious and high-handed, any more than all poor men are virtuous.

My heart goes out to the man who does his work when the "boss" is away, as well as when he is at home. And the man who, when given a letter for Garcia, quietly take the missive, without asking any idiotic questions, and with no lurking intention of chucking it into the nearest sewer, or of doing aught else but deliver it, never gets "laid off," nor has to go on a strike for higher wages. Civilization is one long anxious search for just such individuals. Anything such a man asks shall be granted; his kind is so rare that no employer can afford to let him go. He is wanted in every city, town and village- in every office, shop, store and factory. The world cries out for such: he is needed, & needed badly- the man who can carry a message to Garcia.


Thursday, November 18, 2010

Presidential Hopefuls 2012

Bang, the race begins! The race for president in 2012 is in full gear, there are more "reasons" to be in Iowa now than most can imagine. If you are a civic or charitable organization in Iowa you can get big name speakers just for the asking, maybe with them asking you to have them.

Like sharks who smell blood in the water, there are going to be at least a dozen big name Republicans getting in line to run against Obama in 2012. There likely will even be Democrats to challenge him in the primary, Hillary for one. The very laws of nature cause challenges to the leaders of the herd when they are injured and weak. It is hard to imagine a more injured and weak president, almost all at his own making.

Republican are licking their chops, with the massive win in the last election, most importantly at the State levels with new GOP governors and statehouses. These new GOP controlled state level power structures will be responsible to redraw the U.S. Congressional District lines. Whoever is in power in 2011 will be able to draw those lines to hold power for at least a decade. Those new governors will make Obama winning in those states very difficult indeed.

With the likelihood of a brand new president starting in 2013, there are some things I want and don't want in that individual. We as a nation are in the worst economic situation we have been in since the Great Depression, and the policies that Obama has used will make things much much worse if they are allowed to stand without total repeal. We can't afford another on the job training situation.

There are many who might run this time that I love their ideology, I am a huge fan of them as people, and as politicians, but I don't want them to run for, or be the next president. Maybe somewhere down the road, not now.

Let's not vote for ANYONE who is in Congress or the Senate for president in 2012. I know that eliminates those like Mike Pence, Michelle Bachmann, Jim DeMint and others. Let's not vote for anyone who has not run a business or state government, we need a hard nosed CEO type who can handle the financial burdens that our nation is facing. We cannot afford anyone who has never had any experience as a Chief Executive with a large organization and huge budget.

Let's look at this election as if WE THE PEOPLE were the human resource dept of the largest economy on the planet who must look at the resume of, and interview the candidates to find the most skilled, and best choice to hire to direct our ship of state and economy. Personally, I would love to see Mitch Daniels, current Governor of Indiana. He is uniquely qualified to clean up his mess. There are others, but few who share his particular skill set.

The biggest challenge with Daniels is that he doesn't want the job, and further his wife REALLY doesn't want it, she hates the life of a politician's spouse. That could be a massive liability for him. However, the very fact that he doesn't want the job, might be the biggest endorsement for him to have it. It has been said that the very fact that someone wants to be president disqualifies them as good candidates.

Whoever we end up voting for, please look at it as if you are interviewing to hire your companies new CEO. Someone you can trust to steward your companies fortunes. It is hard to believe that everyone doesn't understand that is exactly what we are doing every election.

Tuesday, November 9, 2010

Overcoming Telephone Call Reluctance.

Call Reluctance, seems to be one of the most debilitating mental disorders of sales people. It leads to making the phone look like a hundred pound weight, causing sales people to make excuses to themselves and others. Is Call Reluctance the problem, or is it a symptom of the real hidden problem. Could it truly be the fear of failure, fear of rejection, or maybe a lack of belief in yourself, or even your product?
Keep in mind, in business and in life, you can make excuses or you can make money, but you can’t do both.

We are independent commissioned sales people, it is up to us to find out what will make us work to our potential, no one will make us do it but we ourselves.
What can you do? Never underestimate the value of investing in you, as Ben Franklin told us, “If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest.”

Put some positive in your head daily, you are getting a good dose of negative just going through an average day. Make it a habit to read a book on sales skills, or more importantly a positive attitude book for 10 to 15 minutes first thing every morning before starting your day, and again each night before going to bed. Find an idea that you can use right away.

Find a WHY:

1. Why: If your why is big enough the facts don’t count.
When I speak of why, it is retraining yourself to embrace delayed gratification. To reward yourself when you accomplish a goal, this should be everything from small activity goals to large production goals. Each should be set with a reward you will give yourself when you achieve it. Make the goals a stretch but attainable.

Once when I was trying to reach an activity goal that every month seemed just out of reach, I would get close, but never was able to attain it. At the time I was doing a lot of public speaking and several of my friends and I were in kind of an arms race for the coolest neck ties. I was at a men’s store and found a tie that I really wanted, I was so excited, as I was standing in line to purchase it, and it dawned on me that I should set it as a reward for hitting that elusive goal. I had the store put a hold on it for a week until the end of that month, and then went back to work feverishly to accomplish my goal so I could come back and claim my prize. Even though that tie is out of style today, it hangs in my closet, and I find myself admiring it occasionally even now. Why? Because it isn’t a tie, it is a trophy. That is a small thing; I often use a good cigar for the same purpose today.

You can use anything you like, dinner out, a massage, it doesn’t matter what it is as long as it matters to you.

My point is that in most cases fear of the phone is nothing more than allowing the phone to be bigger than your why. If you can learn how to expand your why, you dream, your want, whatever you want to call it until it burns in you, there won’t be any obstacle that you can’t overcome.

You have heard the stories of the swimmers who tried to swim the English Channel but gave up after they had almost made it because the fog had set in and they couldn’t see the shore. And we have heard stories of mountain climbers who gave up just short of the pinnacle due to climbing through a cloud and not being able to see the top. If your target is not mentally visible to you, you can get caught up in the problems and not the reason why you are doing what it is you do.

Picture, if you will, a man looking at his goal or dream, then drop a barrier between them that is too tall for the man to see his dream over it.

When we take our eyes off of our prize we tend to make excuses about what problem is holding us back. However the problem is not the problem, it never has been, and never will be. If it were then no one else who has had that problem would have been able to succeed in doing what you want to do, my guess is that there are always examples of someone doing just that. “I’m too young”, “too old”, “too whatever”, “the people in my area are different”, whatever someone uses as their problem or excuse is being proven wrong by someone who has the same issues but it succeeding. Obstacles are those scary things we see when we take our eyes off our goals.

Growing up on a farm, my dad taught me how to plow a straight line. We would walk off the field and tie a rag to a tree or fence to make the mark, then go to the other side and walk it off to the same distance and then drive to the mark on the other side. You would just keep your eyes on the mark and your line would be perfectly straight. If you looked back and took your eyes off the mark you could see where you would lose the straight line, but if you would simply refocus you would straighten up and reach your goal. This is not a new idea, it is found in the Bible in Luke 9:62 Jesus replied; “Anyone who puts his hands to the plow and looks back is not fit for service in the kingdom of God.” You just need to make sure that the thing you are focusing on is big enough, and means enough to you, that it is more important to you than worrying about the size of the phone.

Now imagine that same man, the same obstacle, but with a much larger dream that can be seen over the top of the obstacle. Because if you build your dream big enough, the facts will no longer count.

How do you do this? Break it down into parts. First take a look at your big goal, how much money will it take for you to make over and above your living expenses to get it? Then figure out how much you make on one of your average sales, and divide the total you need to make for your expenses and your goal by that amount. Now you know how many sales you need to make per year, divide by twelve and you have your monthly sales goal. Break it down further, what is your average conversion rate for sales appointments to get a net sale? Now you know how many appointments you need to make per month, divide by four and now how many appointments you need per week. Let’s take it down another step, how many calls do you have to make on an average to get an appointment? Now you know how many calls per week you have to make to reach your appointment goals. Break that number down per day and you have a very reachable daily goal. What is wonderful about this type of goal is you are the only one who needs to cooperate to achieve it. It is purely an activity goal, one in which you are in total control.

So set goals for how many calls, how many appointments, how many sales, with rewards for each.

Let’s make the calls:

Set a goal for how many calls you will make per day. Schedule a time to make calls without distractions.

When you are making calls, be sure that you know the purpose of your call. What is your goal in that call, is it to set an appointment? Then understand that is the sale you are trying to make.

Don’t try to sell your product over the phone, sell the appointment, people are not going to make a large purchase over the phone. Since you are not going to sell the product over the phone, you need to learn to build curiosity. Ask questions, learn about the prospect, learn about their situation, and probe for their needs, their concerns, and their areas of pain.

One of the best examples of this was an old television show “Columbo” with Peter Falk. If you would find an old tape and watch him questioning a suspect, you can learn a lot about questioning a client. The goal should be to create a desire in the prospect to know more, to create a level of curiosity that they want satisfied.

Unfortunately far too many sales people think that the more they tell the prospect the more they will want to know. That isn’t true, you have a goal to set an appointment, and they have a goal as well. Their goal is to determine if they want to keep talking with you or eliminate you from their radar. If they feel they have “enough” information to make a decision over the phone, or if they start to feel you are talking about something “too good to be true” you have fallen from the peak of curiosity to the valley of skepticism.

Most of us, who gravitate to sales, have been told all our lives we are “natural” sales people, that we have “the gift of gab.” That can be an asset, but also a liability. There are two basic types of sales people, the Interesting extroverts, and the Interested Introverts. The Interesting Extroverts love to talk, but have to be very careful not to dominate the conversation by “puking” information dumps on the poor client. The Interested Introverts are very good at asking questions, and really listening to the client’s answers. If you will ask enough questions, and pay attention to the answers, the client will virtually sell them selves.

Be sincere, friendly, and relaxed on the phone.

If you are using a script be sure to rehearse it until it sounds natural, think of your client as a good friend and speak in the same manner.
Instead of a script you might find a bullet point list where the questions you want to ask, and the points you want to make are listed so you don’t forget them, this is my favorite technique.

To make your call have more power, allow your humor to come out. Don’t try to be so professional, or so focuses on your list of things you want to say, to not inject some humor. If you can find a joke that makes a point you want to make you have struck gold.

For instance, I used to sell programs that were designed to help people create secondary income streams. One of the jokes I told was, “I want to make sure that when people ask you what you did last night at work that you have something to tell them. You can tell them that you are now an expert on the subject of money, I am going to teach you the essential knowledge of money that will make you and expert. Are you ready, get out your notepads, ‘About money, it is better to have it than not to have it, it is better to have more of it than less of it, and it is better to have it sooner than later.”

Another one was telling a story of how I sold my wife on marrying me, “When I was dating my wife I told her that if she would marry me she would have it all, she would live in the big house on the hill, drive up in her convertible sports car, would never have to clean a toilet in her life, the maid would take care of that, and we would travel the world going to Hawaii and every place she could dream of.” Before you are married this is called dating, after you are married it’s called lying. Then she started asking when any of this was going to happen, when we were ever going to Hawaii. I would tell her we were too young, why do it when you only have a couple weeks of vacation and have to rush around. Why not wait until we are retired and can really afford both the time and money. She then explained it this way, she said just imagine walking down the beach with the ocean rolling in gently tickling our feet as we walk, off in the distance are the sounds of a luau, the smell of tropical flowers dancing in the breeze. Just you and I on a lonely beach the moonlight following us along the water, the most romantic stroll….. then you take your walker and move try to keep it from getting stuck in the sand.” Guys it is better to have it sooner than later.

Jokes like this can suck your client into the moment and drive home a point stronger than a graph and chart. So if you can find a way to incorporate them do so.

98% of all sales are not made on the first call, so follow-through is as critical as any part of the sales process. Follow-through starts on the initial contact, and continues until there is a yes or hard no. It often takes five to ten follow-throughs to a prospect to make the first sale. The prospect may or may not actually say no each time, but every time you follow-through and they don’t buy; it is as if he is saying, you have yet to convince me. Be prepared to be persistent in follow-through and not quit past that 7th no. As Zig Ziglar says, “Timid sales people raise skinny kids.”

Goals for call:

Your primary goal should be to be Detective Columbo and gather information about your prospect. If you ask enough questions, and then listen to them, encouraging them to elaborate, they will tell you how to close them. They will tell you their concerns and their hot buttons. Once you know those, all you have to do is show them how to solve them and you aren’t even selling but helping them get what they want.
What you want to find in your questions are their areas of pain, want, or need. Design your questions to ferret these out. Use tie down questions to help you direct the prospect if they are not forthcoming.

Tie downs are the little questions at the end of a statement to get the small yes from the prospect.

“Our experience shows that one of the biggest concerns of most of baby boomers today is how do they protect themselves and their families from the costs of long term care in case one of them goes to an assisted care facility, wouldn’t you agree?”

You can also do an inverted tie down by putting the question at the front of the statement as well.

“Isn’t it true that many people today are worrying about the viability of Social Security long term?”

There are eighteen basic tie-downs you can find useful:

Aren’t they, Aren’t you, Can’t you, Couldn’t it, Doesn’t it, Don’t you agree, Don’t we, Shouldn’t it, Wouldn’t it, Haven’t they, Hasn’t he, Hasn’t she, Isn’t it, Isn’t that right, Didn’t it, Wasn’t it, Won’t they, Won’t you?

Of course there are more that you can add to this list, but this gives you a good idea of how they can work for you. At the front of a statement they inverted tie downs, in the middle they are easily hidden in as an internal tie-down; at the end they are the traditional tie-down. It is best to mix them up and not use too many, no more than three or four per conversation.

There is another way that you can use these, the tag on, where if you prospect makes a positive statement on your product. Prospect, “As crazy as the stock market has been I can see how it makes sense to find a safe place for my retirement money.” You, “Doesn’t it?”

When you make the call keep your goals in mind.

1. An appointment. (When you get the appointment, confirm it, and then send them a handwritten note reminding of it.)

2. Schedule another call. (If you can’t get an in person appointment, book another time for a call to give them more information that you will promise them.)

3. Leave a question unanswered that gives you permission to call them back with the answer.

Bram Stoker in his classic book about vampires “Dracula” said that vampires cannot enter your home without permission. I have always tried to use that thought process as a salesperson. I always seek an invitation to follow-through. In each meeting either in person or by phone, I try to find a question to leave unanswered. “That is a great question, let me look into that. I will call you on_____ after I find out the best answer for you.” That way I am not a “pesky” sales person bugging them, but keeping a promise answering a question that they wanted. You can keep that going forever.

Have fun, lighten up. If no one else has fun, you should at least make sure that you do. If you are having fun, you will continue to make the calls, and the fun will come out in your voice and make you much more effective. Play games with your self.
If possible when making a call to someone you don’t know, and that doesn’t know you, use a third party recommendation. This can be a very loose connection, but it still works.

There was a time when I was on the road as a sales trainer for a company that was recruiting new distributors. One of the things I often added to a seminar was how to overcome fear of the phone and how to make a third party referral call.

I would have a local phone book on a table then would ask for a volunteer from the crowd to come and close their eyes and point to a spot on the page of the phone book. I would then ask the audience to be VERY quiet, and beg them not to laugh. I would then call the number that the volunteer pointed to. When the person answered I would say “Hello Bob, I am expanding my company in the ____ area and someone pointed your name out as someone I should talk to.” I would then start questioning and qualifying the person.

Many times would get an appointment for coffee and where they would bring their resume for an interview. Many times I would get shot down, or I would have no interest in meeting with them. Remember it was a random number out of that city’s phone book. I was happy to have the failures in front of the audience as well; it showed that is just part of the game.

If you have a problem personally saying that someone gave you their name, take your list and have someone in your office hand it to you. Then someone did in fact give you their name. Have fun with it. The idea of a list is to get names on it, and then to get names off of it. If you ever need help building a prospect list, I will be glad to teach you how to add at around a thousand new names of people you already know, or know people you know. That is another seminar.

SW, SW, SW, NEXT! Some Will, Some Won’t, So What, Next!

If you understand that last point, it will liberate you to fail your way to success on the phone.

Call Reluctance in not the problem, it is just a symptom. Find out what your Why is and you can accomplish anything.

Friday, November 5, 2010

Bye Bye Brinks 12-12-2007 - 11-5-2010

This is a blog post that maybe no one but me will care about, but of that I couldn't care less. The picture you see as the icon on my blog was my buddy Mister Brinks my Doberman. He was unique, in that after having Dobermans, raising dozens of them, having countless numbers of them come through our house if only as a drop off point for someone to pick up an out of state dog, none of us have ever known one quite like Brinks. His personality was unique to him, so much so, he was the one and only time that we kept a puppy out of one of our litters unplanned just because we became too attached to sell him.

He was a big strong boy, 97 pounds of pure muscle, but a gentle giant, we liked to tease that he was Milton the Monster with "Ooops too much tincture of kindness."
Two days ago, we noticed that he wasn't eating as well as he should have, but that too was not unusual for him, he was always one that you had to entice to eat. We now learn that might have been a clue even though he was "as healthy as a horse." Two days ago, his abdomen became swollen and you could tell he wasn't on his game. Took him to the vet the next day, blood tests, and they wanted him back the next day for an ultra-sound. Today that test showed that he had a severe cirrhosis of the liver, beyond repair or even maintenance, and had to be put down. To see him literally fall apart physically in 48 hours was truly shocking. The belief is that he had a condition known as Copper Toxicosis that caused his liver failure. From what we read it appears that he has had it for a while, but was asymptomatic with no signs of the disease that would have tipped anyone off. The vet said if she had given him a physical last week she probably would have sent him home with a clean bill of health.
I am not sure if I find any comfort there yet or not, will probably need to move away from the raw emotion to gain some perspective there.

For those who have breeds that are prone to this I want to post some information on it for you here to be aware of signs. Most show symptoms in time to deal with it, unlike Brinks.

Copper toxicosis most commonly afflicts terriers such as the Bedlington terrier, Skye terrier, and West Highland white terrier. It also affects Dobermans, which isn't that hard to understand, Dobermans come from the Terrier family originally.

Copper toxicosis is caused by excess copper accumulating in the liver. If not controlled can die because too much copper in the system is toxic.

Copper is normally found in the liver, brain, heart, kidney muscle and bones of healthy dogs; however, it is found only in small traces. Copper toxicosis occurs when the liver does not process copper properly, allowing it to build up to abnormal amounts.

Female Dobermans tend to have copper toxicosis more often than males. Initial symptoms indicate liver problems. They can include jaundice, anaemia, anorexia, vomiting, weakness, weight loss, lethargy, depression, dehydration, although some afflicted dogs are asymptomatic. As with any ailment, early diagnosis by a veterinarian allows for a greater chance of recovery.

The only known treatments for copper toxicosis are to reduce the dog’s intake of copper by changing her diet, and anticupric therapy as recommended by a veterinarian.

Many commercial dog foods are high in copper. In human diets, shellfish, chocolate, liver, nuts, legumes and cereals are all rich with copper. These may not seem to be things common to commercial dog food, but one should read the labels and packages. Cereal is often used as a binder or filler in dog food to help those crunchy nuggets stay together for baking, or to thicken canned food.

The use of copper pipes may also add copper to the dog’s water.

When I did my research, I find that we may have contributed to this at least in part. Brinks, as I said often was difficult to get to eat, one of the things that almost always worked was to put peas on it. He loved peas, but they are legumes.

I hope that no one has to deal with this, but now you know what to watch out for.

Thursday, October 21, 2010

Could We Be The One's We Have Been Waiting For?

During the election of 2008 on Super Tuesday then Senator Obama spoke these infamous words:

"We are the ones we've been waiting for. We are the change that we seek."

After seeing the president's popularity swirl down the bowl for the last two years as he and his Democrat regime shoved one unpopular program after another arrogantly down the collective American throat, it is safe to say, it wasn't the "change that we sought."

However, he may have swerved into the truth on the first part, "We are the Change We've been waiting for." However, not so much in how Obama meant it. Obama may indeed have been the change it took to awaken a long sleeping giant in the American people. It may have taken someone so arrogant, so out of touch, so completely disdainful of the American people and all we hold dear to shake us awake. I pray to God it is not too late.

My own personal journey into conservative politics began in 1977 at 19 years old. It was directed against, now the second worst president in at least one hundred years, Jimmy Carter. As a youngster my parents instilled in me a love for my country, as even then a history nerd, I loved the men and women who had blazed the path each of us were now able to follow.

My passion for the free enterprise system, and our freedom and liberty, tied so closely to our individual rights, and rights to personal property were inflamed through the teaching and associations I shared through the Amway business. Dexter Yager, who owns the largest such business on the planet, an unapologetic passionate patriot, would bring in the biggest names to speak to us, educate us, often during the weekend that most of America was doing Labor Day cookouts, we were celebrating Free Enterprise Weekends all over the country.

Through the associations I was involved, I expected that I would be running for Congress soon, however after the way the media tried to destroy Dan Quayle, I decided I would not put my family through the torment that comes after conservatives. That I would wait until my kids were grown before running for office if ever. I knew that I did inhale during the 70s, and had a nutty ex-wife who I was sure would be good for a few news reels. So, like far too many conservatives, I was pushed to the sidelines backing and promoting others willing to take the arrows.

The biggest topic of consternation by so many of us who were long time passionate believers in moving conservative ideals forward was how most American lived their lives as conservatives, lived by conservative ideals, but might vote for liberals who were trying to undermine those very ideals. Our second big complaint was that most Americans simply were not paying any attention. They were so focused on "Who shot J.R." or "Who would be the Survivor, or Idol" or whatever the current mind drug distraction was on the national programing, they had no idea what was happening in D.C., of course they would complain about "politicians" but couldn't tell you specifics of their complaints. I know I wondered if the American people would ever wake up, or if it would take tanks in the streets enslaving them first.

Then came Obama, Pelosi, and Reid along with a cast of characters that would have made Orwell proud to have invented. Little by little people started to wake up. They would go to town hall meetings for the first time in their lives, and were treated like serfs by their "ruling class" representatives. The more this happened, the more video phones went out on Youtube, the more rage built, the more who got off their couches and joined. Soon town halls, courthouse yards, parks, and the National Mall were full of Americans demanding that they be listened to. New to the political discussion, new to this exchange of ideas, they were vilified, made fun of, called names, and even physically attacked. However "the more they oppressed them the more they multiplied and grew."

Today this new movement of Americans are doing something they have never done before. They are reading the U.S. Constitution, the Articles of Confederation, the Declaration of Independence, and the writings of our founders. They are seeking to learn, and are sharing this information with each other through social media. We have grandmothers in California sharing information with farmers in Iowa, with lawyers in Florida, and doctors in Ohio, and everything in between. There are no distinctions by professions, titles, or wealth, it is an open forum were we are ALL Americans fighting together for the same thing, the move back to our Constitution.

There is disagreement, sometimes heated dialogue, but we are educating each other, we are sharing friend recommendations, building our army of revolutionaries. Revolutionaries not with guns, though most of us have them, but a revolution of ideas and of votes!

What we are seeing today, has long been the dream, and it is about to start becoming reality. This historic election will start the process, not finish it. We The People are serving notice to politicians of all brands. "It's the Constitution Stupid" and when we give the power back to the Republicans we will not go back to sleep. We demand that they don't go back to D.C. and try to get along or go along. We want Repeal, we want to strip these offending policies and bills from our laws and have them thrown into the scrap heap. No half measures will do or will be accepted.

The Republicans need to understand, with great power comes great responsibility, and that power they will hold is not theirs, it is ours, it belongs to We The People and will will take it back as quickly as we give them the leasehold for it. We will grant a leasehold on power, but never the title or deed to it ever again. If the GOP doesn't follow our lead, they will go the way of the Federalists and Whigs before them.

Republicans, we are about to grant you this power. If you follow through you will keep it for a long time, if you lose your way, it is at the peril of your positions.

So who knew, all these years that it was We who we have been waiting on? Thank God We have all shown up, now it begins Tuesday November 2nd, see you at the polls, and I am sure we will hear each other celebrating late into the night.

Just know, after the party, it is back to work!

Friday, October 8, 2010

What Is Going On With The Foreclosure Freeze?

A news story broke on October 4th that seven of the largest mortgage lenders were ordered by the Federal Government to review their foreclosure procedures. It seems that they have “discovered serious deficiencies” in their systems for processing foreclosures.

If you are involved in any sale of REO properties, negotiating a contract, or closing a contract on REO properties, you should immediately contact the listing agent or the REO management company to determine if the sale of that property is subject to this “freeze.”

J.P. Morgan Chase Bank announced it was freezing 56,000 foreclosures, joining Ally Bank (formerly GMAC) halting foreclosures in 23 Judicial Foreclosure states. There are a number of other lenders who have been contacted by the Federal Government, including Bank of America who suspended in all 50 states today, Wells Fargo, Citibank, HSBC, PNC Bank, US Bank, among others. This is tied directly to a practice called Robo-signing using a paperless loan registration system developed by Mortgage Electronic Registration Systems or MERS.

The Senate unanimously passed bill last week H.R. 3808 the Interstate Recognition of Notarizations Act that would allow Robo-signing and notaries signatures crossing state lines. The President vetoed.

The impact that this may have on transactions involving MERS Robo-signing issues that have already closed is not yet clear.
The impact of decisions by three major lenders to review their foreclosure procedures could hinge on reaction by lawmakers, and whether title insurers are willing to continue insuring title on distressed properties and bank-owned REO homes.

Citigroup and Ally Financial (GMAC) and MERS have been sued for Racketeering over their loan database by homeowners in Kentucky for allegedly conspiring with Mortgage Electronic Registration Systems Inc. (MERS) to falsely foreclose on loans.

MERS is the company that handles mortgage transfers among member banks. The suit claims that though MERS the banks are foreclosing on homes even when they don’t hold titles to the properties.

“Defendants have filed foreclosures throughout the state of Kentucky and the United States of America knowing that they were not the ‘owners’ or beneficiaries of the loan they filed foreclosure upon.” The homeowners wrote in their complaint filed Sept. 28th in federal court in Louisville, Ky.

The suit claims that the defendants filed or caused to be filed mortgages with forged signatures, filed foreclosure actions months before they acquired any legal interest in the properties and falsely claimed to own notes executed with mortgages. The case is Foster v. Mortgage Electronic Registration Systems Inc, 10-cv-611, U.S. District Court, Western District of Kentucky (Louisville.)

Lawyers throughout the country increasingly are challenging the MERS approach, questioning whether the company has the legal right to foreclose on homes, on the grounds that it doesn’t actually own mortgages or the notes. This argument is gaining traction with some judges. Concerns about improper paperwork have caused the halt of foreclosures until companies can provide proof that they own the mortgages and have a right to seize the houses.

MERS is an integral part of the system that emerged during the global housing boom, when mortgages were packaged and repackaged so quickly that financial firms had neither the time nor the patience to file paperwork in local courthouses as the loans were traded. By using MERS, lenders were able to reassign loans quickly and cheaply, but didn’t go through normal legal channels at the local levels of processing deeds and documents, making it very difficult to follow a chain of ownership without leaving a paper trail.

The MERS registry tracks more than 65 million mortgages throughout the country, approximately 95% of all loans written since around 2000. It has been the vehicle that has allowed the rapid-fire transfers that went with the heavy demand for the mortgage-backed securities.

As different courts increasingly have begun to nullify the MERS model, this could call into question the legitimacy of millions of mortgages, wreak havoc on the real estate market, spur costly litigation against Wall Street banks and ultimately harm the broader financial system.

The land title system that went largely unchanged in the United States for centuries became an obstacle in the 1990s. That is when financial firms began to ramp up a process called securitization, bundling and selling pools of home loans to sell to investors. Each time the loans were reassigned, the new owner had to record the transfers with local clerks. That is where MERS came to be.

Several executives in the mortgage industry came up with a faster, easier, and cheaper approach be creating MERS. The list of MERS shareholders includes an array of banks, lenders, and title companies. Among them: Fannie Mae, Freddie Mac, Bank of America, Ally Bank, Washington Mutual, Wells Fargo, and AIG’s United Guaranty Corp.

In the legal filings against MERS by several legal services companies from NY claim that though MERS is not a mortgage lender; nor does it ever own or have any beneficial interest in the note or mortgage. Nevertheless, MERS substitutes its name on the public records for the name of the actual owners of mortgage loans. In doing so, MERS is rapidly undermining the accuracy of the public land and court records databases, establishing in their place a proprietary national electronic registry system that “tracks” ownership and servicing rights and whose information is inaccessible to the public.

The argument is that MERS system truly hides the true note and mortgage holder and the insulation of the holder from potential liability in situations involving predatory loans. They claim MERS to be fundamentally unfair to homeowners who are trapped in the system because it transmutes public mortgage loan ownership information, required to be recorded in the public databases, into secret and proprietary information, inaccessible to both the borrower of the public.

In fact, the identity of the servicer is perhaps the only information homeowners know about their loan once MERS is involved. MERS does not offer homeowners access to learn who actually owns their note and mortgage; indeed MERS does not track that information itself. This is a key piece of information that homeowners no longer possess and are unable to access because MERS has eliminated it from the public records.

MERS legal counsel wrote this in an opinion letter; “there is no reason why, under a mortgage, the entity holding the note may not keep the fact of its ownership confidential. The public has no significant interest in learning the true identity of the holder of the note.”

In a 2001 Opinion of the Attorney General of the State of New York:

“Designating MERS as the mortgagee in the mortgagor-mortgagee indices would not satisfy the intent of Real Property Law’s recording provisions to inform the public about the existence of encumbrances, and to establish a public record containing identifying information as to those encumbrances. If MERS ever went out of business, for example, it would be virtually impossible for someone relying on the public record containing identifying information as to those encumbrances or to ascertain the identity of the actual mortgagee of record.”

Before MERS, the easiest way to determine the current owner of the note was to check the public records for the last assignment of the mortgage. In the MERS system, however, assignments are never filed except when the mortgage is initially assigned to MERS or assigned to a non-MERS member mortgagee. As a result when MERS is the nominee for a mortgage, the homeowner cannot determine who owns the note by checking the public records, nor can they obtain this information from MERS. The MERS system thus actively subverts the public policy of maintaining a transparent, public title history of real property.

With MERS, most homeowners only know the servicer of their loans. Yet the owners of the loan retain the power to make certain decisions about the loan. The MERS filing spreads a cloak of invisibility over any member mortgage/note-holder that purchases a loan following origination.

This MERS model is going to be under further scrutiny by local governments all across the country as this becomes more in the spotlight. By subverting the public function of the county clerks and interfering with the collection of funds owed to the public for these deed transfers and document fees, it has at a conservative estimate circumvented those counties governments across the country from more than $2.6 billion. This number was the estimate from when they had reached 40 million mortgages in April of 2006, not the 65 million mortgages today.

The key component to this the new model created by MERS to split the mortgage and the note. What was always the standard principle was the mortgage follows the note. In 1997 an Illinois Court noted, “It is axiomatic that any attempt to assign the mortgage without transfer of the debt will not pass the mortgagee’s interest to the assignee.” MERS has no status as mortgagee if the note is in fact owned and held by another entity, as is always the case with MERS. Thus, MERS’ status as mere nominee is insufficient to give it standing to foreclose, or take any legal action against a borrower whatsoever.

All the while the number of foreclosure starts had continued to ramp up. In August of 2010 there were 258,528 foreclosures initiated by lenders which is the highest level since July 09.

There was a vote that happened very quietly in the Senate September 27th, the day before the Senate recessed for midterm election campaign. H.R. 3808, “The Interstate Recognition of Notarizations Act of 2010”, designed to gain full recognition of notarization in federal courts of any lawful notarization made by a notary public licensed or commissioned under the laws of a State other than the State where the federal court is located, this includes computerized notary signatures. (Robo-signing) This bill would effectively take care of one of the problems that has caused the freeze on foreclosures, but doesn’t address the issue on the unknown note holder.

This bill was first introduced by Rep. Robert Aderholt (R-AL) in April of 2005. At that time mortgage documents were not the reason, it was to overcome the problem of some states not recognizing the authority of signatures from outside their state slowing down interstate commerce.

After languishing for months, actually doing so each year since 05, in the Senate Judiciary Committee, the bill passed the Senate with warp speed and with little if any public awareness of the bills existence. The bill’s approval involved the use of a special procedure. Democrat Senator Robert Casey, on behalf of the Senate Leadership, had the bill taken away from the Senate Judiciary committee, which hadn’t acted on it. The full Senate immediately passed the bill without debate, and by unanimous consent.

Shortly before the Senate’s recess, Judiciary Committee Chairman Patrick Leahy pressed to have the bill rushed through the special procedure, after Leahy’s “constituents” called him and pressed for passage. Leahy’s staffers spoke of the unusual display of bipartisanship, Senator Jeff Sessions, he committee’s senior Republican, also helped to engineer the Senate’s unanimous consent for the bill.

The bill was put on the President’s desk to sign, and he chose to allow the 10 days to expire and not sign it, using the “pocket veto.” Now the NAACP, the Center for Responsible Lending, and other civil rights groups, along with Congressman Grayson of Florida, are pushing for a national moratorium on foreclosures, citing doubts about procedures followed by lenders filing foreclosure proceedings.

“Until lenders demonstrate that they are adhering to all existing laws, regulations, and contractual guidelines related to loss mitigation and foreclosure legal process, lenders in all 50 states should not move forward with any foreclosures.” The Center for Responsible Lending.

Bottom line, this is going to take a while to undo. This is going to likely take legislation to get title companies comfortable again. I don’t see that happening until the next Congress in 11.

This is going to be very hard on the Real Estate and Mortgage Lending business, the banks who hold the debt on these non-performing loans, and the economy as a whole. I was listening to a speech by Congressman Grayson from Florida, and in it especially knowing his record, there seems to be a foreshadowing of trying to use this as a catalyst for the largest transfer of wealth in human history by claiming that the banks can't show proof of a legal note, so the "poor homeowner" who isn't making their payments now own it free and clear. Hopefully that is just paranoia setting in after a lond day of studying this. But those thoughts are being said both by those who want it and those who are afraid of it.

What needs to be considered here are a couple things. One, this MERS and lack of documentation needs to be seriously addressed. However, the most urgent thing is to get these foreclosures into the market to get rid of this shadow inventory hanging over the head of our economy like an old wet blanket. The average foreclosure today doesn't happen until nearly 450 days from the first notice, with the borrower not paying any payments during that year and a half. They are not the victims in this. Keep in mind if the average mortgage payment in America is about 1,000.00/mo and you don't make a payment in 18 months, that is 18,000.00 dollars in benefit that person already has. Hopefully that puts another perspective on these "evil" banks.

Saturday, October 2, 2010

The Obama Tax Shell Game Exposed.

The big topic in Washington today is the expiration of the Bush Tax Cuts. The Democrats are dominating the conversation on this by the use of the old street huckster shell game. Let's break it down to a very simple explanation of what is truly going on.

First of all let's change the language to something that more fits the situation. The Bush Tax Cuts took place nine years ago, if they are allowed to expire they will then be the Obama Tax Increases. The ongoing conversation of the Republicans wanting tax cuts for the wealthiest is nonsense. No one is talking about ANY tax cuts, only keeping the rates the same as they have been for nine years instead of increasing them during the worst economy since the Great Depression.

The game plan is the typical class warfare strategy that the Democrats have been using since FDR. They speak of only those who make more than 250,000.00/year will lose their tax cuts. Who are these people, most are small business owners whose business taxes are filed under their personal income. Let me give you an example, a local new home builder who during the worst year of his company's history took out 75,000.00 as a personal salary, his wife works in the medical industry and made 75,000.00, his company showed a profit of about 150,000.00 because debt service can't be shown on model homes etc, true net profit was a loss. Yet, this is one of those whose taxes will be increased, maybe putting him out of business. It sure wouldn't allow him to hire anyone, might require him to lay off more people to try to survive. This is one story of maybe millions.

Now the shell game. Obama/ Reid/ Pelosi and their minions are claiming that those "Evil" Republicans are the ones that are blocking tax cuts for the middle class. That is an out and out lie. Let's look at the facts.
In the Congress there are 435 Congressmen and women. That means that it takes 218 votes to pass a bill. There are currently 256 Democrats and 178 Republicans, the Republicans cannot stop any bill from passing the House. The reason that Obama and Pelosi will not allow a vote is that more than 45 Democrats are on record that they would vote for ALL the Bush Tax Cuts to be Extended and end the Obama Tax Increase for ALL.

In the Senate the numbers are as follows there are 57 Democrats with two "Independents" who ALWAYS vote with the Democrats, one is Joe Lieberman a lifelong Democrat who became and Independent when the Democrats tried to run him out of his seat for supporting America's Military, the other is a member of the American Socialist Party. There are 41 Republicans. It takes 60 votes to move a bill through the Senate. Yet there are always a one of two of Republicans who are easily bought by the Democrats. However, there are at least six Democrats on record that they would vote to extend the Bush Tax Cuts for ALL and block the Obama Tax Increases.

So, this has nothing to do with the Republicans, even though they are 100% on the right thinking on this topic. This is a shell game where Obama/Reid/Pelosi and their Regime plan to allow the Largest Tax Increase in history to hit all Americans and blame it on the Republicans.

Just an FYI on how it will effect your income. For simplicity I am only doing Single Taxpayer brackets. Married are similar in percentages.

If you are making from:

0-27,500. you will see you rate go from 10% to 15%. (that is a 50% increase, not a 5% as I have had many math challenged liberals try to tell me.)(formula 5% increase divided by 10% rate = 50% increase.

27,500.-62,450. you will see your rate increase from 15% to 28% an 86% increase.

62,450.-132,250. you will see your rate increase from 25% to 31% a 24% increase.

132,250.-283,150. you will see your rate increase from 28% to 36% an 28.5% increase.

283,150.and up you will see your rate increase from 33% to 39.6% a 20% increase.

Armed with this information you are now equipped to not lose your shirt watching those shells move about. Spread the word. Obama, Pelosi, and Reid are depending upon the ignorance of the electorate to get away with this.

Saturday, August 28, 2010

Long Term Consequences On Government Decisions.

When government passes bills the consequences are often not seen for years, in fact when they are truly felt very few will ever understand the connection the consequences have with the legislation. Most will never know, no less understand what happened and why. This is why it is so dangerous and frightening to see these massive unread bills get through. Who knows what and when the consequences will be?

Let's look back to two major changes that came about in 1973 that we are truly feeling the consequences of now, but will even more so in the next few years. One was a legislative change with the ERISA laws, the other a Supreme Court Decision Roe v Wade. It would have been difficult in 1973 to see the profound ramifications these two decisions would cause in our lives, or that they in any way related to each other. However, together they have helped create a perfect storm for our seniors.

The ERISA laws dealt with changing the retirement plans of our nation's employees, it allowed companies to shed the cost of creating and funding the defined benefit plans our grandparents retired on, the proverbial gold watch and company fixed retirement program. This is when we as a nation changed from the defined benefit plans to defined contribution plans and a self-funded retirement of IRA's, Keoghs, SEPs, and 401ks. We forced everyday Americans to become investors however we never got around to teaching them how. This is what has created our retail investment industry of prepackaged mutual funds and fund managers and what has pushed the Dow to record levels for years.

When these new defined contribution plans went into effect the IRS wanted to know when they would see their taxes on those deferred income deposits, so the law spelled it out. When you turn 70 and one half years old, by law, you must start withdrawing money from you retirement accounts if you need it or not so that money can become taxable. The Required Minimum Distribution or RMD is calculated by age and amount in the fund. See below.

"The table shown below is the Uniform Lifetime Table, the most commonly used of three life-expectancy charts that help retirement account holders figure mandatory distributions. The other tables are for beneficiaries of retirement funds and account holders who have much younger spouses.

Joe Retiree, who is 80, a widower and whose IRA was worth $100,000 at the end of last year would use the Uniform Lifetime Table. It indicates a distribution period of 18.7 years for an 80-year-old. Therefore, Joe must take out at least $5,348 this year ($100,000 divided by 18.7).

To calculate the year's minimum distribution amount, take the age of the retiree and find the corresponding distribution period. Then divide the value of the IRA by the distribution period to find the required minimum distribution.

Required minimum IRA distributions

Age of retiree Distribution period (in years) Age of retiree Distribution period (in years)
70 27.4 93 9.6
71 26.5 94 9.1
72 25.6 95 8.6
73 24.7 96 8.1
74 23.8 97 7.6
75 22.9 98 7.1
76 22.0 99 6.7
77 21.2 100 6.3
78 20.3 101 5.9
79 19.5 102 5.5
80 18.7 103 5.2
81 17.9 104 4.9
82 17.1 105 4.5
83 16.3 106 4.2
84 15.5 107 3.9
85 14.8 108 3.7
86 14.1 109 3.4
87 13.4 110 3.1
88 12.7 111 2.9
89 12.0 112 2.6
90 11.4 113 2.4
91 10.8 114 2.1
92 10.2 115 or older 1.9 "

Now how does this impact us today?

The baby boomers have been the driving force of our economy since their birth and will continue to be for some time. In 2012 the first birth year of baby boomers will turn 70.5 years old and required by law to start their RMDs. If you look at the above chart you can see that they will be in their peak RMD years pulling their money out of the market through their 401ks and IRAs. That birth year will add 2.5 million people to the RMD requirements. Then for the each of the next 18 years 2.5 million more will join them pulling out their RMDs. This will have to create an impact on the stock market with all of these people cashing in with a smaller pool of younger workers putting in. Another question is how long will the younger workers keep putting money in if the market falls due to all of those RMDs.

Compounding our situation is the baby boomer drain on the Social Security program. When it was founded it was there were nearly thirty people paying into the system for every one who received benefits. The average length of time Americans were on Social Security was eighteen months from the date they retired until they passed away. Today, we are at about three people paying in for each who is taking benefits, and the average life expectancy is continuing to expand adding further strain on the system. Maybe that is the real idea behind Obamacare, shortening those lifespans to save money. In 2022 the Social Security program will be operating on a one to one ration, with only one paying in for each one drawing out. That was when most expected it to bankrupt, however this year it is already bleeding negative cash flow twelve years earlier than thought.

Also in 1973 Roe v Wade became law by Judicial mandate, I know that isn't how laws are supposed to be made, but let's not focus on that right now. What does Roe v Wade have to do with the Social Security and ERISA laws? It is simple math, those two programs are crashing due to the massive baby boomer generation pushing them over the edge. However, if we had not had Roe v Wade there would be 49,551,703 more Americans who would have been born since 1973. Those people would be working, buying homes, cars, clothes, and making defined contributions into their own IRAs and 401ks and having their income taxed for the Social Security program. If these babies weren't aborted we wouldn't be looking at the financial abyss facing us in the next few years.

So okay, these are the numbers, and they don't look good, what should we do about it?
Let me suggest looking to history once again to where a great deal of wealth was made. As the stock market fell, as millions of homes, land, and businesses were foreclosed, those who had money, or at least access to money, bought land. They bought Real Estate, there is only a finite amount, there will never be any more available than there is today. With prices and interest rates at the lowest we have seen in several decades, anyone who can purchase is setting themselves up for a ride on the inflation train when we actually start into recovery. Once again there will be massive fortunes made buying Real Estate. Just a tip, do as you see fit.

Saturday, August 14, 2010

The Cordoba Initiative, What Does That Mean?

The phrase and underlying belief that for anyone who doesn't know history will be doomed to repeat it is playing out in our daily news today. Unfortunately, most of us have missed it by not knowing the significant history of it. I must admit that I missed it as well. That is in regard to the Cordoba Initiative Mosque near Ground Zero.

The discussion on this ranges from that it is insensitive to that it's their Constitutional right to freedom of religion to build it where ever they please. The discussion goes back in forth on who is this Imam, who is behind the finances, and how we must protect the rights of those we disagree with, to protect our own through our Constitution. However, were is the discussion of the meaning on the name, the history behind this name, and the obvious intersection with this location for this mosque?

The site of the 9/11 World Trade Center attack in NYC has been made into a permanent memorial in remembrance of the more than 2500 people that died there. This is not uncommon for our culture to honor those who have fallen with memorials, creating a sacred ground. For many of the family members this is a sacred grave site, as their loved ones bodies were never recovered, as they were incinerated into only ashes and those ashes are mixed into the soil there.

Now a Muslim group has bought property within 2 blocks of this site. There intention is to tear down the existing building and to erect a 13 story Mosque and Islamic Center. The cost of this project will be approximately 100 million dollars, money which was donated by persons whom wish their identity to remain anonymous. The name of this project is The Cordoba Initiative. An Inman, named Inman Farouk Abdul Rauf, is in charge of the project and he has been linked to terrorist groups outside
the US. He refuses to label Hamas as a terrorist organization, he has blamed America as responsible at least in part for the 9/11 attack, as well as for the existence of Osama bin Ladin.

The name they chose for this project, Cordoba Initiative, is an
interesting chose. For those who are not students of history, Cordoba is
a city in Spain. During the time of the Crusades it was one of Spain's
greatest cultural centers. The Moors, which were a group of Muslims from
North Africa invaded Spain beheading all infidels (non-Muslim
believers), captured Cordoba, converted it to their city and turned the
city's well known Catholic cathedral into a mosque.

Throughout history Muslims have been known to capture territory and always convert the most prized Christian churches into mosques. It is no accident that this
NYC Islamic Center is being called the Cordoba Initiative. They are
claiming a victory of 9/11 and creating their own memorial. In that culture their memorials are not in honor of the dead, but to display their victory over those who were defeated.

Mayor Bloomberg and the city council of NYC have approved the project, and made the statement that it symbolized the religious freedom allowed in America. The Governor of New York and others have offered to find another location for this center, which actual might be a more prime location, but would allow the mosque to be built where it would not be offensive to the 9/11 survivors. The Cordoba Initiative group
refused to relocate.

Last night Obama held a celebration of Ramadan (Friday 8/13),the Muslims most holy holiday, at the White House. At that time he made a statement welcoming the building of the Islamic Center in NYC, on it's chosen location near the 9/11 WTC Memorial.

Also Obama is paying Inman Rauf's way, as a representative of the US State Department as a representative of the Muslim faith in the US, on a trip to Qatar, Bahrain, and the United Arab Emirate. Supposedly Inman Rauf is not to conduct any fund raising on this trip. This is Your tax dollar at work!

Do you suppose this location might have been chosen so that those family members and other Americans who go to Ground Zero to show respect for those who died at the WTC must hear a "celebration of victory over them" every time the Muslim call for prayer is chanted 5 times day from the new mosque, which could be heard at the WTC Memorial?

Does this information help make this less about is it insensitive or should we embrace their rights, and more about why they want to do this? It does to me.

Sunday, August 1, 2010

Jefferson and Madison on Secession and Nullification

There is far too much chatter today among far too many people advocating either secession or nullification regarding the protest of an overreaching federal government. I share the frustration, and the temptation to just tell them to pound sand feels good. However, if we actually played either of those cards it would end our Republic, it would destroy that which we claim we treasure our, Constitution, our very free and independent Republic. Either nullification or secession would create anarchy. It is not Constitutional no matter what anyone tells you, no where will you find any such provision.

This is the story where these ideas first came up, where those who try to spin this story as proof that it was part of the founder's Constitution. Even as you read this you will learn that those players were working to make political hay, and even Jefferson who was pushing the envelope said he was totally against the idea of secession. At least learn the history.

When the Federalist's during the John Adams administration passed the Alien and Sedition Acts, it created a firestorm with the Republican Party led by Thomas Jefferson, Adams's Vice President.

Jefferson with his ally James Madison, the author of the United States Constitution and co-leader of the Republican Party developed their party's strategy. Jefferson drafted resolutions boldly claiming the constitutional authority of the individual states to declare the Alien and Sedition Acts not only unconstitutional but null and void.

In his original draft of what became the Kentucky Resolutions, Jefferson began with the unexpected proposition that the states in the union were not obligated to give blind obeisance to the federal government. He followed that initial statement with the critical constitutional premise that the union was a compact among the individual states.

Under the compact, the federal government was assigned certain explicit powers; all other government authority necessarily remained with the states. Because the constitution was derived from the compact among the states, Jefferson concluded that each state retained the right to judge for itself whether an act of Congress was unconstitutional. When an act of Congress was unconstitutional, as Jefferson believed the Alien and Sedition Acts were, redress was left for the states.

The states, through their elected representatives in Congress, could of course, fight for the repeal of unconstitutional legislation. But, as Jefferson well knew, repeal of the Alien and Sedition Acts was unlikely in the Federalist-controlled Congress. As an alternative to congressional repeal, Jefferson claimed that the individual states could declare the Alien and Sedition Acts unconstitutional and null and void.

Jefferson wrote that, "where powers are assumed which have not been delegated, a nullification of the act is the rightful remedy; every state has a natural right in cases not within the compact, to nullify of their own authority all assumptions of powers by others within their limits." Although his resolutions were drafted for a single state legislature, Jefferson invited others states to "concur in declaring these acts void and of no force" and to prohibit the application of any other legislation "not plainly and intentionally authorized by the Constitution" within their respective states.

Jefferson gave the draft to his neighbor and confidant, Wilson Cary Nicholas, who passed it on to John Breckinridge, a Kentucky legislator and loyal Republican. Both men were sworn to secrecy in protecting Jefferson's identity as the author. By the time the Kentucky legislature passed the resolutions in revised form on November 10th, Jefferson's most controversial proposal, that Kentucky act upon the declaration that the Alien and Sedition laws were null and void, was eliminated. Significantly, the Kentucky legislature's relatively moderate remedy was to work with other states assemblies for the repeal of the Alien and Sedition Acts.

Madison's companion resolutions passed by the Virginia legislature in December did not contain Jefferson's provisions justifying a declaration by the state that the federal legislation was null and void. Madison, in fact, disagreed with Jefferson on that critical point as well as the exact nature of the constitutional compact. Of course Madison disagreed with much of Jefferson's ideas on the Constitution, he hid Jefferson's beliefs that each generation should have a revolution every twenty years, that no generation should be forced to live under the rules set forth by the previous generation for years to protect Jefferson from scorn.

Madison conceded that states joined together to form the union, but he was not convinced, as Jefferson was, that the Constitution allowed a state to declare an act of Congress null and void. He was not even certain that a state was the ultimate judge of the constitutionality of a congressional act, nor did he demand that the states redress what he considered an unconstitutional act. Madison's Virginia Resolutions called for congressional repeal of the Alien and Sedition Acts.

In preparing the Republican response to the Alien and Sedition Acts, Jefferson had, characteristically, worked simultaneously on two distinct levels; the philosophical and the pragmatic. At the theoretical level, Jefferson could proclaim the most radical constitutional position, as he did in his original resolutions.

Taken literally, such a state's rights position justified the most extreme political measures, even secession. However, Jefferson strongly opposed any secessionist movement, calming distraught colleagues such as another state's rights advocate, Virginia's John Taylor, who had raised the possibility of Virginia's and North Carolina's withdrawing from the union in 1798.

Admitting that the crisis was serious, Jefferson nonetheless told Taylor, "In every free and deliberating society, there must, from the nature of man, be opposite parties and violent dissensions and discords; and one of these for the most part, must prevail over the other for a longer or shorter time. Perhaps this party division is necessary to induce each to watch and relate to the people the proceedings of the others." Jefferson concluded his letter to Taylor optimistically: "A little patience, and we shall see the reign of witches pass over, their spells dissolved, and the people recovering their true sight, restoring the government to it's true principles."

It is these resolutions by Jefferson that gave credence to a constitutional claim, highly controversial in 1798 and yet two centuries since, that the states through their legislatures, possessed a sovereignty under the Constitution comparable in scope and authority to that of the federal government.

However, when reviewing the words of Madison, the Father of the Constitution, and even the words of the most radical Jefferson, neither believed for a moment that secession was a constitutional option.