I recently had a couple of experiences in a car dealership that made me look back on the above distinction.  It may seem somewhat demeaning to refer to someone as an “order taker” but there is a big difference between a sales person who develops a market within a prospective client’s operation and goes on to make that market cost effective and save the client money, while in many cases, improving his or her overall processing.  This is selling.

I was in a dealership recently waiting for my car to be repaired.  I approached a man by the name of Frank and asked him if he could give me a price on a car.  Well Frank was eager to sit down at his PC and run through all the options that I was asking about.  As soon as Frank had most of the information, he headed into the mysterious sales manager’s office to have his figures blessed.  Frank came out and handed me a business card, which of course was not his, with a total figure “out the door” for the car that I was inquiring about.  Now, I asked him if he had a business card, and Frank mentioned that he was using these cards until his came in.  I figured Frank was either new to the operation or he was on his way out.  Turned out I was right.  Frank was on his way out.

A few weeks went by and no one from the dealership contacted me so I called to see what was happening with Frank.  The telephone receptionist said that “Frank no longer works her.”  Well, the next thing I know I am talking to a Tiffany.  I stated that I was not sure if I wanted to buy the car as I had originally indicated or lease it for 36 months.  Tiffany and I went through all the steps over again that I had done with Frank.  Tiffany mentioned that she needed “a little time” to work up the monthly lease cost and that she would get back to me as soon as she could.

I am not sure if it was a cost effective measure or not but all the salespersons were using their own personal cell phones to make sales calls.  Now I waited a couple of days to talk again with Tiffany with no luck.  I looked at my incoming telephone register and I had a lot of “caller unknown” calls which didn’t surprise me.  What I suspect is that Tiffany, being a professional order taker, felt that if she placed a call to me, it was my responsibility to figure out which one of the dozens of calls were swamp salesmen from Boca Raton, Florida and which call was from Tiffany.  I don’t think it ever dawned on Tiffany to leave a message for me, saying “This is Tiffany, Mr. Wittmer, and I have your lease price, please call me,”

Somewhere I recently read that the average life of a car salesman at a specific dealership was about 18 months in total.  I am not sure how much an average car salesperson makes per year but I suspect that it is not as high as we think.  Maybe, due to the low wages, the dedication and sales techniques are lacking.  Frank and Tiffany worked in an area 50 by 40 with cubicles surrounding the new cars.  They stand and wait for customers to enter the dealership.  They may leave the dealership if they spot a customer showing some interest in a car in the front lot.  Basically, they wait to see if they can write and process an order.  Good order takers.

I am firmly convinced that the majority of city dwellers that buy property in northern Michigan will transition that property into an extension of their city home.  Trust me.   It never fails.  It might take some time and money but it is all but assured.  I can almost hear the husband as he leans over to his wife upon purchasing their “piece of heaven” saying “what a beautiful place to watch the sunset and relax.”  This is usually the last time that the word, “relax” will ever be used.

One of the first events to occur is either the small 600 square foot cabin is reduced to ruble by a large bulldozer and a small 3,600 square foot, pre-fab, A Frame style home is erected in its place.  The other possibility is that our small cabin is expanded to a 2,600 square foot or larger home.  No one can live with one bedroom.  In fact, if you are adding a bedroom, why not add two or three additional bedrooms?  Now no one has one bathroom.  That went out with the Civil War.  So now we have usually three bedrooms, two bathrooms, a kitchen, a great room and a large deck or screened-in porch.  The windows are replaced with Andersen or Pella windows, a septic tank and/or field is installed to accommodate the new washer, dishwasher, two sinks, two toilets, a tub, and a shower.  Given some time, the throw rugs and hand-me-down furniture will be removed and given to a local charity and new carpeting will be installed along with furniture from the local Ethan Allan furniture store.

 Now our forefathers walked on packed leaves called “trails” for years.  But this does not fit the mode of the new “piece of heaven.”  The leaves are removed, top-soil is brought in, the large areas seeded and we soon have a new lush green lawn that has to be fertilized, mowed and the leaves removed – forever or until the owner dies.  Now, if we are near water, a dock is a necessity and possibly a swim platform and a small boat.  Nearer to our new expanded home, brick pavers, concrete circles, concrete squares, wood or asphalt must be installed to cover the old dirt walkways.  No self respecting man or woman of the north will walk on dirt outside his or her home.  Why?  That dirt would be tracked inside to the carpeting and eventually to the Ethan Allan furniture.

Usually the garage is the first building to be modified.  Shelves are installed to handle all the cans and tools that we have collected.  However, no garage can handle everything.  Next comes the 15 by 20 foot shed.  When that is full, we move on the pole barn.  Now the original pole barns were just that.  Poles were placed in the ground; sides and a roof were put on; and a door was installed. These original pole barns were drafty and let in mice and rodents.   Now this lasted a few years and the modern 21st century pole barn emerged.  It had a cement floor along with rat walls, electricity for the lights and power to the work bench that will soon be installed so that we can repair, modify, and fix all the things that we will store in our new modern pole barn.

Now Mother Nature is hard on northern roads.  Heavy rains tend to create holes and what is referred to as the “washboard” surface.  Well, no northern Michigan man or woman is going to drive his or her car on a road that is not smooth and up to par so a grader is brought in and more gravel and with this renovation begins the perpetual cycle of road repair that also lasts for the life of the owner.

In time, say 10 or 15 years, the weary owner will sit back, holding a cold beer with calloused hands and a sore back and say, “damn this place looks good.  After I cut the grass tomorrow, I will sit back and enjoy it.”  Now a word of caution, many owners go through a lot of “friends” over the years as, even the most naïve of friends soon realizes after a few years that the saying “come on up and have a beer with me and we will do a little fishing” is a lie.  The beer you will be holding is in your hand while you drive the tractor over the leaves that have collected on the new grass and the fishing you will do is the fish sandwich at the local bar that you will have while taking a break from cutting wood.  Oh, my piece of heaven.

The fine print is getting longer and the prices are now more ridiculous than ever.  Most ads now are almost all employee pricing with at least six price deductions that most people don’t qualify for.  How about “consumer cash” or a “trade in bonus”?   The ads have one purpose – to get you in the dealership where you will find out the real price which is usually much higher than the price advertised.

Several dealers have tried to establish one price and stick to it, but apparently they have been unsuccessful.  I was in a dealership looking at the new cars the other day while I was having my car serviced.  I asked the salesman if he could give me a price on a specific model.  He came back 10 minutes later with an amount written on his business card that he claimed was “blessed” by the mysterious new car manager.  The amount was “out the door with sales tax” but nothing was itemized.  It makes it more difficult to comparison shop when you have nothing but one number.

Most dealerships now realize that people shop so they do all they can to make the process confusing and cumbersome.  The ideal lease now is a “low mileage, employee return lease.”   The new pricing strategy is to take the manufacturer’s suggested retail price and deduct as many “phantom” numbers as possible.  I guess what makes it legal is there is a person out there who would qualify under this crazy pricing but the average person doesn’t stand a chance.  You can’t even rely on the picture as the ad states that “the picture may not represent an actual vehicle” and the quote “ price” is plus tax, title, license fees, and the cost to bring the auto to the dealership called a “destination” charge which can be as much as an additional $900.00.

I am not sure where the new “low mileage” lease originated but I know of very few people who can drive a car less than 10,000 miles annually.  This represents about 192 miles per week.  If you drove to work and back 5 days a week, for example, and your employment was 20 miles away from your home, you would exceed the weekly cap of 192 miles before you even drove to the grocery store, cleaners or the gas station.  The dealer expects either you will run over the limit and pay the additional cost of $0.25 cents per mile or upgrade your lease to 12,000 or 15,000 miles per year for an added cost.

Now how about a lease for $129.00 a month?  Sounds almost too good to be true and it is.   Buried in the small mini print is a down payment of $2,995.00.  Add this $83.00 to the 36 monthly payments and you are at roughly $225.00 per month with the added monthly sales tax.

I purchased a new magnifying glass the other just to read the car ads.  The trick is to match the number of asterisks with the disclaimers in the fine print.  I guess a qualified GM employee is a GM employee who still has a job?  Every car is advertised with the basic equipment of an automatic transmission, A/C, Tilt, cruise control, and special features such as floor mats, a cargo net, a heavy duty battery, plastic wheel covers, and “much more.”  With some newer models, a power driver’s seat is now part of a package otherwise it is the old grab and pull seat.  I knew it was only a matter of time before this feature went away along with the ash tray.

Cars are getting smaller with smaller engines.  It seems the manufacturers are reducing models and selectively adding features to basically the same car but now advertising the upgraded model as an LT, LS, SX, GLS, or a Limited edition.  I have often wondered how the car manufacturers in conjunction with their dealers can continue to advertise employee pricing when they know that there are not enough employees at Ford, GM, and Chrysler to buy all the cars advertised if any given week even if every employee bought a new car every six months.  Something has to change for these folks.  Their advertising program stinks.

Many of us have heard the term “they are stacking the deck chairs on the Titanic.” It means a useless activity with no meaningful purpose.  This country is in trouble.  I am not sure we have the type of people we need in Congress to transact the business of our nation regardless of which party they belong to.  Maybe their short term focus is generated by the limited time that they plan on spending in Congress.

Everyone agrees that our Federal Tax Code is a joke – all five and one half million words of it.  But what we have built is an internal government agency of some 93,000 people that no one in Congress has the guts to dismantle and move ahead with a flat more reasonable tax.  Instead we perpetuate the status- quo hoping something magical will happen.

It should come as no surprise that Social Security and Medicare will get worse in the years to come.  Add Obama Care to the mix and it will come close to a disaster.  Mr. Obama is real concerned.  So concerned that he was willing to push forward a program to reduce the Social Security that workers pay by two percent!  Why?  Because it is short term fix and he may not be in office next year to worry about Social Security or Medicare anyway.  Many people also don’t realize that the so-called Social Security “Trust Funds” that were established years ago are empty of real money.  Instead they are filled with government IOU’s” from the General Fund.   The money we now pay in Social Security does not go into the Trust Fund but into the General Fund where it is spent with all the other taxes collected by Uncle Sam.

How about the National Debt?  Last August, most of us thought the world was coming to an end with the debt ceiling crisis.  Congress passed the debt ceiling increase and then established a committee to come forward with recommendations to reduce the deficit.  Now we all know how successful committees are especially when it comes to something dealing with taxes or finance.  The Budget Control Act of 2011 included “triggers” to ensure that at least $1.2 trillion in deficit reduction is achieved by Congress.  The process of “sequestration” may never happen.  Already, our Congressional leaders are talking about cancelling or capping these sequestrations or at least exempting certain programs from the deficit cuts.  The bottom line is that we have forgotten about the National Debt and Congress has more important things on his plate such as investigating the Secret Service scandal which will fade into history faster than yesterday’s newspaper.

 How about the Federal Budget process in Congress?  We have not had a budget recognized by both parties in three years.  Basically, we are operating on “continuing resolutions” which is simply throwing money we don’t have at the problem and hoping that it will go away.  The Federal Budget itself is almost comical.  Built within the current budget is a $1.33 trillion deficit that adds to the almost $16 trillion dollars that we have accumulated over decades.  The concept of a balanced budget is beyond the comprehension of our leaders as they would have to spend time matching revenues to expenses and actually working out plans to pay for all the programs that they want to propose.

Meanwhile, Congress has passed Obama Care with a shortfall of $532.8 billion dollars and the United States Postal Service is hemorrhaging money at the rate of a $3.1 billion dollar loss per quarter.  At what point Congress will address the Postal Service situation and ongoing losses is anyone’s guess.  Add to this our continuing high unemployment and the skyrocketing cost of gas and things can’t get much worse. 

Complicating this whole mess is the fact that we are in an election year.  Many members of Congress are probably packing some boxes and getting ready for a January 2013 exit.  Meanwhile the problems in our country continue to mount.  How did we ever get into this type of fix?  Most private employers would fire workers who stopped working altogether and sat back for seven months until an election.  Maybe the answer lies in continuing elections rather than our present process.  This way not so many members of Congress would come due for re-election at the same time and motivate the others to address the work that needs to be done in Congress.

Over the last three years, nearly 5 million U.S. workers have effectively gone missing.  No, you will not find their pictures on the backs of milk cartons.  They are the jobless Americans who have grown discouraged by their unsuccessful searches for work and have simply given up the hunt.  Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983.  Last year alone, only 66.8% of men had jobs, the lowest on record.  Working-age men have been dropping out of the labor force for decades.  This disappearance has been quickened by the loss of construction and manufacturing jobs.

The current “measured” unemployment rate is 8.3% that is those workers who are currently collecting unemployment benefits.  This equates to roughly 27.31 million people out of work.  If we add back the “missing” workers, we come close to a real unemployment figure of 17% or over 55 million people out of work!  It is difficult to accurately pinpoint the real number of Americans out of work but most economists would double the current published rate of 8.3 which would give us 16.6% or very close to the estimated 17%.

According to a recent report, a single worker needs an income of $30,012 a year, or just above $14.00 per hour, to cover basic expenses and save for retirement and emergencies.  This figure is close to three times the 2010 national poverty level of $10,830 for a single person, and nearly twice the federal minimum wage of $7.25 an hour.  Now a single worker with two young children needs an annual income of $57,756, or just above $27.00 per hour, to attain economic stability.  Even for those who do get jobs, it may be hard to live without public assistance.  Many households with children are working but not earning enough to cover basic needs, much less save for retirement or an emergency.  In households with an annual income of $25,000 almost 83% of them would not be able to afford food within 3 months of losing the family income.  Many jobs being added in retail, hospitality and home health care are unlikely to pay enough for workers to cover the cost of fundamentals like housing, utilities, food, health care and transportation, and in the case of working parents, child care.

Complicating this already dismal outlook is the fact that today many of the “missing” workers are largely qualified workers.  But ever since World War II, the U.S. has shifted from a manufacturing industry to a service industry and many of the manufacturing jobs have moved overseas to cheaper countries like China and India.  A lot of low-skilled labor jobs have been lost and people are no longer needed in America to work in factories and assembly plants.  But now service jobs are quickly being replaced overseas.  Travel agents are being replaced by websites like Expedia, librarians are replaced by Google and Wikipedia, bank tellers are being replaced by ATMs, and salesmen are being replaced by online stores.

The difference in today’s economy is that to succeed, you actually need unique, irreplaceable skills.  Many college graduates specialize in business or liberal arts but do not acquire many skills during school.   Skills that matter today relate to computers and programming.  So how does this problem get fixed?  Americans must “qualify” themselves either through higher education or vocational schools.  It is sad but everyone needs a skill that contributes to society or they can expect to be unemployed.  Today’s fastest growing companies are based on ideas and designs.

Currently, some of the hardest jobs to fill can’t be outsourced or turned over to robots.  Sales representatives, mechanics, welders, truck drivers, machine operators to name just a few.  Part of the problem is that many of the jobs are not all that attractive like delivery drivers and technicians.  One hiring source was quoted as saying that we need “people who can go to a trade school.”  Unfortunately, a college degree alone won’t be a free pass to employment anymore.

I anticipate that during the coming years, the U.S. labor market will be transitioning from “generalists” to “specialists.”  I would also anticipate that we will see a change in our higher educational system away from four year degrees to programs that result in a “certification” or a “license” to perform a specific type of work.  However, during this transitional period, the new norm or standard for our unemployment level in the United States may move up from the old 4% to a newer, higher 8% level.

The age of the large, brawny vehicle is ending and Americans will squeeze into smaller vehicles in the future.  Many auto analysts predict that by 2015, the size of the U.S. fleet will be just about the same as Europe’s and Japan’s.  Consistently higher fuel prices will lead consumers toward smaller engines and eventually smaller vehicles.  Hybrids and electric vehicles will be options, but the technology remains expensive.  The large outlay of cash for an electric vehicle has to be offset by years of owning the electric vehicle to get a return on your money.  In some cases, one would have to own the electric vehicle for 10 years or more just to break even.

With the price of gas skyrocketing over the last few years, it has become harder and harder for the average American to maintain the same standard of living that he or she once enjoyed.  According to the government, the average price of gasoline in 2001 was $1.41.9 a gallon.  Today that same gallon of gasoline will cost around $3.88.9 dollars.  You don’t have to be gifted in math to calculate that if your minivan has a 15 gallon tank, in 2001 it cost $21.40 dollars to fill up.  Today that same tank of gas would cost at least $58.35.  Now if you fill up more than one car, as many families do, and you fill up once or twice a week, the cost can rise easily to over $116.00 or more with an annual fuel cost of at least $6,000.00.

As gas prices continue to rise, we will no doubt see the decline of the larger vans and trucks.  No car seemed more out of touch with reality than the GM Hummer.  I think production lasted about 10 years.  I recall being in gas station a few years ago and after I had filled my Ford with some 14 gallons of gas, I stood by and waited for the gentleman across from me to complete filling his Hummer.  When he passed $100.00 and 40 gallons of gas and was still going strong, I went into the station and paid my bill and was on my way.

Now smaller vehicles are not good news for soccer moms or large families.  But I was surprised to discover that today there are more families with dogs than children.  The average number of children per household in the 2010 census was 1.90.  In April of 1940, the number of children per family was 3.76.  Our socio-economic situation is changing along with cost factors that are driving up the price of an automobile.  Newer automobiles must have multiple air-bags, catalytic converters, and meet new emission and fuel standards.  It is hard to predict where all this will go but the future of the two ton SUV does not look good.

I also see the size of the manufacturer’s fleet getting smaller as well so model choices will be more limited.  There was a time when many manufacturers tried to make a car for every segment of the buying public.  The higher mileage and emissions standards set by the Obama administration which take effect in 2012 and are to be achieved by 2016 will transform the American car and truck fleet.  These new rules will bring the average of all new cars and trucks sold in the United States to an average of 35.5 miles per gallon.  It may be more cost effective to discontinue a model than to try an attempt to re-engineer it to meet the new fuel standards.  Car companies are already rewiring vehicles so components such as air conditioners and power steering pumps are powered by electricity, rather than by the engine, saving fuel.  One thing for sure is that even with all these changes, the size of the future automobile will not be as large as in years past.

If access to the Internet is a little slow this weekend, please keep in mind that millions of Americans are doing annual harrying experience called filing their Federal and State taxes.  The IRS expects some 140,000,000 returns to be filed by Tuesday, April 17th.  Many of these returns will be filed electronically.  Most Americans agree that our tax code is too long and too complicated. Americans will spend about 5.4 billion hours this year complying with the tax requirements.   The code itself is some 5,500,000 million words, many inconsistent with each other.  There are 569 different income tax form requirements.   The code itself has grown by 18.9% since 2005 and the directions for a typical 1040 totals 161 pages.  The “EZ” version is 41 pages.  No single person on the face of this earth completely understands the entire tax code – not even the IRS employees.

We know that this being an election year, Congress will accomplish very little.  While most Americans, even CPA’s, agree that we need a simpler and fairer tax code, I expect that we will never see it.  First of all, no one in Congress wants to tackle the simplification of the tax code.  Two, lobbying is the biggest business in Washington.  Many of America’s 15,139 registered lobbyists are working to increase the level of complexity of the tax code by fighting for special loopholes and regulations. Three, even President Obama, while he may suggest a simpler code, is now advocating for what he calls the “Buffet Rule.”  This is a tax on wealthier Americans, and while it does have some merit, just makes the existing tax code that much longer and more complicated.  Many wealthy Americans receive a large percentage of their income in the form of capital gains which are taxed at 15%.  Obama wants the wealthier Americans to pay 30%.  Do we just add 15% to their tax liability?  Accompanying the Buffet Rule is more complicated tax regulations regarding the use of corporate jets.  I don’t completely understand the tax ramifications on the use of fractionally owned corporate jets but I guarantee that the IRS will find a way to add an additional hundred pages to the tax code.

If all this is not complicated enough, we have two existing issues in our current economy.  Tax compliance is a multi-billion dollar industry and 58% of all individuals filing taxes hire someone else to do it totaling 81 million returns.  H & R Block alone employs more than 90,000 tax preparers with an annual income of close to $3.87 billion dollars.  Intuit, the owner of the Turbo Tax software package, is looking at similar revenue for 2012 near $4 billion dollars.

Complicating matter even more, the IRS employs a staff of about 93,000 employees with an operating cost of $11,207,223,000.  The IRS employees range from attorneys, processors, and auditors.  As part of the 2012 budget, President Obama has requested $13.3 billion dollars for the Internal Revenue Service.  Actually, Mr. Obama is calling for a boost in funding for the IRS.  Of the $13.3 billion dollars requested in the President’s budget, roughly $6 billion would go toward enforcement activities, an increase of $463 million over the prior year.  So, again, we have a case of the good President speaking out of both sides of his mouth.  He proposes to add to the complexity of the code through the Buffet Rule, does nothing to clarify the already complex tax code, but allocates additional money for enforcement.  I don’t think the good President wants too many people to know about his tactics especially in an election year.

It appears to be uneconomical to purge a data base.  The new motto is “no deletes all adds.”  My wife and I appear to be in just about every data base that exists in the Midwest.  My mail is bulging at the seams with offers from people that I have not heard from in years.  In fact, I even get mail from vendors that solicited my children years ago.  I have called them back in an attempt to purge their data base and save them time and postage but with zero results.   Why should they care?  The data base of names and numbers is not used by them.  It is used by the telemarketing firms that they hire.

It would seem that firms would want to use their dollars as productively as they can.  Three years ago, I made a donation of used clothing to the Purple Heart.  How they got my telephone number is beyond me but I get a call every month from a different person whose job it is to call former donors to see if they are ready to donate again.  But 36 months running would seem to indicate that maybe I don’t have any more used clothing to donate?

How about Habitat for Humanity?  Another case of a donation of a check to help their cause!   Five years later and at least a hundred letters and appeals for donations, and I am ready to scream!   I spent a few years in the Knight of Columbus in the late 1990’s.  Good organization but we moved and I just did not have the time to devote to their organization so I tactfully resigned.  Well, you may physically resign from the K of C but once you are in their data base, you are in for life.  I get raffle tickets, monthly and quarterly newspapers and magazines.  Letters come to me from all over – Lansing, Hartford, Washington, D.C. to name a few.   I wrote and sent the magazines back but with no luck.  Now my wastepaper is the direct recipient of the mail as it comes in.

I get mailings from physicians and clinics all over the country.  Every few months I receive a “marketing check” for $1,000 off my hearing aids.  However, I do not have hearing aids at least for now.  I suspect that these firms buy or obtain from AARP, Social Security, Medicare, etc. a list of homeowners in an area that are over 65 who become targets for their mailings. You would think that after a number of years, the firms promoting these products would purge their list at least against the death notices.  AARP is one of my favorites.  You cannot physically stop AARP from contacting you.  They sell auto insurance, life insurance, trip insurance, mortgage insurance, to name just a few of their quote “products.”  You become a member of AARP whether you send their request for dues in or not.

Without a doubt, the best of all is the travel magazines.  Once one travel magazine gets your name and address, you are a target for life. Your name and address are automatically forwarded to the other magazines.   I had no idea how many travel magazines there are.  I assume the travel industry is depressed and they target senior citizens with their travel brochures and magazines as senior citizens are the only ones left in this economy with any discretionary money.  I may even consider a Viking River Cruise down the Rhine just to stop the brochures.

There are companies that sell data base lists.  I suspect that the longer the list the more money they get for their product.  Is there anything that one can do – probably not?   There is really no way of stopping the mailings as you as a consumer have no idea where the next mailing will come from.  I would hope with the increased costs coming from the U.S. Postal Service that it may cause these mailers to review their lists and remove people who have not responded in years.

In November of 1923 at the Burgerbraukeller in Munich, Adolf Hitler ordered three beers at the cost of $3 billion marks.  Inflation in post World War I Germany was out of control.  In 2006 in the African country of Zimbabwe, it took $150,000,000,000 billion dollars, notes printed by the Reserve Bank of Zimbabwe, to take the city bus.  Within a few months, the economy of Zimbabwe collapsed. Extreme you say.  Yes it is, but both Europe and the United States are now flirting with the dangers of inflation.

The current United States debt, rising at $4 billion dollars per day, is at approximately $15,998,386,432,825.00. 

Many economists say that the Federal Reserve has many tools to contain inflation once our economy turns around.  But one thing the Federal Reserve doesn’t have is the ability to control Federal spending.  And that is what should worry us.  Even ardent supporters of the current U.S. government plan to fight our sour economy by spending money now and worry about the debt later, should be worried about the inflationary effect.  Every day, for example, the U.S. needs to borrow $15 billion dollars to fund the deficit.  Someone has to buy all that and, more importantly, the U.S. has to pay it back!

Inflation is a tempting choice to pay the nation’s staggering debt, especially because the alternatives are to raise taxes or cut spending.  The government could simply print more dollars to pay off our debts with cheap currency – a tempting but inflationary solution.  Unfortunately, the effects of inflation are cumulative.  After 5 years of 6% inflation, $1 trillion dollars would be worth $734 billion, a 27% drop.  But any sustained burst of inflation would have some ugly long term effects.  One is higher interest rates.  Even if inflation remains tame, the Federal Reserve will eventually have to return to short-term rates of about 3% to 5%.  A lower dollar value on the international currency exchanges is another measure of inflation.  A declining dollar makes imported goods more expensive, although it makes U. S. exports more attractive.

One big fear is that the U.S. will have to offer much higher interest rates to sell its debt.  And that could have a big adverse effect on our economy.  But as the deficit grows, the threat of inflation grows too.  If only because the measures that the country needs to take to prevent inflation are so difficult.  There are only three ways to cut the National Debt: raising revenue, cutting expenses or inflation.  We are already seeing inflation in many sectors of our economy.  Airline fares are up 30% above last year; health insurance premiums increases are in the double digit category; and food prices have been quietly sneaking up.  Meanwhile, the U.S. government insists that the rate of inflation is close to zero.  Anyone who actually believes the government inflation numbers is living in a fantasy world.  The U.S. government has been openly manipulating official inflation numbers for several decades now.  As increasingly larger amounts of paper money are dumped into the economy, we are eventually going to see the worst inflation in American history.

Up to this point the dramatic expansion of the U.S. monetary base has not caused that much inflation because U.S. government borrowing has soaked most of it up and U.S. banks have been hoarding cash and have been building up their reserves.  However this situation will not last forever.  Eventually all this cash will make its way through the food chain and into the hands of U.S. consumers.  The next aspect of the coming inflation is the rising commodity prices.  Agricultural raw materials, metals, coffee, meat, fruit, cotton, rubber – the list goes on and on.  As those price increases enter the chain of production, there is every chance that they will cause inflation.  Meanwhile the Federal Reserve wants to print lots of money.  Further action by the Fed is likely to be warranted unless the employment situation improves.

Many American families are going to be financially shredded by the coming inflationary tsunami.  How far will their paycheck go when a half gallon of milk is $10.00 and a loaf of bread is $5.00?  Already it is incredibly difficult for the average American family of four to get by on $50,000 a year.  How much money will this family need when the rampant inflation starts kicking in?  I am afraid that we will find out soon!

As the United States Postal Service struggles with a declining volume and revenue that will not cover its existing cost structure, we are going to see a dramatic rise in calls from the infamous “telemarketers.” It has started already and a First Class Postage Stamp is only $0.45 cents but the stamp cost is expected to climb to $0.50 cents per stamp along with the elimination of Saturday mail delivery. Marketing efforts by many of the major companies search today to reach their markets. Newspapers are struggling as hard print is getting to be more and more expensive. The answer seems to be flood the American public with millions and millions of telephone calls.

There are over 5,000 telemarketing companies in the United States, and revenues for the industry total about $500 billion dollars per year. Telemarketers place 148,000,000 junk calls per day. A lot of people fail to realize that charities make more money from selling your name and number to telemarketing companies than from the donations they collect from calling. The average American is called 2 to 3 times a day by a telemarketer. The National Association of Attorneys General estimates that about 5,000,000 Americans are defrauded by telemarketers every year and that one in five of them do not report the fraud.

Now people say that we have a “Do Not Call List” now but “Do Not Call Lists” do not exempt people from getting calls from political campaigns, charities, and some nonprofit groups, or from companies with whom you have done business with recently. In addition, enforcement of the “National Do Not Call List” is ineffective, even though more than 300,000 complaints have been filed against unwanted telemarketers. In most cases, enforcement of the “Do Not Call List” is also impossible beyond the U.S. borders so calls can be placed to anyone from a foreign call center regardless of the customer they are calling for.

Assuming that the letter that you want to mail is not oversize and is not overweight, a First Class letter with postage at $0.45 cents per letter, plus paper, envelope, preparation, etc. can easily run in the area of $0.5854 cents each. Now send out two hundred letters in a mailing and you have run up a decent sized bill of approximately $117.08. Now there are a myriad of factors in the cost of a telemarketing call but a conservative estimate would be about $0.31 cents per call on the average. An operator can usually make between 40 and 80 calls per hour. Typically, this $0.31 cents per call includes the training and upkeep of the program as well as the programming and data plus the cost of the telephone system. Using the latest technology of auto dialing capabilities, several hundred calls could be made in a day. So if you divided the mailing cost of $117.08 by the cost of $0.31 cents per call, the result is that you could reach 377 prospects versus 200 contacts using the mailing. Obviously telemarketers sell the instantaneous aspect of their services versus a 3 to 5 day wait for a letter.

Many believe that in the 1950s, Dial America Marketing became the first company completely dedicated to inbound and outbound telephone sales and service. The company was spun off and sold by Time, Inc. magazine in 1976. The term telemarketing was first used extensively in the late 1970s to describe Bell Systems communication efforts relating to outbound WATS and inbound Toll-free services.

Telemarketing will no doubt change in the coming years. The days of low skilled telemarketers working from a script to make calls are over. Moving forward there is a requirement to hire the best resource, pay individuals the right money and use the telemarketing effort as an integral part of a larger marketing campaign. I would anticipate that the calls will become more sophisticated but this will only be a small segment of the telemarketing effort. It may be a long, long time before the calls stop from Oregon, South Dakota, and Wyoming. In the meantime, you may still have to shut off the ringer on your telephone at dinner time.