Q: [How have you] made ends meet (feeding, clothing, diapering, entertaining, etc.) while still being debt-free? Also, how do [you] pay for everything without credit, and still have money in the bank every month? — Marni, Kings Mountain, N.C.

Jim Bob: How do [other] people pay interest for the debt on top of making ends meet? What we’ve done is something that a lot of people don’t want to do. It’s not keeping up with the Joneses. We’ve always driven older vehicles; we’ve never bought a new vehicle.

In the past, Michelle’s gone to garage sales and bought shoes for a dollar. We probably spend less on clothing than what a family of four would spend. We spend a lot of money on food — $3,000 a month on food and diapers and that type of stuff.

We saved up and paid cash for our second house 18 years ago, then spent a year remodeling to get it fixed up to be livable. But then we didn’t have house payments. We don’t have any debt, so it makes it easier to live.

Michelle: We went to a financial freedom seminar when we were young. It was about getting out and staying out of debt. It really is freedom when>>>>Read the Full Article

Mr. Obama,

Given the uproar about the simple question asked you by Joe the Plumber, and the persecution that has been heaped on him because he dared to question you, I find myself motivated to say a few things to you myself. While Joe aspires to start a business someday, I already have started not one, but 4 businesses. But first, let me introduce myself. You can call me ‘Cory the well driller’. I am a 54 year old high school graduate. I didn’t go to college like you, I was too ready to go ‘conquer the world’ when I finished high school.

25 years ago at age 29, I started my own water well drilling business at a time when the economy here in East Texas was in a tailspin from the crash of the early 80’s oil boom. I didn’t get any help from the government, nor did I look for any. I borrowed what I could from my sister, my uncle, and even the pawn shop and managed to scrape together a homemade drill rig and a few tools to do my first job.

My businesses did not start as the result of privilege. It is the result of my personal drive, personal ambition, self discipline, self reliance, and a determination to treat my customers fairly. From the very start my business provided one other (than myself) East Texan a full time job. I couldn’t afford a backhoe the first few years (something every well drilling business had), so I and my helper had to dig the mud pits that are necessary for each and every job with hand shovels. I had to use my 10 year old, 1/2 ton pickup truck for my water tank truck (normally a job for at least a 2 ton truck).

A year and a half after I started the business, I scraped together a 20% down payment to get a modest bank loan and bought a (28 year) old, worn out, slightly bigger drilling rig to allow me to drill deeper water wells in my area. I spent the next few years drilling wells with the rig while simultaneously rebuilding it between jobs. Through these years I never knew from one month to the next if I would have any work or be able to pay the bills. I got behind on my income taxes one year, and spent the next two years paying that back (with penalty and interest) while keeping up with ongoing taxes. I got behind on my water well supply bill 2 different years (way behind the second time… $80,000.00), and spent over a year paying it back (each time) while continuing to pay for ongoing supplies C.O.D.. Of course, the personal stress endured through these experiences and years is hard to measure. I do have a stent in my heart now to memorialize it all.

I spent the next 10 years developing the reputation for being the most competent and most honest water well driller in East Texas. 2 years along the way, I hired another full time employee for the drilling business so that we could provide full time water well pump service as well as the well drilling. Also, 3 years along the path, I bought a water well screen service machine from a friend, starting business # 2. 5 years later I made a business loan for $100,000.00 to build a new, higher production, computer controlled screen service machine. I had designed the machine myself, and it didn’t work out for 3 years so I had to make the loan payments without the benefit of any added income from the new machine. No government program was there to help me with the payments, nor to help me sleep at night as I lay awake wondering how I would solve my machine problems or pay my bills. Finally, after 3 years, I got the screen machine working properly, and that provided another full time job for an East Texan in the screen service business.

2 years after that, I made another business loan, this time for $250,000.00, to buy another used drilling rig and all the support equipment needed to run another, larger, drill rig. This provided another 2 full time jobs for East Texans. Again, I spent a couple of years not knowing if I had made a smart move, or a move that would bankrupt me. For the third time in 13 years, I had placed everything I owned on the line, risking everything, in order to build a business.

A couple of years into this, I came up with a bright idea for a new kind of mud pump, a fundamentally necessary pump used on water well drill rigs. I spent my entire life savings to date (just $30,000.00), building a prototype of the pump and took it to the national water well convention to show it off. Customers immediately started coming out of the woodworks to buy the pumps, but there was a problem. I had depleted my assets making the prototype, and nobody would make me a business loan to start production of the new pumps. With several deposits for pump orders in hand, and nowhere to go, I finally started applying for as many credit cards as I could find and took cash withdrawals on these cards to the tune of over $150,000.00 (including modest loans from my dear sister and brother), to get this 3rd business going.

Yes, once again, I had everything hanging over the line in an effort to start another business. I had never manufactured anything, and I had to design and bring into production a complex hydraulic machine from an untested prototype to a reliable production model (in six months). How many nights I lay awake wondering if I had just made the paramount mistake of my life I cannot tell you, but there were plenty. I managed to get the pumps into production, which immediately created another 2 full time jobs in East Texas. Some of the models in the first year suffered from quality issues due to the poor workmanship of one of my key suppliers, so I and an employee (another East Texan employed) had to drive across the country to repair customers’ pumps, practically from coast to coast. I stood behind the product, and made payments to all the credit cards that had financed me (and my brother and sister). I spent the next 5 years improving and refining the product, building a reputation for the pump and the company, working to get the pump into drill rig manufacturers’ product lines, and paying back credit cards. During all this time I continued to manage a growing water well business that was now operating 3 drill rig crews, and 2 well service crews. Also, the screen service business continued to grow. No government programs were there to help me, Mr. Obama, but that’s ok, I didn’t expect any, nor did I want any. I was too busy fighting to make success happen to sit around waiting for the government to help me.

Now, we have been manufacturing the mud pumps for 7 years, my combined businesses employ 32 full time employees, and distribute $5,000,000.00 annually throughout the local economy>>>>Read the Full Article

The scene in the Bradley’s neighborhood Tuesday was much like something you might expect to see on the big screen, or read about in one of those hard to believe mystery novels.  But for Annie, her husband Randy and their eight children, it was a very real nightmare.

“I begged them not to take her,” explains her husband.  He couldn’t understand why law enforcement was at his house in the middle of the night, demanding $10,000 cash for bail, or they were going to be taking his wife.  At 9 o’ clock in the evening, when banks and businesses are closed, it’s close to impossible for an average family to come up with that kind of cash.

So, at approximately 9:41 pm, after local agents from the Utah County Sheriff’s office, accompanied by at least two federal agents, had surreptitiously surrounded the family’s home and afterwards made quite a scene for the neighborhood, law enforcement agents placed Annie Bradley under arrest, handcuffed her, and led her the long way across the front lawn, in front of inquiring neighbors, stunned house guests, her confused and bewildered husband, and perhaps most difficult, in front of her sobbing children.

When asked why they were doing this in the middle of the night, with so little opportunity for the Bradleys to even reach an attorney, one member of the Utah County Sheriff’s department replied, “Well, we don’t usually deal with nice folks like you.”  Annie was booked into jail and held on $10,000 bail.

Annie Bradley's Arrest Photograph

While the image of her arrest might seem dramatic, the facts surrounding her arrest are even more bizarre. Annie Bradley wasn’t arrested, as it turns out, because she’s suspected of committing some violent crime.  The barrage of law enforcement officers didn’t surround her house to execute an arrest warrant because she’s suspected of some kind of drug involvement or some other dangerous crime.  Annie Bradley was arrested because she and her husband have been caught up in a political battle related to the Utah Department of Commerce.

In February of this year that Utah Division of Securities Director Wayne Klein resigned under a cloud of suspicion for corruption and mismanagement.  Randy and Annie Bradley were one of the cases originally overseen by Klein.  Earlier this summer, on July 3rd, an independent audit of the Division was delivered to the State Legislature citing widespread abuses, mismanagement, miscarriages of justice and a government agency rife with internal conflict, lack of leadership and suffering serious internal divisions.

But what does this have to do with Annie Bradley?

Well, let’s start with the basics.  A lifelong resident of Utah County, the last year and a half has been an exceptionally difficult time financially for Annie her family.   In a situation becoming all too common in America today, with the mortgage market in shambles, and the credit industry in upheaval, Annie and her family are in the middle of an unplanned move.  The guests in her home Tuesday night when she was arrested, were negotiating the purchase of several pieces of furniture to be sold along with their house.

The previous success of her husband’s small business Race Holdings, LLC—which had enabled the family to move from Springville just a year and a half ago into their dream home on the west side of Mapleton—has become a thing of the past.  With no business income to speak of for most of the past year, the family has been living on food storage, modest financial reserves, and the hard work of the entire family to bring in whatever they can.  Randy has recently taken a job working over six hours away from his family, in Montana.

The Bradleys however, are no strangers to hard work or sticking together.  Generations of both sides of the family have made a living at hard work in Utah, with no troubles or run ins with the law and no questions about their integrity or reputation.  What they are unable to comprehend however is in the midst of these difficult circumstances, why was Annie Bradley arrested, handcuffed and taken from her family in the middle of the night.

The entire Bradley Family

What would cause the Utah County Sheriff’s office, in conjunction with Federal Agents, to surround the family’s home as if they were conducting some kind of undercover sting operation?  Why would law enforcement arrest a stay-at-home mother in the middle of the night when it’s almost impossible for the family or friends to reach an attorney or to get access to cash for bail?

The charges made against Mrs. Bradley, according to the affidavits and other documents provided by the Utah Division of Securities allege that Annie was involved in committing securities fraud against her neighbor.  The Bradleys dispute the charges. Annie Bradley never worked for her husband’s business and was never an employee or manager of the company.

The neighbor, Mrs. Wendy Hendry, who owns and manages her own real estate related investment company loaned $30,000 to Race Holdings, LLC in June of 2007.  The loan from Mrs. Hendry’s company to Mr. Bradley’s company, was a high interest loan charging 36% annual interest.  According to banking records the entire loan plus interest and fees was repaid in full by Race Holdings in November of 2007.  No subsequent business was transacted between the parties.  Annie Bradley had nothing to do with it.

So what were the grounds upon which to make such a dramatic arrest of Mrs. Bradley? Apparently, Annie was arrested as part of a legal strategy related to another case being investigated by Securities Division Enforcement Director Michael Hines under the direction of his superior Ms. Francine Giani the Executive Director of the Utah Department of Commerce.  Their plan was evidently to increase pressure on Annie’s husband, Annie’s friends and some of her husband’s former business associates related to another case.

Substantiating the chain of events is a reputable and prominent Utah County securities attorney who has represented clients and worked directly with the Utah Division of Securities for more than a decade.  FCD has obtained multiple audio recordings substantiating the shocking reality behind Mrs. Bradley’s arrest, but has been asked not to reveal the identity of this attorney for fear of reprisal and other consequences from the Utah Government.

Apparently Mr. Hines believed that Randy would do “just about anything” to keep his wife out of jail.  In the recordings obtained by FCD it is revealed that Mr. Hines’ intention was a strategic decision to implicate Mrs. Bradley regardless of her actual involvement in any suspected wrongdoing, in order to bring pressure on her husband to “turn State’s evidence.”

Hines reportedly explained,

We have to put maximum pressure on people…and if Mr. Bradley can’t provide me information that would help me then we are going to charge them both   The information that would help is for Randy to say contrary to that whole affidavit basically, to say he received misrepresentations.

Annie and her Husband Randy Bradley

In the same conversation Annie and Randy were told that if Randy wasn’t able to provide the information he was looking for, Hines intended to follow through with his threat to put Annie in jail.  At one point in the conversation Mr. Bradley can be heard asking,

“What if there isn’t any information?… I would have to commit perjury to say that.”

The formal audit released to the public after several complaints about these kinds of abuses, explains that obtaining cooperation or even false confessions under the threat of jail time is a “Division Tactic” where investigators attempt “to coerce cooperation by intimidating and threatening that the person would be arrested.”

At one point in the recordings it is revealed that in an earlier conversation with Hines, prior to her company even being repaid, Mrs. Hendry was uncomfortable with Mr. Hines agenda, insisting;

“We don’t care about the money.  Let’s just rip up the promissory note.”

Even though Annie was not involved, even though her neighbor apparently did not want to complain against the Bradleys, and even though Race Holdings, LLC did in fact repay the full amount of the loan in question as per the written agreement, Michael Hines had another objective and it required that the case proceed against Annie.

According to Hines, he could charge Annie with a crime based solely on one conversation she had with her neighbor in church one Sunday.  Evidently, during a short stretch of time in mid-2007 when her husband’s business had fallen behind on monthly payments Mrs. Hendry approached Annie looking for re-assurance that the debt would be paid. In defense of her husband, Annie reportedly replied, “My husband is an honest man, and he will repay this debt no matter what.”

Annie Bradley, targeted by Michael Hines

That statement, innocently made by a spouse, in a Sunday church meeting, according to Hines, “constitutes an inappropriate statement or omission of material facts, and therefore constitutes fraud.”

The Bradleys are confused as to how Annie’s statement could be considered fraudulent, especially since her husband later did exactly as she had suggested, ensuring that his business repaid the very high interest loan, plus all interest and fees, as agreed.  The Hendrys profited, according to FCD calculations, in excess of $10,000 in six months and received a full recovery of principal prior to the note’s maturity.

Answering the question of how such a situation could be construed as fraud, Utah Securities regulator A. Gary Bowen provided a rather lengthy but insightful explanation.  He explains:

“People do not understand the nuance of securities regulation.  Most attorneys do not…we can go after these people and we have been just overwhelmed by the filings, you get into my office I’ve got them practically stacked up to the ceiling and I’m not making this up and I’ve got them stacked all over the floor so we’re pursuing them…

“I’m going to recommend you look at section 61-1-1 which is entitled ‘Fraud Unlawful’ and you’re going to discover a definition of fraud that your average attorney is going to be totally clueless about…the nuance that the average attorney doesn’t get, whose competent in real estate, competent in corporate or business law, competent in contract law, is the mere omission of a material fact… do you know what the implication of fraud is, criminal prosecution, time in jail!”

Mr. Bowen who according to his own representations has been charged with advising Utah citizens and business owners about how to avoid breaking the law for more than ten years, later admits that its impossible to pin down what might be construed as “fraud” if the government wants to press charges.  He continues,

“If you look at our definitions section, I’ve been working for this for years and read it a number of times but it really sunk into me here this summer when I was reading it and talking to someone like you, you go in and read the definition actually under 61-1-13 of fraud, and its one of those things that you say, well, what does that mean? The answer is, I don’t know.”

With a definition like this, its no wonder that Utah has become known by some as the “fraud capitals” of the West.  Mr. Bowen’s advise boils down to a simple axiom.  If the government thinks it is fraud, its fraud.

Even experienced attorneys, according to Mr. Bowen, can’t understand what the enlightened public servants in the Department of Commerce might allege.  Or, in short, all Utahans should be very careful when discussing their spouse’s integrity in church on Sunday.

As 2008 rolled around, the Bradleys lived with the daily uncertainty and fear of being charged with fraud as a result of Mr. Hines strategy.  It didn’t seem to matter that both parties agreed the loan had been satisfied and that Annie Bradley had nothing to do with it, other than being married to the business owner.

At one point Randy reveals that the stress became unbearable.

“I came close to considering saying whatever Mr. Hines wanted me to say if it meant it would keep my wife out of jail.  I decided against it, but I couldn’t trust Hines anyway if he was willing to build another case based upon a lie.”

Resigned. Former Director Wayne Klein

But this past February things started to look brighter from the Bradley’s perspective, when Utah Securities Director Wayne Klein was forced to resign because of scrutiny being placed on the Securities Division for its alleged abuses.  The Bradleys along with many small business owners in Utah hoped a new Director would be more just in his oversight of the Division and more effective at reigning in employees like Hines.

Lying, by “any person” during a proceeding under Sate Securities Laws is a 3rd degree felony.  While Randy decided against going along with the enticements of Hines, Audit Manager Tim Osterstock’s performance audit of the Division clearly documents that the Division had been engaging in deceptive practices, evidently believing that government employees are exempt from the requirements of the law.

“The division has, at times, violated the terms of its settlement agreements.  In one case, the division agreed to not publicize the action or commence further administrative actions and then violated both terms of the agreement.  The person accused told us he felt compelled to plead guilty to a lesser criminal charge rather than place his business in jeopardy defending a greater charge.  The division agreed to not seek additional charges but nevertheless pursued an administrative action.  The respondent then signed the settlement agreement after the division agreed to not publicize it.  However, the day the settlement was signed, the division publicized the information on its web page and also published the information in its newsletter the following month.”

The audit also revealed that the Division made false allegations against innocent businessmen as part of its coercive tactics, obtained false confessions and false settlements by threatening citizens with arrest and jail time, and that the State of Utah had been violating its own legal settlements with impunity while Department employees escaped criminal investigation for such activity that clearly violates State law.

With this information now public, the Bradleys anxiously waited for the government to take action to reform the Department.  They also continued to correspond regularly through their attorney with the Division of Securities and specifically with Securities Division attorney Scott Davis who works for the Utah Attorney General’s office.

Mr. Davis corresponded multiple times with the Bradleys about resolving the civil concerns raised by the Division, but never informed the Bradleys that they were in eminent danger of being arrested or criminally charged.  Things seemed to be looking better for the Bradleys, and they were hopeful they could soon put this troubling ordeal behind them.

Then, out of the blue, new rumors began circulating of the Bradley’s pending arrest.  The rumors came from the most unusual of places.  For some unexplainable reason in early August of this year, Mr. Hines called Ron Hendry and explained that the Bradleys were being charged criminally and would soon be arrested.

“I didn’t know what to make of it,” said Randy about the phone call from Hines to Hendry.  Mr. Hendry subsequently began sharing the information with other Bradley neighbors including their religious leaders.

Although the Hendrys had profited handsomely from their transaction with Race Holdings, Mr. Hines, in very questionable legal territory, evidently had some reason for giving them a “heads up.” As it turns out, Hines had told the Hendreys that they were witnesses, as victims, in the now criminal case against both Randy and Annie.

Hines, according to Ron Hendry, had been in contact with them seven our eight times throughout the months of June and July.  During this same time, the Bradleys unsuspectingly continued to hope things were getting closer to being resolved.

When Randy received a surprise phone call from his local Bishop asking about his pending arrest, he wasn’t sure if Ron Hendry was just spreading gossip, or if the strange collaboration between he and Hines were actually fact.  So, through their attorney the Bradleys went straight to the government.  They contacted Scott Davis of the Utah Attorney General’s office.  Randy explains,

“I thought we were working things out.  Through our attorney we were in regular communication with the State.  They are the ones who postponed our last meeting.  Through our attorney we contacted the Attorney General’s office and Scott Davis, the man we were told was the attorney for the Division and he acted surprised and claimed he knew nothing about any criminal charges.  He acted completely embarrassed and didn’t seem to know what Michael Hines was up to.”

Huntsman Appointee, Executive Director of the Utah Department of Commerce, Francine Giani

Seeking to defend herself and her Department, once the audit was released, Francine Giani publicly insisted that her Department had taken all necessary corrective action.   However, one of the major indictments in the audit was that Giani’s staff was repeatedly in violation of Utah State law related to how the State’s lawyers from the Attorney General’s office were being ignored as the Division pursued its own agenda.  The audit reads in part,

“[S]taff from the AG’s office are assigned to represent the  division.  Securities law states “The attorney general shall advise and represent the division and its staff in all matters, administrative or judicial, requiring legal counsel or services in the exercise or defense of the division’s power or the performance of its duties” (Utah Code 61-1-21.5).  There have been conflicts with both how the former director utilized the attorneys representing the division and the level of authority the attorneys should have in defining division activities.  In some cases, it appears the former director assumed the role of the attorney.”

Despite the Attorney General’s office claiming that they knew nothing about criminal charges or arrest warrants, to the shock of Annie, Randy, and their attorney, such warrants were indeed issued.  Randy was arrested on August 29, 2008.

After Randy’s arrest he worried that his wife would be next.  Through their Attorney, the Bradleys made an agreement with prosecutors that with Randy voluntarily returning from his job in Montana, surrendering to the Utah County Sheriff’s office, and providing the required $10,000 bail, the warrant for Annie’s arrest would be withdrawn.  A few short days later however, local and federal agents were surrounding the Bradley’s home and in almost no time, Annie was in jail.

“I told them that we had already taken care of things,” says Randy.

“I begged them not to take her.  I explained that the prosecutor had agreed to release the warrant for Annie’s arrest since I cooperated and posted $10,000 bail.  The Deputy told me that he believed me, but since I had nothing to prove it, there was nothing he could do.  I wasn’t angry at the Sheriff’s office, they were professional and doing what they were supposed to do.  But, who is going to stop Michael Hines from ruining people’s lives while he does whatever he wants?  That is what makes me so angry.  He doesn’t care about my wife, my kids, or our family.”

Annie and Her Two Daughters

So, how and why was Annie arrested so dramatically this past Tuesday night, even after the prosecutors had agreed to release the warrent for her arrest? Why didn’t the government follow the usual procedure when dealing with reputable citizens, not charged with violent crime, having no past criminal history, and just deliver a “Summons to Appear?”  Evidently, that wouldn’t work for Mr. Hines strategy.

Annie Bradley was arrested because Randy and Annie had the courage to resist Mr. Hines for almost a year.  That, evidently, is just not acceptable to the State of Utah, Department of Commerce.

It’s not just the Bradleys who have had to make this tough choice.  The pattern of unjust enforcement by the Division of Securities is revealed unmistakingly in the formal audit results, but Ms. Giani and her boss Utah Governor Jon Huntsman Jr., have neglected to address the gravity of the situation.  Certainly, Ms. Giani and the new Securities Director Keith Woodwell have failed to reign in Hines and others engaged in the abusive practices.

The actual truth related to Annie Bradley’s arrest might have never come to light except that a number of individuals, attorneys, businessmen and even Department of Commerce employees have grown weary of this unchecked abuse and have begun using audio recording’s to try and help document this behavior.

The recordings obtained by FCD are a collection from multiple sources, and cover a multitude of cases. These recordings, and hopefully others yet to be provided to FCD by interested citizens, are beginning to serve as a powerful tool to provide critical insight and political leverage to address this rogue government agency reeling from criticisms, rife with internal conflict and desperate to cover-up its own current and past misdeeds.

Nevertheless, some bureaucrats can’t seem to understand how persecuting small businessmen in Utah (and their wives) is the same as persecuting normal families.  Some government officials can’t seem to understand how unjust it is to have a government agency justify their supposed administration of justice with lies, cover-ups, excessive force, coercion and deceit.

Annie Bradley’s arrest is one more revelation in a series of events alerting Utahan’s to the very real consequences of a corrupt government agency, the conduct of malicious bureaucrats and an incompetent government appointee—Francine Giani—who seems more worried about the appearance of “protecting investors” than she is about following Utah’s laws and protecting all Utah citizen’s civil rights.

The Bradleys have now had to come up with $20,000 cash bail so that they could continue remain free to take care of their family while continuing their fight against a corrupt government investigation.  This amount pales in comparison to the mounting legal costs they’re incurring in a legal circus that could last many more months if not years.

But, instead of heaping added difficulty on their heads, the State of Utah should be issuing the Bradleys a sincere apology as part of its first step to clean up the seriously damaged reputation of the Utah Government.  We should all be grateful for families like the Bradley’s that stand up to corruption, that work constantly to provide a good life for their children, that conduct an honest business, and do all they can–even if they’re late on payments—to always pay their personal and business debts as agreed.

“This has probably been the most difficult emotional thing that has ever happened in our lives, but we’re going make it through,” says Randy, soberly.  “Annie has said that if this is what it takes so that someone will finally put a stop to people like Michael Hines, its okay, I’m okay with it.”

In the face of America’s current economic difficulties it seems like the Executive Branch of Utah’s government has somehow forgotten the virtue of families like the Bradleys and the responsibility to protect all Utah citizens equally.  It is, after all, small businessmen and women, along with their families, who regularly take risks and assume responsibilities that creates more jobs, deliver more services, and add more value to our community than any government appointee and her bureaucrats.

Despite Mrs. Giani’s public assurances, there is an obvious problem in the Utah Department of Commerce.  Evidently this problem extends all the way to the head of the Executive Branch into the office of Governor Jon Huntsman.

Despite calls by numerous state legislators for the removal of Ms. Giani and several of her remaining staff; and despite the multitude of problems revealed in the recent performance audit of her Department; and finally despite even the personal appeals made directly to him from Utah’s own Attorney General for her firing, Governor Jon Huntsman (who is the only elective oversight provided by State law over Francine Giani) seems to share the philosophy of Giani and Hines, namely, that innocent people being wrongly accused is simply a price Utahans should get used to paying if they expect the government to do its job.

That’s an interesting theory of government.  No matter how nice, pleasant or polite Governor Jon Huntsman, Jr. comes across — there is no mistaking that he was not elected to simply look good in office.  Hard decisions sometimes have to be made, and in this case, when dealing with the Department of Commerce, the direct action that needs to be taken just isn’t that hard to discern.

Tyranny, at any level, only works for so long.  What is happening in the Utah Department of Commerce is wickedness; there is no way to skirt around the issue.  A full audit of all divisions within her stewardship will reveal even more succinctly that it is time for leadership in the Governor’s office, in the legislature, and in the judiciary in dealing with abuses like the Giani’s absurd, forceful, and dramatic arrest of Annie Bradley.

This problem will come to a head and the unjust, and in some cases criminal, activity of government bureaucrats along with the startling incompetence of executive management in the Department of Commerce will ultimately cost some politicians and employees their jobs.  Someone with courage will ultimately step forward to address and correct the very serious problems.

In the mean time however, the dirty politics and renegade operations of the Utah Department of Commerce will ensure that more Utah families like the Bradleys will be trying to explain to their small children why mommy or daddy was dragged away in handcuffs, in the middle of the night.

It just doesn’t seem like America.

The Bradleys

Key Points

• Ayn Rand explained, “In order to sustain life, every living species has to follow a certain course of action required by its nature. The action required to sustain human life is primarily intellectual: everything man needs has to be discovered by his mind and produced by his effort. Production is the application of reason to the problem of survival.”
• Adam Smith devoted 500 pages to the importance of labor in Wealth of Nations.
• To explain the importance of private property in a person’s liberty, John Locke wrote, “The ‘labour’ of his body and the ‘work’ of his hands, we may say, are properly his. Whatsoever, then, he removes out of the state of Nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state Nature placed it in, it hath by this labour something annexed to it that excludes the common right of other men.”
• Thomas Jefferson:
  • I made a point of paying my workmen in preference to all other claimants. I never parted with one without settling with him, and giving him either his money or my note. Every person that ever worked for me can attest this, and that I always paid their notes pretty soon.
  • The great mass of our population is of laborers; our rich who can live without labor, either manual or professional, being few and of moderate wealth. Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families.
• Benjamin Franklin used Poor Richard to teach much about labor, “If we are industrious, we shall never starve; for, as Poor Richard says, At the working man’s house hunger looks in, but dares not enter.
• One of Rich Dad’s lessons for Robert Kiyosaki was that the rich “work to learn, not for money.”

Conclusion

The list goes on and on. The capitalist values labor, both his own and that of others. The entire sturcture of being a producer depends upon a person’s labor. Therefore, in spite of the socialist usurpation of labor from the “worker,” a capitalist should celebrate a Labor Day. One of the best ways to accomplish this is to perform his own value creation and to engage in exchanges with those whose labor he values.

Action Steps

1. Recognize the value of labor in your own life. List ways you can create value in the world. Make a plan to begin value creation in at least one new way today.
2. Recognize the value others create in your life. Resolve to exchange with these people and to allow the dollars to follow from your hand to their in appreciation of that value creation.

MRFC Principles:

Sources

Rand, Ayn. Capitalism: The Unknown Ideal, Signet Non-fiction edition, first published 1967. p. 17.

Locke, John. The Second Treatise on Government, Chapter V, “Of Property” paragraph 26.

The Writings of Thomas Jefferson. Edited by Paul Leicester Ford. 10 vols. New York: G.P. Putnum’s Sons, 1892–1899. 5:34.

The Writings of Thomas Jefferson. Edited by Albert Ellery Bergh. 20 vols. Washington: The Thomas Jefferson Memorial Association, 1907. 14:182.

The Writings of Benjamin Franklin. Edited by Albert Henry Smyth. 10 vols. new York: The Macmillan Company, 1905–7. 2:372.

Kiyosaki, Robert. Rich Dad, Poor Dad. Warner Books, New York, 1997.

Today’s work-at-home environment poses new challenges that yesteryear’s work-at-homers perhaps didn’t have to deal with. Sue Shellenbarger, of the Wall Street Journal, reports that employers fear workers will take advantage of the lack of personal supervision and squander valuable time. The solution? Employing monitoring devices in employees’ computers to “look over their shoulders.” Naturally, questions of “Big Brother” arise both from employees and from critics of the process. So, is an employer justified in placing such monitoring devices? Or should the work-at-home employee have the right to work as he sees fit without the close electronic supervision? Several principles are at play in this this interaction.

Most recognize almost immediately in this story that force destroys freedom and that perhaps by using the monitoring devices employers are using force over their employees and therefore destroying their freedom. But other principles come into play that reveal a much deeper issue involved in the interaction between employer and employee: Productivity is the standard, and agency implies stewardship.

Key Points

• Employers own the businesses people work in.
• They own the equipment, the buildings, the hardware and the software associated with the business.
• They own the projects pertaining to the profitability of the business.
• They own the labor their employees have agreed to sell them.
• Owners recognize that labor rightly ordered (or as Napoleon Hill puts it, organized effort) is required to be profitable.
• Therefore, they have the right to monitor the productivity and effectiveness of the labor they have purchased from employees.
• To be honest, employees should be the most productive they can be during the times they sold their labor to employers.
• Employees often squawk about the monitoring of labor from their employers. They claim the employers take away their agency in this process.
• The best way to recognize where agency rightly exists is to answer the question: Who has stewardship in the matter? Regarding Employer/Employee exchanges agency and stewardship changes hands at different times.
  • Prior to the agreement, both parties have stewardship over their own self-interest—their personal and family welfare, business concerns, etc.
  • In the process of coming to an agreement both parties essentially say, “I see what you are wanting to do. My self-interest aligns with yours in ____ area, and I want to create value for you by ____.” The employee agrees to sell a portion of his life (time and labor) to the employer in order to accomplish both sets of self-interests. Or in other words, the employee sells a portion of his agency to the employer.
  • After the contract has been signed, the employee no longer has stewardship or agency over that portion of his life (time and labor). He must therefore fulfill his obligations in the contract by laboring in the manner and at the time his employer and he agreed upon.
  • The employer still carries the ultimate stewardship of the business, and has the right to monitor the employee’s productivity while on the job.
• Often employers like to share the responsibility of stewardship with their employees. Along with that responsibility, when properly executed by the boss, comes added agency for the employee. The employee then is able to make a few decisions regarding his time and labor.

Conclusion

Ms. Shellenbarger’s story dealt mostly with employers monitoring employees. Based upon the items listed above, this process appears perfectly right. However, often the comment was made that employers wish to monitor free-lance and contract workers at home as well. These types of individuals clearly fit into a more free category. While they have sold their time and labor to others, they generally do not sell those items in the same way an employee does. They have usually preserved for themselves a little of the agency and stewardship that the employee gives up. It would therefore be against principle for the employer to monitor the productivity of these people.  

The challenges between employer and employee have been around for generations. The boss wants the utmost productivity from his workers. The worker wants mostly to be left alone while working and to have the freedom to work as, how and when he chooses. A FreeCapitalist society—one in which both employer and employee choose voluntarily to live according to ancient principles of prosperity—can peacefully and easily solve these challenges by exploring the myriad solutions available to those whose brains are awake and switched to on.

Action Items

1. Review your own situation for creating value in the world, whether it be business owner, self-employed, freelance, contract worker, or employee.
2. Study out the level of agency and stewardship you possess by reviewing the agreements you have made for the exchange.
3. Resolve to stick to those agreements. If you do not like your agreement, stick with it until the opportunity presents itself to alter or abolish that agreement in advantage of a new one.
4. If you are the boss of work-at-home employees and you suspect that you are not receiving the level of productivity you desire or think is reasonable, discuss alternatives with your employees. Perhaps some of the following questions could be of help.
   1. What is the nature of the agreement you have with your employee?
   2. How much agency and stewardship have you afforded to your employee?
   3. Have you allowed the amount of agency and stewardship you intended?
   4. Is the amount of agency and stewardship facilitating or restricting the amount of productivity you desire?
   5. If no on #4, how can you make arrangements—including monitoring, or changing the employment status to freelancers or contract workers, etc.—with your employee to incite higher productivity?
5. If you are the employee in a similar situation, and you are dissatisfied with the current arrangements, it is also healthy for you to explore the answers to the above questions. If they are not to your liking, consider some of the following.
   1. Go into business for yourself.
   2. Seek to become a freelancer where you have control over your time and labor and whom you sell them to. Perhaps selling time and labor to several employers on a piece-rate method would be better than selling your productive time to just one employer.
   3. Become a contract worker, which carries a little more agency than an employee but not as much as a freelancer or a self-employed individual.

MRFC Principles:  (3, 7, 9, 10, 13) 

Sources

Sue Shellenbarger, Work at Home? Your Employer May Be Watching, Wall Street Journal, July 30, 2008.

Well, some consumers are concerned that this has been happening at the grocery store. As prices have continued to rise, some food companies have recognized that there is a threshold price for any given commodity. When the price reaches that threshold, consumers will simply stop buying that product. Rather than continue to push the price to the threshold point, food companies have decided to change tactics. They have repackaged items in smaller amounts and still charge the same price. The end result is the same—a gallon of ice cream will cost you more than it used to. But, consumers aren’t used to thinking in terms of “product decreases”, and some feel that the practice is a little deceptive.

Key Points

• Consumers enter transactions freely. While it is frustrating to get less than you thought you were getting, that is the consequence of your choice. As the agent in the transaction, it is the consumer’s stewardship to verify the facts before paying for anything. (Makes grocery shopping sound fun, doesn’t it?)
• The beauty of the invisible hand in the free market system is that it leads entrepreneurs to find better, more efficient ways to create value. Deception (a form of force) hinders that process, and ultimately destroys freedom.
• If the market doesn’t continue to support your product, deception will never substitute for a sustainable marketing plan. Dollars follow value, and if the value you present doesn’t attract dollars, then it’s time to re-think your value proposition.
• Consumer-minded people believe that remaining competitive is solely a function of pricing. “If competition gets tight, find a way to give less or charge less.” This scarcity-based mentality is an unsustainable lose-lose situation where neither party really feels that it is getting what it needs from the exchange.
• A better idea, as suggested in “Blue Ocean Strategy”, is to figure out ways of tailoring the value you offer to match the value that the market place is looking for. When my wife and I go to our favorite restaurant, the price isn’t our focus. We go because the quality of the food and the experience are exactly what we are looking for.

Conclusion

Food producers have a bottom line to focus on. That bottom line has to include the costs of raw materials, transport of those materials, production and processing, product marketing, and transportation to their vendors. The costs in all of those areas have increased significantly in recent months, and that leaves the companies with a difficult choice. While consumers are responsible for the choices they make when spending their money, grocery companies should let the invisible hand work its magic. Exchange creates wealth only when both parties are getting what they think they are getting from a transaction. If there is a need to change pricing structures, make it obvious to the consumer. Rather than hope that consumers don’t catch on to what they are doing, food producers should be up front and let the market decide. Otherwise, deceptive marketing practices will almost certainly make that decision for them.

Action Items

1. Before entering any transaction, see that your expectations are being met. Failure to do so does not entitle you to play the victim card later.
2. When your obligations become difficult to meet, determine that you will never try to deceive others in an attempt to give less than is expected.
3. Read “Blue Ocean Strategy—How to Create Uncontested Market Space and Make the Competition Irrelevant”.
4. Realize that productivity, not pricing, is the standard.
5. Consider how you can increase and customize the value that you offer to your family relationships and your business relationships.

MRFC Principles: (4, 7, 8, 9, 10, 11)

Sources

Four Points Media, “Incredible Shrinking Consumer Products”, KUTV 2 News, July 22, 2008.

(Matthew Pilling is a member of the FreeCapitalist movement known as the Canadian Capitalist. Despite his time in the Great White North, Matthew loves America and all that it stands for. He lives with his wife and two children in Taylorsville and works in finance.)

In 1938, the Federal National Mortgage Association (Fannie Mae or FNMA) was created as a government agency to create liquidity in the failing mortgage market. Then, in 1968, Fannie Mae was privatized—not because the government shouldn’t be messing in private market matters, but because Fannie Mae’s numbers were messing up the Federal Budget. In the same year, congress chartered the Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC) as a private corporation to provide competition to Fannie Mae’s 30 year monopoly on the secondary mortgage market. Nothing like fair, open-market competition between Uncle Sam’s step children, is there?

While both Fannie Mae and Freddie Mac hold the status of being Government Sponsored Entities (GSE), they are technically private institutions. As GSE’s, both enjoy relaxed regulatory guidelines, so they hold an obvious upper hand in the competitive market place. So much so that virtually all privately owned lending companies base their guidelines on standards set by Fannie and Freddie.

And now, even with that competitive advantage, both organizations are on the verge of collapse. Ironically, their collapse is being blamed on current mortgage market conditions, when in reality, the presence of GSE’s in the market-place is one of the leading factors in the meltdown. Lenders, borrowers, and investors have poured money into the system based on the mistaken belief that FNMA and FHLMC are backed by the government. They are not. That false sense of confidence and security has led to over-extension of credit and speculation. FNMA and FHLMC are companies that were created by a government inexperienced in that field, with dollars that weren’t theirs to spend in the first place. Had either company had an honest start in the market place, they would have likely collapsed decades ago. Instead, we have an entire market segment that is based entirely on unsustainable foundations. The foolish man built his house upon the sand.

Yesterday’s news was that if the two lending giants were to collapse, there was little that the government could or would do for them. This morning’s news is that, in rethinking the ramifications of that collapse, the government feels we need to preserve these tumors. The foolish man tried to rebuild his house on the sand.

Key Points

• The creation of FNMA and FHLMC using tax payer dollars was an extreme violation of principle (Principle 9, to be specific), and was therefore destined to fail.
• The government is saying that the cost of bailing out either or both groups will have to be passed on to tax payers because it doesn’t have the money.
• The bailouts will only provide a temporary fix and will simply delay the inevitable at an extreme cost to the American people.
• To put this in greater perspective:
  • The total cost of war on terror through end of 2008 is estimated at $752 billion.
  • The high-end potential cost of bailing out private mortgage companies is estimated at $250 billion.
  • No one knows the exact cost of bailing out Fannie and Freddie yet, but they own and/or guarantee around $6 Trillion in loans. That’s 8 times larger than the current cost of the war on terror, and 24 times the cost of bailing out private mortgage banks.
  • While it is not likely that both organizations would be bailed out for every dollar they owe, the level of their insolvency is growing daily.

Conclusion

Allowing FNMA and FHLMC to fail will bring dire ramifications. The entire lending industry and all investments tied to that industry will experience major setbacks. This will affect other seemingly stable industries (such as the insurance industry) that invest heavily in mortgage-backed securities, and it will have direct impact on the stock market and value of the U.S. dollar. Trying to save FNMA and FHLMC, however, will bring much greater problems. Both organizations will still likely fail in time. They will just do so at a much greater cost to tax payers.

Action Items

1. Learn more about seller-carried financing and other lending options that aren’t connected to government lending agencies.
2. Write your congressman and express your concern that spending more to save a dying patient will only multiply the problem.
3. Develop greater levels of self reliance in your life by studying the Principles of Prosperity and learning to effectively apply them.

MRFC Principles: (4, 5, 7, 9, 10, 11, 12)

Sources

Letter to Committee on the Budget, Congressional Budget Office, February 11, 2008.

Mark Zandi, A Mortgage Bailout Would Cost up to $250 Billion, Wall Street Journal, February 27, 2008.

Independence Day is also a day to reflect. Do we recognize the price our Founders paid to win their independence? Do we know of the struggle leading up to that great event? What do we know about those men? Do we buy in to the image so prevalent today that they were philandering old men or have we done our homework and recognize their virtue? Do we just spend our day lounging around, getting drunk, and exercising the inner urge to blow things up?

The Founders started a revolution, but they did not complete it. They recognized it would take many generations to complete what they started. Yes, they were able to validate their declaration of political sovereignty; but their revolution was so much more. They subsequently created a government to transcend the ages, one which had never been tried before. One which honored the individual and allowed the individual to govern himself.

The Founders revolution included three areas. The first, most well-known is the political revolution, discussed above. The basic premise is that man is able to govern himself and doesn’t need a king or elected officials to tell him what to think and how to act. How are you doing? Do you govern yourself or do you allow others (political leaders, bosses, Kommissars*, etc.) to control your life? Second, this revolution was one of religious freedom, or freedom of conscience. Finally, to be a citizen of a nation an individual did not have to be the member of a certain church. He could choose for himself, according to the personal belief system within his own mind. The third portion of the revolution is economic. Through capitalism people can freely exchange with one another, individuals can do more than just live paycheck to paycheck. They are free to discover their life’s missions and to pursue those with that same freedom of conscience and to strive to leave the world better than when they entered it.

This revolution—all three portions of it—are not intended only as a collective revolution; it is a personal revolution. So how are you doing? Do you understand the purpose of the revolution? Do you live the revolution, or are you just living paycheck to paycheck, getting up when others say you should, going places others say you should, thinking the ideas others say you should? Or do you practice your own autonomy? Are you actively engaged in a personal revolution? Do you celebrate independence all year long, or is it a 0.27% of the year?

MRFC Principle:

*German spelling used intentionally for effect.

The American Association of Suicidology report some sobering statistics. they report over 32,000 suicides in 2005, the last year for which they have statistics. Over half of these were firearm related suicides. Justice Breyer’s numbers were similar, where he cited government studies revealing 36,000 firearm related deaths, 51% of which were suicides. While these numbers are cause for alarm, assigning blame to the presence of a firearm is illogical and not founded upon principle. Merely banning guns or hazardous materials will not solve the problem causing all the suicides, or other violent murders for that matter. As always in these types of topics, the issue lies much deeper than simply having a material weapon available. Human Life Value and an individuals perspective of that value is the real issue.

Key Points

• Suicide is a reflection of a person’s self-loathing. Refer to the American Association of Suicidology:

A person in acute risk for suicidal behavior most often will show: Warning Signs of Acute Risk:
• Threatening to hurt or kill him or herself, or talking of wanting to hurt or kill him/herself; and/or,
• Looking for ways to kill him/herself by seeking access to firearms, available pills, or other means; and/or,
• Talking or writing about death, dying or suicide, when these actions are out of the ordinary.

• These are all signs of a person whose self-loathing has reached dark depths. If they have reached this point, professional help should be sought after. However, it is suggested that for real success to occur, therapy based upon true principles should be employed and not just the scientific mysticism often employed by the psychology industry of the day.
• Lasting change comes when the individual learns to love his life and recognizes the truth regarding his self-interest. This is not always an easy task. The individual must unlearn all the training, teaching, and educating that sticks him in the consumer, scarcity paradigm and robs him of his self-love and feelings of being a producer.
• Productivity is the standard in this process. Productive members of society generally feel better about themselves and about their fellowman. The more productive success one has, the better he feels.
• Even some who claim to be productive may begin to loath themselves. This is because their productivity is not creating real value for others in the world. Productivity requires an exchange between two consenting individuals. Many otherwise successful individuals become overstressed and lose perspective in the value they create for others when they do not exchange with them.

Conclusion

In seeking for root causes of nearly any activity, it is always good practice to look beyond inanimate objects to the Human Life Value that acts upon that object. Nearly forty thousand individuals kill themselves in America every year. This is indication of a much deeper problem than whether a gun is close within their grasp. Proper education, helping them learn to create value for others, is the best thing to help people learn to create a life they love.

Action Items

1. Create a life that you love.
2. Seek to create value for others and exchange with them. Begin small, if necessary, but make sure it is meaningful.
3. Make a new friend.
4. Find a cause larger than yourself that you are passionate about.
5. Seek professional help if you are too deeply in despair.

MRFC Principles: (2, 3, 4, 6, 10, 13)

Sources

Mike Stobbe (AP), Surprising Fact: Half of Gun Deaths Are Suicides, Yahoo! News, June 30, 2008.

Supreme Court Opinions, District of Columbia v. Heller, June 26, 2008.

American Association of Suicidology, U.S.A. Suicide: 2005 Ofiicial Final Data

American Association of Suicidology, How Do You Remember the Warning Signs of Suicide?

Key Points

• Competition and innovation can bring some players in the market to their knees and threaten extinction. This even happens to entire communities when one are provides greater perceived value than another. This was the case with the shopping mall in the 1970s and 1980s America. Shopping was brought to one specific point, often under the shelter of indoor shopping. The result was that many downtown streets found businesses relocating or going out of business. Paducah, KY was one such place as reported by Ms. Cox.
• Voids often create opportunities for others to create value, such as the Schroeders and their American Quilters Society. Cox also reports that the Schroeders’ efforts revived a declining downtown and redubbed the city “Quilt City USA.” Since 1985, Paducah has been host to the AQS Quilt Show bringing in tens of thousands of visitors and generating large profits.
• Many towns and cities throughout the USA and other countries are in decline. Entrepreneurial leaders in these areas will explore their own strengths and consider how to use their Human Life Value to innovate where opportunity presents itself. Others in these towns, resigning to brain-off tactics, will simply see a dying town and run away from opportunity.

Discussion

The idea of quilting may appear to some as trivial, merely a pastime. To others it may be tedious and time-consuming. Yet, to others it may mean big business. The Schroeders and others in Paducah, Kentucky have found a way to use their hobbies and interests (their Human Life Value) to create value for millions of people throughout the world. This has brought life to a dying town.

Action Items

1. Explore your own unique abilities, hobbies and passions. Consider ways you could become productive with them.
2. When you see an empty business building, get into the habit of asking, How could I use that space to create value in the world? Even if you don’t act on it immediately, it will start increase your HLV by activating your mind to look for solutions.
3. If you already have some ideas, take steps to act on them. What could you do today to move closer to your achieving them?

MRFC Principles:  6 (5, 6, 7, 10)

Resources

Meg Cox, “Stitching Up the Future,” The Wall Street Journal, April 12, 2008

American Quilters Society, Paducah, KY