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Chumps for Chump Change By Charles Payne

Question of the Day

Taking so much for granted and wanting even more without the sacrifice and elbow grease is a national epidemic.

How do we get our children and our country to get back to basics where hard work is appreciated and a pay check no matter how much is treasured?


Click here to post your answer and let Charles know what you think.
For the entire hubbub over Mitt Romney's effective tax rate, I think the bigger issue was his comment that dismissed $374,000 as no money, or as my friend Ellis Henican called it, "chump change." You see, I think his comment points to a greater challenge for the nation that has led to the big stumble over the past several decades. Romney grew up with money. George Romney was chairman and CEO of American Motors then left for politics that saw him elected governor of Michigan for three terms. He later ran for the GOP nomination for president but came up short, dropping out early in the race and later joining the Nixon cabinet.

George Romney once turned down a $100,000 bonus back in 1960 and told his board that executives needed not to make more than $225,000, or $1.4 million in 2012 dollars. In fact according to a piece in yesterday's Washington Post, Romney turned down $268,000 over a five year period. Fast forward to this week, and his son dismisses $374,000 as not much money, even making it seem like it might have gotten stuck in the sofa. This does make him seem out of touch, but I think there is a different red flag that we should all pay attention to and be introspective about; taking our riches for granted and not being grateful to the point we are arrogant is certainly a red flag.

There is no way the world should be as competitive with America as it is right now, but it's because we became complacent and arrogant. We got to a point where we were so far ahead that the little things stopped mattering, and the urgency to stick to the game plan was ignored. We had it made. Even today "poor" Americans would qualify as the top 1% of world earners. But how do we achieve success and build upon the shoulders of those that came before us once we're in that rarified air? They say the sky is the limit, but what happens if you're born in the sky, or your country is at the highest altitude of any other country in the world?

It's easy to dismiss Mitt Romney as being out of touch, but it's not just rich people that look down their nose at "chump change" or "chump wages." A lot of supposedly poor people have the same kind of attitude. I know young people that have dropped out of high school yet look down their nose at a job at McDonalds. Yet these same young adults aspire to the things in life that cost a lot of money. Martin Luther King Jr called it the "drum major instinct," the idea of leading the parade or keeping up with the Joneses. Aspirations are great, but understanding them takes elbow grease, and commitment to be the drum major seems to be lost on so many.

I guess I got my swagger back
Truth: new watch alert, Hublot's
Or the big face Rollie
I got two of those
Jay Z & Kayne West

 

I grapple with this situation with my son. At 15 years old, he can spot a Hublot from a mile away and knows all the specs for the most expensive cars in the world. At his age, I simply wanted a car and had no clue about anything beyond the Caddy. As for watches, I loved my Timex that was a gift from a family friend. I like that my son wants the finer things in life, but I don't like that right now his work ethic isn't up to par with earning those things. He's a nice kid, and smart, but at this very moment, he doesn't have the internal engine needed to roar to the top of the heap. I guest a lot of that is my fault.

Things are different these days when it comes to getting your kids on track. It was never hard for my mother to get my mind right. I feel he's going to come around and be a world-beater, but he has to quicken the pace very soon. The fact is America has to quicken the pace and stop assuming great stuff is going fall into its lap and go out and earn and create great stuff. This is a serious challenge.

It's easy to say Mitt Romney is out of touch by dismissing a few hundred grand, but the more I think about it, the more in-touch he might actually be. And if that is the case, then we're all in a lot of trouble.

Keystone Politics

If you see Washington DC as nothing more than those old Keystone Kops follies, then yesterday's decision by the White House to skip the Keystone pipeline must have been hilarious. Sadly, it's not a laughing matter. By denying this project, which could knock out so many birds with a single stone, President Obama is saying he takes marching orders from environmentalists and not from unemployed welders, or even unions in this case. Last night on Payne Nation, Rayola Dougher, senior economic advisor at the American Petroleum Institute said President Obama was "genuflecting" to the "extreme elements" in his party.

Gasoline prices are up 85% since inauguration day, and most experts agree they will reach sustained record highs this year. I think it's crazy to force Canada to sell this oil to China. There is no environmental issue, but this is going to be a springboard to a greater campaign against fracking and horizontal drilling. For the record, Dougher reminded me that fracking has been around for 60 years while the horizontal part of it is relatively new. It's been a miracle allowing for cheaper natural gas and an avalanche of good-paying American jobs. Do we want to freeze progress and roll it backwards? I thought jobs were priority number one.

By the way, yesterday a Russian tanker finished unloading 296,000 gallons of unleaded gasoline and half of 580,000 gallons of diesel to Nome Alaska. Following a US Coast Guard icebreaker, the ship delivered the fuel to alleviate a situation that the commissioner for the Alaska Department of Environment stated "clearly jeopardize the residents" ability to heat their homes and survive late winter and spring conditions. This was a unique situation, but it illustrates how tenuous our energy situation is, and could become, if we try to kill this industry.

Message of the Market

In a nutshell, the message of the market is that this rally is real! I understand you're worried, and I even got an email from a guy that said my commentary about the war on business is right and that's why he's not going to get involved. Yes the war is real, but so too is the greatness of America. Last year the foundation of free markets and capitalism took a shot to the gut and didn't fall ... it stumbled for sure, but stood tall in the end. Even if this is a product of cyclical timing and proves short-lived, you should take advantage. The key for the next couple of days will be housing data and corporate earnings.