Nikola Drobac – 10/19/06

This page was last updated on October 25, 2006.

Economy should benefit us all; Nikola (Nick) Drobac; Beaver County Times; October 19, 2006.

Mr. Drobac has written at least the 25^th anti-Bush and/or anti-Republican rants since July 1, 2004. In a letter entitled “GOP messing things up” (October 29, 2002), Mr. Drobac expressed a wish to be able to laugh as all Republicans face financial ruin in retirement, calling them fools because they may have more confidence in themselves than in government bureaucrats and politicians.

According to his website, Mr. Drobac attended CCBC, Pitt, and USC. I hope the stuff in Mr. Drobac’s letter doesn’t represent what these schools teach/taught.

As you read this letter, keep in mind Mr. Drobac is a current/former high school business teacher. Does anyone doubt the BS he writes in letters like this also finds its way into Mr. Drobac’s classes?

Below is a detailed critique of the subject letter.

“Sunday’s article ‘Landmark year for pensions’ was interesting. However, important information was omitted.

“When first passed into law during the Carter administration, 401k plans were meant to be a supplement to retirement income. They weren’t meant to be the primary source of income during retirement.

“I teach the three pillars of a retirement plan: employer defined-benefit plan, Social security [sic] and 401k [sic] plan and/or similar savings plans.”

[RWC] What does Mr. Drobac mean by he teaches “the three pillars of a retirement plan?” These are three possible components, but they aren’t all necessary for a solid retirement plan. Because it’s the only “pillar” you can control, I believe personal investment and savings plans – including 401(k) plans – should be a person’s primary focus. In my opinion, anyone who places control of his retirement planning in the hands of someone else – whether it’s government or an employer – is nuts. That’s why I made sure my retirement plans don’t depend on either a pension or Socialist Security.

“Then came the global economy. If you cannot describe what’s going on in the United States (pensions, health insurance, etc.) in terms of the global economy, then you have totally missed the picture.”

[RWC] “Then came the global economy?” Earth to Mr. Drobac. We’ve had a “global economy” for thousands of years. If not for the global economy, there would not have been the post-war boom after World War II. You see, most of the U.S. boom was fueled by foreign demand for U.S. products. That was because the war destroyed most of the manufacturing capability of Europe and Japan, making much of the world dependent on the U.S. until the war-ravaged countries could rebuild their economies.

If anyone has “totally missed the picture,” it’s Mr. Drobac.

“In the 1950s and ‘60s, when we had an industrial/manufacturing base, all you needed was a defined-benefit plan and Social Security. We increased our foreign trade deficit by sending American dollars over seas to buy foreign products, causing a decline in the standard of living for all Americas [sic].”

[RWC] Note Mr. Drobac presents nothing to support his assertions. Does anyone seriously accept the assertion that since the 1960s, we’ve had “a decline in the standard of living for all Americas [sic]?”

If you read closely, Mr. Drobac appears to believe U.S. exports are OK but imports aren’t.

Mr. Drobac also seems to ignore the fact that the trade imbalance is caused by the fact that many goods can be made cheaper overseas, and those less expensive products allow us to get more out of our paychecks.

“As more and more foreign companies like The Royal Bank of Scotland (owner of Citizens Bank) and Bayer take profits out of the United States, things will continue to decline. Even though these foreign companies employ Americans, the profits go overseas, increasing our current account deficit and further reducing our standard of living.”

[RWC] The idea that “profits go overseas” is a deliberate attempt at deception. The truth is, regardless of a business’ HQ location, some profit goes overseas and some stays in the U.S. This is true for both American and foreign businesses. This is because profits go to the shareholders, and shareholders live all over the world. Mr. Drobac failed to note that while RBS and Bayer are foreign companies, their shares are traded on the New York Stock Exchange. Therefore, if you want to buy shares in these companies and share in their profit, you can do so.

Another point to be made is to discuss what foreigners do with profit earned in the U.S. While some of it goes to investment in projects in foreign countries, much of it is reinvested in the U.S. Apparently Mr. Drobac didn’t learn – or forgot – that businesses require a constant infusion of capital to stay in business, and that capital comes from company profits. For example, even if a company merely wants to maintain its operations by purchasing new equipment, the money for that new equipment comes out of profits, not expenses.

Mr. Drobac doesn’t tell us how profit going overseas reduces “our standard of living.”

Using Mr. Drobac’s business “logic,” we should discourage foreign investment in the U.S.

“Article One, Section Eight; Clause Three of the Constitution gives Congress the power to regulate commerce with foreign nations. However, our congressional leaders have failed to preserve, protect, and defend the Constitution as required in their oath of office.”

[RWC] Mr. Drobac needs to retake his civics class or consult with his high school’s civics teacher. The oaths taken by members of Congress say they will “support and defend the Constitution,” not “preserve, protect, and defend the Constitution.” Mr. Drobac has confused the oaths taken by members of Congress with that taken by the President.

In any case, what does regulating commerce have to do with defending the Constitution?

“You judge a government by how well it takes care of its people. To increase the standard of living for all Americans, government must work with American companies in an effort to build a U.S. economy that benefits all Americans.”

[RWC] “You judge a government by how well it takes care of its people?” Written as a true liberal.

First, the idea that we are the government’s people is completely upside down. Our government serves at the pleasure of American citizens. It is the obligation of U.S citizens to take care of our government, not the other way around.

Second, the purpose of a government is not to take care of anyone. The purpose of a government is to establish a legal framework that allows the country’s citizens to take care of themselves without fear of government interference

Third, beyond providing a legal framework, when did government involvement in commerce ever “benefit all Americans?”

“Unfortunately, look for things to get worse before they get better.”

[RWC] It’s disturbing to consider Mr. Drobac is pumping this stuff into the heads of high school students.

Note Mr. Drobac didn’t tell us what government should do beyond the nebulous “work with American companies.”