Last April the US picked up a suspected terrorist off the coast of Somalia and held him of a US Naval vessel for two months during which time they interrogated him. Then they shipped him to the United States and turned him over to the FBI who promptly read him his Miranda rights. I think it was a little late for that but now they say he is going to be tried in civil court. Last year the congress passed a law stating that no one could be sent to the US from Gitmo and tried here in civil court so this was Obama’s way to get around this law. Having witnessed this little tactic the congress will now broaden the law to include terrorist coming to the country from anywhere.
I believe that if you question someone for two months with no lawyer present and then read them their rights and take them to court you should have a slam dunk case and my guess is that is just what Attny Gen Eric Holder wanted. This whole thing looks like a sham and makes a mockery of the Miranda Act.
Sunday, October 30, 2011
Legacy benefits
When I first got into the financial planning business I took a lot of courses to get a lot of initials behind name. I once joked that I would have to get larger business cards. In any event my interest directed me toward retirement planning and that is where I spent 25 years working. I recall in the early days I would be constantly searching for someone who understood pensions and I couldn’t find anyone. I had to learn on my own and as the years passed I discovered that I had become the expert I was looking for and associates were turning to me for help.
I am telling you this because of the all of the news about pensions and how unions are revolting not only in the US but in Europe. I understand why they are upset and they have legitimate reasons. The problem exist in both public and private pensions but more so in the public area.
Let’s go back in time to the 1950’s and you own a company and you want to set up a pension plan for your employees. You sit down with a pension expert and set out your plan. First he asks for the number of employees and their ages and salaries. Then he asks for turnover because you have to consider how many of your current employees will still be there at retirement age. Then he asks for your opinion on what inflation will be for the next 20 years so he can determine how wages will increase over time. Finally he asks how much you expect to earn on the pension fund over the coming years. It doesn’t take a rocket scientist to quickly understand that all of these estimates are just wild guesses. In order to overcome the problems associated with these guesses he suggests that you review your pension each year and make adjustments accordingly. Plans that were developed like this and adjusted like this remained solvent but often times these procedures were not followed.
In some state plans the need for funds was so great that they diverted pension money to other projects, things like bridges and highways. Now the government requires that pensions always have enough money to meet the needs of retirees so if there was not enough the plans were underfunded and the government demanded that they be brought up to spec. Now any professional pension consultant will tell you that you must be conservative on your projections of future earnings and using the inflation rate would be acceptable. When these plans diverted pension monies they made up the difference by estimating future earnings at a higher rate. Then as the years passed and elected officials found this new source of funds the practice continued until some states were projecting future earnings at 8% even though current inflation has been less than 3% for most of the past two decades. If I save $1,000 per year at 3% for 30 years I have $47,000 but if I use 8% I have $113,000.
Please understand that over the years many of the pensioners were given retirement benefits in lieu of wage increases. This allowed the states to continue on their spending spree by pushing off commitments to the later years. Well the later years are here. It is time to pay the piper. Since states are not allowed to declare bankruptcy they must come up with a way to resolve this problem and most will have to reduce benefits and people are not going to be happy about this. Some have suggested that congress pass the appropriate laws to allow states to declare bankruptcy but many say this could be unconstitutional.
Earlier I mentioned that public pensions are in worse shape than private pensions and the reason for that lies in the negotiating process. If you own a company you are looking at your money or your stockholders money when you renew your pension contracts, If you are in the public sector you are using public money. Which do you think you are more likely to covet?
Let us look at an example. Suppose there is an election for county commissioner. The union people select a candidate who is partial to their view and campaign for this person. The not only go door to door but they contribute funds for his campaign and he is subsequently elected. Now when it comes time to negotiate a new contract the unions leadership sits down across the table from the person they helped to elect and the two sides decided on how they will divvy up the tax payers money.
This process has been going on in cities and counties across the country for 30 plus years and we now see the results with public pensions having better benefits than the private pensions. Once this cozy arrangement was put in place not only were pension benefits increased but salaries and other benefits like health care were also padded.
For you people in my generation, if this is sounding familiar, don’t be surprised for the federal government has done something similar to social security. The money in social security was used to purchase government bonds and this money was then used for things like bridges and highways. This mixing of government money with social money is known by the happy name of unified federal budget.
In the Minneapolis School District there are 3,300 teachers and 6,700 support staff. 1,500 of the support staff are members of the teachers union. If the teachers select a candidate who will negotiate contracts that are favorable to teachers and then work to get them elected, they have a very good chance of winning. If each teacher and spouse vote for a particular candidate that is 9000 votes. Now if they get their parents to vote that is another 18,000. Next if they have coffee parties and invite the neighbors plus make a small campaign contribution they can just about guarantee a win for their candidate. The proof of this is that
No DFL-endorsed candidate for the board has lost in at least 20 years.
Here are the results from the last school board election and it is easy to see why someone with a 27,000 vote head start will be the likely winner and you can be assured that all the teachers do vote.
3 seats 131 of 131 precincts (100%)
Lydia Lee *
61,623
Jill Davis
58,998
Carla Bates
54,691
Sharon Henry-Blythe *
39,476
Kari Reed
33,118
Doug Mann
28,416
This is why it is necessary for there to be a disinterested third party to negotiate contracts. Some thing similar to arbitration
I am telling you this because of the all of the news about pensions and how unions are revolting not only in the US but in Europe. I understand why they are upset and they have legitimate reasons. The problem exist in both public and private pensions but more so in the public area.
Let’s go back in time to the 1950’s and you own a company and you want to set up a pension plan for your employees. You sit down with a pension expert and set out your plan. First he asks for the number of employees and their ages and salaries. Then he asks for turnover because you have to consider how many of your current employees will still be there at retirement age. Then he asks for your opinion on what inflation will be for the next 20 years so he can determine how wages will increase over time. Finally he asks how much you expect to earn on the pension fund over the coming years. It doesn’t take a rocket scientist to quickly understand that all of these estimates are just wild guesses. In order to overcome the problems associated with these guesses he suggests that you review your pension each year and make adjustments accordingly. Plans that were developed like this and adjusted like this remained solvent but often times these procedures were not followed.
In some state plans the need for funds was so great that they diverted pension money to other projects, things like bridges and highways. Now the government requires that pensions always have enough money to meet the needs of retirees so if there was not enough the plans were underfunded and the government demanded that they be brought up to spec. Now any professional pension consultant will tell you that you must be conservative on your projections of future earnings and using the inflation rate would be acceptable. When these plans diverted pension monies they made up the difference by estimating future earnings at a higher rate. Then as the years passed and elected officials found this new source of funds the practice continued until some states were projecting future earnings at 8% even though current inflation has been less than 3% for most of the past two decades. If I save $1,000 per year at 3% for 30 years I have $47,000 but if I use 8% I have $113,000.
Please understand that over the years many of the pensioners were given retirement benefits in lieu of wage increases. This allowed the states to continue on their spending spree by pushing off commitments to the later years. Well the later years are here. It is time to pay the piper. Since states are not allowed to declare bankruptcy they must come up with a way to resolve this problem and most will have to reduce benefits and people are not going to be happy about this. Some have suggested that congress pass the appropriate laws to allow states to declare bankruptcy but many say this could be unconstitutional.
Earlier I mentioned that public pensions are in worse shape than private pensions and the reason for that lies in the negotiating process. If you own a company you are looking at your money or your stockholders money when you renew your pension contracts, If you are in the public sector you are using public money. Which do you think you are more likely to covet?
Let us look at an example. Suppose there is an election for county commissioner. The union people select a candidate who is partial to their view and campaign for this person. The not only go door to door but they contribute funds for his campaign and he is subsequently elected. Now when it comes time to negotiate a new contract the unions leadership sits down across the table from the person they helped to elect and the two sides decided on how they will divvy up the tax payers money.
This process has been going on in cities and counties across the country for 30 plus years and we now see the results with public pensions having better benefits than the private pensions. Once this cozy arrangement was put in place not only were pension benefits increased but salaries and other benefits like health care were also padded.
For you people in my generation, if this is sounding familiar, don’t be surprised for the federal government has done something similar to social security. The money in social security was used to purchase government bonds and this money was then used for things like bridges and highways. This mixing of government money with social money is known by the happy name of unified federal budget.
In the Minneapolis School District there are 3,300 teachers and 6,700 support staff. 1,500 of the support staff are members of the teachers union. If the teachers select a candidate who will negotiate contracts that are favorable to teachers and then work to get them elected, they have a very good chance of winning. If each teacher and spouse vote for a particular candidate that is 9000 votes. Now if they get their parents to vote that is another 18,000. Next if they have coffee parties and invite the neighbors plus make a small campaign contribution they can just about guarantee a win for their candidate. The proof of this is that
No DFL-endorsed candidate for the board has lost in at least 20 years.
Here are the results from the last school board election and it is easy to see why someone with a 27,000 vote head start will be the likely winner and you can be assured that all the teachers do vote.
3 seats 131 of 131 precincts (100%)
Lydia Lee *
61,623
Jill Davis
58,998
Carla Bates
54,691
Sharon Henry-Blythe *
39,476
Kari Reed
33,118
Doug Mann
28,416
This is why it is necessary for there to be a disinterested third party to negotiate contracts. Some thing similar to arbitration
Romney care
Since Mitt Romney decided to run for president the Massachusetts State Health Care Plan he installed has come under scrutiny. The plans main benefit was that it increased the number of insured from 94% to 98% but at what cost. The first thing that happened was a shift of the cost of health care from the employer to the employee. Between 2005 and 2009 employer cost declined while employee cost increased by 21%. Individual bankruptcy filings increased by 35% from 2007 to 2009. Rising overall costs continued to increase and are expected to double in nine years. The people are wondering if the cost to insure that additional four percent was worth the benefit. Stay tunned!
Econ 101
In economics 101 I learned that S=I. Savings equals Investment. What brought this to my mind was the recent news about the rich paying more in taxes. When a man has a lot of money there are two things he can do with it. First he can spend it and this of course is good for our consumer powered economy. The second is that he can save his money. It is from savings that banks accumulate the money that they lend. When a business wants to invest and expand they need money so they go to the banks for loans. If the banks have customers who have put money in savings then they have money to loan. The more money the banks have to loan the lower interest rate they can charge and the more incentive there is for business to expand. If you take money from a man who has a lot you are taking money right out of the economy and making it more difficult for business to operate. Now every day in the news a different expert comes out saying that businesses create jobs though expansion yet some of these same experts are suggesting that we raise taxes on the rich. Did they never learn about savings equals investments or did they just forget what they learned. Or maybe they just don’t know what they are talking about. I vote for the latter.
Libs
Here is a quote from a recent news item:
PROVO, Utah (ABC 4 News) - A new Harvard University study finds that July 4th parades energize only republicans, help boost voter turnout for GOP candidates and entices children to become conservatives.
Liberals are often accused of being antimilitary and this item highlights that accusation. The question is there any basis for such belief. If we assume that liberals are generally more interested in social programs that is government aid then this would be accurate. Liberals see military expenditures as direct competition for social dollars. Over the years this belief has fostered the idea that liberals see the military as taking away money from social programs. The result is that they have some hesitancy in appropriating funds for defense. Thus the findings of this report seem to accurately portray the liberal position on guns vs butter. They lean toward butter.
PROVO, Utah (ABC 4 News) - A new Harvard University study finds that July 4th parades energize only republicans, help boost voter turnout for GOP candidates and entices children to become conservatives.
Liberals are often accused of being antimilitary and this item highlights that accusation. The question is there any basis for such belief. If we assume that liberals are generally more interested in social programs that is government aid then this would be accurate. Liberals see military expenditures as direct competition for social dollars. Over the years this belief has fostered the idea that liberals see the military as taking away money from social programs. The result is that they have some hesitancy in appropriating funds for defense. Thus the findings of this report seem to accurately portray the liberal position on guns vs butter. They lean toward butter.
Plant
I received an early morning call to come down to the plant right away. When I got there I found a large group of people had gathered outside in the plant parking lot. They were government employees protesting cuts in their pension plan. I asked what they were doing at my plant and wouldn’t they be more effective protesting at the offices of their elected officials. They responded by saying that their officials cannot get any money because people like me don’t want taxes on the rich increased and that is where the money would come from to pay the pensions.
I told them that 30 years ago I was in the same position they are in and I started a business. I used all of my savings plus a second mortgage on my home to get a loan to cover start-up cost. I worked 16 hours a day seven days a week for ten years and built up a successful enterprise. I currently employ 100 people and they are people just like you. They are happy to have jobs with benefits. Now you are here to take money from me to pay you. Would you come into my house and take my belongings? You would never do anything like that but instead you go through the government to come and take my money out of my pocket and put it in your pocket. If you do that it puts my employees at risk as I may have to lay off someone or at best I will not be hiring any new people. I realize that there are some people who inherited large fortunes but most small businessmen like myself, took great financial risk and worked hard to make a comfortable living. Most of us pay 40 to 50% in income taxes while one half of the American people pay no income tax. Look around at your friends and ask yourself which of these friends can offer me a job. Does it really help our country to put my employees economic safety at risk to protect your pensions?
It appears that you were promised more than your employer can give and that is a very sad situation but the answer is not to “tax the rich”. The answer is to get your financial house in order and that will require sacrifice but in the long run it will protect pensions for future employees. Mistakes were made but correcting them by making more mistakes is not the answer. I realize every day that a down turn in the economy or a change in technology can ruin my business but if that happens I will not expect you to take up a collection for me to cover my loss.
There are times when we all need a safety net. This is especially true when unexpected illness or accident arises and we are no longer able to care for ourselves but being shorted on our pension plan is not one of those times.
I told them that 30 years ago I was in the same position they are in and I started a business. I used all of my savings plus a second mortgage on my home to get a loan to cover start-up cost. I worked 16 hours a day seven days a week for ten years and built up a successful enterprise. I currently employ 100 people and they are people just like you. They are happy to have jobs with benefits. Now you are here to take money from me to pay you. Would you come into my house and take my belongings? You would never do anything like that but instead you go through the government to come and take my money out of my pocket and put it in your pocket. If you do that it puts my employees at risk as I may have to lay off someone or at best I will not be hiring any new people. I realize that there are some people who inherited large fortunes but most small businessmen like myself, took great financial risk and worked hard to make a comfortable living. Most of us pay 40 to 50% in income taxes while one half of the American people pay no income tax. Look around at your friends and ask yourself which of these friends can offer me a job. Does it really help our country to put my employees economic safety at risk to protect your pensions?
It appears that you were promised more than your employer can give and that is a very sad situation but the answer is not to “tax the rich”. The answer is to get your financial house in order and that will require sacrifice but in the long run it will protect pensions for future employees. Mistakes were made but correcting them by making more mistakes is not the answer. I realize every day that a down turn in the economy or a change in technology can ruin my business but if that happens I will not expect you to take up a collection for me to cover my loss.
There are times when we all need a safety net. This is especially true when unexpected illness or accident arises and we are no longer able to care for ourselves but being shorted on our pension plan is not one of those times.
War Money
The US went into Afghanistan to take out those who attacked the world trade center and killed innocent people. As time passed the war seemed more distant to people and as they watched the death toll rise and the injury count increase they became more and more disillusioned. Now after ten years polls show that the people want to end the conflict and so one of the reasons they give is the cost. You can dismiss the cost as incidental to the suffering incurred by the people of Afghanistan but the world revolves around money. In a country with a GDP of 60 billion imagine what that 2 billion per week could do for the poor people in Croatia. Hungry people around the world need money. Research needs money. It takes money to provide new industry which provides new jobs. People cannot have freedom without economic freedom. It is US research and US money that is saving millions in Africa from the scourges of AIDS. It is US research and money that has almost rid the world of polio. The point I am making is that there is more to Americans desire for money than just having another car in the garage. Don’t disparage the way Americans deal with money. Using it to fight a war is very low on the priority list of most Americans. We know that war is hell as do the people of Europe but human nature being what it is leads me to believe that there will always be war somewhere. I wonder what the world would be like today if the American people disliked war so much that they opted out of the two world wars. What would your county be like today? Just some things to think about.
Campaign Finance Reform
It is generally known by those who follow politics that money is it’s mother’s milk and money often leads to winning elections which leads to power and power corrupts.
Over my life there have been dozens of attempts at campaign finance reform and all have failed. It reminds me the old adage that the smartest lawyers work for the private market where the big money is and the not so smart work for the government. No matter what kind of scheme the government comes up with the private sector finds a way around it. Most advocates of reform often say that openness is the secret to getting rid of corruption in campaign finance but McCann Feingold did just that and it was struck down by the courts. This bill brought out a rarely used portion of the IRS called section 527 which stated that donors could contribute any amount but they had to be identified as to name and amount.
There are no upper limits on contributions to 527s and no restrictions on who may contribute. There are no spending limits imposed on these organizations; however, they must register with the IRS, publicly disclose their donors and file periodic reports of contributions and expenditures.
Prior to McCann-Feingold soft money (money which comes from organizations and groups rather than political campaigns and parties) contributions could be made without government oversight but that changed with passage of the bill …..see above quote.
The Court then stepped in and declared the bill unconstitutional saying it limited free speech since according to The Court limiting money limits speech. This is based on the premise that the constitution provides that no limit shall be placed on freedom of speech which includes not only oral speech but written or otherwise and the otherwise in todays world means TV ads and that means lots of money.
Elected officials often say that contributors do not affect their votes and that is likely true in most instances. If the official feels particularly strong about an issue the money will not interfere with the vote but on many other issues it may. Big contributors have access and on issues with which the official is not familiar and not interested in the influence can determine a vote. Money----access-----votes.
Over my life there have been dozens of attempts at campaign finance reform and all have failed. It reminds me the old adage that the smartest lawyers work for the private market where the big money is and the not so smart work for the government. No matter what kind of scheme the government comes up with the private sector finds a way around it. Most advocates of reform often say that openness is the secret to getting rid of corruption in campaign finance but McCann Feingold did just that and it was struck down by the courts. This bill brought out a rarely used portion of the IRS called section 527 which stated that donors could contribute any amount but they had to be identified as to name and amount.
There are no upper limits on contributions to 527s and no restrictions on who may contribute. There are no spending limits imposed on these organizations; however, they must register with the IRS, publicly disclose their donors and file periodic reports of contributions and expenditures.
Prior to McCann-Feingold soft money (money which comes from organizations and groups rather than political campaigns and parties) contributions could be made without government oversight but that changed with passage of the bill …..see above quote.
The Court then stepped in and declared the bill unconstitutional saying it limited free speech since according to The Court limiting money limits speech. This is based on the premise that the constitution provides that no limit shall be placed on freedom of speech which includes not only oral speech but written or otherwise and the otherwise in todays world means TV ads and that means lots of money.
Elected officials often say that contributors do not affect their votes and that is likely true in most instances. If the official feels particularly strong about an issue the money will not interfere with the vote but on many other issues it may. Big contributors have access and on issues with which the official is not familiar and not interested in the influence can determine a vote. Money----access-----votes.
Dodd Frank
The innocent eye might have trouble spotting this loophole. The Dodd-Frank bill bans proprietary trading (Page 245: “Unless otherwise provided in this section, a banking entity shall not engage in proprietary trading”) and then appears to make it clear what that means (Page 565: “The term ‘proprietary trading’ means the act of a (big Wall Street bank) investing as a principal in securities, commodities, derivatives, hedge funds, private equity firms, or such other financial products or entities as the comptroller general may determine”).
Regulation proprietary trading under Dodd Frank. There are three weaknesses in the law. First is the words “as a principal”. It is up to the GAO to determine what that means and big banks are already acting as if they know and so the GAO coming in later will likely go along
Second the law allows up to 3% of funds to be invested as proprietary and with big banks this amounts to billions.
Third it encourages big banks to move out of the country since the bill allows for that.
Regulation proprietary trading under Dodd Frank. There are three weaknesses in the law. First is the words “as a principal”. It is up to the GAO to determine what that means and big banks are already acting as if they know and so the GAO coming in later will likely go along
Second the law allows up to 3% of funds to be invested as proprietary and with big banks this amounts to billions.
Third it encourages big banks to move out of the country since the bill allows for that.
Greece
In the Greek parliament the Socialist and Communist control 180 seats and the conservatives control 90.
Greek wages are set at artificially high levels and the result is poverty and unemployment. These effects, however, are partly counteracted by the profligate spending of the Greek government. To finance the spending, the Greek government simply prints bonds. (sound familiar)Transferring new funds to the Greek government, the banking system buys these bonds and uses them as collateral for new loans from the European Central Bank (ECB), which thereby monetizes the government deficit. The Greek government uses the new money to pay for early retirement schemes, an army of public servants and generous social benefits. The Greek economy’s lack of competitiveness is thereby sustained and increased.
Among the benefits are free tuition and text books for all public education.
Free health care for all citizens
Full retirement benefits at age 61and earlier for certain professions. Benefits are 80% of working pay
Government provides disability benefits and unemployment benefits
There are many other strange benefits I will not list except one as an example. If you are a hair dresser you can retire at age 50 because it is deemed a hazards profession
To quote Margaret Thatcher: when you have a socialist government sooner or later you run out of other people’s money
Greek wages are set at artificially high levels and the result is poverty and unemployment. These effects, however, are partly counteracted by the profligate spending of the Greek government. To finance the spending, the Greek government simply prints bonds. (sound familiar)Transferring new funds to the Greek government, the banking system buys these bonds and uses them as collateral for new loans from the European Central Bank (ECB), which thereby monetizes the government deficit. The Greek government uses the new money to pay for early retirement schemes, an army of public servants and generous social benefits. The Greek economy’s lack of competitiveness is thereby sustained and increased.
Among the benefits are free tuition and text books for all public education.
Free health care for all citizens
Full retirement benefits at age 61and earlier for certain professions. Benefits are 80% of working pay
Government provides disability benefits and unemployment benefits
There are many other strange benefits I will not list except one as an example. If you are a hair dresser you can retire at age 50 because it is deemed a hazards profession
To quote Margaret Thatcher: when you have a socialist government sooner or later you run out of other people’s money
Keynes
Most Liberals follow the economic ideas of John Maynard Keynes. Keynes said that when the economy is in the slumps the government should deficit spend and then in good time the government should collect money and pay back the debt. I always felt this was a good way to do things but unfortunately in practice the government was only half Keynesian. In down times they would spend the country into debt but in good times they would not repay the debt. Instead they started up new programs to provide benefits and the net result is we have too many programs and too much debt. Surprise!
It is another one of those ideas that looks good on paper but doesn’t work in the real world, sort of like socialism. When elected officials see some extra money they cannot control themselves and must spend it to gain votes in the next election. Then the people who get the benefits reelect them. We have the government we deserve. It seems the only way to get people to behave in a responsible manner is through force and thus ideas like The Balanced Budget Amendment and term limits are gaining in popularity. They are both bad ideas but considered the lesser of two evils. It seems there is not a lot of difference between our elected officials and our children.
It is another one of those ideas that looks good on paper but doesn’t work in the real world, sort of like socialism. When elected officials see some extra money they cannot control themselves and must spend it to gain votes in the next election. Then the people who get the benefits reelect them. We have the government we deserve. It seems the only way to get people to behave in a responsible manner is through force and thus ideas like The Balanced Budget Amendment and term limits are gaining in popularity. They are both bad ideas but considered the lesser of two evils. It seems there is not a lot of difference between our elected officials and our children.
Tax the rich
Last year when the Democrats had large majorities in both the house and the senate a proposal by Senator Bernie Sanders of Vermont and Representative Jan Schakowsky of Illinois to raise the tax rate from 35% to 45% on income over one million dollars was presented. This was rejected by the Democratic majorities before it was even put to a vote. After the election when the Republicans took control of the house the Democrats then put forth a plan to raise taxes on millionaires knowing that the Republicans would oppose it and then they could say the Republicans refuse to the tax the rich.
Velocity of Money
Economics 101 tells us that one way to measure the Gross Domestic Product (GDP) is to multiply the money supply by the velocity of money. The money supply used for this formula is cash, checking accounts and savings accounts and is called M3. The velocity of money means how many times each dollar is spent. Let’s say I pay a painter to paint my porch $100 and he uses $80 to buy paint and the paint store spends $20 to stock the paint. My original $100 has turned into $200 and the velocity of money is 2. If there is 700 billion in the money supply (M3) then MV = 1,400 billion and that equals GDP.
Recently in the news there has been a lot of discussion about Quantitative Easing (QE). The Federal Reserve Bank also known as the Central Bank last year had QE1 and this year QE2. The Fed adds money to the account of large banks and they in turn use this to purchase Fed bonds. The bank gets the money at zero interest and buys bonds that pay 3 or 4% interest. As long as that is all that is done the money supply does not increase so the threat of inflation is not increased. However banks are allowed to create money. If the banks instead of buying Fed bonds would loan this money out then the money supply would increase. This happens because banks are only required to hold 10% in reserve to cover their loans. It works like this. The bank gets $100 from the Fed and then it loans out $90 and the money supply increases by $90. Up to this point the banks have not been loaning since they prefer the 3% no risk return from the Fed as opposed to a higher risk to a private party. When the economy recovers from this slump and the banks start lending to business then the money supply will increase rapidly and inflation will follow.
Recently in the news there has been a lot of discussion about Quantitative Easing (QE). The Federal Reserve Bank also known as the Central Bank last year had QE1 and this year QE2. The Fed adds money to the account of large banks and they in turn use this to purchase Fed bonds. The bank gets the money at zero interest and buys bonds that pay 3 or 4% interest. As long as that is all that is done the money supply does not increase so the threat of inflation is not increased. However banks are allowed to create money. If the banks instead of buying Fed bonds would loan this money out then the money supply would increase. This happens because banks are only required to hold 10% in reserve to cover their loans. It works like this. The bank gets $100 from the Fed and then it loans out $90 and the money supply increases by $90. Up to this point the banks have not been loaning since they prefer the 3% no risk return from the Fed as opposed to a higher risk to a private party. When the economy recovers from this slump and the banks start lending to business then the money supply will increase rapidly and inflation will follow.
college
The only reason to go to college is to get a diploma. The only reason to get a diploma is that employers require one. Let’s remove that requirement and say that when you applied for a job, no one asked you what kind of formal education you have but instead they spent two full days interviewing you. Now let’s take two people. The first goes to college and gets a BA. To do this requires about 15 hours a week of class time plus another 30 hours per week in study time. This continues for four years. Now the second person spends 45 hours per week in self-study using the Internet. Let’s say the position is for an engineer.
What can we deduce about the character of the second person? He has to be at least as smart as the first. He has to be a self-motivator. He has to be very disciplined.
Now let’s suppose you interviewed these two people and found them to be comparable. Would you have a bias toward one because he had a diploma? Perhaps you would be biased toward the self-educated person. Point is that the diploma is only there to help perspective employers choose applicants.
Why bother with all this? It’s simple. It’s a matter of money. The college person graduates with a large debt and the self-educated person does not.
I personally can tell you that without a doubt, I would choose the self-educated person because anybody that can do this on their own, has all the qualities I want in an employee and they have demonstrated that they have these qualities.
I admit that I have a personal prejudice in favor of kids who work their way through school vs those who have parents who pay their way. I realize I am generalizing here but that is my bias.
What can we deduce about the character of the second person? He has to be at least as smart as the first. He has to be a self-motivator. He has to be very disciplined.
Now let’s suppose you interviewed these two people and found them to be comparable. Would you have a bias toward one because he had a diploma? Perhaps you would be biased toward the self-educated person. Point is that the diploma is only there to help perspective employers choose applicants.
Why bother with all this? It’s simple. It’s a matter of money. The college person graduates with a large debt and the self-educated person does not.
I personally can tell you that without a doubt, I would choose the self-educated person because anybody that can do this on their own, has all the qualities I want in an employee and they have demonstrated that they have these qualities.
I admit that I have a personal prejudice in favor of kids who work their way through school vs those who have parents who pay their way. I realize I am generalizing here but that is my bias.
End war
As the cold war came to an end something called the Peace Dividend came into play. This was the extra money the government would have when the defense budget was cut. During the Clinton years the military was decreased from 2.1 million to 1.3 million. If we abruptly withdraw the troops from Afghanistan will this add to the unemployment? What jobs will be available for these servicemen. Will the money we save be applied to the deficit (ha) or will it go for more government programs. Will the money we paid the serviceman in salary put him on unemployment and pay for health insurance for some poor family.
Fisa
Just like the changes made by Clinton in the 90’s effected the home mortgage crisis of the past couple of years so did the changes made by the Church Commission of the 70’s effect our military actions of today.
For those who don’t remember the Church committee it was designed to rein in the power of the CIA as they had been caught using illegal tactics investigating US citizens. While this was well and good the committee went on to limit the activities of the CIA in foreign intelligence using the Foreign Intelligence Surveillance Act of 1978 (FISA). It was not designed to effect activities outside the country but it did. The net result was that the CIA people no longer dealt with unsavory characters around the world and in the process lost valuable contacts which led to loss of valuable information.
Fast forward to today. People are questioning why the US did not know about the 9-11 disaster in advance or why we seem to be behind the curve on so many incidences. It is because we cut off our information channels years ago in an attempt to control the activities of the CIA which many thought were unacceptable. Even today the use of drones relies on observers on the ground and this requires that we have troops on the ground. Perhaps if we had more secret contacts we could be using them to find targets instead of our own troops.
Laws that are passed today may have negative effects many years from now. Even something like waterboarding may one day come back to haunt us. While we are taking the high ground today will we one day regret it.
For those who don’t remember the Church committee it was designed to rein in the power of the CIA as they had been caught using illegal tactics investigating US citizens. While this was well and good the committee went on to limit the activities of the CIA in foreign intelligence using the Foreign Intelligence Surveillance Act of 1978 (FISA). It was not designed to effect activities outside the country but it did. The net result was that the CIA people no longer dealt with unsavory characters around the world and in the process lost valuable contacts which led to loss of valuable information.
Fast forward to today. People are questioning why the US did not know about the 9-11 disaster in advance or why we seem to be behind the curve on so many incidences. It is because we cut off our information channels years ago in an attempt to control the activities of the CIA which many thought were unacceptable. Even today the use of drones relies on observers on the ground and this requires that we have troops on the ground. Perhaps if we had more secret contacts we could be using them to find targets instead of our own troops.
Laws that are passed today may have negative effects many years from now. Even something like waterboarding may one day come back to haunt us. While we are taking the high ground today will we one day regret it.
Paul Revere
Last week an event occurred that reminded me of something that happened to Hilary Clinton right after her husband was elected president. I will get to the event later. When Hilary became first lady one of the first public things she did was to object to poor people having to pay for immunizations. She announced that the government would pay. Only later did she find out that all communities offered shots at no cost to those who could not afford them. The whole thing just quietly went away and that was that.
Now to last week: Sara Palin noted that Paul Revere rode to Lexington to warn the British and the intellectual elite in the east immediately pounced on her remarks. It was later revealed that most of these intellectuals had confused what happened with the poem by Longfellow and within two days the whole thing disappeared from the news.
Revere rode quietly from town to town not wanting to alert the British troops but he did warn local leaders who were mostly British colonist about the planned moves of the British Army. He most certainly did not yell that the British were coming. The press seemed to have confused the colonist with the army or at least considered them on in the same.
This sort of thing happens to the press on a regular basis but no one makes a big deal out of it and that’s OK with me since they are not public officials and I take what they say with some degree of doubt. More and more people are distrusting of the press.
Now to last week: Sara Palin noted that Paul Revere rode to Lexington to warn the British and the intellectual elite in the east immediately pounced on her remarks. It was later revealed that most of these intellectuals had confused what happened with the poem by Longfellow and within two days the whole thing disappeared from the news.
Revere rode quietly from town to town not wanting to alert the British troops but he did warn local leaders who were mostly British colonist about the planned moves of the British Army. He most certainly did not yell that the British were coming. The press seemed to have confused the colonist with the army or at least considered them on in the same.
This sort of thing happens to the press on a regular basis but no one makes a big deal out of it and that’s OK with me since they are not public officials and I take what they say with some degree of doubt. More and more people are distrusting of the press.
Go along
During the 2010 elections, controversy erupted in the Delaware Republican primary for US Senate. The establishment candidate Michael Castle was challenged by Tea Party favorite Christine O’Donnell. Castle was the going away favorite to win the seat for the Republicans but when O’Donnell defeated him in the primary she was unable to beat the Democrat and the Republicans lost the seat. Establishment experts like former Bush advisor Carl Rove predicted this would happen and they were upset.
I bring this up to point out that most politico gurus want to win the seat regardless of what the candidate stands for and it is this idea I want to examine further. If you are a newly elected official it will not be long before you face your first real dilemma. A situation will arise where your personal beliefs will be in conflict with what your constituents believe. At that point you can either follow your heart and risk not being reelected or go with the crowd and be reelected or you can resign. In most cases the choice is to go with the crowd. The reasoning behind this is that if you are reelected you can have time to bring the crowd around to your way of thinking but if you are not reelected you lose the power that comes with office to make changes.
What happens over time is that you move the crowd slightly in your direction and the crowd moves you a good deal in their direction. The long term result is after many years you have moved so far away from where you started that you no longer have any strong personal convictions. You are always getting reelected but you are just going along to get along. All your bright eyed bushy tailed idealism is long gone and you are just another politician.
I bring this up to point out that most politico gurus want to win the seat regardless of what the candidate stands for and it is this idea I want to examine further. If you are a newly elected official it will not be long before you face your first real dilemma. A situation will arise where your personal beliefs will be in conflict with what your constituents believe. At that point you can either follow your heart and risk not being reelected or go with the crowd and be reelected or you can resign. In most cases the choice is to go with the crowd. The reasoning behind this is that if you are reelected you can have time to bring the crowd around to your way of thinking but if you are not reelected you lose the power that comes with office to make changes.
What happens over time is that you move the crowd slightly in your direction and the crowd moves you a good deal in their direction. The long term result is after many years you have moved so far away from where you started that you no longer have any strong personal convictions. You are always getting reelected but you are just going along to get along. All your bright eyed bushy tailed idealism is long gone and you are just another politician.
Guns
When guns are captured from criminals in Mexico they are examined and if it appears they might be from the US they are sent back to the US. Upon examining these returned guns it appeared that nine out of ten were made in the US. Using this information Hilary Clinton said:
EXCLUSIVE: You've heard this shocking "fact" before -- on TV and radio, in newspapers, on the Internet and from the highest politicians in the land: 90 percent of the weapons used to commit crimes in Mexico come from the United States.
-- Secretary of State Hillary Clinton said it to reporters on a flight to Mexico City.
Later when more facts were available and all guns were checked the number that came from the US was 17%. By that time Hilary had made the argument that the drug problem was just as much the fault of the US as it was the fault of Mexico.
Shortly after that the AFT decided to send US made guns to Mexico hoping to keep track of these guns and lead them to the criminals. The operation was called Fast and Furious and some 2,500 guns were sent into Mexico. Unfortunately the government lost track of the guns and one of them was used to kill a border patrol agents.
There was an attempted cover up and it looks like the head of the ATF will lose his job.
Up to this point what I have stated is factual. Now I will move into speculation. Some people who are biased against Hilary suggest that she encouraged this operation in order to back up her claim that many guns come from the US. We will see how this evolves over the next few weeks. Some have suggested that if the economy continues to trend downward and Obama looks vulnerable that Hilary might challenge him for the nomination in 2012. These same people think that if it looks like Hilary might consider this the Obama administration will leak that it was Hilary who encourage the ATF to move these guns into Mexico. Is this dirty politics or what?
EXCLUSIVE: You've heard this shocking "fact" before -- on TV and radio, in newspapers, on the Internet and from the highest politicians in the land: 90 percent of the weapons used to commit crimes in Mexico come from the United States.
-- Secretary of State Hillary Clinton said it to reporters on a flight to Mexico City.
Later when more facts were available and all guns were checked the number that came from the US was 17%. By that time Hilary had made the argument that the drug problem was just as much the fault of the US as it was the fault of Mexico.
Shortly after that the AFT decided to send US made guns to Mexico hoping to keep track of these guns and lead them to the criminals. The operation was called Fast and Furious and some 2,500 guns were sent into Mexico. Unfortunately the government lost track of the guns and one of them was used to kill a border patrol agents.
There was an attempted cover up and it looks like the head of the ATF will lose his job.
Up to this point what I have stated is factual. Now I will move into speculation. Some people who are biased against Hilary suggest that she encouraged this operation in order to back up her claim that many guns come from the US. We will see how this evolves over the next few weeks. Some have suggested that if the economy continues to trend downward and Obama looks vulnerable that Hilary might challenge him for the nomination in 2012. These same people think that if it looks like Hilary might consider this the Obama administration will leak that it was Hilary who encourage the ATF to move these guns into Mexico. Is this dirty politics or what?
Tea Party
There are many reasons attributed to the rise of the Tea Party but I think they can all be put into one category called corruption. We have politicians who are influenced by lobbyist, we have CEO’s who have huge benefits because the sit on each other’s board and give raises to one another, we have government agencies in bed with the people they regulate, we have Wall Street bankers using inside information to pad their pockets, we have political action committees (PAC’s) using money to influence elections, we have big unions using dues to elect people who will repay them with taxpayer money, and finally we have elected officials who say one thing to get elected and do another thing when in office.
For many years this type of behavior went ahead without challenge but the people finally got fed up and begin to speak up. At first these people were not considered a threat to the establishment when Pelosi referred to them as astroturf, but they soon realized that this group was not business as usual. The 2010 elections were a wakeup call to those in office and the slow economy has more and more people listening to these Tea Partiers. These people do not see themselves as members of a political party but rather as citizens concerned about the overall morality of the country. They believe that the America they grew up with is disappearing and they don’t like it.
For many years this type of behavior went ahead without challenge but the people finally got fed up and begin to speak up. At first these people were not considered a threat to the establishment when Pelosi referred to them as astroturf, but they soon realized that this group was not business as usual. The 2010 elections were a wakeup call to those in office and the slow economy has more and more people listening to these Tea Partiers. These people do not see themselves as members of a political party but rather as citizens concerned about the overall morality of the country. They believe that the America they grew up with is disappearing and they don’t like it.
Polls
Polls show that the American people are getting tired of the war in Afghanistan. I believe the reason for this is a misunderstanding between the civilian leadership and the military leadership. It is up to the President to set out the strategy and the military to determine the tactics. For example, suppose the President would say to the generals that we want to destroy the poppy fields and encourage the farmers to grow food products. The generals would then respond by saying we can do that and we will need 50,000 troops and two years. The failure in Viet Nam was a lack of strategy and we are in the same situation in Afghanistan. Obama told the generals what he wanted them to do and they said they need 60,000 troops and Obama said you can have 30,000 and they accepted that. They should have come back to the President and said if you are only sending half what we need then you must change your strategy. McChrystal tried to do this but the President would not meet privately with him for six months so he went ahead with the 30,000.
This same thing happened in Viet Nam. General Westmoreland asked for 100,000 troops and President Johnson sent 36,000 and the general accepted that. Unless the strategy was changed this was a mistake and we seem to be making the same mistake again.
This same thing happened in Viet Nam. General Westmoreland asked for 100,000 troops and President Johnson sent 36,000 and the general accepted that. Unless the strategy was changed this was a mistake and we seem to be making the same mistake again.
Stimulus
On February of 2009 the Obama administration passed the Stimulus Bill of 787 billion dollars. They predicted that passing this would keep unemployment below 8% but then it went to over 10%. They responded by saying that the economy was worse than they expected even though he had previously stated that the economy was the worst since the Great Depression. Last week the president said that he had created 2 million jobs in the past 15 months and attributed this to the stimulus. Assuming that is true we do the math and discover that each job cost the government $390,000. This does not count the second stimulus called QE2 which passed last November for 600 billion more. If this is the way we create jobs and we currently have 15 million people unemployed we must spend 5 trillion more to get jobs for these people. The fed has printed up 2.5 trillion in the last two years so I guess they could print up another 5 trillion. The reason I am going through this exercise is to point out that the average person does not have to analyze the situation to know that there is something not right about just printing money and handing it out to friends to spend. You can just use your common sense and know that this is going to lead to some serious problems not the least of which is inflation. I know that the average working stiff can see through this charade.
Frank
Barney Frank was in congress when the Community Investment Act was passed. This was one of four Acts passed during the late 70’s and early 80’s that force banks to make home loans to people who were not qualified. These loans were backed by Fannie Mae and Freddie Mac and were designed to make the American Dream of home ownership available to everyone. Frank continued to defend the actions of these two agencies throughout the years preceding the big mortgage crisis of 2008. Once the collapse came and he had to admit his err in judgment he was on TV and here is a quote from that interview:
So, as I waited to be interviewed on a TV show last August, I was surprised and pleased to hear Mr. Frank concede that he had erred: “I hope by next year we’ll have abolished Fannie and Freddie” he said, referring to the two government sponsored enterprises (GSEs), “... it was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.” Then he added, “I had been too sanguine about Fannie and Freddie.
The dictionary definition of sanguine is Cheerfully optimistic. That interview was on August of 2010. In the November elections following his admission of bad judgment he was reelected.
On Tuesday, voters in the United States went to the polls for midterm elections. The entire House of Representatives and one-third of the Senate were up for grabs and, when the polls closed, internet gambling champion Barney Frank (D-MA) was reelected by a 54% vote. This was an election when the Republicans won house seats in record numbers
The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion
The top six executives of the two mortgage giants, Fannie Mae and Freddie Mac, received a combined total of $35.4 million during 2009 and 2010
We complain about the corruption in government but we keep reelecting the same people. The above illustrates the money he cost the taxpayers but does not include the pain and suffering inflicted upon all those poor people who were promised their dream home.
So, as I waited to be interviewed on a TV show last August, I was surprised and pleased to hear Mr. Frank concede that he had erred: “I hope by next year we’ll have abolished Fannie and Freddie” he said, referring to the two government sponsored enterprises (GSEs), “... it was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.” Then he added, “I had been too sanguine about Fannie and Freddie.
The dictionary definition of sanguine is Cheerfully optimistic. That interview was on August of 2010. In the November elections following his admission of bad judgment he was reelected.
On Tuesday, voters in the United States went to the polls for midterm elections. The entire House of Representatives and one-third of the Senate were up for grabs and, when the polls closed, internet gambling champion Barney Frank (D-MA) was reelected by a 54% vote. This was an election when the Republicans won house seats in record numbers
The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion
The top six executives of the two mortgage giants, Fannie Mae and Freddie Mac, received a combined total of $35.4 million during 2009 and 2010
We complain about the corruption in government but we keep reelecting the same people. The above illustrates the money he cost the taxpayers but does not include the pain and suffering inflicted upon all those poor people who were promised their dream home.
Cobalt Volt
When I read that GM does not release sales numbers on the Volt I got a little curious and did some research and found out that others were also curious. Several investigations led to the conclusion that May sales were somewhere between 400 and 500. Since the Chevy Cruise sold 22,700 during that same month I wondered why sales of the Volt were so low and did some simple calculations.
I have a Chevy Cobalt and I get 30 miles per gallon. A new Cobalt cost about $14,000.
A new Volt gets 60 miles per gallon and cost $32,000 after the $7,500 government rebate. Since I drive 24,000 miles per year I use 800 gallons of gas. The Volt would use only half that much for a savings of 400 gallons per year or 2,000 gallons in five years. Since the Volt cost $18,000 more than my Cobalt the price of gas would have to be $9 per gallon for me to recap my investment. In five years I have driven 120,000 miles and it would be time to purchase new batteries for my Volt since GM only guarantees them for 100,000 miles. New batteries cost $8,000. This does not include the cost of charging up my Volt every night or more likely for my old brain forgetting to charge.
After careful investigation I have come to the conclusion that I am not ready to dump my Cobalt for a Volt.
I have a Chevy Cobalt and I get 30 miles per gallon. A new Cobalt cost about $14,000.
A new Volt gets 60 miles per gallon and cost $32,000 after the $7,500 government rebate. Since I drive 24,000 miles per year I use 800 gallons of gas. The Volt would use only half that much for a savings of 400 gallons per year or 2,000 gallons in five years. Since the Volt cost $18,000 more than my Cobalt the price of gas would have to be $9 per gallon for me to recap my investment. In five years I have driven 120,000 miles and it would be time to purchase new batteries for my Volt since GM only guarantees them for 100,000 miles. New batteries cost $8,000. This does not include the cost of charging up my Volt every night or more likely for my old brain forgetting to charge.
After careful investigation I have come to the conclusion that I am not ready to dump my Cobalt for a Volt.
Mortgage crisis
I have written before on how the mortgage crisis had its beginning and I would like to expand on that in more detail. Recall that it all began in the 1970’s when it was discovered that mortgage companies were red lining. This means that in certain neighborhoods the income levels were so low that loans were not offered. Bankers would take a red pencil and draw lines around these neighborhoods and did not offer loans to those people. In order to rectify this apparent discrimination the government passed four laws during the 70’s and 80’s. The first was the Home Mortgage Disclosure Act (HMDA) which required banks to report on their loans. I use the term bank when in fact most home loans were provided by Savings and Loan Institutions which today are called bank. Because of this law by 1977 the government had all the information it needed to prove discrimination by banks against poor people. The second was the Community Reinvestment Act (CRA). This law required the banks to make loans to poor people and there were stiff penalties if they did not. In order for banks to comply without losing money they had to find a way to charge more for these loans. Third, the Deregulatory and Monetary Control Act (DIDMCA) was passed in 1980. This allowed banks to charge more for higher risk loans. Forth, in 1982 the Alternative Mortgage Transaction Parity Act (AMTPA) passed and it allowed banks to charge variable interest rates using balloon payments. And with the passage of these four Acts the sub-prime mortgage was born.
It seems that it never occurred to the law makers that banks could not afford to give loans to people who could not repay them. This is the result of law makers who have no business experience. Some of the same law makers who passed the above Acts are now saying that the banks are responsible for the crisis.
So what did the banks do with these loans? They sold them to someone else and said you worry about defaults. This led to the securitization of loans. This means that the loans were bundled together and sold as security investments like mutual funds. These bundles were called Collateralized Debt Obligations (CDO’s). These CDO’s can be bundles of any type but when they contain mortgages they are called Mortgage Backed Securities (MBS’s). In the days before the Acts a banker would meet with the borrower and set up a loan that was based on the ability to pay since the loan would stay in the bank and the bank had a long term interest in the safety of the loan. With the advent of CDO’s this all changed.
During the years when many of these variable loans were sold the interest rate on a 30 year mortgage held in the 5 to 7% range which was historically low and thus allowed many people to take on larger mortgages. Then in 2003 Greenspan started raising the fed fund rates and he raised them 17 times going from 1% to 5.25% which caused the variable home loans to increase by over 4%. What does this look do to the loan? Since the prime rate was 5% and the sub-prime was 10% this now increased each by 4% so the sub-prime went to 14%. You do the math and you will quickly understand why so many poor people had to default. Just another example of the unexpected consequences of good intentions. Isn’t government grand!
It seems that it never occurred to the law makers that banks could not afford to give loans to people who could not repay them. This is the result of law makers who have no business experience. Some of the same law makers who passed the above Acts are now saying that the banks are responsible for the crisis.
So what did the banks do with these loans? They sold them to someone else and said you worry about defaults. This led to the securitization of loans. This means that the loans were bundled together and sold as security investments like mutual funds. These bundles were called Collateralized Debt Obligations (CDO’s). These CDO’s can be bundles of any type but when they contain mortgages they are called Mortgage Backed Securities (MBS’s). In the days before the Acts a banker would meet with the borrower and set up a loan that was based on the ability to pay since the loan would stay in the bank and the bank had a long term interest in the safety of the loan. With the advent of CDO’s this all changed.
During the years when many of these variable loans were sold the interest rate on a 30 year mortgage held in the 5 to 7% range which was historically low and thus allowed many people to take on larger mortgages. Then in 2003 Greenspan started raising the fed fund rates and he raised them 17 times going from 1% to 5.25% which caused the variable home loans to increase by over 4%. What does this look do to the loan? Since the prime rate was 5% and the sub-prime was 10% this now increased each by 4% so the sub-prime went to 14%. You do the math and you will quickly understand why so many poor people had to default. Just another example of the unexpected consequences of good intentions. Isn’t government grand!
Baby boomers
They say that the unemployment rate is 9.1% and 15 million people are out of work. What I have not seen is anyone take into account the effect of the baby boomers retiring. Since 10,000 retire every day, they are no longer counted as part of the work force, so they reduce the unemployment rate. If we added them back at 10,000 per day that is 3.65 million per year that would increase the number of unemployed to 18.65 million and the unemployment rate to 11.3%. While these baby boomers are making the social security and Medicare problems worse they are making the unemployment problem look better. I wonder when someone in the press will realize this fact.
Fair
The controversy surrounding the case of Anthony Wiener points out an interesting characteristic of our human nature in that we tend to judge a person’s behavior on the bases of how much we like them. Moral, ethical and legal activities take a back seat to personality. Wiener who sent naked pictures of himself to young women is being asked to resign even though there is precedent to the contrary in the case of former President Clinton. Wiener sent the pictures to several different women on his Face Book site and then when questioned about it proceeded to lie to the public numerous times over a ten day period before finally admitting to the deed. Now fortunately for most of us lying is not a crime. President Clinton, on the other hand, had sexual relations with a young woman, who was working in the White House while he was president. He then said on national television that he did not have sexual relations but it was later proven that she performed oral sex on him. This led to the ridiculous conclusion, that she was having sex with him but he was not having sex with her. He then compounded the problem by saying under oath that he did not have sex with her. Now lying under oath constitutes a crime.
The reason given that Wiener is being treated more harshly than Clinton, is that people generally do not like Wiener but they do like Clinton. This brings me back to the point of human nature. We tend to make allowances for people we like and it goes even further in that people who look presentable tend to get a better reception. Many studies have shown that men who are tall and women who are attractive are looked upon in a favorable manner. Just another example of the many ways that life is not fair. When a child is treated unfairly and dad tried to console him by telling him that life is not fair, he is just getting the child prepared to face the world as it is. When legislators run around passing laws to make life fair they are going up against human nature and more times than not it doesn’t work. How many times have you heard the phrase, “you can’t legislate morality”.
The reason given that Wiener is being treated more harshly than Clinton, is that people generally do not like Wiener but they do like Clinton. This brings me back to the point of human nature. We tend to make allowances for people we like and it goes even further in that people who look presentable tend to get a better reception. Many studies have shown that men who are tall and women who are attractive are looked upon in a favorable manner. Just another example of the many ways that life is not fair. When a child is treated unfairly and dad tried to console him by telling him that life is not fair, he is just getting the child prepared to face the world as it is. When legislators run around passing laws to make life fair they are going up against human nature and more times than not it doesn’t work. How many times have you heard the phrase, “you can’t legislate morality”.
Trees
Sino Forrest is a company that has millions of acres of trees on plantations in China. They have been accused of overstating their inventory, so to calm the waters they have hired Price Waterhouse Accounting to audit their books.
This is another one of those cases that I have referred to in the past where the accounting firm takes the word of the company to determine the value of the company. To review when AXA, a French Company wanted to get into the US life insurance market they offered to invest one billion dollars in Equitable Life of NY. Before doing that they spent 20 million appraising Equitable assets. Does anyone believe that Price Waterhouse is going to count the estimated billions of trees owned by Sino Forrest at a cost of millions or will they just go with the current inventory on the books?
If they just go with the current books then hiring this firm is just a PR stunt and in no way will determine if they are over counting inventory or not. It may calm the fears of ordinary investors but the pros know better. I bring this up to show why ordinary investors should stick to broad based mutual funds since ordinary people do not have the time to look into the accuracy of a company’s inventory data.
This is another one of those cases that I have referred to in the past where the accounting firm takes the word of the company to determine the value of the company. To review when AXA, a French Company wanted to get into the US life insurance market they offered to invest one billion dollars in Equitable Life of NY. Before doing that they spent 20 million appraising Equitable assets. Does anyone believe that Price Waterhouse is going to count the estimated billions of trees owned by Sino Forrest at a cost of millions or will they just go with the current inventory on the books?
If they just go with the current books then hiring this firm is just a PR stunt and in no way will determine if they are over counting inventory or not. It may calm the fears of ordinary investors but the pros know better. I bring this up to show why ordinary investors should stick to broad based mutual funds since ordinary people do not have the time to look into the accuracy of a company’s inventory data.
Holocaust
Once in a while, sad to say that it is so rare, I come across a story that makes me proud to be a member of the human race. A man by the name of Felix Zandman was hidden away in a small underground room along with his uncle and two other Jews in Poland during WW 11. The room was so small they had to take turns lying down and deal with their personal modesty as best they could for the 17 months they lived in this tiny space. To pass the time the uncle taught the young Felix higher math by rote. After the war Felix went on to college and later immigrated to the US where he founded an electronics company, Vishay International. He died this week at the age of 83, a self-made billionaire. Have you ever wondered what the other 6 million Jews, who were killed in the Holocaust, might have contributed to the world, had they lived? We all have heard it said that we would never allow this to happen again but things are developing around the world today that cause me concern. I am speaking of the growing sympathy toward the people of Palestine and the threats from some of the Israeli neighbors.
Volt
Here is short but sweet example of American ingenuity resulting in an unexpected consequence based around the good intentions of a government program. It seems that the government is offering a $7,500 tax credit (a credit is money you subtract directly from taxes you owe) so some dealers are buying Volts, taking the credit for themselves and then selling the Volt as a used car with Zero mileage. What a country!
Edwards
The road through life can and usually is bumpy and the case of John Edwards represents a study worth investigating. He was born into a middle class family and was the first member of his family to go to college. He was a good student and continued on through law school. He became a very successful defense attorney and amassed a fortune estimated at 70 million. Later he became a US senator and vice presidential candidate. He married and had 4 children. It was a rags to riches charmed life. He was at the apex of his life when things began to turn around. He wife was dying from cancer when he had a child with a young woman who worked in his office. He denied this but later admitted to the affair. His wife died and he recently was accused of using campaign funds to cover up his affair and is now awaiting trial. All of this is factual and I would like to move into the area of fantasy. There is a place in Matthew where it says that it is easier for a camel to pass through the eye of a needle that it is for a rich man to enter the kingdom of heaven. I believe that if we move 30 years into the future and we see Edwards as an 80 year old looking back on his life that he will say that when he lied about his affair it was the low point of his life and it was a turning point. From that point on he started to understand how life really works and what is really important. He learned after that God doesn’t come into your life through the front door of your ego but through the back door of your shame. At the point where his shame was broadcast on the public airways he felt deep within the beginnings of a new life. As the years past he came to understand that fame and fortune were just phantoms and represented barriers to happiness. It was only after meeting his shame that he began thinking of others and how he could help them and with each passing year he grew into the person he was meant to be. It is not the rich that prevents the rich man from entering a life of happiness but the ego that bloats up when riches come along.
When things are going my way I don’t need anyone. I am self-sufficient and I control my destiny and I am the captain of my ship and I know where I am going and how I will get there. Every one of those I’s in the previous sentence represents the ego. It is only when adversity strikes and misfortune rears her ugly head that I have the opportunity to open my heart to those around me. When my mistakes are made public and my shame is exposed I am on the road to happiness. I may not know it at the time but down the road it will be my salvation. The road of life is filled with strange and unexpected turns. I have faced disappointed many times but in retrospect each was a learning experience.
Back to the real world I believe that Edwards could make a decision to devote the rest of his life to doing pro bono law work for those who cannot afford a top attorney. As the years past and he used his skills to help others his children would slowly regain the respect they once had for him as will those around him.
Presented by Pastor John
When things are going my way I don’t need anyone. I am self-sufficient and I control my destiny and I am the captain of my ship and I know where I am going and how I will get there. Every one of those I’s in the previous sentence represents the ego. It is only when adversity strikes and misfortune rears her ugly head that I have the opportunity to open my heart to those around me. When my mistakes are made public and my shame is exposed I am on the road to happiness. I may not know it at the time but down the road it will be my salvation. The road of life is filled with strange and unexpected turns. I have faced disappointed many times but in retrospect each was a learning experience.
Back to the real world I believe that Edwards could make a decision to devote the rest of his life to doing pro bono law work for those who cannot afford a top attorney. As the years past and he used his skills to help others his children would slowly regain the respect they once had for him as will those around him.
Presented by Pastor John
Medicare
The problem we are encountering with Medicare is the same that we saw with the Bush attempt to fix Social Security. In both situations the cost problem has developed into one of ideology. The Republicans want to privatize the system and the Democrats want to keep these as government plans. As long as they continue to fight this battle ideologically nothing will be done.
I think the Republicans have to concede that now is not the time to privatize. Current Medicare premiums rage from $96.40 per month to $369.10 per month depending on income. The higher amount is for individuals whose income is greater than $200,000 per year. By doing the math it can be shown that there is room for adjustments here. A single person who gets $10,000 per year from social security pays 12% of their income for part B whereas a person who earns $200,000 pays 2.2%. One way to improve the cost problem is to increase the amount paid by higher income people. The second change is to increase the age when people become eligible for Medicare. It was set at age 65 when Medicare was started back in 1965 and has never been changed. This age could gradually be increased as the baby boomers retire.
In addition to the above changes it is also necessary to formally ration benefits. The current Republican plan allows insurance companies to ration and Obama’s plan sets up a committee of 15 government employees to ration. We know that we cannot provide every medical service to every Medicare recipient so the question is how do we ration? The first step is for everyone to understand that we have been rationing health care in both private and public plans for many years and then we can formalize how we ration. Up to now we have been doing this on the sly.
I think the Republicans have to concede that now is not the time to privatize. Current Medicare premiums rage from $96.40 per month to $369.10 per month depending on income. The higher amount is for individuals whose income is greater than $200,000 per year. By doing the math it can be shown that there is room for adjustments here. A single person who gets $10,000 per year from social security pays 12% of their income for part B whereas a person who earns $200,000 pays 2.2%. One way to improve the cost problem is to increase the amount paid by higher income people. The second change is to increase the age when people become eligible for Medicare. It was set at age 65 when Medicare was started back in 1965 and has never been changed. This age could gradually be increased as the baby boomers retire.
In addition to the above changes it is also necessary to formally ration benefits. The current Republican plan allows insurance companies to ration and Obama’s plan sets up a committee of 15 government employees to ration. We know that we cannot provide every medical service to every Medicare recipient so the question is how do we ration? The first step is for everyone to understand that we have been rationing health care in both private and public plans for many years and then we can formalize how we ration. Up to now we have been doing this on the sly.
Chrysler
About a year ago it was announced that General Motors had repaid their government loan but after further investigation it was determined that they used another government loan for the payoff. The CEO of GM was on TV bragging about this loan payoff but when the truth came out he had to run for cover as they stopped the commercial.
Yesterday Vice President Biden announced that Chrysler had repaid its government loan so I was somewhat suspicious. Here is a recent news item.
No one was really surprised that Chrysler posted a quarterly profit — a modest $116 million — this year, technically its first since exiting bankruptcy in 2009, but really the first time it’s been in the black since the mid-2000s.
Now I wondered how they could pay off a 7 billion dollar loan so I looked further into the matter and discovered that Fiat had increased its ownership from 20% to 46% so I figured that Chrysler got the money from Fiat. Now there are 650 million shares of outstanding Chrysler stock and it is values at $8 per share so the book price of the entire company is about 5 billion. If Fiat bought 26% of that it would only inject about 1.2 billion so how could they pay off 7 billion.
Here is another quote:
The Obama administration’s bailout agreement with Fiat gave the Italian car company a “Incremental Call Option” that allows it to buy up to 16% of Chrysler stock at a reduced price. But in order to exercise the option, Fiat had to first pay back at least $3.5 billion of its loan to the Treasury Department. But Fiat was having trouble getting private banks to lend it the money. Enter Obama Energy Secretary Steven Chu who has signaled that he will approve a fuel-efficient vehicle loan to Chrysler for … wait for it … $3.5 billion.
But wait there is more:
So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion.
Oh, and Obama plans to make this “success” a centerpiece of his 2012 campaign.
More smoke and mirrors. Will the American people ever catch on?
Yesterday Vice President Biden announced that Chrysler had repaid its government loan so I was somewhat suspicious. Here is a recent news item.
No one was really surprised that Chrysler posted a quarterly profit — a modest $116 million — this year, technically its first since exiting bankruptcy in 2009, but really the first time it’s been in the black since the mid-2000s.
Now I wondered how they could pay off a 7 billion dollar loan so I looked further into the matter and discovered that Fiat had increased its ownership from 20% to 46% so I figured that Chrysler got the money from Fiat. Now there are 650 million shares of outstanding Chrysler stock and it is values at $8 per share so the book price of the entire company is about 5 billion. If Fiat bought 26% of that it would only inject about 1.2 billion so how could they pay off 7 billion.
Here is another quote:
The Obama administration’s bailout agreement with Fiat gave the Italian car company a “Incremental Call Option” that allows it to buy up to 16% of Chrysler stock at a reduced price. But in order to exercise the option, Fiat had to first pay back at least $3.5 billion of its loan to the Treasury Department. But Fiat was having trouble getting private banks to lend it the money. Enter Obama Energy Secretary Steven Chu who has signaled that he will approve a fuel-efficient vehicle loan to Chrysler for … wait for it … $3.5 billion.
But wait there is more:
So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion.
Oh, and Obama plans to make this “success” a centerpiece of his 2012 campaign.
More smoke and mirrors. Will the American people ever catch on?
Tax and spend
As the elected officials in Washington debate how they will solve the budget problems we are faced with two arguments. The Democrats say we must cut spending and raise the tax rates but the Republicans say cut spending and reform the tax laws. Obama wants to raise taxes on those making more than $200,000 and use that money to invest (spend) on education and infrastructure. This is what we used to call tax and spend. His theory is that by spending this money we will cause the economy to grow. We know that the so called shovel ready projects are not ready. It takes years to get environmental approval and planning can only start after these approvals. As far as spending on education this may keep some teachers from getting laid off but there are good reasons to doubt that spending more will improve education.
On the other side there is evidence that shows when you increase taxes on those who provide jobs you slow down the economy. I believe both sides concur that reforming the existing tax law can help. When large corporations pay zero tax it is not because the tax rate is too low it is because there are too many loopholes in the tax code. We could easily lower the corporation tax rate from the current 35% to 25% and eliminate the loopholes and end up with more revenue.
The question remains, is it better for the economy if the government spends our money or is it better if we spend our money. Remember that taxation is merely the transfer of money from one group of people to another group with the government deciding who gets what and from whom. If you are a cynic you see it as taking money from those who earn it and giving it to those who don’t. Most people realize that there are times in the lives of people that they need help and most are ready to give help but when it gets to the point of more people in the wagon than pulling the wagon then no one is helped. Currently there are 310 million people in the US and 40 million receive food stamps, 10 million get unemployment benefits, 58 million on Medicaid and 52 million on social security and if you do the math you see there are more in the wagon than pulling the wagon.
Wake up people!
On the other side there is evidence that shows when you increase taxes on those who provide jobs you slow down the economy. I believe both sides concur that reforming the existing tax law can help. When large corporations pay zero tax it is not because the tax rate is too low it is because there are too many loopholes in the tax code. We could easily lower the corporation tax rate from the current 35% to 25% and eliminate the loopholes and end up with more revenue.
The question remains, is it better for the economy if the government spends our money or is it better if we spend our money. Remember that taxation is merely the transfer of money from one group of people to another group with the government deciding who gets what and from whom. If you are a cynic you see it as taking money from those who earn it and giving it to those who don’t. Most people realize that there are times in the lives of people that they need help and most are ready to give help but when it gets to the point of more people in the wagon than pulling the wagon then no one is helped. Currently there are 310 million people in the US and 40 million receive food stamps, 10 million get unemployment benefits, 58 million on Medicaid and 52 million on social security and if you do the math you see there are more in the wagon than pulling the wagon.
Wake up people!
Medicare Medicaid
The two sides have staked out their claims on how to solve the problem with Medicare and they are both right so regardless of which way we go we will begin to make some headway. The Obama plan is to set up a government committee of 12 members who will decide what treatments are available. The Ryan plan offers vouchers to people who can then purchase a plan through a group of private insurers. Both of these approaches use rationing to reduce cost and that is the only logical way to go. Whenever any benefit is reduced or eliminated there will be good arguments as to why this particular procedure should be allowed but as time passes people will realize that this is the only way to save the program. It comes down to the simple fact that everyone cannot have every procedure that is medically available and someone or some insurance company will have to make these tough choices. Unbeknownst to most people this process of rationing has been going on for many years in both Medicare and private insurance. Last year when the phrase “Death Panels” was coined everyone panicked but upon further evaluation it was revealed that by the way that doctors present options the idea of dying with dignity was often chosen over life extending treatments. It is time for people to grow up and face the fact that there is not enough money to do everything for everyone. Once both political parties have the courage to explain this quandary to their constituents we will begin to take the necessary steps to save Medicare. Let’s hope this happens before the whole program goes down the drain, which by the way is currently scheduled for 2018.
Since Medicaid is financed with ongoing funds from the federal and state governments there is no date when it will go broke but it faces the same cost problems that Medicare does and the same cure will be needed. We must ration. This is a very difficult problem since about one in four Medicaid recipients are in eldercare facilities. There is new technology available that can keep many of these people in their homes. For about $10,000 most houses can have the bath modified to accept people in wheel chairs. Instead of paying out $7,000 per month to stay in a care facility many people can stay in their homes where they would rather be. This is only one example. In the future it may be necessary that families take on more responsibility as they did not that many years ago. People who use Medicaid for their health insurance will have to face rationing just as others in private insurance will face.
Since Medicaid is financed with ongoing funds from the federal and state governments there is no date when it will go broke but it faces the same cost problems that Medicare does and the same cure will be needed. We must ration. This is a very difficult problem since about one in four Medicaid recipients are in eldercare facilities. There is new technology available that can keep many of these people in their homes. For about $10,000 most houses can have the bath modified to accept people in wheel chairs. Instead of paying out $7,000 per month to stay in a care facility many people can stay in their homes where they would rather be. This is only one example. In the future it may be necessary that families take on more responsibility as they did not that many years ago. People who use Medicaid for their health insurance will have to face rationing just as others in private insurance will face.
Mortgage crisis
One of the main reasons that the mortgage fiasco was so big is that it was allowed to develop even though many people warned that there were serious problems. Every time someone or some agency challenged the easy access to a home mortgage they were shot down by accusing them of not wanting poor people to participate in the American Dream of home ownership. The biggest advocates for the loose requirements for home loans were liberals who wanted to help the poor. One of these was Barney Frank, who chairs the House Financial Services Committee, the congressional committee whose job is to oversee the mortgage business. For more than ten years Frank defended mortgage giant Fanny Mae against attacks by promising to make it easier for low income people to get loans.
One group that regularly investigated Fanny Mae was the Office of Federal Housing Enterprise Oversight (OFHEO). Now I would be willing to cut Barney some slack during the early years as this problem developed but at some point he had to know that things were not right. Yet in late 2010, two years after the whole thing blew up, he was asked why he always defended Fanny Mae and he said that he thought the problem was just an adversarial relationship between the regulators at OFHEO and Fanny. This is a very revealing statement as most people would expect there to be or would demand that there be tension between the regulators and the regulated. Frank had been in bed with Fanny for so many years he could not break away even after they were proven to be corrupted.
Lest we just want to blame our elected officials be advised that Frank easily won re-election after the scandal was made public and he is now serving his 31st year in congress.
The people who have been most hurt by the collapse of the housing market were the very poor people that Frank set out to help. This same result has happened over and over since the start of the Great Society which was supposed to help the poor but has time after time hurt more than it helped. This has not deterred liberals from continuing to propose government programs that will help (?) the poor. One more example of the unintended consequence of good intentions.
One group that regularly investigated Fanny Mae was the Office of Federal Housing Enterprise Oversight (OFHEO). Now I would be willing to cut Barney some slack during the early years as this problem developed but at some point he had to know that things were not right. Yet in late 2010, two years after the whole thing blew up, he was asked why he always defended Fanny Mae and he said that he thought the problem was just an adversarial relationship between the regulators at OFHEO and Fanny. This is a very revealing statement as most people would expect there to be or would demand that there be tension between the regulators and the regulated. Frank had been in bed with Fanny for so many years he could not break away even after they were proven to be corrupted.
Lest we just want to blame our elected officials be advised that Frank easily won re-election after the scandal was made public and he is now serving his 31st year in congress.
The people who have been most hurt by the collapse of the housing market were the very poor people that Frank set out to help. This same result has happened over and over since the start of the Great Society which was supposed to help the poor but has time after time hurt more than it helped. This has not deterred liberals from continuing to propose government programs that will help (?) the poor. One more example of the unintended consequence of good intentions.
Rubin
In the past I have discussed the China Wall. This was one of the first things I learned when I got into the financial business. It is a fictitious wall that separated banks into the commercial side and the investment side. The idea is the employees on side should not discuss business with the other side since the commercial side might be tempted to invest customer funds in businesses represented by the investment side. This is what happened in the 20’s and the banks went broke when businesses failed. A law was passed in the 30’s to prevent this from happening again. The law was named after its sponsors Senator Glass and Congressman Steagall. For many years various interested parties tried to repeal Glass-Steagall and in 1999 they succeeded.
The CEO of Travelers Insurance Sanford Weill wanted to merge with Citibank which was run by John Reed but they needed to get rid of Glass-Steagall to allow such a merger. Weill was a mover and shaker and had influence with Fed Chairman Alan Greenspan and Treasury Secretary Robert Rubin and so with their help he was able to push through the repeal. The new company was called Citigroup and was the biggest merger in US history and became the largest financial institution in the world.
Now here is the interesting part. Rubin left the government and got a job with Citicorp and over the next ten years he was paid $115 million while he helped to run the company into the ground.
Here is a quote from the new media:
Rubin made at least $115 million (plus stock options) between 1999 and 2008, before the feds had to inject $45 billion and then guarantee $300 billion of the firm's liabilities to keep the place afloat.
Rubin told the Wall Street Journal in November 2008 that he was worth every penny -- and then some. "I bet there's not a single year where I couldn't have gone somewhere else and made more," he said.
Is this a great country or what!
The CEO of Travelers Insurance Sanford Weill wanted to merge with Citibank which was run by John Reed but they needed to get rid of Glass-Steagall to allow such a merger. Weill was a mover and shaker and had influence with Fed Chairman Alan Greenspan and Treasury Secretary Robert Rubin and so with their help he was able to push through the repeal. The new company was called Citigroup and was the biggest merger in US history and became the largest financial institution in the world.
Now here is the interesting part. Rubin left the government and got a job with Citicorp and over the next ten years he was paid $115 million while he helped to run the company into the ground.
Here is a quote from the new media:
Rubin made at least $115 million (plus stock options) between 1999 and 2008, before the feds had to inject $45 billion and then guarantee $300 billion of the firm's liabilities to keep the place afloat.
Rubin told the Wall Street Journal in November 2008 that he was worth every penny -- and then some. "I bet there's not a single year where I couldn't have gone somewhere else and made more," he said.
Is this a great country or what!
Democracy
A man by the name of Alexander Tyler is credited with saying
"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."
I realize we have a Representative Republic and not a Democracy but the idea intrigues me because in the next election we will find out if the people are wise enough to vote to limit their benefits or will they chose to spend us into bankruptcy.
"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."
I realize we have a Representative Republic and not a Democracy but the idea intrigues me because in the next election we will find out if the people are wise enough to vote to limit their benefits or will they chose to spend us into bankruptcy.
Socialism
I often hear people say that Obama is leading us toward socialism so I looked up the definition of Socialism.
Socialism is an economic system characterized by public ownership and centralized planning of all major industries (manufacturing, services, and energy), banks and insurance companies, agribusiness, transportation, the media, and medical facilities.
As I read that I am astounded that so called educated people believed that such a system would work. I will let my imagination run wild and set up a socialist type of country. First the government owns everything so they can agree to pay everyone the same salary regardless of what the job entails. Brain surgeons and CEO’s make the same as garbage collectors and janitors. That is easy enough to do although it begs the question as to why someone would go through all the training for no extra salary but this is not the tough part. How does the government decide on how many surgeons and how many janitors are needed and then how do they decide who will assume those positions. Next take production of goods and services. How many cars and how many clerks are needed and once again who are these people and how are they selected. Finally who decides who does the selecting?
It is obvious to me that such a system as pure socialism cannot exist in the real world but partial socialism is what most people refer to when they say Obama is tending toward socialism. The argument is how far toward socialism do we want to go. For all of my life the federal government has been assuming more responsibility. It appears that we are at a crossroad and the pendulum is beginning to swing back. Will the people who have become accustom to Big Brother be willing to give up some of their benefits and take on more personal responsibility? We will find out in November 2012.
Socialism is an economic system characterized by public ownership and centralized planning of all major industries (manufacturing, services, and energy), banks and insurance companies, agribusiness, transportation, the media, and medical facilities.
As I read that I am astounded that so called educated people believed that such a system would work. I will let my imagination run wild and set up a socialist type of country. First the government owns everything so they can agree to pay everyone the same salary regardless of what the job entails. Brain surgeons and CEO’s make the same as garbage collectors and janitors. That is easy enough to do although it begs the question as to why someone would go through all the training for no extra salary but this is not the tough part. How does the government decide on how many surgeons and how many janitors are needed and then how do they decide who will assume those positions. Next take production of goods and services. How many cars and how many clerks are needed and once again who are these people and how are they selected. Finally who decides who does the selecting?
It is obvious to me that such a system as pure socialism cannot exist in the real world but partial socialism is what most people refer to when they say Obama is tending toward socialism. The argument is how far toward socialism do we want to go. For all of my life the federal government has been assuming more responsibility. It appears that we are at a crossroad and the pendulum is beginning to swing back. Will the people who have become accustom to Big Brother be willing to give up some of their benefits and take on more personal responsibility? We will find out in November 2012.
Jews
The United States is considered by many as a Judeo-Christian country. While many
Christians believe this, they often forget that the Old Testament is the history of the Jews. If I had to sum up the Old Testament in one sentence, I would say that it is a written record of the Jews searching for the promise land. More than 3000 years ago when Moses, led the Jews out of more than 400 years of slavery in Egypt, the first place he headed was for the promise land. Where is the promise land? It is that area that lies between the rivers Nile and Euphrates and the center of this is the old land of Canaan which is located in and around the present city of Jerusalem.
The Jews basically stayed in this area until about 2500 years ago when the city of Jerusalem was destroyed by the Babylonian army and the Jews were exiled to what is present day Iraq. During the 200 years they remained in Iraq the area around Jerusalem was controlled by many different groups including Persians, who allowed the Jews to return to the promise land
The Jews never had a country and for the next 2000 years they migrated to different parts of the western world where they were treated as second class people. At first it was because of their religion but later it turned into prejudice against them as a race and this was called anti-Semitism. This continued well into the 19th century when the idea of a Jewish homeland called Zionism came into being.
About 100 years ago the area in and around Jerusalem became known as Palestine and some wealthy Jewish businessmen in Europe begin to sponsor settlements in Palestine for Jews.
After WW1 Zionism attracted the interest of many in Europe as a way a getting rid of the Jews and after WW11 the Jews were granted statehood and the country of Israel was founded in 1948 and the Jews finally had a home in the promise land
Christians believe this, they often forget that the Old Testament is the history of the Jews. If I had to sum up the Old Testament in one sentence, I would say that it is a written record of the Jews searching for the promise land. More than 3000 years ago when Moses, led the Jews out of more than 400 years of slavery in Egypt, the first place he headed was for the promise land. Where is the promise land? It is that area that lies between the rivers Nile and Euphrates and the center of this is the old land of Canaan which is located in and around the present city of Jerusalem.
The Jews basically stayed in this area until about 2500 years ago when the city of Jerusalem was destroyed by the Babylonian army and the Jews were exiled to what is present day Iraq. During the 200 years they remained in Iraq the area around Jerusalem was controlled by many different groups including Persians, who allowed the Jews to return to the promise land
The Jews never had a country and for the next 2000 years they migrated to different parts of the western world where they were treated as second class people. At first it was because of their religion but later it turned into prejudice against them as a race and this was called anti-Semitism. This continued well into the 19th century when the idea of a Jewish homeland called Zionism came into being.
About 100 years ago the area in and around Jerusalem became known as Palestine and some wealthy Jewish businessmen in Europe begin to sponsor settlements in Palestine for Jews.
After WW1 Zionism attracted the interest of many in Europe as a way a getting rid of the Jews and after WW11 the Jews were granted statehood and the country of Israel was founded in 1948 and the Jews finally had a home in the promise land
Reagan spending
There is a lot of talk about the deficit and looking back we can see some interesting things if we compare the 8 Reagan years 1981 through 1989 and the 8 years of Clinton 1994 through 2001. During the Reagan years revenues increased by 6.1% per year and spending increased by 5.5%. During the Clinton years revenues increased by 5.9% but spending increased by only 3.1%. Reagan ended up with a deficit and Clinton with a surplus and the major difference was in spending. The reason for this is that Reagan for most of his time had a Republican congress who did not try to hold the line on spending but Clinton had a Republican congress which fought against spending.
More recently with George Bush and a Republican congress and Obama with a Democrat congress spending has sky rocketed. Since party trumps county no congress wants to spend money if the President is in the opposite party since they don’t want the President to get credit. It appears the country is better off when the President is in one party and the congress in the other party.
More recently with George Bush and a Republican congress and Obama with a Democrat congress spending has sky rocketed. Since party trumps county no congress wants to spend money if the President is in the opposite party since they don’t want the President to get credit. It appears the country is better off when the President is in one party and the congress in the other party.
Missouri
A friend sent me this interesting piece and check out the source at the bottom
Missouri has no problem with illegals, go figure...won't be too difficult......
Missouri's approach to the problem of illegal immigration appears to be more advanced, sophisticated, strict and effective than anything to date in Arizona .
Do the loonies in San Francisco , or the White House, appreciate what Missouri has done? When are our fearless President and his dynamic Attorney General going to take action to require Missouri start accepting illegal immigrants once again? So, why doesn't Missouri receive attention?
Answer: There are no Mexican illegals in Missouri to demonstrate.The "Show Me" state has once again shown us how it should be done. There needs to be more publicity and exposure regarding what Missouri has done.
In 2007, Missouri placed on the ballot a proposed constitutional amendment designating English as the official language of Missouri . In November, 2008, nearly 90% voted in favor! Thus, English became the official language for ALL governmental activity in Missouri . No individual has the right to demand government services in a language OTHER than English.
In 2008, a measure was passed that required the Missouri Highway Patrol and other law enforcement officials to verify the immigration status of any person arrested, and inform federal authorities if the person is found to be in Missouri illegally. Missouri law enforcement officers receive specific training with respect to enforcement of federal immigration laws.
In Missouri , illegal immigrants do NOT have access to taxpayers benefits such as food stamps and health care through Missouri HealthNET.
In 2009, a measure was passed that ensures Missouri 's public institutions of higher education do NOT award financial aid to individuals who are illegally in the United States ..
In Missouri , all post-secondary institutions of higher education to annually certify to the Missouri Dept. of Higher Education that they have NOT knowingly awarded financial aid to students who are unlawfully present in the United States .
So, while Arizona has made national news for its new law, it is important to remember, Missouri has been far more proactive in addressing this horrific problem Missouri has made it clear that illegal immigrants are NOT welcome in the state and they will certainly NOT receive public benefits at the expense of Missouri taxpayers
Taken from: "The Ozarks Sentinel" Editorial - Nita Jane Ayres, May 13, 2010. If the link does not work, just type in "The Ozarks Sentinel - Nita Jane Ayres" in Google. Here is the link to confirm: Be sure to read the reader comments too.
http://www..ozarkssentinel.com/missouri-ahead-of-the-game-in-dealing-with-illegal-immigrants-p1034.htm
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Missouri has no problem with illegals, go figure...won't be too difficult......
Missouri's approach to the problem of illegal immigration appears to be more advanced, sophisticated, strict and effective than anything to date in Arizona .
Do the loonies in San Francisco , or the White House, appreciate what Missouri has done? When are our fearless President and his dynamic Attorney General going to take action to require Missouri start accepting illegal immigrants once again? So, why doesn't Missouri receive attention?
Answer: There are no Mexican illegals in Missouri to demonstrate.The "Show Me" state has once again shown us how it should be done. There needs to be more publicity and exposure regarding what Missouri has done.
In 2007, Missouri placed on the ballot a proposed constitutional amendment designating English as the official language of Missouri . In November, 2008, nearly 90% voted in favor! Thus, English became the official language for ALL governmental activity in Missouri . No individual has the right to demand government services in a language OTHER than English.
In 2008, a measure was passed that required the Missouri Highway Patrol and other law enforcement officials to verify the immigration status of any person arrested, and inform federal authorities if the person is found to be in Missouri illegally. Missouri law enforcement officers receive specific training with respect to enforcement of federal immigration laws.
In Missouri , illegal immigrants do NOT have access to taxpayers benefits such as food stamps and health care through Missouri HealthNET.
In 2009, a measure was passed that ensures Missouri 's public institutions of higher education do NOT award financial aid to individuals who are illegally in the United States ..
In Missouri , all post-secondary institutions of higher education to annually certify to the Missouri Dept. of Higher Education that they have NOT knowingly awarded financial aid to students who are unlawfully present in the United States .
So, while Arizona has made national news for its new law, it is important to remember, Missouri has been far more proactive in addressing this horrific problem Missouri has made it clear that illegal immigrants are NOT welcome in the state and they will certainly NOT receive public benefits at the expense of Missouri taxpayers
Taken from: "The Ozarks Sentinel" Editorial - Nita Jane Ayres, May 13, 2010. If the link does not work, just type in "The Ozarks Sentinel - Nita Jane Ayres" in Google. Here is the link to confirm: Be sure to read the reader comments too.
http://www..ozarkssentinel.com/missouri-ahead-of-the-game-in-dealing-with-illegal-immigrants-p1034.htm
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67 borders
Today President Obama laid out his view of the Middle East and in a surprise said that Israel should go back to the 1967 borders. In 2004 President Bush said the US would not require Israel to do this and a letter to that effect was sent to congress and 75% of the house members and 75% of the senate signed the letter. This was not an agreement made with Bush and the congress but it was made with the United States government.
In Israel’s 70 years history there have been 5 wars with the Arabs and Israel won all five. In each war they captured Arab territories and later gave back the territories. After the 67 war they kept certain territories so they could defend themselves against future attacks. If Israel goes back to the 67 borders the Arab border will be only five miles from the capital of Tel Aviv.
It has always been expected that one day Israel would be willing to negotiate a return to these borders when they could be assured they would not be attacked. In addition Israel would demand that the Palestinians give up the right of return. These is the idea that all Palestinians that lived in what is now Israel in 1948 when Israel became a state had the right to return to Israel and reclaim their property and be citizens of Israel. Since there are fewer than 5 million Jews in Israel and there would be 6 million Palestinians returning that would be the end of Israel because these people returning would have the rights of citizens and the right to vote. The very next election they would vote all the Jews out of the country and that would be the end of Israel.
The interesting thing about this right of return is that throughout history this right has been reserved only to those who were displaced and not their progeny. Since this occurred in 1948 most of these people are dead and it would make no difference but the UN has ruled in this case that it is the refugees and their progeny who could return.
As a reminder when the Jewish state was created in 1948 there were about a half million Jews living in that area and about a half million Arabs. In the days preceding the war all of these Arabs moved out of the area and about an equal number of Jews who were living in Arab lands moved into Israel. The war then began with forces from Egypt, Syria, Jordan, Iraq, Lebanon, Saudi Arabia and Palestine attacking Israel. Their plan was to drive Israel into the sea but instead Israel defeated these armies, something which would repeat itself in four more wars.
Each time the Arabs were humiliated their hatred toward the Jews increased and today they would like nothing better, as the leader of Iran says, to wipe Israel off the map. Another disturbing aspect is the fact that two days ago the Jews were told there would be no mention of the 67 borders but today it came out just one day before the head of Israel is schedule to visit the White House. When Netanyahu visited Obama last year he was made to sit and wait while the President ate dinner which was considered a slap in the face and some say this is no way to treat an ally.
In Israel’s 70 years history there have been 5 wars with the Arabs and Israel won all five. In each war they captured Arab territories and later gave back the territories. After the 67 war they kept certain territories so they could defend themselves against future attacks. If Israel goes back to the 67 borders the Arab border will be only five miles from the capital of Tel Aviv.
It has always been expected that one day Israel would be willing to negotiate a return to these borders when they could be assured they would not be attacked. In addition Israel would demand that the Palestinians give up the right of return. These is the idea that all Palestinians that lived in what is now Israel in 1948 when Israel became a state had the right to return to Israel and reclaim their property and be citizens of Israel. Since there are fewer than 5 million Jews in Israel and there would be 6 million Palestinians returning that would be the end of Israel because these people returning would have the rights of citizens and the right to vote. The very next election they would vote all the Jews out of the country and that would be the end of Israel.
The interesting thing about this right of return is that throughout history this right has been reserved only to those who were displaced and not their progeny. Since this occurred in 1948 most of these people are dead and it would make no difference but the UN has ruled in this case that it is the refugees and their progeny who could return.
As a reminder when the Jewish state was created in 1948 there were about a half million Jews living in that area and about a half million Arabs. In the days preceding the war all of these Arabs moved out of the area and about an equal number of Jews who were living in Arab lands moved into Israel. The war then began with forces from Egypt, Syria, Jordan, Iraq, Lebanon, Saudi Arabia and Palestine attacking Israel. Their plan was to drive Israel into the sea but instead Israel defeated these armies, something which would repeat itself in four more wars.
Each time the Arabs were humiliated their hatred toward the Jews increased and today they would like nothing better, as the leader of Iran says, to wipe Israel off the map. Another disturbing aspect is the fact that two days ago the Jews were told there would be no mention of the 67 borders but today it came out just one day before the head of Israel is schedule to visit the White House. When Netanyahu visited Obama last year he was made to sit and wait while the President ate dinner which was considered a slap in the face and some say this is no way to treat an ally.
Fairness
President Obama has been using the words fair or fairness in pursuit of his tax increase on those making more than $200,000 per year. I believe that in a free market capitalist system the concept of fairness seems woefully out of place. For example if Bill Gates needs brain surgery he will go to the finest facility in the world, and his bed will be surrounded by a half dozen of the world’s finest brain surgeons. Any and all equipment needed, will be made available and no expense will be spared. If the operation cost 50 million it will be paid for up front in cash. If I on the other hand I need brain surgery I will likely go to the local hospital and use the services of the local surgeon. Does this appear to be the kind of fairness that Obama is talking about? I think not!
This is not limited to the health industry. If OJ Simpson had a court appointed public defender, do you think he would have been found not guilty? Can the local inner city kid who robs a gas station and kills the attendant receive the defense of the, “Dream Team”, of lawyers that Simpson got. I think not!
The point is that we live in a world where we do not have unlimited resources which means by definition that we must limit what we do. When it comes to Medicare and Medicaid we cannot spend unlimited resources on each person. We must use the dirty word “ration” when it comes to what we can do. Yes we must have death panels.
You start with something obvious like should a 97 year old man with a bad liver get a heart transplant and then work your way down from that.
The only possible way to put fairness into the systems is to limit what Bill Gates can pay out of his own pocket for his own health care and I don’t believe that Americans want to go down that road.
I say it is time for Americans to wake up to the fact that all of this talk about fairness just takes us away from looking at the problem in a serious way.
This is not limited to the health industry. If OJ Simpson had a court appointed public defender, do you think he would have been found not guilty? Can the local inner city kid who robs a gas station and kills the attendant receive the defense of the, “Dream Team”, of lawyers that Simpson got. I think not!
The point is that we live in a world where we do not have unlimited resources which means by definition that we must limit what we do. When it comes to Medicare and Medicaid we cannot spend unlimited resources on each person. We must use the dirty word “ration” when it comes to what we can do. Yes we must have death panels.
You start with something obvious like should a 97 year old man with a bad liver get a heart transplant and then work your way down from that.
The only possible way to put fairness into the systems is to limit what Bill Gates can pay out of his own pocket for his own health care and I don’t believe that Americans want to go down that road.
I say it is time for Americans to wake up to the fact that all of this talk about fairness just takes us away from looking at the problem in a serious way.
Honesty
On the news today there is a story about a gas station in California where the pump price was set at $1.10 instead of $4.29 and in three hours some 7,000 gallons of gas was sold at this lower price. An estimated 300 customers bought gas at this low price and no one reported this to the station manager. Ordinarily I would not pay much attention to a story like this but it reminded me of something that happened to me about 40 years ago. As most of you know I used to own a neighborhood tavern and one night after closing someone broke in and took the money from the till. I don’t recall the amount but I do know that typically about 75% of my daily take was in the form of checks. In the days that followed many customers came in and told me that if their check did not clear the bank they would come in and write me another check. As I recall these people completely reimbursed me for all the checks I lost in the robbery. Does this show how times have changed or does it show the difference between California and North Dakota? I don’t know.
Predestination
When I was a student I was taught that there was a heaven and a hell and it was with some consternation that I encountered the concept of predestination. My thought was that if God already knew what my future was then what difference did it make as to how I lived my life.
It was many years later, after I conclude that there was no hell that I got a better understanding of predestination. I believe that before I was born that God laid out a plan for my life down to the tiniest detail and if I followed that plan I would have life of joy and happiness. This does not mean that I would never encounter any disappointments but that I would be able to deal with these down turns in a constructive manner.
The conflict arises because God also gave me a free will and I am allowed to deviate from God’s plan anytime I choose.
Now as a young adult my ego stepped in and began to run the show and often times the plan of the ego moved away from God’s plan and thus introduced stress into my life.
Think of God’s plan as your right hand and the ego’s plan as you left hand. Now there is a spring holding these two hands together and as they pull apart the tension on the spring increases. As long as they remain fairly close the tension is not too great to cause any trouble but when they move a certain distance, problems surface. These problems can be physical, mental, emotional or spiritual and they detract from your joy and happiness. If you are fortunate, sometime well into the second half of life you realize what is going on and you take the necessary steps to reign in your ego and realign yourself with God’s plan and you can spend your remaining years in peace and contentment.
So while there is such a thing as predestination, I am not bound by limits of God’s plan because I am free to choose which plan I want to follow. By following the plan of the ego does not mean that I must spend the rest of eternity in hell but it does mean that my life on earth was not as happy as it could have been.
It was many years later, after I conclude that there was no hell that I got a better understanding of predestination. I believe that before I was born that God laid out a plan for my life down to the tiniest detail and if I followed that plan I would have life of joy and happiness. This does not mean that I would never encounter any disappointments but that I would be able to deal with these down turns in a constructive manner.
The conflict arises because God also gave me a free will and I am allowed to deviate from God’s plan anytime I choose.
Now as a young adult my ego stepped in and began to run the show and often times the plan of the ego moved away from God’s plan and thus introduced stress into my life.
Think of God’s plan as your right hand and the ego’s plan as you left hand. Now there is a spring holding these two hands together and as they pull apart the tension on the spring increases. As long as they remain fairly close the tension is not too great to cause any trouble but when they move a certain distance, problems surface. These problems can be physical, mental, emotional or spiritual and they detract from your joy and happiness. If you are fortunate, sometime well into the second half of life you realize what is going on and you take the necessary steps to reign in your ego and realign yourself with God’s plan and you can spend your remaining years in peace and contentment.
So while there is such a thing as predestination, I am not bound by limits of God’s plan because I am free to choose which plan I want to follow. By following the plan of the ego does not mean that I must spend the rest of eternity in hell but it does mean that my life on earth was not as happy as it could have been.
Torture
Both manuals deal exclusively with interrogation.[14][15] Both manuals have an entire chapter devoted to "coercive techniques." These manuals recommend arresting suspects early in the morning by surprise, blindfolding them, and stripping them naked. Suspects should be held incommunicado and should be deprived of any kind of normal routine in eating and sleeping. Interrogation rooms should be windowless, soundproof, dark and without toilets.
These techniques include prolonged constraint, prolonged exertion, extremes of heat, cold, or moisture, deprivation of food or sleep, disrupting routines, solitary confinement, threats of pain, deprivation of sensory stimuli, hypnosis, and use of drugs or placebos
These techniques include prolonged constraint, prolonged exertion, extremes of heat, cold, or moisture, deprivation of food or sleep, disrupting routines, solitary confinement, threats of pain, deprivation of sensory stimuli, hypnosis, and use of drugs or placebos
Short sale
A Short Sale is when you sell stock you do not own. So how does this work. Let’s assume that you think a stock is going to fall in value. A certain stock is selling for $100 per share and you believe it will go down in value so you go to your broker and you borrow 100 shares from him and agree to pay him back in one year. He charges you 5% interest for these shares. You immediately sell the 100 shares for $10,000 and you set aside $600 to pay the interest at the end of the year. 12 months later you guessed right and the stock is selling for $50 per share so you go out and buy 100 shares for $5,000 and pay back your broker along with the $600. You have made $4,400 on this transaction.
There is currently an investigation into activities by Goldman Sachs for insider trading. Apparently Goldman put together a group of really bad home mortgages and then told their clients to buy them saying they were a good investment. They sold many billions of these and while doing so their top executives were selling these products short. Sure enough the investments failed and 8 executives from Goldman made over $500 million dollars each. Here is a quote from a professor regarding the White House and Goldman
Lawrence Jacobs, a University of Minnesota political scientist, said that "almost everything that the White House has done has been haunted by the personnel and the money of Goldman . . . as well as the suspicion that the White House, particularly early on, was pulling its punches out of deference to Goldman and its war chest.
Here is list of Goldman employees connected with the White House.
Obama Administration: Deputy Director, National Economic Council
Former Goldman Sachs Title: Financial Analyst
Stephen Friedman:
Obama Administration: Chairman, President’s Foreign Intelligence Advisory Board
Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005-)
Gary Gensler:
Obama Administration: Commissioner, Commodity Futures Trading Commission
Former Goldman Sachs Title: Partner and Co-head of Finance
Robert Hormats:
Obama Administration: Undersecretary for Economic, Energy and Agricultural Affairs, State Department
Former Goldman Sachs Title: Vice Chairman, Goldman Sachs Group
Philip Murphy:
Obama Administration: Ambassador to Germany
Former Goldman Sachs Title: Head of Goldman Sachs, Frankfurt
Mark Patterson:
Obama Administration: Chief of Staff to Treasury Secretary, Timothy Geitner
Former Goldman Sachs Title: Lobbyist 2005-2008; Vice President for Government Relations
John Thain:
Obama Administration: Advisor to Treasury Secretary, Timothy Geitner
Former Goldman Sachs Title: President and Chief Operating Officer (1999-2003)
Henry Paulson:
Bush II Administration: Secretary, Treasury 2006 - 2009
Former Goldman Sachs Title: Chairman and CEO (1998-2006)
Neel Kashkari:
Bush II Administration: Assistant Secretary for Financial Stability, Treasury (2008 – 2009)
Former Goldman Sachs Title: Vice President, San Francisco; led Information Technology Security Investment Banking Practice
Reuben Jeffery III:
Bush II Administration: Undersecretary for Economic, Energy and Agricultural Affairs, State Department (2007 –2009)
Former Goldman Sachs Title: Managing Partner Paris until 2002 Security Investment Banking Practice
Robert Steel:
Bush II Administration: Under Secretary for Domestic Finance, Treasury, (2006 – 2008)
Former Goldman Sachs Title: Vice Chairman – 2004
Steve Shafran:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Private equity business in Asia until 2000
Edward C. Forst:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Co-head of Goldman’s investment management business
Dan Jester:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Deputy CFO
Kendrick R. Wilson III:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Chairman of Goldman’s financial institutions groups
Joshua Bolten:
Bush II Administration: White House Chief of Staff (2006 – 2009)
Former Goldman Sachs Title: Executive Director, Legal & Government Affairs (1994-99)
Gary Gensler:
Bush II Administration: Undersecretary, Treasury (1999-2001) and Assistant Secretary, Treasury (1997-1999)
Former Goldman Sachs Title: Partner and Co-head of Finance
Robert Rubin:
Bush II Administration: Secretary, Treasury 1995-1999
Former Goldman Sachs Title: Vice Chairman (1987-90)
Robert Zoellick:
Bush II Administration: United States Trade Representative (2001-2005), Deputy Secretary of State (2005-2006), World Bank President (2007 -)
Former Goldman Sachs Title: Vice Chairman, International (2006-07)
William C Dudley:
NY Federal Reserve: Current President/CEO
Former Goldman Sachs Title: Partner and managing director – 2007
Stephen Friedman:
NY Federal Reserve: Former Chairman of the Board – 2009
Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005-)
Other Noteworthy Appointees:
Edward Liddy:
Current Title: AIG CEO
Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005-)
Duncan Niederauer:
Current Title: Chair/CEO NYSE
Former Goldman Sachs Title: Managing Director – 2007
Malcolm Turnbull:
Current Title: Federal Leader, Liberal Party, Australia
Former Goldman Sachs Title: Partner (1998-2001)
Mark Carney:
Current Title: Governor, Bank of Canada
Former Goldman Sachs Title: Managing Director Goldman Sachs Canada until 2003
David Watson:
Current Title: Monetary Policy Committee, Bank of England
Former Goldman Sachs Title: Chief European economist
Romano Prodi:
Current Title: Prime Minister of Italy (1996-1998 and 2006-2008) and President of the European Commission (1999-2004)
Former Goldman Sachs Title: Paid adviser/consultant 1990 – 1993
Mario Draghi:
Current Title: Governor of the Bank of Italy (2006- )
Former Goldman Sachs Title: European Deputy Chairman/Partner until 2006
Massimo Tononi:
Current Title: Italian Deputy Treasury Chief (2006-2008)
Former Goldman Sachs Title: Partner 2004 – 2006
Do you think any of the Goldman short sellers will be going to jail?
There is currently an investigation into activities by Goldman Sachs for insider trading. Apparently Goldman put together a group of really bad home mortgages and then told their clients to buy them saying they were a good investment. They sold many billions of these and while doing so their top executives were selling these products short. Sure enough the investments failed and 8 executives from Goldman made over $500 million dollars each. Here is a quote from a professor regarding the White House and Goldman
Lawrence Jacobs, a University of Minnesota political scientist, said that "almost everything that the White House has done has been haunted by the personnel and the money of Goldman . . . as well as the suspicion that the White House, particularly early on, was pulling its punches out of deference to Goldman and its war chest.
Here is list of Goldman employees connected with the White House.
Obama Administration: Deputy Director, National Economic Council
Former Goldman Sachs Title: Financial Analyst
Stephen Friedman:
Obama Administration: Chairman, President’s Foreign Intelligence Advisory Board
Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005-)
Gary Gensler:
Obama Administration: Commissioner, Commodity Futures Trading Commission
Former Goldman Sachs Title: Partner and Co-head of Finance
Robert Hormats:
Obama Administration: Undersecretary for Economic, Energy and Agricultural Affairs, State Department
Former Goldman Sachs Title: Vice Chairman, Goldman Sachs Group
Philip Murphy:
Obama Administration: Ambassador to Germany
Former Goldman Sachs Title: Head of Goldman Sachs, Frankfurt
Mark Patterson:
Obama Administration: Chief of Staff to Treasury Secretary, Timothy Geitner
Former Goldman Sachs Title: Lobbyist 2005-2008; Vice President for Government Relations
John Thain:
Obama Administration: Advisor to Treasury Secretary, Timothy Geitner
Former Goldman Sachs Title: President and Chief Operating Officer (1999-2003)
Henry Paulson:
Bush II Administration: Secretary, Treasury 2006 - 2009
Former Goldman Sachs Title: Chairman and CEO (1998-2006)
Neel Kashkari:
Bush II Administration: Assistant Secretary for Financial Stability, Treasury (2008 – 2009)
Former Goldman Sachs Title: Vice President, San Francisco; led Information Technology Security Investment Banking Practice
Reuben Jeffery III:
Bush II Administration: Undersecretary for Economic, Energy and Agricultural Affairs, State Department (2007 –2009)
Former Goldman Sachs Title: Managing Partner Paris until 2002 Security Investment Banking Practice
Robert Steel:
Bush II Administration: Under Secretary for Domestic Finance, Treasury, (2006 – 2008)
Former Goldman Sachs Title: Vice Chairman – 2004
Steve Shafran:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Private equity business in Asia until 2000
Edward C. Forst:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Co-head of Goldman’s investment management business
Dan Jester:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Deputy CFO
Kendrick R. Wilson III:
Bush II Administration: Advisor on setting up TARP to Treasury Secretary, Henry Paulson 2008
Former Goldman Sachs Title: Chairman of Goldman’s financial institutions groups
Joshua Bolten:
Bush II Administration: White House Chief of Staff (2006 – 2009)
Former Goldman Sachs Title: Executive Director, Legal & Government Affairs (1994-99)
Gary Gensler:
Bush II Administration: Undersecretary, Treasury (1999-2001) and Assistant Secretary, Treasury (1997-1999)
Former Goldman Sachs Title: Partner and Co-head of Finance
Robert Rubin:
Bush II Administration: Secretary, Treasury 1995-1999
Former Goldman Sachs Title: Vice Chairman (1987-90)
Robert Zoellick:
Bush II Administration: United States Trade Representative (2001-2005), Deputy Secretary of State (2005-2006), World Bank President (2007 -)
Former Goldman Sachs Title: Vice Chairman, International (2006-07)
William C Dudley:
NY Federal Reserve: Current President/CEO
Former Goldman Sachs Title: Partner and managing director – 2007
Stephen Friedman:
NY Federal Reserve: Former Chairman of the Board – 2009
Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005-)
Other Noteworthy Appointees:
Edward Liddy:
Current Title: AIG CEO
Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005-)
Duncan Niederauer:
Current Title: Chair/CEO NYSE
Former Goldman Sachs Title: Managing Director – 2007
Malcolm Turnbull:
Current Title: Federal Leader, Liberal Party, Australia
Former Goldman Sachs Title: Partner (1998-2001)
Mark Carney:
Current Title: Governor, Bank of Canada
Former Goldman Sachs Title: Managing Director Goldman Sachs Canada until 2003
David Watson:
Current Title: Monetary Policy Committee, Bank of England
Former Goldman Sachs Title: Chief European economist
Romano Prodi:
Current Title: Prime Minister of Italy (1996-1998 and 2006-2008) and President of the European Commission (1999-2004)
Former Goldman Sachs Title: Paid adviser/consultant 1990 – 1993
Mario Draghi:
Current Title: Governor of the Bank of Italy (2006- )
Former Goldman Sachs Title: European Deputy Chairman/Partner until 2006
Massimo Tononi:
Current Title: Italian Deputy Treasury Chief (2006-2008)
Former Goldman Sachs Title: Partner 2004 – 2006
Do you think any of the Goldman short sellers will be going to jail?
Obama's book 2
The portrayal of Obama in Denesh’s book explains some of Obama’s economic policies which seem disturbing to me. He states that he is for the middle class but his economic policies so far have made the big banks much bigger, Wall Street much richer and the middle class with high unemployment, high gas prices, losing homes and rising food cost. He has stopped drilling in the Gulf of Mexico but gave a billion dollar loan to help Mexico drill there. He has given a two billion dollar loan to Brazil for off shore drilling. He spends lots of money on solar and wind power but nothing on natural gas which the US has a lot. If we just changed our Semi trucks over to natural gas we would no longer have to buy oil from Saudi Arabia.
Counting the TARP which was the bail out of the big banks plus the first stimulus and the second stimulus we have spent 21/2 trillion dollars to get the economy going and during this time we have created 1.8 million jobs. If you do the math you can see this is 1,400,000 per job. During this time 4 million home owners have lost their homes.
Regarding how Obama brought down bin Laden I have mixed feelings. First I too was surprised when all those young people went out in the streets waving flags and cheering. I didn’t think most young people cared about this stuff.
The story we get here is that Obama could not trust the Pakis to keep a secret. He felt that they would have warned bin Laden. I have no way of knowing whether that would have happened or not. I wonder how you would have felt if the US had sent in a team of Seals to take out Milosevic
I think you should look closer at Obama’s foreign policy as compared to Bush. Obama has sent more troops into Afghanistan, has increased by four times the drone raids into Pak, has agreed to keep Gitmo open, has reaffirmed the concept of rendition (sending terror suspects overseas to be interrogated using harsh methods), has decided to try terror suspects in military courts, has given permission to kill on sight Anwar al-Awlaki (no trial here) and has not allowed the building of a Muslim church near the twin towers. And the latest is invading Libya supposedly to protect innocent people but it looks like we might end up killing more.
I think many people in Europe and the Middle East liked it when Obama came and apologized for Americas past behavior. He got a Noble Peace prize for that and I wonder if Norway wants to take it back now
Counting the TARP which was the bail out of the big banks plus the first stimulus and the second stimulus we have spent 21/2 trillion dollars to get the economy going and during this time we have created 1.8 million jobs. If you do the math you can see this is 1,400,000 per job. During this time 4 million home owners have lost their homes.
Regarding how Obama brought down bin Laden I have mixed feelings. First I too was surprised when all those young people went out in the streets waving flags and cheering. I didn’t think most young people cared about this stuff.
The story we get here is that Obama could not trust the Pakis to keep a secret. He felt that they would have warned bin Laden. I have no way of knowing whether that would have happened or not. I wonder how you would have felt if the US had sent in a team of Seals to take out Milosevic
I think you should look closer at Obama’s foreign policy as compared to Bush. Obama has sent more troops into Afghanistan, has increased by four times the drone raids into Pak, has agreed to keep Gitmo open, has reaffirmed the concept of rendition (sending terror suspects overseas to be interrogated using harsh methods), has decided to try terror suspects in military courts, has given permission to kill on sight Anwar al-Awlaki (no trial here) and has not allowed the building of a Muslim church near the twin towers. And the latest is invading Libya supposedly to protect innocent people but it looks like we might end up killing more.
I think many people in Europe and the Middle East liked it when Obama came and apologized for Americas past behavior. He got a Noble Peace prize for that and I wonder if Norway wants to take it back now
Obama's book
I have just finished reading a book about Obama and I highly recommend it. The title is “The Roots of Obama’s Rage” by Dinesh D’Souza. In it he points out with examples that Obama is driven by anti-colonialism as was his father. The writer notes that the name of Obama’s book was Dreams From My Father not Dreams Of My Father. His father was a misguided soul who suffered from alcoholism and died in a drunken driving accident. He only met his father one time when he was ten years old so he romanticized the man. His father lived in Kenya at the time the British were leaving and Kenya was seeking independence. Obama thus sees all western countries including the US as former colonizers. He has a concern for third world countries and in particular those in Africa.
He felt it OK to turn the world and apologize for Americas past behavior. He would like to see the US be more on a par with other countries and does not understand American Exceptionalism
On a slightly different subject and a bit of irony the fed policy under Obama of increasing the money supply has caused the price of commodities like food to double and triple in price thus leading to great hardship in the third world, the place he supposedly wants to help..
He felt it OK to turn the world and apologize for Americas past behavior. He would like to see the US be more on a par with other countries and does not understand American Exceptionalism
On a slightly different subject and a bit of irony the fed policy under Obama of increasing the money supply has caused the price of commodities like food to double and triple in price thus leading to great hardship in the third world, the place he supposedly wants to help..
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