Healthcare

New revelations regarding the rising cost of Obamacare surface almost daily and I am totally amused at the surprise expressed by the news media. They must be the same people who thought we were going to insure 31 million new people at no cost. It is possible that the news people were so in favor of health care for everyone that they were willing to overlook the cost issue.

Shirts

In the news this week is the story of the building in Pakistan that collapsed. The building house garment workers who were making clothes sold mostly in the USA and Europe. The company neglected to take proper care of the building in order to save money so they could sell at a low price. Some here in the US are now blaming US companies for demanding such low prices and saying that these companies are partly responsible for the problem. I scanned the Internet but could not find any studies done in regards to the morality of purchase decisions by consumers. I wonder what would happened if a consumer was presented with two identical shirts one marked five dollars and made by slave labor in Pakistan and one marked seven dollars and made by responsible companies in Turkey.

Student loans

The student loan program started in 1965 was handled through banks but the money was always government money. The banks would take government money at a low rate and loan it to students at a higher rate, a typical bank activity. President Obama decided that the government should eliminate the banks from this equation and pass the savings along to the students but the interest rates at 6.8% is still high. The rate was 6.8% when the government took over and the rate went down to 3.4% but now it is back up to 6.8%. What happened? Instead of the money being used to keep student loan interest rates down it is being used for other purposes, one of which is Obamacare.

Geithner

There are millions of small business owners and millions of others who work as individual contractors. This means, among other things that they must pay self-employment tax. For most people who work for someone else this is not a concern because your employer will withhold 7.65% of your salary as payroll tax. Payroll tax is 6.2% for social security and 1.45% for Medicare. The employer matches that 7.65% so the government gets 15.3% of your salary. Now take the case of the former Secretary of Treasury Tim Geithner. He was working for the IMF and was considered an independent contractor. They told him when he started that he would be responsible for paying the 15.3% payroll tax but they unlike most employers gave him extra money to pay for this tax. When he filed his taxes in years 2003 and 2004 he failed to pay this tax and when he was caught he agreed to pay the back taxes plus interest. He said he was not aware of the mistake. A year later he was notified that he also failed to pay this tax for tax years 2001 and 2002. To get a perspective on the amount of money we are talking about, assume that his salary was $100,000. They gave him an extra $15,300 to pay this, which he kept and then did not pay the $15,300 he owed, meaning he ended up with $115,300 instead of $84,500. A nice tidy sum I would say. Let’s be generous and say he forgot the first time but did he not think about the earlier years!

Midlife

I am writing this in response to a young friend of mine who asked for my thoughts on the subject of mid-life crisis. To begin with, it is only a crisis if it comes unexpected but can be a rewarding experience if it is properly understood. The basis for this mid-life transition starts before birth with the understanding that each person gets half of their chromosomes from their mother and half from their father. Psychologist Carl Jung brought this to my attention when he spoke of the anima and animus. These are Latin terms he used to describe the masculine and feminine side of each person. He chose those words so people would not confuse masculine with male and feminine with female. This is critical to grasping Jung’s concepts of masculine and feminine characteristics. These are traits that are more common in one gender verses the other but they are by no means limited to that gender. It merely means that if you interviewed a large number of people you would find that one trait is more characteristic to one gender. Some examples are competitive vs co-operative, aggressive vs assertive and analytical vs intuitive. This does not mean that there are no aggressive women but that it is more generally found among males. If we are born with equal numbers of chromosomes then, in the case of the male, what happens to the feminine traits? A baby does not realize that he is an individual until about the age of one or so. Up to that time he thinks he is part of his mother. When he begins to realize that he is different he starts the long journey of differentiating himself which continues until mid-life. At a very young age he understands that he is not like his mother but is in fact more like his father. This is reinforced daily by other family members and other relatives. He is treated like a male, dressed like a male and expected to act like a male. This reinforcement continues with neighbors, teachers, coaches and other members of society with whom he comes into contact. During the first half of life his masculine side grows in maturity while his feminine side remains underdeveloped and at mid-life it is time for him to reconnect with the inner feminine and become the whole person he was meant to be. It is this process of reconnecting that opens the door to a whole new world for the man who is ready to look inward and welcome his other half into his life. She brings with her a glorious new world filled with adventure and surprise. Nature in her wisdom, brings about a reduction in testosterone at this very time which aids in the transition. For the man who is ready for this change the world takes on a more profound meaning and rewards him with a greater understanding of human nature. It is a time of emotional and spiritual growth and makes the second half of life the best half.

Political influence

Most Americans are familiar with Political Actions Committees (PACS). These are groups headed up by a lobbyist that represent different interest. For example some well-known groups are the pharmaceuticals, AARP and the National Rifle Association (NRA). These groups provide a valuable service to elected officials, in particular, congressmen in Washington. They explain their positions on complicated issues saving time for the congressmen. Before they can present their case they must have access to the elected official and this is where the controversy begins. In order to get the attention of a congressman these groups help with campaign financing and this is where many people think that congress votes based on these contributions. Upon further investigation it can be shown that votes are not always influenced by these monies. Take the example of the steel lobby vs the auto lobby. Steel wants import taxes to keep out the competition which keeps prices up but the auto people oppose such measures and want to keep prices down. Both of these industries have lobbyist and both try to influence the congressmen. If that congressman represents a district where there are lots of steel industry jobs he may vote in their favor but if he is in a district with many auto jobs he likely will vote in that direction. In either case he is voting the needs of his constituents. This does not mean that the system in not abused as sometimes the group with the most money has the most influence. Other times the group with the most voters can sway the congressman. Such groups like AARP, NRA and unions can bring many voters to the polls and they have influence without offering money to the congressmen. And, of course some groups use both voters and money. The point is that just because a congressman accepts money does not mean he is selling his vote.

Corruption

During the past 40 years the inflation adjusted income for the middle class rose 65% while the income for the top 1% rose 275%. If this were the free market working independently, I would not object but forces are at work that cause the field to be tilted in favor of the rich. These range from political influence to insider information to outright corruption. This is what the Tea Party and the Occupy Wall Street people object to and efforts should be made to resolve these problems. It is the middle class where the income increases are not what they seem. The 65% figure is based on family income and much of that has come from the fact that we now have more two income families in the middle class. Were it not for women entering the work force the figures for the middle class would be less favorable. There will always be disparities in income distribution and that is as it should be but corruption should not be part of the calculus.

gerrymandering

Many people are aware of the fact that congressmen are re-elected at a 94% rate but many are not aware of why. The high rate is the result of something called gerrymandering. This process has been around for many years and is a way of drawing the district lines to favor one party over the other. As time passed the lines got sharper to where today we have only about 40 districts that are competitive. This has had many unfortunate side effects and one of the most damaging has been the tendency for it to make partisanship more acute. This happens because the only way a congressman, in a so called safe district, can lose his seat is by a primary challenge. Primary elections have low turn-out and bring out the die-hards and this scares the politicians and causes them to move further from the center. It gives undue power to those on the extreme right and left. This will continue until the redistricting process is reformed. In the high tech world we live in the answer is to have a computer draw the lines instead of elected officials but they are not likely to vote for something that will limit their power.

Red line

There are many headaches facing a president and one of the most exasperating is the fact that everything you say is recorded for later playback. On several occasions President Obama stated that if Syria every used chemical weapons that would be a “red line” and if they crossed that line there would be serious consequences. In recent weeks France, England and Israel have all concluded that the chemical gas Sarin was used in Syria. Yesterday our government said the following: The White House said Thursday that military forces loyal to Syrian President Bashar Assad probably used chemical weapons on a “small scale,” reigniting the debate over what role the U.S. should play in trying to topple the regime. I believe the words probably and small are designed to change the red line to a sort of pink. The country, once again, finds itself in an awkward position because we waited too long to get involve. We now face a country adrift in a full scale civil war with over 70,000 of its citizens dead and another 2 million forced out of the country and living in refugee camps.

WMD

I was watching the dedication of the Bush Library and I was reminded of what I consider to be the major public relations mistake of his presidency. When the US went into Iraq the question was always poses as do they have WMD. In fact the question should have been where are the WMD as we know they had them but not where they were. Here is short list of WMD that Saddam was known to have. I would not be surprised of some of these materials are now in Syria. THE US and Britain sold Saddam Hussein the technology and materials Iraq needed to develop nuclear, chemical and biological weapons of mass destruction. Reports by the US Senate's committee on banking, housing and urban affairs -- which oversees American exports policy -- reveal that the US, under the successive administrations of Ronald Reagan and George Bush Sr, sold materials including anthrax, VX nerve gas, West Nile fever germs and botulism to Iraq right up until March 1992, as well as germs similar to tuberculosis and pneumonia. Other bacteria sold included brucella melitensis, which damages major organs, and clostridium perfringens, which causes gas gangrene. Many other countries contributed as well; since Iraq's nuclear program in the early 1980s was officially viewed internationally as for energy production, not weapons, there were no UN prohibitions against it. An Austrian company gave Iraq calutrons for enriching uranium. The nation also provided heat exchangers, tanks, condensers, and columns for the Iraqi chemical weapons infrastructure, which can hardly be said to be for energy. Singapore gave 4,515 tons of precursors for VX, sarin, tabun, and mustard gases to Iraq. The Dutch gave 4,261 tons of precursors for sarin, tabun, mustard, and tear gases to Iraq. Egypt gave 2,400 tons of tabun and sarin precursors to Iraq and 28,500 tons of weapons designed for carrying chemical munitions. India gave 2,343 tons of precursors to VX, tabun, Sarin, and mustard gases. Luxembourg gave Iraq 650 tons of mustard gas precursors. Spain gave Iraq 57,500 munitions designed for carrying chemical weapons. In addition, they provided reactors, condensers, columns and tanks for Iraq’s chemical warfare program, 4.4% of the international sales. China provided 45,000 munitions designed for chemical warfare. Portugal provided yellowcake between 1980 and 1982.Niger provided yellowcake in 1981.[36]

power grab by congress

It is well known amongst most people that one of the strengths in the constitution is what is referred to as the balance of power between the three branches of government. There have been many battles over the years especially between the legislative and executive. Presidents have routinely tried to grab more power and congress has denied them the opportunity and a recent event has raised questions because of the history of these battles. With the sequester the President stated it was not good policy to make blanket cuts across all areas and that it makes more sense to make specific designated cuts and most agree with that. The President said he did not have the power so congress passed a bill allowing him to have this power but he threatened to veto the bill. Republicans say he gave up the option for more presidential power because he did not want to be responsible for the cuts. In addition they say that he wanted the cuts to go toward things like air traffic controllers instead of cuts in grant monies to show the public how irresponsible it was for congress to make these across the board cuts. The President says congress is responsible for spending and he warned everyone that these indiscriminant cuts would cause severe problems. Once again politicians from both sides have put making the other side look bad ahead of the public need and once again we the public sit idly by because most of us are not directly affected by air travel problems.

free money socialism

This past week Margaret Thatcher died and I was reminded of one of her most famous quotes when she said that socialism is a great form of government until you run out of other people’s money. Sometime ago I wrote a short essay on taking the income from the rich and taking the assets from the rich. I repeat it here to illustrate Thatcher’s point. The average income of the top one percent of wage earners is 1.1 million. Since there are 150 million people working this means that the top one percent represents 1.5 million people. If we multiply this by 1.1 million and divide that by 149 million we get $11,000. If we took all the income from the richest one percent and gave an equal share to all the other working people they would each get $11,000. Since the average household income in the US is about $50,000 this would be a nice increase but it would take only a couple of years for these people to get used to their new income and then we would have to look at the top three percent and do the same thing over again. If you want to redistribute the wealth in a way that will have a real impact consider doing just that. Don’t mess with income but look at wealth. Instead of redistributing income redistribute wealth or what people own. The top one percent own 40% of all assets or 10 million each. Multiply the top one percent (1.5 million people) times $10 million and divide by 149 million and you get $100,000. Now you’re getting somewhere. Let’s just pass a law that says we can take all the assets of the top one percent and divvy it up amongst the rest of us. I only do this to illustrate what most people have always known and that is there are not enough rich people to take care of all the poor.

Free press

The free press is a blessing but it can be a curse. Case in point, the latest attempt by some deranged person trying to terrorize the country. The news media needs to keep the public informed but in a reasonable manner. Their good judgment seems to be overly influenced by ratings. Phases like, terror strikes fear in the hearts”, “there was panic in the streets” and “body parts were everywhere” do not help matters. The press should realize that there is a difference between terror and terrorism. When they exaggerate the damage with hyperbole they aid and abet the enemy. They should emphasize the calm and collected way that citizens reacted when they set about to help the wounded.

Moral capitalism

During my career I worked in union plants and non-union plants. At one point I was transferred to manage a plant in Alabama as the previous manager was fired for poor performance. When I arrived the morale was low and both employees and supervisors felt they had been mistreated. I instigated a number of changes based on the premise that if people are treated with dignity and respect they will not want a union and if they are not treated that way they deserve a union. During this time and the months before I arrived union organizers were at the plant gates on a regular basis getting signatures and six months after I arrived we had an election. The union lost by a vote of 132 to 92. They lost mostly because it is difficult to unionize in the south because of cultural mores but also because I was able to show some concern for the employees. I was allowed by the National Labor Relations Board to speak to the employees with the caveat that I not threaten or promise. I told them it was their job to run the plant and my job to get as many benefits as I could. I told them that there were no guarantees but every time I went to the home office I went with request to make their work place a better place. I bring this up at this time because there is a push to unionize some restaurant chains, in particular, Panera Bread. The owners say they cannot compete if they are unionized, not just because of higher wages and benefits but because of union work rules. I know that the fast food business is competitive as there are many chains slowly going out of business at this time. Names like Benningtons, Big Boy and Ponderosa are fast disappearing. The books on a chain like McDonalds show one-third for materials, one-third for labor and one-third for expenses. If a Big Mac cost $3 then $1 is for labor. If the company wanted to increase the pay of employees from $8 per hour to $16 per hour they would double the labor cost and the cost of a Big Mac would rise to $4. Now if you add in the cost of benefits that would increase the cost of a Big Mac to $4.60. Now I rarely eat out but my guess is that people who eat at McDonalds would notice if the price went from $3 to $4.60. Many of McDonalds customers are blue collar workers but would they pay the extra to help out these employees. I see the same dilemma at places like Wal-Mart where blue collar people do most of their shopping. If consumers feel that people should be paid a living wage and received benefits like healthcare and pensions then they should be willing to pay more for those products. The questions is , will they?