Tax the rich

Bernie Sanders the only avowed socialist in the United State Senate was on TV echoing The Presidents call for a more equal distribution of income and he suggested higher taxes on the rich. I have to believe that both of these gentlemen understand that this will not work because there are too few rich and too many not rich. In 2010 the 1.35 million taxpayers who represented the top one percent earned 19% of the total gross income and paid 37% of all federal income tax which means they paid in 354 billion dollars in taxes. If we double their taxes and collect another 354 billion and distribute that to the remaining 99% they would each receive $3,000. This is not a very effective way to help the 99 percenters. A much better solution is to grow the economy and a proven way to do that, is free market capitalism and a good starting point, is the energy sector and specifically start using natural gas for power plants, and change over to natural gas in transportation. This is all shovel ready stuff and is underway in certain areas. I don’t understand what we are waiting for!

AIG bailout

AIG the large insurance company that had to be bailed out by the taxpayers is running ads on TV toting the fact that they paid back the bailout money. These are people who purchased high risk mortgage backed bonds and lost the bet. The bonds turned out to be junk and this company filled with investment experts lost their shirts. The government stepped in and purchased 95% of the company and allowed them time to restructure their company and then over time they bought back their stock from the government. Today they are bragging about their come back. Was anyone punished for this risking behavior? Quite to the contrary they were rewarded. American International Group is set to pay $450 million of bonuses to employees of the unit that was largely responsible for the New York insurer's near collapse last fall. Here is how our watch dogs in the congress responded. Rep. Elijah Cummings plans to send a letter Monday to Treasury Secretary Tim Geithner expressing his "outrage" that insurance giant AIG, the recipient of more than $170 billion in government aid, will dole out $165 million in corporate payments this week as part of its $1 billion retention program to keep senior executives at the company. They sent a nasty letter and that was the end of it. Congressional oversight committee members did not see the threat coming and when it was exposed they sent a letter and that was it. No one at AIG was ever punished. This is what many citizens see as corruption and this is what most upsets people but they re-elect these people year after year.

Calling

Here is something I sent to a young person who asked me what they should do with their life. As your children reach the right age they may find this helpful. When discussing the kind of work people do, most of us understand what is meant by a job, a career and a profession but a calling is something most do not give much thought to. The words themselves are somewhat interchangeable but in my way of thinking they are distinctly different. To me a job is something you get without much preparation and you can change jobs frequently and not suffer any adverse consequences. A career on the other hand requires some commitment beyond being there from 9 to 5. A career is recognizable to others and normally requires some degree of expertise. A profession means you are a professional. This usually means a lot of time and effort directed at a very narrow course of action. Professionals make a career out of their job. Professionals are highly skilled either by formal training or natural ability. Calling is in a class by itself and not many are called or more precisely not many recognize their calling. Biblically Mathew in the New Testament says, “many are called but few are chosen”, which to me means that we may all have a calling but only a few of us recognize it and even fewer follow up on it. A calling sometimes comes from the inside out and that happens early in life. Other times it comes from the outside in and that can happen at any stage in life. Most of us are familiar with people who have a calling from within. Many people miss their calling because they are tied up just with making enough to support their families. Many pass by opportunities because of a fear to take a financial risk. Many do not think they are worthy……no one in our family ever does anything important. A man can have a good life, meaning he has a job that provides for his family, he enjoys going to work and feels like he is making a difference and that satisfies him. Sometimes a man in that position gets to midlife and realizes that something is missing. If he looks into it he might discover a part of himself he did not know existed and upon further study can come to understand that there is something more important in his future. Such a man will seemingly stumble into his calling. Since he has searched and studied, this it is more than a stumble, it is an example of serendipity Money is rarely the clue to someone’s calling….more often it is a desire to share ones talents, experience, and knowledge in ways that can be helpful to others. It has little to do with fame and fortune. In answer to your question, we are all born selfish and as we go through life we should reach the point where we realize that happiness comes from giving. I would say that a man recognizes his calling when he realizes that the secret to happiness, is in giving. It does not matter what method (type of work) he uses to share what he has but it is in the sharing that he begins to use his calling.

Read my lips

When the first George Bush was running for president in 1987 he said, “Read my lips, no new taxes”, and then after he was elected in 1990 he agreed to raise taxes. He was defeated in his re-election for 1994, almost four years after the tax increase and seven years after his pledge. Looking back many analyst feel the breaking of his pledge cost him the second term. Now we have the case of Hillary Clinton who made the now infamous statement about those who died in Benghazi saying, “what difference does it make how they died”, and some say it will cost her the election in 2016 only 4 years after she made the remarks. Others say it will all be forgotten in 4 years and I believe they are correct because even in this short time the public attention span has gotten so much shorter.

cost

When congress passed Obamacare the estimated cost for the first ten years was 900 billion since he said he wanted to keep the cost under a trillion. The latest ten year cost projection is 2.6 trillion. Now we find out that there is a clause in the act stating that if the insurance companies lose money the government will reimburse them. This will happen if not enough young healthy people sign up to offset the cost of the previously uninsured who are quickly signing up. We have seen many times over The President saying that if you like your insurance you can keep it and how this was not the case but we have yet to see his statement that this plan will not add one dime to the deficit. That will probably be on our screens this coming year.

Gas

A common question regarding the price of gasoline is why is the price still over $3 when we are producing so much more oil and the answer is that the price of oil is set on the world market. The increase in production here in the US has been offset by an increase in demand in the rest of the world. If we had not increased our output through fracking the price would be much higher. The easiest way to lower the price of gas is to have a substitute fuel such as natural gas. If we converter all semi-trucks to natural gas we would eliminate our need for Saudi oil and the price would come down. It requires the instillation of natural gas pumps at all truck stops. The cost of all of this would be less than what the government has wasted on wind and solar experiments that have gone bankrupt. In spite of this the march toward natural gas is inexorable because of free market forces. The changes are already underway as we move from coal power plants to natural gas and semis will follow.

Unemployment

A bill is being introduced to extend unemployment benefits and it will be paid for by calling it a national emergency and the cost will be added to the deficit. That is a great idea. Now why not add to that the millions who are homeless and all those who don’t have enough to eat. I have a plan to pay for these new programs. Just ask the big banks to pay. The government has given them two trillion (with a T) over the past four years and they are just sitting on it as excess reserves. Here is their chance to be good citizens.

Insurance bailout

When Obamacare was first proposed The President wanted the cost for the first ten years to be under one billion and that was the task assigned to the developers in the senate. To meet that goal the plan was started in 2010 but most of the benefits and therefor the cost didn’t start until 2014. By the start of 2013 the new cost estimates were over 2 billion and now they are up to 2.5 billion. People wondered why the insurance companies were in favor of Obamacare and the answer given was that it would supply them with 30 million new customers who would be forced to buy insurance. What wasn’t known was a clause in the law that said if the insurance companies lost money because too many old and uninsured signed up and too few young health people signed up, the government would step in with a bailout. At this point it looks as though that might happen and this will add more cost to the already over budget plan.

Tolerance

Now that Phil Robertson from Duck Dynasty is in the headlines I am reminded of my travels through the world of tolerance. When I was young I was tolerant of just about everybody. If someone made a comment about another person I would jump to their defense by saying if you had walked in their shoes you might think differently. My favorite line to defend some big city delinquent was if your mother was a prostitute and you father a druggie where would you be. I got so good at this that by the time I hit 30, I reached the point where no one was responsible for anything. As years past I came to understand that this was an unattainable position and slowly changed and started evaluating each situation on its merits and today I have a warning for younger folks. Don’t make a virtue of tolerance lest you end up standing for nothing. Freely express your views and show tolerance to those who differ. Like the old adage goes, agree to disagree.

Fired Sacco

I woman called Justine Sacco, while flying on a plane sent out a tweet saying 'Going to Africa. Hope I don't get AIDS. Just Kidding. I'm White!' Before the plane landed her company put out a notice that she was terminated. The company also stated that despite the controversial tweet, it had “otherwise known [Sacco] to be a decent person at core. As bad as that tweet is, I believe the company should have called her into the office and her managers should have questioned her about the tweet and then based on their investigation, if warranted should have fired her. We have teachers in New York City who are in what is called the rubber room. These teachers are known child molesters but they cannot be fired because the union protects their jobs so they just go to a special room each day and collect their pay. Reassignment centers are holding facilities for New York City Department of Education, where more than 600 teachers accused of misconduct were paid to work full time doing nothing for months or years at a time while awaiting resolution of their cases.[1] Among teachers they are referred to as rubber rooms.[2]The city has 13 reassignment centers.[3]

Sin

As everyone who reads the news knows, a man was suspended from a TV show because he said homosexuality is a sin. He is a Christian and that is what his faith teaches. This same faith also teaches that adultery is a sin and lying is a sin and coveting thy neighbor’s goods is a sin and not loving your neighbor as you love yourself is a sin and having false gods is a sin and not honoring your father and mother is a sin. Will people begin to lose their jobs if they say any of the above? His same faith teachers that all men are sinners so if says that will he get fired? This is not a matter of free speech as some have said because that only applies to government just as censorship only applies to government but the people who fired this guy have opened the door to a lot of other problem situations.

more tipping point

Here is another small example of the tipping point. Al Sharpton, a self-proclaimed civil rights leader, a man who always showed up whenever a suspected racial crime occurred, whether justified or not, is now holding meetings in Chicago to try to reduce the black on black murder rates, that have plagued the city. This, in my way of thinking, is a step forward in solving one of the major problems facing blacks in today’s world. While his being there is a positive, I am concerned with some of the early conclusions they have drawn. The main point coming out of these meeting, is that having more jobs will solve the problem and that certainly is the case in some instances but not the real cause surrounding these crimes, which is the breakdown of the family unit. There are black males in these communities who view a job at a fast food place as a dead end, who see a factory job where you can make twice that amount as a dead end. They compare these jobs with selling drugs where you can make ten times that amount. Selling drugs leads either to using drugs or drug wars or both. Sharpton like other black leaders are unwilling to admit that the disintegration of the family is the main cause, even though statistics show this to be the case. Perhaps this is their first step to reaching out to reconnect to the family values that used to be a part of the black community. Throughout their history, where they have been discriminated against, they always survived by relying on family and church. Revitalizing these two powerful cultural units along with today’s more enlightened view of racism could go a long way to solving some of these problems. At that point the use of vouchers to get some of these young people into a more disciplined learning environment could help reduce the education gap. You might call this whole process, hope and change.

tipping point

In a recent correspondence, where I indicated that the country may be reaching a tipping point when it comes to confidence in government and the way people see their government a minor incident has arisen that may in some small way illustrate the point. There is a TV show called, “Duck Dynasty” which I have never seen but it is involved in a controversy regarding political correctness and free speech. One of the stars of this show during a news type interview expressed his personal views on homosexuality and he was removed from his TV show. There has been a back lash and it appears that the free speech side may win the day. This is only the latest in a series of similar events over the past several years where this sort of back lash has won the day. This is just the opposite of what was happening say five or ten year ago. It falls into a larger category of what people refer to as attacks on Christianity. There was a time not that long ago that any criticism of gays was considered intolerant but now the thinking is that a person has the right to express their personal beliefs even if they do not approve of the gay life style. The freedom of speech argument seems to be winning over the political correctness argument and that is a tipping point.

Ryan plan

The Ryan-Murry budget just announced will affect military pensions for retirees between the ages of 40 and 62. There is a lot of controversy swirling around this so I did some calculations. An E-5 (Sergeant) after 20 years of service is earning $3,000 per month. He can retire at 50% of that or $1,500 per month. If he receives a 3% cost of living adjustment each year by the time he is 62 his pension will be $2,872. If the COLA is reduced to 2% he will be earning $2,319 at age 62. This is the proposal in the Ryan-Murry budget agreement. At age 62 this person’s pension will be adjusted to recapture the money lost in the years between 40 and 62. This is the worst case scenario. An average person would be 51 and have only 11 years until age 62. In that case his pension would increase from $1,500 to $2,076 with a 3% COLA and $1,865 with a 2% COLA. Once again at age 62 the pension would be adjusted to recapture the lost money between the ages of 50 and 62. The COLA for this year is 1.5% and will be reduced to 0.5%. This means that the 40 year old who retired after 20 years will have his pension increase from $1,500 to $1,867 by age 62 but with the one percent reduction he would end up with $1,674.

politically correct trap

I have often heard, supposedly wise people say that children are more influenced by what the parent does as opposed to what the parent says and if that is true it can lead to some very controversial conclusions. I offer a couple of examples, the first designed to lead you into a trap and the second to spring the trap. Johnny and his dad are traveling out of state and dad gets a speeding ticket and he just throws it away saying we won’t be back here. Johnny and his dad go to the hockey game together but dad doesn’t buy a ticket for his son, he just pushes him through the turnstile ahead of him. Dad’s TV antenna is getting old so one morning after a wind storm he goes up and pulls it down and turns in a claim to the insurance company. Dad fills out his taxes and declares charitable deductions for items he never gave to charity. Dad had a girlfriend on the side that Johnny knows about but dad tells him to keep quiet. Johnny gets to be a teen and is caught shop lifting and dad moans in shame and says where did I gone wrong? There the trap is set. Jimmy lives alone with his mom. She is on welfare and collects rent subsidies, food stamps, utility subsidies, and various other benefits that all together allow her to stay home and not work. Jimmy gets free lunch at school and they both get free health care through Medicaid. Jimmy gets to his teen years but does not see any reason to get a job but spends his time on the street with his friends waiting until his 16 so he can drop out of school like his mom did when she was 16. His mom never impressed upon him the value of education and she never read any books. There is a subtle but politically incorrect difference between these two situations. Think about it.

Read my lips

The controversy over The Presidents statements about keeping your doctor are reminiscent of Bush 41 who said, “read my lips, no new taxes” and then proceeded to raise taxes. Polls showed that most people agreed that taxes had to be raised but those same polls showed that people no longer trusted Bush and it cost him his re-election. The Gulf war ended in early 1991 and his ratings soared to 86% but during his run for re-election the Republicans who ran against and then in the general election the Democrats constantly showed him in commercials saying no new taxes. His poll numbers dropped to the low 40’s and he lost to Clinton. It didn’t help that Perot as an independent got 19% of the vote but his broken promise did him in. You can bet that in the up-coming elections you will see many ads against Democrats running for office reminding everyone of the pledge of keep you doctor.

Times are a changing

An old Bob Dylan song says times they are a changing and it is apropos for today’s world. This change has its roots in the Viet Nam War where disillusionment in government came to life. Over the next 20 years this feeling of unease was accelerated as the county slowly and painfully watched as the war on drugs and the war on poverty slipped away. On top of that came the realization that the government sponsored public education system was leaving behind our most vulnerable students while smaller areas like the post office and Amtrak floundered in sea of debt. Next came the public sector where employee benefits like pensions and health care were causing cities, counties and states to follow the federal government into the abyss of debt. The concept of spending more than what one earns spread to the private sector and now when we total up our long term obligations to future generations we are approaching the time when we will have to introduce an new word into the average person’s vocabulary and that word is quadrillion. And now we are confronted with the final straw in the governments back and that is Obamacare. The belief that the government could solve problems started with the great victory in WW 11 but as the deficits piled up year after year times started a changing. When Reagan said that the government is not the solution but the problem he stuck a cord deep inside the people and that has come alive over the past thirty years and people are now awake and ready to turn the ship of state around. As people watch the huge apartment complexes known as, “the projects”, or what I like to call the modern day equivalent of the reservation, come tumbling down overwhelmed by crime and addiction they began to have doubts. When year after year we see the inner cities crumble both literally and figuratively as the gap in education grows ever wider we have doubts. When individuals lose their dignity as they are forced to rely more and more on government aid and when words like personal responsibility are considered racist we have doubts. When young boys grow up with no role models and young girls seek the safety of their own apartments by having babies we have doubts. When the government bails out big banks and big corporations while people lose their homes, we have doubts. When elected officials care more about party than country, we have doubts. When so many see their only hope for the good life is winning the lottery we have doubts. But in the midst of all these doubts there is still hope because there is a changing. It is the awakening of the individual spirit that made this country great and it will arise again like the Phoenix. It is the realization that each of us must learn to take responsibility for our lives and reach for the brass ring. In this great land, the home of the free and brave it can be done and it starts with a change in attitude. We must get back the can-do attitude we had when I was growing up. We hear in the news every day that we have just been through the worst economic times since the Great Depression but those people came through and built the greatest generation and it can be done again because times are a changing.

Changing

An old Bob Dylan song says times they are a changing and it is apropos for today’s world. This change has its roots in the Viet Nam War where disillusionment in government came to life. Over the next 20 years this feeling of unease was accelerated as the county slowly and painfully watched as the war on drugs and the war on poverty slipped away. On top of that came the realization that the government sponsored public education system was leaving behind our most vulnerable students while smaller areas like the post office and Amtrak floundered in sea of debt. Next came the public sector where employee benefits like pensions and health care were causing cities, counties and states to follow the federal government into the abyss of debt. The concept of spending more than what one earns spread to the private sector and now when we total up our long term obligations to future generations we are approaching the time when we will have to introduce an new word into the average person’s vocabulary and that word is quadrillion. And now we are confronted with the final straw in the governments back and that is Obamacare. The belief that the government could solve problems started with the great victory in WW 11 but as the deficits piled up year after year times started a changing. When Reagan said that the government is not the solution but the problem he stuck a cord deep inside the people and that has come alive over the past thirty years and people are now awake and ready to turn the ship of state around. As people watch the huge apartment complexes known as, “the projects”, or what I like to call the modern day equivalent of the reservation, come tumbling down overwhelmed by crime and addiction they began to have doubts. When year after year we see the inner cities crumble both literally and figuratively as the gap in education grows ever wider we have doubts. When individuals lose their dignity as they are forced to rely more and more on government aid and when words like personal responsibility are considered racist we have doubts. When young boys grow up with no role models and young girls seek the safety of their own apartments by having babies we have doubts. When the government bails out big banks and big corporations while people lose their homes, we have doubts. When elected officials care more about party than country, we have doubts. When so many see their only hope for the good life is winning the lottery we have doubts. But in the midst of all these doubts there is still hope because there is a changing. It is the awakening of the individual spirit that made this country great and it will arise again like the Phoenix. It is the realization that each of us must learn to take responsibility for our lives and reach for the brass ring. In this great land, the home of the free and brave it can be done and it starts with a change in attitude. We must get back the can-do attitude we had when I was growing up. We hear in the news every day that we have just been through the worst economic times since the Great Depression but those people came through and built the greatest generation and it can be done again because times are a changing.

Pope's economics

I, like many others, see our new pope as a man of the people and he recently said that many around the word are too materialistic. I am not sure that he understands the free market capitalist system. When consumers buy stuff they create profits for the companies that sell stuff and these companies create jobs and all of these people pay taxes. Some of the profits from companies and some of the taxes that governments collect are used for research and development. From this R&D came things like the polio vaccine, AIDS medicine which saved lives in Africa, farm equipment that allow the US to feed our population and many millions around the world. Over 2 billion people have access to the Internet and over 5 billion have cell phones. People in remote parts of the world are now connected and this helps them learn new ways of doing things. R&D has brought clean water to many parts of the world and reduced the health problems associated with bad water. The ways in which R&D has improved the lives of people around the world is almost endless. If consumers here in the US quit consuming we will have a depression and that will spread around the world and the poorest of the poor would be hurt the most. Remember when the United States sneezes the rest of the world catches a cold and the third world countries get pneumonia. I think the pope needs an economic advisor and that with his good heart and his good intentions could go a long way to helping many of the poor around the world.

Health care cost

In 1973 I sat in a classroom for three full days listening to an expert tell me about health care insurance. The morning of the second day my classmates and I discussed what we had learned and we all agreed there were two major problems. The first was that with low deductible and low co-payments the patients did not pay out of pocket enough for services rendered and this would cause a rapid increase in cost. The second was the realization that no country could afford to provide total care for all of its citizens. Fast forward 40 years and much to my surprise Obamacare has stumbled and bumbled its way into solving both of these problems. The up-front cost problem is solved with high deductibles and the total care is solved by rationing. The rationing will be primarily directed toward patients near the end of life and the deductibles will hit the middle and upper middle class. These two aspects of Obamacare will reduce the long term cost and bring that in line with the regular cost of living. The saving will be large enough to provide free or almost free care for the poor and Obamacare will do all that was promised. It will reduce long term cost and insure everyone. Since money was taken from Medicare by reducing payments to physicians and hospitals there will be some reduction in service to us folks who are on Medicare and of course we will face the prospect of rationing but remember there is no free lunch.

Language

Tonight on the news I saw a supporter of Obamacare say that things are in disarray now but they will get better and by 2019 the cost will start to come down. I thought to myself how convenient because there is no way I can disprove that statement. The other day the President said the web site will be operating at 80% efficiency and this is another thing that cannot be disproved because we don’t know 80% of what. It was the same when the President talked about 3 million jobs saved or created and when they passed the stimulus the President said if they hadn’t done that things would have been worse. These guys are slick

Iran enrichment

The news about the agreement with Iran is being presented with an upbeat positive spin but the whole truth is not being told. Here is a quote from Secretary Kerry. Iran will stop enriching uranium beyond 5% and neutralize its stockpile of uranium enriched beyond this point. The amount beyond is about 20% and could be used as a bomb but would be bulky and awkward. The bomb dropped on Japan used 80% enriched. What Iran has done to neutralize is to change the uranium hexafluoride that is used in the centrifuges to uranium oxide. What is not revealed is that this oxide can easily and quickly be returned to the hexafluoride. In other words they have kept their 20% product on hand for future use. One common way to deceive is to reveal only part of the story and in this case it is the saying that they have neutralized without pointing out that this process is reversible. Another point has to do with inspections. IAEA has been inspecting the civilian plants but not the military instillations and this process will continue but it is presented as if this is some new inspection.

Iran nukes

As I watch the negotiations with Iran over its nuclear program, I am reminded of how Saddam Husain used the west, in his claims of not producing WMD. His strategy was to hide his efforts from the IAEA inspectors to create doubt as to his intentions. It was a classic case of miss-direction. He would say he had no such weapons and when the inspectors came to verify, he would secretly move resources around, giving the impression that he was hiding something. All the while this was going on, he was allowed to sell oil for food and medical supplies, money that he used instead to build up his army and increase his personal wealth. Every time he claimed that he had destroyed the weapons, which by the way we and other countries gave him, the IAEA would ask where he did this and he would not tell them. He knew that they could test soil samples and determine if he was being truthful. This game of cat and mouse went on for years until the US finally invaded and took down his government. Now we have Iran playing the same miss-direction game. They have suffered economic hardships because of their potential threat to build a bomb. Just like Saddam they have been willing to let their people suffer short term hardship to achieve a long term victory. They have built rockets to use as delivery systems and in the process have kept the price of oil up. This threat has kept their enemies in the region at bay and made them into the power house in the Middle East. Now they are in a position to collect economic benefits that have been withheld plus a lot more. President Obama is in a weakened position here at home and looking for a success in foreign policy and he is willing to ignore warnings from our ally Israel. Iran is still holding on to the threat of building a bomb but in a slightly limited way. It has always been my contention that Iran never wanted a nuclear bomb and I base that on the fact that they have been working with the latest technology for 25 years and have yet to produce enough enriched uranium to make a single bomb. In the 1940’s the US in the Manhattan Product created enough enriched uranium to make a bomb in three years using equipment from that time period. There is more going on here than meets the eye!

JP Morgan

J P Morgan Chase Bank has agreed to pay 13 billion in penalties and fines for their part in the mortgage crisis. In return they admit no wrong doing which means that no one goes to jail. The company has assets of 2,500 billion much of which they made during the mortgage debacle so the fine is a small payment to keep the executives out of jail. Nine billion of the 13 goes to various government agencies and 4 billion will go to 100,000 homeowners who suffered from the banks activities. This is $4,000 per home owner hardly enough to keep them from losing their homes. The government is bragging up this great achievement and the bank is bragging up its concern for home owners. This type of corruption is rampant throughout the system.