Most of us who have been around for a while understand that politicians running for office tell us what we want to hear and our president was no exception to the rule when he was a candidate. In spite of this the president said the reason he did not call the CEO of BP is because
I have not spoken to him directly – and here’s the reason: because my experience is when you talk to a guy like a BP CEO, he’s going to say all the right things to me.
Here is one example from the campaign and when he was in office
Jan 30,2010
By Anne E. Kornblut
Pledging to curb federal budget deficits, President Obama used his weekly radio address Saturday to praise the Senate's passage of a measure requiring that increased spending be offset with cuts and to tout his proposed freeze on non-discretionary budget spending. The idea is called pay as you go or paygo.
The problem is that all the government has to do is to declare an emergency and they can bypass paygo
Pay-go gets passed, then it gets bypassed
By Walter Alarkon - 02/16/10 09:33 PM ET
The ink is barely dry on the pay-as-you-go law, and Democrats are seeking to bypass it to enact parts of their job-creation agenda.
Democratic leaders said extensions of unemployment insurance and COBRA healthcare benefits should be emergency spending that isn’t subject to the pay-as-you-go statute, which requires new non-discretionary spending to be offset with spending cuts or tax increases.
This is not just my criticism of Obama but one of the main reasons why many Americans are unhappy with their government. This sort of double talk has been going on for many years now and I could fill up a book with examples like the above.
Sunday, January 16, 2011
we all count
My wife called her sister today to wish her happy birthday, something she does on a regular basis, since there are ten girls in her family, but this reminded me of the last time I talked with this particular sister. It was about five years ago and she was telling me about a local TV person who wanted to interview her about some current affairs and she declined saying that she wouldn’t know much about the subject. I was upset when she told me that story and I explained why I always feel that my opinion counts as much as others.
You can take any controversial subject and you will find people on both sides of the issue who are experts, people who have spent years investigating the facts, and have reached certain conclusions. Since these people disagree you could flip a coin and have just as good a chance as being right as they have, but the problem is in the word right. In most of these situations the “right” is very hard to define and is subject to the foibles of human bias and misunderstanding.
I told her that she could use her 80 years of life experience along with her God given common sense and come up with an answer that would be just as good as anyone else. I told her that I wouldn’t place too much faith in “experts”. We have all heard the definitions of experts and my favorite is.
An expert is a man who knows more and more about less and less until he finally knows everything about nothing.
When I see these experts on TV I want to inject one thought into their heads and it is an old adage that is one of my favorite sayings.
When you change the way you look at things, the things you look at change.
I will close with a comment on one of my favorite sports figures, Coach John Wooden who died this past week at the age of 99. He was the first college coach to take in the inner city boys and teach them about life and treat them like sons, an approach that is followed by most coaches today.
My favorite quote from Coach Wooden was
The finest thing a man can do for his children is to love their mother.
Jack/John
You can take any controversial subject and you will find people on both sides of the issue who are experts, people who have spent years investigating the facts, and have reached certain conclusions. Since these people disagree you could flip a coin and have just as good a chance as being right as they have, but the problem is in the word right. In most of these situations the “right” is very hard to define and is subject to the foibles of human bias and misunderstanding.
I told her that she could use her 80 years of life experience along with her God given common sense and come up with an answer that would be just as good as anyone else. I told her that I wouldn’t place too much faith in “experts”. We have all heard the definitions of experts and my favorite is.
An expert is a man who knows more and more about less and less until he finally knows everything about nothing.
When I see these experts on TV I want to inject one thought into their heads and it is an old adage that is one of my favorite sayings.
When you change the way you look at things, the things you look at change.
I will close with a comment on one of my favorite sports figures, Coach John Wooden who died this past week at the age of 99. He was the first college coach to take in the inner city boys and teach them about life and treat them like sons, an approach that is followed by most coaches today.
My favorite quote from Coach Wooden was
The finest thing a man can do for his children is to love their mother.
Jack/John
birds
Rep Jim Clyburn of South Carolina was on CNN today and said the problems with handling the oil spill are complicated by the fact that there are more than a dozen government agencies involve and coordinating the different groups is difficult. Duh! This man is a liberal who believes that the government is the best entity to solve problems. Here is one small example of the difficulty.
The government said that people will work around the clock cleaning up the beaches and then OSHA stepped in and said they could only work two hours at a time because of the heath hazards and before they start they must attend a four hour HazMat class. You can look this up as I didn’t want to since I am sure it would make me sick.
Once more on my rant about oily birds. The saviors of these birds have a spotter helicopter that flies up and down the beaches and when they see a bird they radio the ground crew who then dispatches a boat to the birds location. Most of the time the ground crew is unable to capture the bird. Yesterday after working all day using the helicopter and four boats with ground crews they were able to rescue 21 birds. I think I am going nuts. I plead with the news people not to let me know the cost per bird of this noble adventure.
Have a nice day
The government said that people will work around the clock cleaning up the beaches and then OSHA stepped in and said they could only work two hours at a time because of the heath hazards and before they start they must attend a four hour HazMat class. You can look this up as I didn’t want to since I am sure it would make me sick.
Once more on my rant about oily birds. The saviors of these birds have a spotter helicopter that flies up and down the beaches and when they see a bird they radio the ground crew who then dispatches a boat to the birds location. Most of the time the ground crew is unable to capture the bird. Yesterday after working all day using the helicopter and four boats with ground crews they were able to rescue 21 birds. I think I am going nuts. I plead with the news people not to let me know the cost per bird of this noble adventure.
Have a nice day
Pensions
There is a pending disaster that I have been watching for years and it is not getting the attention of the press. The reason it has not been covered is that it is very complicated and therefore difficult to explain in a news broadcast. It involves pensions both public and private. In the past I have mentioned some personal experiences I had with pensions when I worked for Equitable. One was with the Grand Forks city pension and the other was the North Dakota state pension. In the years following WW 2, pensions came into their own and with the help of unions grew rapidly. These pensions were known as defined benefit plans, that is, they defined the benefit you would receive at some later date. Realize that this is no easy task. A typical pension plan would say that when you retire it will pay you one percent of your salary for every year you worked. This means that if you are 65 and retire after 30 years of service the company would pay you 30% of your salary. Just think of what kind of calculations and estimations are needed to make such a promise. First we have to determine how many people working here today will still be there at age 65. We then have to estimate what their wages will be at their age 65. We next have to estimate what kind of return on investment we would earn over these next many years. With all these uncontrolled variables the companies had to review the pension plan yearly to make the necessary adjustments. As time passed the government stepped in and in 1974 passed the landmark Employee Retirement Investment Security Act known as ERISA. Since that time pensions have been required to meet certain funding levels designed to protect the pensioners. Pension funds were audited in order to make sure there was enough money in the fund to provide the promised benefits.
Just look at one example say of a person who is age 25 and starts to work for company A. His salary is $30,000 and we have to project his future increases in pay so we used an average of 4% per year which means when he is 65 his salary will be $144,000. Now if our pension plan says he will get one percent for each of the 40 years he worked his pension will be $57,600 per year. Now we have to determine how much money we need to set aside each year to purchase a pension of that amount. We can use insurance tables that tell us that if we want to pay that much out for the rest of his life we will have to have about $950,000. In order to accumulate that much money over 40 years at 4% we must set aside $10,000 per year. But pension managers realized that they could put a smaller amount in during the early years and larger amounts in later years. In addition the plans were set up so that if you left the company you left most of your benefit behind which meant that with high turnover the company could get by putting in much less. The idea of a pension plan was to encourage employees to stay but the math gave a financial advantage to companies with high turnover but that is a problem for another day.
Now that the difficulties in determining pension contributions are exposed it becomes obvious that the ability to manipulate the numbers is tempting and of course this is just what has happened. The three big government pension funds in California are currently short of money to provide the promised benefits. How did this happen? Well instead of putting the proper amount into the fund the government used the money for other purposes and made the fund whole by raising the projected rate of return. They projected that they would earn 8% on the investments and everyone knows that 8% in today’s market is unrealistic. The state of California over the past 20 plus years has given money to city, county, state employees and teachers in the form of raises and has shorted the pension fund. They balanced out the shortage by increasing the projected rate of return on the pension fund. For example over a 40 year period the difference in earning 4% vs 8% on $1,000 per year contribution is the difference between ending up with $95,000 or $259,000.
Now that this practice has been exposed, not only in California but many others states, these states are looking to the federal government for bailouts and Obama still has about $400 billion in the stimulus to help them out.
This problem will not go away and the first step is to stop the bleeding and that can be done by switching away from defined benefit plans to defined contribution plans like 401K’s. Under these plans no future benefits are guaranteed by formula but each person has their own account and what ever money is there at retirement belongs to that individual.
There are some pensions that are called multicompany. One large union where the members work for various companies is the Teamsters. Their pension is underfunded and a good prospect for government bailout since both the union and the company will benefit. Senator Bob Casey has introduced a bill to move in this direction and he has the backing of both company and union.
This brings us to what economist refer to as a “moral hazard”. Since the managers of these pension benefit when they perform well, they are willing to take higher risk when they know that ultimately the government will back them up if they guess wrong which means that they will likely fail at some future point. It is the too big to fail idea that we saw in banks so get ready for tax payer bailouts.
As an interesting aside when I worked for Equitable the company was part of a fix up to a problem by the Teamsters. The fund for about one half million members was used as a slush fund for various illegal projects by the union bosses. Under the guiding hand of Hoffa the fund invested heavily in Las Vegas gambling casinos which is not allowed and they lost. They were all caught and the government asked The Equitable and other companies to straighten things out and get the fund back on track. This fund was so damaged that even after years of effective management they were never able to get out from under and to this day remain in danger. The longer the problem persisted the older the pensioners got and more and more were retiring and the payouts were more than the fund could handle. This will be one of the funds that Senator Casey’s bill will bailout. Who would have thought that Jimmy Hoffa would one day get into our pockets to take care of the people he shafted.
Just another day at the office. You see it doesn’t seem to matter much which political party is in charge because the problem is systemic in that big business, big unions and big government are corrupt and people are fed up and this and November could be a wake up call. I told you it was complicate.
Just look at one example say of a person who is age 25 and starts to work for company A. His salary is $30,000 and we have to project his future increases in pay so we used an average of 4% per year which means when he is 65 his salary will be $144,000. Now if our pension plan says he will get one percent for each of the 40 years he worked his pension will be $57,600 per year. Now we have to determine how much money we need to set aside each year to purchase a pension of that amount. We can use insurance tables that tell us that if we want to pay that much out for the rest of his life we will have to have about $950,000. In order to accumulate that much money over 40 years at 4% we must set aside $10,000 per year. But pension managers realized that they could put a smaller amount in during the early years and larger amounts in later years. In addition the plans were set up so that if you left the company you left most of your benefit behind which meant that with high turnover the company could get by putting in much less. The idea of a pension plan was to encourage employees to stay but the math gave a financial advantage to companies with high turnover but that is a problem for another day.
Now that the difficulties in determining pension contributions are exposed it becomes obvious that the ability to manipulate the numbers is tempting and of course this is just what has happened. The three big government pension funds in California are currently short of money to provide the promised benefits. How did this happen? Well instead of putting the proper amount into the fund the government used the money for other purposes and made the fund whole by raising the projected rate of return. They projected that they would earn 8% on the investments and everyone knows that 8% in today’s market is unrealistic. The state of California over the past 20 plus years has given money to city, county, state employees and teachers in the form of raises and has shorted the pension fund. They balanced out the shortage by increasing the projected rate of return on the pension fund. For example over a 40 year period the difference in earning 4% vs 8% on $1,000 per year contribution is the difference between ending up with $95,000 or $259,000.
Now that this practice has been exposed, not only in California but many others states, these states are looking to the federal government for bailouts and Obama still has about $400 billion in the stimulus to help them out.
This problem will not go away and the first step is to stop the bleeding and that can be done by switching away from defined benefit plans to defined contribution plans like 401K’s. Under these plans no future benefits are guaranteed by formula but each person has their own account and what ever money is there at retirement belongs to that individual.
There are some pensions that are called multicompany. One large union where the members work for various companies is the Teamsters. Their pension is underfunded and a good prospect for government bailout since both the union and the company will benefit. Senator Bob Casey has introduced a bill to move in this direction and he has the backing of both company and union.
This brings us to what economist refer to as a “moral hazard”. Since the managers of these pension benefit when they perform well, they are willing to take higher risk when they know that ultimately the government will back them up if they guess wrong which means that they will likely fail at some future point. It is the too big to fail idea that we saw in banks so get ready for tax payer bailouts.
As an interesting aside when I worked for Equitable the company was part of a fix up to a problem by the Teamsters. The fund for about one half million members was used as a slush fund for various illegal projects by the union bosses. Under the guiding hand of Hoffa the fund invested heavily in Las Vegas gambling casinos which is not allowed and they lost. They were all caught and the government asked The Equitable and other companies to straighten things out and get the fund back on track. This fund was so damaged that even after years of effective management they were never able to get out from under and to this day remain in danger. The longer the problem persisted the older the pensioners got and more and more were retiring and the payouts were more than the fund could handle. This will be one of the funds that Senator Casey’s bill will bailout. Who would have thought that Jimmy Hoffa would one day get into our pockets to take care of the people he shafted.
Just another day at the office. You see it doesn’t seem to matter much which political party is in charge because the problem is systemic in that big business, big unions and big government are corrupt and people are fed up and this and November could be a wake up call. I told you it was complicate.
bombs
For several years now there has been talk that Israel might attack the Iranian nuke facilities but I have always maintained that they could not do this without the US help. I felt there were two reasons for this. First the Israeli plans did not have the range without flying over Iraq and the US would not give them permission and second they needed our 15,000 pound bunker busters to penetrate the underground facilities. Well guess what? In the news today I saw the following item from the London Times.
Saudi Arabia has conducted tests to stand down its air defences to enable Israeli jets to make a bombing raid on Iran’s nuclear facilities, The Times can revealed.
I new that KSA, a Suni Muslim country was concerned about Iran a Shia country but I never thought they would go this far.
The only question that remains now is will the US sell bunker busters to Israel and here is a news item.
In 2008, the United States approved an Israeli request for bunker-busters capable of destroying underground facilities, including Iranian nuclear weapons sites. Officials said delivery of the weapons was held up by the administration of President Barack Obama.
Since taking office, Obama has refused to approve any major Israeli requests for U.S. weapons platforms or advanced systems. Officials said this included proposed Israeli procurement of AH-64D Apache attack helicopters, refueling systems, advanced munitions and data on a stealth variant of the F-15E.
Many in Israel think of this as an embargo against them by Obama.
There have been rumors that Obama was anti Israel but I never put much faith into rumors but now I am wondering.
Saudi Arabia has conducted tests to stand down its air defences to enable Israeli jets to make a bombing raid on Iran’s nuclear facilities, The Times can revealed.
I new that KSA, a Suni Muslim country was concerned about Iran a Shia country but I never thought they would go this far.
The only question that remains now is will the US sell bunker busters to Israel and here is a news item.
In 2008, the United States approved an Israeli request for bunker-busters capable of destroying underground facilities, including Iranian nuclear weapons sites. Officials said delivery of the weapons was held up by the administration of President Barack Obama.
Since taking office, Obama has refused to approve any major Israeli requests for U.S. weapons platforms or advanced systems. Officials said this included proposed Israeli procurement of AH-64D Apache attack helicopters, refueling systems, advanced munitions and data on a stealth variant of the F-15E.
Many in Israel think of this as an embargo against them by Obama.
There have been rumors that Obama was anti Israel but I never put much faith into rumors but now I am wondering.
EU
After WW 2 Germany was to be protected by NATO and they were not allowed to have a large military and the result of that is that Germany spends only 1% of its GDP on defense whereas the US spend 19%. The result is that the German people have many government benefits and they pay dearly for them. Here is a comparison between and American family of four and their German counterpart, both with family income of $50,000.
American family would pay $3,800 in social security tax and that would be it.
The German family would pay $4,500 in social security tax, $5,200 in federal income tax, $7,600 in value added tax and each private company has to pay Municipal Trade Tax of 15% in addition to the corporate income and pass that on to the consumer in the form of higher prices.
The bottom line is the American family has $46,200 to spend and the German family has $32,700 to spend and the items they purchase will cost more than they cost here.
Many of the benefits the Germans receive are in the form of longer paid vacation, more holidays, low cost health care, lower cost for education, and earlier retirements.
This is common through out Europe and the result is that the European Union with 500 million people produces about 20% of the world’s GDP as compared to the US with 300 million people which also produces 20% of world GDP.
Because of this the countries of Europe are now going through the painful exercise of weaning the people away from benefits and this is causing a great deal of unrest as best seen in Greece and soon to be seen in other parts of the EU.
The interesting thing about all this is that while they have come to realize that the government tried to do too much our government is trying
American family would pay $3,800 in social security tax and that would be it.
The German family would pay $4,500 in social security tax, $5,200 in federal income tax, $7,600 in value added tax and each private company has to pay Municipal Trade Tax of 15% in addition to the corporate income and pass that on to the consumer in the form of higher prices.
The bottom line is the American family has $46,200 to spend and the German family has $32,700 to spend and the items they purchase will cost more than they cost here.
Many of the benefits the Germans receive are in the form of longer paid vacation, more holidays, low cost health care, lower cost for education, and earlier retirements.
This is common through out Europe and the result is that the European Union with 500 million people produces about 20% of the world’s GDP as compared to the US with 300 million people which also produces 20% of world GDP.
Because of this the countries of Europe are now going through the painful exercise of weaning the people away from benefits and this is causing a great deal of unrest as best seen in Greece and soon to be seen in other parts of the EU.
The interesting thing about all this is that while they have come to realize that the government tried to do too much our government is trying
Thursday, December 23, 2010
Oil
It has occurred to me that there are good reasons why Democrats and Republicans are treated differently by the public and the press. I will use two examples to illustrate what I mean. First consider morality. When a Republican is caught up in a moral problem say like having an extramarital affair they are treated more harshly than their Democratic counterparts because Republicans claim the high ground on family value issues. On the other hand Democrats are held to a higher standard when it comes to handling national disasters like hurricanes and the current oil spill. The reason for this is that Democrats believe that the federal government can best solve problems and the Republicans think not.
President Obama will take a lot of heat on the current spill because he is liberal and believes that the government can solve problems as witnessed by the heath care reform, the stimulus, the ongoing legislation on cap and trade and extending unemployment benefits on past the November election.
New subject. Prince Phillip yesterday gave a speech in which he declared that we should pay more attention to the Koran as it relates to keeping the environment clean and pure. What he didn’t say was many Muslim countries are third world when it comes to providing for their people and the ones that have viable economic systems get 90% of their income from oil which environmentalist say is the main cause of global warming which in tern they say is the main environmental problem. You don’t have to lie to mislead you just need to leave out part of the information.
President Obama will take a lot of heat on the current spill because he is liberal and believes that the government can solve problems as witnessed by the heath care reform, the stimulus, the ongoing legislation on cap and trade and extending unemployment benefits on past the November election.
New subject. Prince Phillip yesterday gave a speech in which he declared that we should pay more attention to the Koran as it relates to keeping the environment clean and pure. What he didn’t say was many Muslim countries are third world when it comes to providing for their people and the ones that have viable economic systems get 90% of their income from oil which environmentalist say is the main cause of global warming which in tern they say is the main environmental problem. You don’t have to lie to mislead you just need to leave out part of the information.
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