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Wednesday, June 30, 2010

Raising Generations of Wimps

Listening to the radio last evening on the way home I was incredibly frustrated. The topic was Abby Sunderland, the 16 year old girl who was attempted to follow in her older brother's wake and sail around the world, solo. Reflecting the incredibly over protective society and culture that we have created, mother's were calling in chastising Sunderland's parents, ascribing motives, stating as fact the level of intelligence and maturity the sixteen year old Sunderland must have because they have a sixteen year old girl.

Thank goodness for the Abby Sunderland's of the world. Young people who have a dream, have acquired skills and who are fortunate to have parents who support their dreams and help build their skills. The Abby Sunderland's of our nation are getting to be fewer and farther between as our Nanny State culture and sociology not only prevent the ability of an Abby to develop, but if and when she does descends on the parents of such a remarkable young women with threats of taking away other children and prosecution for child endangerment.

To recap, Sunderland set off from Marina Del Rey with the goal of sailing around the world in her boat "Wild Eyes." Her brother had accomplished the feat a few years ago and at the time set the record for youngest solo circumnavigator, since broken. She grew up on the water and sailing in small and big boats. Earlier this month a rescue signal was sent from her boat in the middle of the Indian Ocean. Having survived a big storm, Abby was below deck repairing her engine (yes a sixteen year old girl repairing a marine engine) when a rogue wave rolled her boat. It rolled completely, broke her mast, damaged much of her electronic gear and also knocked Abby out for a time according to her account. A few days after her disabling she was rescued by a French ship that was a few hundred miles away--close in the Indian Ocean. Yesterday Abby's mother gave birth to either her seventh or eighth child, a boy named after the captain of the French vessel that rescued Abby.

Before she took off the Helicopter Moms and Dads were out in force trying to get the State of California from preventing Abby from setting sail. Because their own children are coddled, wrapped and taken everywhere in their Navigators or Escalades they feel every child must be like their own. Unfortunately more and more are becoming unable to fend for themselves, or even make breakfast, as parents tend to more and more of their needs. On the other end of the spectrum are more and more children who are ignored by their young parent(s) and raised by grandparents. A gulf is forming between the entitled and pampered and the destitute and ignored among our children. Abby, who is neither, provides hope that once again our nation can raise children who are able to learn skills, focus and apply them to create adventure, conquer goals and challenge themselves and others.

I have a friend who works in a Southern California high school in an urban setting. She is an administrator and over the years her job has evolved so that her primary duties are to work with pregnant students. Keep them in school through their pregnancies and then after delivery getting them back to school. Special classes have to be set up, there are enough pregnancies to have their own teachers. Should not this situation, in just one high school but no doubt reflective of many in our region, be of greater concern than another sixteen year old girl sailing a boat by herself?

This weekend another teenager, a fifteen year old, was shot and killed in Long Beach. Police say he was a gang member, one of tens of thousands of fifteen year olds in the region in gangs. One of hundreds of young teenagers killed in gang violence of the past several years, his murder merits a column on the front page and soon will be forgotten by all but a few. Shouldn't the condition that allows families to raise multiple generations of gang bangers be a bigger concern and issue than parents who have given their children the skills, physical, emotional and intellectual, to sail a high tech boat with the goal of circumnavigation?

On the one end of the spectrum we have the throw-away children the state and local governments feel can be treated with more and more money and programs that have proven do not work as they try not to caste judgement on the parents, but rather want to feel good about how they are trying to tackle the problem. They may feel good about the programs they have developed that continue to fail, but their failure is costing lives and creating future failures as the problems grow. Afraid to look judgemental they cannot come to castigate young, unemployed or still in high school, poor women having babies with absent dads (often thankfully), often more than one baby with more than one dad. These children are on the road to gang membership because there is no family to raise them, but rather a public sector that employs no consequences for the mother, or the father, or the grandmother or grandfather who enabled their teenage children to become parents. But ask their opinion of Abby Sunderland and her parents and the judgements are easy to come by.

Go by any elementary school on a school day and count how many children are walking or riding their bikes to school compared to how many are being dropped off by moms in huge SUVs slurping on a Starbucks or Big Gulp as they drop off their kids then speed off at 35 MPH in the school zone talking on the phone. Go to any sports practice and see how many kids from the neighborhood have walked or rode their bike to the practice compared to how many are not only driven but their parents are sit and watch everything Salem or Montana do.

Our school has a Talent Show and some parents are upset because the kids are judged and winners are announced. Uh-oh! You know what that means? If there is a winner their must be a loser. Yes, I'm sorry but Jennifer or Jose did not sing or dance as well as the other kid--evidently you are the only who could not see it. Do you think Abby Sunderland's parents lamented awards being handed out in school for performance, achievement, success? Probably not, but then their kids probably were and are kicking every other kid's butt.

Drive around neighborhoods on weekends or after school, how many kids do you see out playing in the yards and streets? Was it like this when you were growing up? Our kids are padded from knees, to wrists, to elbows to heads to ride a push scooter. The state has mandated that they be strapped into special car seats until they are practically having their first periods or "night time discharges" and my guess is that by the time my kids reach sixteen the minimum driving age will have moved to eighteen, or maybe twenty-one.

I am not sure what is worse for the future of current generations, the single moms having kids in gang infested communities destined to repopulate the gangs, or the Helicopter Parents who hover over every little move and activity of precious Tonya or Austin. These parents never leave their children, at birthday parties you need food and beverage for each kid and at least one parent, at rehearsals or practices, at school field trips, one wonders if the kids must leave the door open when using the bathroom.

We are raising two types of children, those with no hope because they are born into the high crime, low parental touch, community or they are born into the high touch, afraid to let you fail and learn community. In the meantime Abby Sunderland and her family is criticized because she is neither. God forbid some more children in our society are raised to achieve success on their own, or learn how to cope with failure when they don't.

Ask the mom of the fifteen year old shot down this weekend if she would rather her son met the fate he met, or had the chance to sail around the world with the risk he may die that way. Abby knows the answer.

Abby Sunderland's news conference, does this sound like teenagers you encounter?

Abby Sunderland's web page


Monday, June 28, 2010

May Peace Prevail On Earth

In Sign Language, Spanish, Hebrew and English these words are written, "May Peace Prevail On Earth" and attached to a Peace Pole dedicated on Sunday by the Seal Beach Center for Spiritual Living, a congregation of Religious Science. These words, "May Peace prevail on earth," are part of the weekly service as a lamp is lit symbolizing the desire, the vision for world peace. It is a vision wholly embraced and sought by Doctor Reverend Peggy Price, Dr. Peggy, minister at the church, and spiritual advisor and mentor to many; including yours truly.

Dr. Peggy challenges me routinely with sermons, teachings and our conversations regarding peace on earth. Universal peace, a world without war or armed conflict, is quite a vision. It is a vision everyone certainly has. But to what extent does our current reality enable such a vision? This is the source of my challenges with the means by which the vision may be achieved. I believe it is the source of all, or most, people's challenges with achieving a state of world peace.

I see peace as two-fold, there is Peace which is internal and individual. Daily I strive to live in Peace. Dispel my internal conflicts and quell daily assaults on my psyche that arise from just living life and working at the goals of achieving inner, personal Peace. Release anxieties, fears and frustrations for myself and family at times can be challenging but ultimately working to achieve that inner-Peace brings the release I seek.

Then there is peace, as in peace between nations, between rivals, between foes. This is the peace where there is absence of war, absence of oppression, absence of violence. How do we get to this state of global peace?

Yesterday in her sermon Dr. Peggy spoke of Peace within, saying (paraphrasing and not a direct quote to what she said), no President, no Senator, no Congressman, no Mayor can give us Peace. No Reverend, no Minister, no Priest, no teacher can give us Peace. For each of us must find our own Peace. Once we find it for ourselves by living within it we will show others that Peace so they too may find theirs. But can these people, elected officials, religious leaders, give us "peace?"

Many feel they can. Many feel that if our President and elected leaders withdrew American troops from conflicts and "hot-spots" around the world that other leaders would follow and peace would result. If we speak to the despot building nuclear arms with the intent of destroying another civilization or nation, that conversation will result in peace and the absence of conflict. That if the United States were to unilaterally disarm and disable all nuclear weapons all other nations would follow suit creating a world free from nuclear weapons. Ardent and committed pacifists believe if we remove the military element from our nation we will not have to turn the other cheek as the absence of the ability to make war, even in defense, will disarm those who would strike our cheek in the first place.

Dr. Peggy is not, to my understanding though I have never asked her, an ardent pacifist. She recognizes that past conflicts and wars have resulted in freedom from tyranny, slavery and oppression. Acknowledging the positive outcome of past conflicts seems to acknowledge the potential need for future conflicts resulting in freeing others from tyrannical oppression or protecting freedoms they already have. The question becomes what is a "just" war? A "just" conflict? How is this framed within a vision of global peace?

Peace and safety are inter-related. The safer one feels the more at Peace one is. Absence of threats, physical, financial, social, makes finding Peace a much easier process for us. Perhaps this is why recent studies have shown that we become happier after the age of fifty. A myriad of factors may contribute to the happiness that grows as we age and mature, but deep seeded in this must be an inner-Peace and knowledge of personal safety.

Lack of safety, or the feeling or perception of safety, is the primary factor for lack of peace in our nation. With declarations and acts of war against our country by some Islamists, a small percentage of all Muslims globally, we know we are not entirely safe. For decades now striking in our country and others killing ordinary citizens in their ordinary routines, these groups have changed how we may achieve world peace. No longer lining up army to army, division to division, company to company to wage battle, the new threats to our safety and security come in bombs planted in cars or planes. With a belief of eternal pleasures if they die in their pursuit to eradicate "non-believers" these terrorists create the biggest challenge in history to the freedoms and liberties of not only our nation but others as well. How to combat these threats while maintaining a vision that peace prevails on Earth?

As we enter yet another phase in our war in Afghanistan, a new commander and a deadline to withdrawal American troops and turn over security to the Afghan government. As we face another deadline to withdrawal our troops in Iraq and allow local police and the Iraqi military to provide the security for Iraqi citizens. As we withdrawal our presence while terrorists remain in the region, what is to become of the people who live in the region? How is that vacuum filled? Presumable as it was filled before, by despots and tribal leaders who oppress the population and murder those who are of a different sect or tribe. And how does this impact our safety, or does it? And if it does not should we be concerned?

The United States of America is not perfect, but it is far less imperfect than any other nation on earth. We are a morally just society that has at times lost a bit of its morality. Whatever our flaws and imperfections, we stand as a beacon to those who desire freedom and liberty for all, including women. That beacon is a challenge to those who see freedom and liberty as threats to their power, their beliefs and their ability to oppress. When any conflict or crisis occurs where does the world look for intervention and/or relief? Not China. Not Russia. Not France. Not Senegal or Australia or Venezuela or Cuba. Not Saudi Arabia or Syria or Iran.

What will make it possible for our nation, for America, to be at peace throughout the globe? Free from attacks, free from being a target for those who wish to deny liberty and freedom to all? Free from being called upon to defend and protect other nations?

May peace prevail on Earth. Yes, may it. May it prevail in my lifetime, or my children's, or my grandchildren's, or my great-grandchildren. Some future generation will surely know this vision to come true. For today I embrace the vision for world peace, while also knowing our safety and freedom is challenged and must be defended so those future generations may know that peace.

In the meantime I shall continue to strive for Peace. If all individuals are able to find this Peace it puts us all a step closer to peace prevailing on Earth. First with ourselves, then with our neighbors, then within our community, our city, our state and within our nation. When we reach absence of armed conflict and violence within our own country we then truly become a Beacon for the rest of the world and truly laying the foundation for global Peace.

If you are driving by the corner of 5th and Marina in Seal Beach, as you come to a halt at the stop sign, take a look at the Peace Pole and envision what your life, your children's life, would be like should Peace Prevail on Earth.

Click to learn more about the Seal Beach Center for Spiritual Living

UPDATE: This morning the Supreme Court ruled in McDonald v. Chicago that 2nd Amendment rights extend to all individuals in all states. Interestingly the decision quoted extensively from members of Congress post-Civil War debating the 14th Amendment and the rights of "freedmen", former slaves, to keep and bear arms. The 19th Century lawmakers believed that a "loaded musket" was at times necessary for the freedmen to protect themselves, their families, their household and their freedoms. Peace, avoidance of conflict, by armed protection as a right. Interesting in the historical perspective of a topic still debated today.


Wednesday, June 23, 2010

Politics Like Water

Pour a glass of water on a table and as it spreads imagine instead of water it is politics, for they are similar. Without restraint it flows outward until restrained only by its own surface tension holds it back. It cuts into rock creating new streams and rivers reaching far into continents of mass. We are surrounded by it and it lays constantly under the surface. Life cannot exist without it.

Having beat the metaphor to death, the politics of water has constantly been a source of tension, money and emotions in California. Water is constantly in the news and lately the water news is as constant as it ever was.

The Gulf of Mexico oil spill is constantly in discussions in Southern California, I am guessing more so than many other areas that are not located on the Gulf itself. Our Pacific Ocean border gives us the ability to imagine tar on our own beaches, our own wonderful pelicans covered in oil, our own businesses impacted. The politics of the Gulf spill therefore are also of interest and conversation, unusually quiet in regards to any criticism of the governments response, not surprising but quiet nonetheless.

Arizona passes SB1070 and shakes up the immigration debate across the country. In Southern California that debate includes water. Our shared border with Arizona is water, the Colorado River, source of life for both states and California's agriculture in the region. Even debates on illegal immigration, state sovereignty and interstate commerce include water in California.

A continual debate and mired in politics is the Delta in Northern California. Hundreds of millions in bond measures pass to shore up levys that are as decrepit as those that failed in New Orleans several years ago. Politics of national versus state's rights and jurisdictions, economic and environmental interest lawsuits and the value of water for all versus life for a fish smaller than your finger.

Debate now begins on whether California's decade long drought is finished, living in Southern California I believe there is no drought but rather normal conditions of living in an arid climate and reclaimed desert. The drought debate comes to for as water companies have enacted policies to restrict water use, encourage conservation and raised rates.

Water. As one philosopher said, man values gold but if dying of thirst would give it all for a cup of water. It is our most precious commodity and we cannot sustain ourselves, or our lifestyle, our culture, our communities without it. We cannot make water, though we are trying to convert ocean water to potable water, we are not there yet.

We drink it, we water our property with it, we play in it, on it and under it, we eat from the bounty it sustains, we clean ourselves in it. Water is the focus of some much of our lives, and because of our ocean neighbor, perhaps more so than most parts of the country.

Locally we have had a debate for years regarding a tremendous breakwater that was constructed by the federal government over seventy years ago. The purpose of the breakwater was to create a huge anchorage for ships to make harbor in Long Beach. Then a major Navy town, sailors and soldiers embarked from Long Beach to fight in World War II, Korea and Vietnam. Home to the busiest port complex in the world, ships sit at anchor in the calm waters created by the breakwater before off loading goods from abroad or loading up on American goods.

For many years some of the residents have advocated deconstructing the breakwater and letting waves come crashing on our Long Beach shores once again. The picture above is Long Beach from sometime in the 30's before the breakwater was built, and also the condos and other developments. The Remove The Breakwater (RTB) crowd posits that our community will become flush with tourism dollars as those looking to enjoy the ocean flock to Long Beach rather than Huntington Beach or the South Bay beaches.

The Long Beach is bordered by two rivers, the Los Angeles and San Gabriel. Of particular interest in this breakwater debate is the LA River, more importantly the pigs and slobs who live upstream and dump their trash, crap and junk into the river bed, or that is washed off their streets and into the gutters, through the sewer lines and into the river. Because of the lack of wave action, the RTBs argue, the junk ends up on Long Beach shores. Remove the breakwater and all that junk will no longer be on our beaches and we will have clean ocean water.

Because of the politics and water, in this case water is a giant highway and primary mode of transportation of goods, the Port of Long Beach has a somewhat complex set of policies and restrictions as to where its profits and revenues must go. One would think that because it is in Long Beach, on property in the City of Long Beach and governed by appointments from Long Beach City Hall that Long Beach would benefit greatly from the profits and revenues of the Port. One would think. Because of some politics involving water several decades ago this is not the case. From time to time the City of Long Beach must go to the Port of Long Beach, hat in hand and ask for money. Money to cover development projects such as the Aquarium of the Pacific that cannot meet bond obligations is an example. The Port is like the City's rich uncle who under certain circumstances may help you buy a new car to get to your new job.

The City of Long Beach faces its annual budget deficit crisis. I believe the current number is $19 million but I may be off a few million. We have aging infrastructure that needs replacement and repair, so much so that a bond measure was put before voters specifically to complete infrastructure repairs and replacement because decades of no vision by those at City Hall, elected and appointed, failed to properly budget such expenditures. It failed, and so we are stuck with broken sidewalks, potholed streets, unpaved alleys, failing water and sewer mains.

Last night the City Council of Long Beach voted unanimously, well almost one member was absent, to spend $4 million on a feasibility study. The $4 million price tag is half the cost of the study with the Army Corps of Engineers picking up the other half of the study. The purpose of the study is to determine if the breakwater can be reconfigured to allow waves to return to Long Beach, while protecting existing property and residences and also not interfere with the commerce of the Port by retaining a safe and calm anchorage.

Here are some issues that I have not seen addressed by those most ardent about the breakwater and want its removal.

Isn't the Army Corps of Engineers the organization that was doing feasibility studies and repairs on the levies in New Orleans?

For $8 million of government funds, i.e. taxes, i.e. funds that could be spent on other projects, all we are getting is a survey, a study, paper.

What guarantees do we have that those overseeing the survey, the Army Corps of Engineers, do not have a preconceived outcome that the breakwater cannot be reconfigured? What happens then when our community is $4 million poorer and still have a breakwater?

Assuming the desired outcome from those in favor of spending the money on the survey results, i.e. the breakwater can be reconfigured, what next? Does anyone think that to go through the reconfiguration process will not cost a billion dollars? We are talking about a government project, it costs the government $400,000 to pour concrete for a skatepark or basketball court.

Where is the money to come from to pay for reconfiguring the breakwater? Will the City of Long Beach suddenly become flush, or will the Port of Long Beach be strong armed into coughing up the cash? After all the survey will take four years, then we will have years of planning, during this time several Port Commissioners will be up for re-appointment, or replacement.

Will the number of people going to the beach increase exponentially with the sudden addition of wave action at our beaches? Or will the local economies of Seal Beach, Huntington Beach and the South Bay suffer? Does that matter?

With our civic history of not being very good at budgeting and fiscal control, a scaling back of Marine Department personnel, staffing levels at Long Beach Police Department, the maintenance department and other workers who actually work in the city instead of City Hall, looming because of deficits; where do the funds come to keep the beaches now filled with people clean and safe?

The vision of enabling waves to return to our shores while enabling the vital Port traffic to continue and the property and residences to not be washed away in storms is quite compelling. Spending $4 million of public funds in our current economic state with no plans for what happens next seems short-sighted and wasteful.

The emotion and passion of the water has overcome our city leadership to enter into the agreement for a study. I would prefer that there had been some thought as to how to pay for reconfiguration, how to pay for increased personnel needs, how to manage and mitigate possible traffic and parking issues, had been discussed and thought out before committing to spending what amounts to 25% of our current deficit. On a study.

The lack of "what next" discussions exemplifies the biggest problem with all levels of government. Consequences of decisions and votes are not looked at and analyzed. Votes are made to make supporters happy, to satisfy an immediate visceral cause, and little heed is paid for "what next." How do we pay for what needs to happen next if the study says, yes the breakwater can be reconfigured? If we do not have the answer to that question then the study is a waste of money not matter what it determines.

You've spent the $4 million, now it is up to you, the City Council, to begin work right away on answering the "what if" and "what next." You have four years.

Of course by then we will have a new members of City Council and probably a new Mayor due to term limits and it becomes their problem. Politics.


Monday, June 21, 2010

What If We Ignored Politicians?

I believe that we are surrounded by perfect solutions to all situations at all times. Our humanness either prevents or inhibits our ability to see the myriad of solutions. Our race consciousness overrides the openness required to move beyond what we know, what we think we know, and our innate self-interest so we are receptive to all solutions available. Only by stepping out of ourselves and putting aside our personal history, our demographic identifiers, our prejudices, our expected outcomes, can we then be open to alternative solutions to problems and issues.

Accepting this process of solution finding, what if we ignored our politicians? What if we ignored the solutions that they present to problems that often they themselves have created? What if we ignored solutions that are formed often not because of their worth but rather because of what they can do--raise money and votes? What if we who are closest to most of the issues and problems looked inside ourselves and our immediate community rather than outside for the perfect solutions which exist by we have not seen?

Our problems are a lot different than they used to be. While many problems remain through history, poverty, illiteracy, quality housing for all, the percentage of our population afflicted with these problems are smaller than they were before. Consider the conditions in major urban areas such as New York City, Chicago or San Francisco one hundred years ago and know we have made great strides in education, sanitation, and safety.

But as our problems have changed so has our problem solving. It seems to me that over the years, especially the past few decades, we have ceded more and more of our problem solving and solution providing to those further and further away from ourselves and where problems exist. Instead of looking within our communities to solve our problems with solutions that exist locally, collectively we have removed ourselves and our communities from the process with the exception of a ballot cast every two or four or six years. Rather than having a local issue that needs addressing being addressed by local residents coming together to discuss the issue and the range of solutions, more and more residents have taken the path of waiting for the government to identify and solve the issue.

What if we lived and acted not out of selfish self-interest but out of what is right, ethical, moral? Can we even do this anymore? Our education system has curriculum designed and required by bureaucrats and politicians not in our community. Our health care delivery system has mandates and requirements that place incredible control in the hands of bureaucrats not in our communities protected by politicians residing far away most of the time. Our public safety is more and more detached as local communities interact less and less with those working to protect them. What solutions that we as a community have are even brought forth much less able to be enacted?

What if we ignored our politicians? What if we ignored the attachment identity that not only they have but that many, most, of us have as well. Attachment and detachment identity. What if we ignored politicians who stake themselves to one solution, in doing so their most ardent supporters stake themselves too, inhibiting the free commitment to the myriad of solutions that surround issues. Too often the solution is conceived by political party officials or workers so far removed from the problem being addressed that they have no concept of the issue much less any possible solutions. Too often the solution has very little to do with the actual problem and more to do with the individuals or groups that enable election and re-election.

What if we ignored the solutions offered by politicians to problems and instead required them to offer their philosophy of problem solving? What if instead of them telling us what problems we have and how they plan to solve them we demanded they tell us instead of what role the government should have in solving problems that exist in our community? What if instead of telling us who supports them we demanded instead that they tell us why that support exists? What if we broke down from the required political dialogue of what can you do for me/us and instead learned what can you do that allows me/us to do for ourselves?

Politicians have one purpose, to determine how much of our money they can acquire through taxes and then to determine how that money will be spent. Our money goes to the city, the county, the state, the federal government, with the belief by those given the power to collect our money that they can spend our money better than we can to solve problems that affect us more than them. What if we were able to use that money ourselves to solve these problems ourselves in our own communities? Are we capable? Would we be able to transcend selfish self-interest sufficiently to enact community self-interest and do what is right? Would we see a greater amount of accountability and personal responsibility within ourselves and our community?

Yesterday as we walked into Ralph's grocery store my eight year old asked me, "Dadda, if we are a free country why do we have laws?" I explained to her the value of laws, to ensure that everyone has an equal chance to be free so some of us do not restrict or stop the freedoms of others. But then I thought, she's is on the right track, but I ask "if we are a free country why do we have so many laws?" Because we are enabling our politicians to create more and more laws by ceding more and more control of solving our problems to them.

What if we ignored our politicians and began finding the perfect solutions that exist within ourselves and our own communities? What if our politicians recognized that more laws and more money do not solve problems, but individuals and communities with recognized common values, common morals, common principles of integrity, accountability, personal responsibility and trusteeship can solve problems?

We are surrounded by perfect solutions, are we open to seeing them? Do we have the internal integrity and courage to recognize them and implement them? Can we ignore our politicians and create our own solutions?


Wednesday, June 16, 2010


We use a lot of energy. Twenty million barrels of oil a day. Approximately 1 million tons of coal per year, almost all of it for electricity production. We us a lot of energy. The energy we use is a tremendous economic engine as well. Hundreds of thousands of jobs are tied to energy: production, distribution, transportation and delivery. Billions of dollars in taxes are generated by energy: corporate tax, dividend and capital gains tax, income tax, sales tax, state tax, local utility tax, property tax.

We use a lot of petroleum products besides gasoline for our SUVs, SmartCars and Hybrids. Plastics, paint, technological hard ware, look around where you are sitting right now and try to find something that is entirely natural with no petroleum distillates added. Ignoring the petroleum required to power the manufacturing plants and modes of transportation of the items we use every day, the items themselves are made almost wholly or in part by petroleum distillates.

The food we eat is dependent on oil. Not just to power the tractors and harvesters for farming, or the trucks that transport it from distant farms to our local stores. But also in most of the fertilizer that is used to grow crops.

What is happening in America, and around the globe, is an inability to separate "oil" from "energy." This lack of separation is welcomed by the "global warming" crowd and those who seem bent of removing all fossil fuels from our economies and use. But it is important that we consider the energy issue as two issues: oil for consumer consumption and energy for the production of electricity.

Oil is the current dirty word due to the disaster in the Gulf of Mexico as we turn on our televisions and see the gushing oil from the ocean floor. Knee-jerk reactions were unsurprising to call for the cancellation of all off-shore drilling and some calling for the cessation of all drilling in our country. In the next breath these same people decry our dependence on oil produced abroad. But we consume 20 million barrels of oil a day. But we are not permitted to produce what we consume at home. Venezuela, Nigeria, Iran, Saudi Arabia, Canada, Mexico, are just a few nations willing to continue to extract oil from the earth and send it to America to fill the gap between our domestic production and consumption.

We need to drive less and have more energy efficient cars. How much? What is an acceptable amount of oil consumption? Fifteen million barrels per day? That's a 25% cut in consumption, pretty steep. A fifty percent cut to ten million barrels per day? We can cut our driving and increase the efficiency of our automobiles that much? Maybe use more Hybrid vehicles. But don't they actually have larger "carbon footprints" due to their production?

Let us assume that Americans through economical driving habits and advancing technology of automobile manufacturing are able to reduce our gasoline consumption by fifteen percent. Does that cut the oil consumption by fifteen percent? When we are consuming more and more goods made by petroleum by-products? We are replacing books with little plastic devices. We are replacing our plastic cellular phones every year or two depending on your calling plan. We replace our laptops and home computers every few years to keep up with the changing technology. We are buying new iDevices that are somewhere between our laptop, Kindle and handheld phone/calendar/camera. We buy new printers that are cheaper than purchasing ink for the old printer.

Our entire economy and personal consumption habits are dependent on oil, petroleum, fossil fuels buried in our earth. Our political climate is such that we are shutting down the exploration and extraction of this commodity from the earth within the boundaries of the United States. We are becoming increasingly dependent upon foreign nations and companies for the commodity that is most important to our economy.

We have oil, plenty of it. Oil we can get to without deep water drilling, which is what has created the problem in the Gulf. Had the same incident occurred closer to shore on a slant drilling rig the nation would be talking about the financial reform bill working through the House and Senate and not the oil rig accident that was capped in a few days. Had the same type incident happened on a drilling rig on dry land you never would have heard of it. This disaster is a disaster because of where it is located: one mile under the surface of the ocean.

As politics and extreme environmentalism shuts down the ability to operate drilling and extracting operations in relatively safe environments the likeliness of future drilling disasters like the one now occurring increase. We have plenty of oil, off the Atlantic coast, off the Gulf coast, off the Pacific coast, throughout Alaska, we have oil that can be drilled and extracted without incurring anywhere near the disaster of what is happening now. Last night President Obama spoke about the relationship between oil companies and politics and said something to the effect that we need political "courage and fortitude" I believe were the words used, to break our oil dependency.

What we need is political courage and fortitude to encourage and support production of our oil supply within our nation's boundaries and be serious about reducing our reliance on foreign production--much of it in the control of tyrants who repress their citizens. We are not going to reduce our reliance on foreign oil by reducing our consumption if we continue to reduce our domestic production. What we needed to hear last night from President Obama regarding oil production and consumption was a commitment to utilize our nation's national resources for safer and cleaner extraction of this commodity upon which our economy and way of life balance.

Regarding energy production for our electricity needs, Obama gave us the standard pablum of "green jobs" and increasing solar and wind technologies. Which take up huge swaths of land to provide their relatively clean energy (solar panels and wind propellers are mostly petroleum based in manufacturing) and in California are being opposed by environmentalists so they won't be in production any time soon.

What about nuclear energy? Zero mention of this clean energy that is one reason Europe consume less petroleum, natural gas and coal per person than Americans do--most of their energy is now coming from nuclear power plants. We have entire fleets of decommissioned nuclear submarines that can be converted to provide electricity to our coastal communities. Entirely clean and safe. We have approximately twenty nuclear power plants across the country that are stalled from being put into play because of government and legal issues.

We have the solutions to our national energy "problems." Our issues are not lack of solutions, it is lack of implementation. Our issues are due to dishonest discussions that bend public opinion into keeping us trapped in our dependency of foreign oil production and out of date and dirty energy production. Until President Obama and others in politics break themselves away from the extreme environmentalists we will not be able to implement solid strategies that solve our two issues of energy consumption.


Tuesday, June 15, 2010

Coyote Activity Will Increase Bixby Knolls

I had the pleasure of playing golf at Virginia Country Club this Sunday. We teed off a little early, a bit after 6:30, and about 30 minutes later as we approached the 4th green we saw a coyote running parallel to the fairway and into the brush on the hill between the 4th green, 5th tee (Ladies), 16th tee and 15th green.

When I saw the coyote I said to my playing partner, "Looks like we have some company." He said that evidently there is a litter of pups in the brush in that area. Perhaps Mama was out foraging for her youngsters.

Later in the round we heard many "yips" that those who have heard them first hand know are definitely the sound a pack of coyotes make. Virginia Country Club is abundant with wildlife enjoying the brush, ponds and fields. Besides the coyote we saw a hawk doing lazy circles in the sky, copious amounts of squirrels and several varieties of birds busy in the morning hours. Plenty of feeding opportunities for a family of coyotes.

Also plentiful is the colony of feral cats that I believe still abound between Virginia CC and the Los Cerritos Rancho.

But no matter how abundant the current food supply may be for a mom and her young pups, eventually the hunting grounds will start to expand and when it does residents in the Los Cerritos area, and then Bixby Knolls east of Atlantic and then south of Carson, can expect some increased coyote activity as the summer gets going full swing and the little ones begin to mature.

As they roam the area at night they are looking for easy prey, which includes domesticated animals out for the night. If you see one or more during your morning or evening walks make plenty of noise, yelling, whistling and clapping, and usually they will trot off away from you.
One antidote for them coming onto your property is to spread human urine on your yard, garden or perimeter--sounds like a good excuse for the neighbors to come together for a "Make Coyote Repellent Party!"

For those golfers reading this, after spotting the coyote I two putted from the back of the green to the front pin location for par and my buddy knocked in his uphill eight footer for birdie. Mama Coyote was good luck, and we needed her for one more hole as we proceeded to double and triple the par 5 fifth.

Watch your pets.


Monday, June 14, 2010

Credit or Debit?

A question we are used to answering as we pay for our goods and services at coffee shops, grocery stores, barber shops and book stores. The assumption by retailers is that you will not be paying cash for your transaction, but rather that you will swipe either a credit card or a debit card tied to your bank account. With over $1.63 Trillion in debit card transactions in 2009 according to J. D. Power & Associates survey, compared to $20 billion in credit card transactions, Americans are saying "debit" more frequently.

With consumer spending dropping in the recent recession, so to has consumer debt. Seeing an increase in debit card usage and decline in credit card usage for purchases is not surprising as consumers begin to reign in buying "wants" and stick to "needs." Through all of these transactions is a myriad of companies and fees that scrape a little off the total bill of $43.56 you just paid at Trader Joe's to handle the transaction and make your check out so easy.

There are different fees for debit cards and credit cards and most retailers prefer the debit card transaction as it costs them less per transaction. With the rising numbers of debit card transactions, retailers are facing a choice, or have already slowly implemented their choice: raise prices or lower profit margins, because of the rising costs of doing business with a consumer that is moving away from cash. Years ago AM/PM made the move to give the consumer the choice: pay cash or pay $0.45 more on your transaction to use a credit or debit card. The choice most retailers are making has been an incremental increase in prices, a penny hear a nickel there to cover their increased operating expenses due to decreasing cash transactions.

When you swipe your card at the cash register the merchant pays a fee up to 2.95% of the total transaction cost plus a flat fee up to $0.15 (fifteen cents). Larger retailers such as Home Depot or Kroger's, have a better rate than smaller merchants that may have only one or two, or even ten, stores. The percentage rate can, and usually does, vary by the size of the transaction with the higher rate being for smaller purchases. A stand alone coffee shop with an average transaction of $4.32 will most likely pay the highest fees for offering the convenience of card transactions, using the $4.32 transaction up to $0.28 (6%) can be for fees so you can use your card. In addition to the swipe fee the retailer has standard bank fees for statements, transfers, etc.

Looking forward the retailers and banks realize that the use of debit cards for transactions are likely to increase as more and more consumers become used to using them, essentially as those who grow up with debit cards make them an integral part of their financial habits, just like on-line bill pay. Banks and Visa/MasterCard have been increasing their marketing to use debit cards because of the billions in fees collected by the use of these cards through the interchange rates per transaction. Retailers have been supporting their use to an extent, as banks have been raising their fees for debit cards the convenience offered customers balanced against the higher fees offset by a recession that makes raising prices very difficult, retailers are in a difficult financial position. Especially smaller retailers.

This huge financial industry that is integral to almost all of our lives now has a new factor with which to contend: politics. President Obama, Majority Leader Reid and Speaker Pelosi have found a silver lining in the Gulf oil disaster, it has completely obfuscated all news on their financial reform bills. As complex, confusing and disjointed as the health care reform act, the financial reforms coming out of yet another multi-thousand page bill have seen little scrutiny by the media. As a result most Americans are completely ignorant of many provisions that will impact their daily lives. In fact many industries are still trying to learn how they will be impacted if the bills are passed as they currently stand.

One aspect of the current bill in the Senate is to limit the fees that can be charged retailers for interchange fees. The purpose of this is, of course, to "protect the consumer." The principle being to limit the fees that banks and credit card companies can charge retailers will limit the charges passed onto consumers for debit charges through higher prices needed to off-set the bank fees. This works very well for the retailer and the large banks such as Chase and Bank of America, but not so well for many consumers and the smaller community banks and credit unions.

Under the proposal the government will set the interchange fees for debit and credit card purchases and the supposition is the fees will be much lower than they are today. Seeing the billions of dollars to the banking and credit card industry in these fees that ultimately are paid by consumers through prices at retailers, the politicians feel having government control of these fees will lower the costs to consumers by taking them out of bank profits. But like taxes, fees or inability to collect fees to maintain profit margins, are always passed along to consumers.

Small banks and credit unions are strongly opposed to the government intervention in the interchange fee market and especially forcing lower fees. They are communicating to their customers that such a reform will result in their having to raise their bank fees to depositors, and/or charge a fee for every debit transaction they process to individual accounts to make up for lost fees from retailers. They argue that retailers most likely will not lower their costs to make up for the lower fees imposed by the government, so in the end consumers will pay the same retail costs plus higher bank fees for the convenience of using debit cards.

Retailers, particularly small retailers, have long complained of the high costs of debit and credit card fees paid to banks, fees that have become increasingly more noticeable to them as the number of cashless transactions they process has risen. Banks count of the fees to ensure profitability, or at least lower operating costs; as has been seen in the past few years many banks are on the verge or have been past the verge of profitability. Caught in between, as always and as the market system is supposed to work, are the consumers. Choosing between quality, price and service consumers make their choices known by where they swipe their cards. With the pending legislation impacting bank fees consumers will then be faced with making their choices on which banks to use based on what charges will accrue to them for the convenience of using debit cards for their transactions.

Since 2007 we have heard "too big to fail" in many different ways. In looking ahead to the future for American consumers and their financial options, it appears Congress and the Administration would rather have a few very large banks, lets call them huge, versus an economy with many small community banks and credit unions serving local populations. By moving the charges to consumers for using debit cards from the retailers to the banks, the pending legislation will move consumers from smaller banks to larger banks that will be able to use economies of scale to offer lower fees to a larger customer base.

As a consumer that uses a debit card significantly more than cash for my purchases, I would much rather pay the retailer for any interchange fees as part of the price of the goods and services I am purchasing than have additional fees added to my monthly bank charges. For one in any given month I do not know how many such charges I will have making it difficult to properly budget these fees.

Do you use mostly cash or debit/credit cards for your everyday transactions? Would you rather pay for the convenience of these transactions at the cash register or through your bank fees? Click on "comments" below (itty-bitty next to "Posted by Dennis C Smith...") and let us know will you go back to cash or stick with debit card if fees change?


Wednesday, June 9, 2010

California Crossroads

California voters have put the state at a crossroads. Using Robert Frost's "The Road Not Taken" as an analogy. One is a road deeply trodden black from elections past, the other grassy and wanting for wear.

One road will echo the path of Washington the past eighteen months, the other provide the people with protection from reckless spending, higher taxes and continuing failed economic policies that have pushed our state, and nation, down the road of insolvency.

With our gerrymandered districts for State Senate and Assembly there is little chance the composite of the California Legislature will change. It will remain firmly in control of Democratic majorities, who will need just a few defectors from the GOP side to pass any budgets. Not needed will be any defections to pass mountains of legislation that impact businesses, daily life and continue the intrusion of the state into our lives.

Our government is set up with a system of checks and balances, you learned about them in high school, or should have. Unfortunately too many voters, most voters, do not appreciate their role in the checks and balances between the Legislature and the Executive. Having one party with a significant control over the Legislature and the Executive removes safeguards for extreme legislation.

In the primary election yesterday Meg Whitman secured the Republican nomination in a brutal campaign with mostly Steve Poizner. Whitman trounced Poizner but in the campaign he took more than an ounce of flesh. In a critical election, once again the California Republican Party shows no discipline, no cohesion and assists the Democrats with a close primary fight that wounds the winner financially and politically. Whitman having secured the nomination of the minority party must now unite not only the Republican Party but also enough Independent and Conservative Democrats (are there any in California) to upset her opponent. If Poizner truly cared about this election he would start today in congratulating Whitman on the race and work hard for her campaign for November--without his supporters the race is lost.

Whitman's opponent is no surprise. Spending perhaps $100,000 through the primary former Governor Jerry Brown secured the nomination in a landslide. Making no news, merely sitting back and letting the two Republican candidates pound the politics out of each other, Brown's campaign just ran their DVRs and recorded what a fellow Republican said about Brown's opponent. The Democrats kept any serious candidates out of the race allowing no spears to chink Brown's armor.

Jerry Brown is an open book. He will campaign as close to the center as he can get. He need not appeal to the Democratic base because he is the base: he defines liberalism in California as shown by his years in the Governor's mansion, Mayor of Oakland and more recently as Attorney General. His sole campaign strategy will be to appeal to Independents and the right-wing of the Democratic Party. Sound familiar to November 2008? Like then Senator Obama, Brown can leave his principles and ideology off the campaign trail and pick them back up when, if, elected.

Quickly looking down ticket it is a landslide for Democrats: Lt. Governor will pit Abel Maldonado (R) against San Francisco Mayor Gavin Newsome (D). Maldonado has angered many in the GOP with his vote to raise taxes last year; Newsome is Jerry Jr. with his liberal agenda and willingness to ignore the California Constitution for his own political gain and popularity.

Secretary of State Debra Bowen (D) will face unknown Damon Dunn and unless she is caught doing something illegal will cruise to victory, though depending on the illegal act California voters will probably ignore and transgressions and re-elect her anyway.

Similarly Treasurer Bill Lockyer (D) will face Mimi Walters in a race that should mirror the Secretary of State race.

Perhaps showing some competitiveness will be the race for Attorney General between Kamala Harris (D) and Steve Cooley (R). Cooley has a record that can appeal to the middle, but enough to defeat rising star Harris? He may not contain the GOP base, which would be a shame for that base if they do not support him, if not he goes down.

Governor, Lt. Governor, Secretary of State, Treasurer, Attorney General, at a minimum four of the five seats can, and probably will, go Democrat. Facing the "checks" and "balances" of a Democratic Senate and Democratic Assembly.

So the question Californians need to ask is this: Can our state afford having every statewide office plus the Legislature in the control of one party? If you answer "no" then you need to support Meg Whitman for Governor, not just with your vote but with your voice, your money and your relationships. If you answer "yes" then just sit back and wait.

I shall be telling this with a sigh

Somewhere ages and ages hence:

Two roads diverged in a wood, and I—

I took the one less traveled by,

And that has made all the difference.

Excerpt from "The Road Not Taken" by Robert Frost

Will California take the one less traveled by?


Tuesday, June 8, 2010

Joe Friday Interviews President Obama

He brought us "just the facts, ma'am" now he comes back to life to interview the President.


Monday, June 7, 2010

More Jobs On Your Payroll

On Friday the Labor Department released employment figures for the Month of May. To those who just read the headlines the news was fantastic, 431,000 net new jobs in the economy. Unfortunately headlines are not news, except to the lazy and continuously uninformed. Beyond the headlines we learned that the actual number that should have been highlighted by news publishers was 41,000. That was the number of private sector jobs created in May.

Of the 431,000 jobs created 411,000 were temporary Census workers hired by the Federal Government. And according to some reports the Census is firing workers and then re-hiring them to pad their employment reports (NY Post, Neil Cavuto, CBS Sacramento). So we do not know is if the 411,000 being touted as new hires by the Census are representative or inflated. Keep in mind that to count as a new job the Census Bureau must hire someone to work one hour in a month. Sounds like unemployment to most people but not the Labor Department.

What gets lost in these numbers are the payments these workers receive, the cost to train them to knock on doors and say "How many people live here," are paid by taxpayers. Taxes that come from public sector jobs are just recirculating dollars within the government sink, taxes that come from the private sector are adding new water to the sink--water to replace that which has gone down the drain.

With only 41,000 new jobs in the private sector supporting 411,000 new jobs in the public sector it seems well continues to run dry to support expanding, or even current levels, of government employment. Meanwhile the majority in Washington (and Sacramento, Albany, Springfield...) and the Chief Executive feel more spending will create more jobs. This may be so on a very limited basis if any spending is actually being done to create private sector jobs, but that is not what has occurred or what is planned to be spent next.

Government spending to stimulate the economy is referred to as Keynesian Economics, after economist John Maynard Keynes. Keynes' philosophy of government fiscal policy to stimulate an economy was very popular with Western governments after World War II and the policies seemed successful as economies boomed. That economies had tremendous manufacturing bases built to produce war material now converted to consumer goods seems lost on the economic historians touting the success of Keynesian activity during the Fifties and Sixties. As the economies slowed and the oil embargoes pushed the cost of production higher in the Seventies Keynesian policies began to unravel. No mind to Europe as social democrats continued their progress to where they are today, deep in debt, high percentage of their populations on government payrolls or entitlements and being forced to rapidly retract government spending and handouts.

The White House is under the economic policy advice of Keynesian philosophy. The modern neo-Keynesian philosophy is that for every dollar the government spends economic output will grow 1.5 times, a fifty percent return. Under this philosophy the "Stimulus Plan" in February 2009 of $787 Billion should have a return of almost $1.2 Trillion. Except there has been practically no return as most of the funds did not go into jobs stimulation in the private sector.

Underlying the Keynesian $1 of spending is that dollar has to come from somewhere, and that somewhere is the private sector. For the efficiency of government spending it needs to collect almost $2 for $1 it wishes to spend in transfer payments (social security, Medicare, government salaries). Further exacerbating the current situation is that most of the spending on "jobs" bills in Congress have nothing to do with enabling the private sector to create jobs, but rather end up increasing taxes on the private sector that inhibits job creation. Increasing payments to unemployed workers is not a "jobs" program, it pays people not to work. Making massive payments to state governments, $100 billion so far and requests for at least $25 billion more, to retain teachers is not a "jobs" program. Increasing taxes over $80 billion on small businesses is not a "jobs" program. All these measures continue or expand government payrolls, benefits and pensions that are being supported by a shrinking private sector.

Small and medium size businesses provide the overwhelming majority of jobs in the private sector. For the past few years credit has been almost non-existent to this sector restricting operating expenses, growth and expansion. Credit has been tight as banks are concerned about balance sheet audits and federal take-overs of banks considered "risky" by the Feds. Lending to small businesses can be risky. Too many small business loans by a local community bank results in a balance sheet that the Feds may not appreciate and require the bank to be absorbed by a larger regional or national bank. With the risk of losing a charter on the horizon smart bankers are sitting on their deposits.

Small and medium size businesses generally do not operate with the reserves or ability to gather capital like large businesses and multinational corporations. With the entitlement and benefit mandates included in Obamacare and other industry specific legislation passed many businesses do not have an idea of what their future costs will be. If I hire a new worker at $45,000 per year will it end up costing me $60,000 per year? Will the extended benefits I will have to provide to my current workers equal $45,000 so I should save the funds to insure against future employment costs? Uncertainty leads to stagnation. Few businesses expand into an uncertain economic environment. Faced with higher costs in benefits and taxes most businesses are not going to take on new employees until they know exactly what the cost-benefit analysis will be.

With many small and medium sized businesses family owned as either LLCs, Sole Proprietor or S Corporations profits and net income flow from the company income statement onto the personal tax returns. If the company profits $250,000 and the business owner decides to retain $150,000 in capital for reserves and cover operating costs, lines of credit or future equipment replacement, he is still taxed on the $250,000. A magic number with the Obama Administration to eliminate tax deductions for home interest deductions, increase marginal tax rates and expand taxes to health care premiums and other expenses. Facing increased costs on the business and personal side of the income stream business owners are not willing to invest in expansion or growth to further increase the net negative on their personal net incomes.

Throughout the current Congress every piece of legislation has expanded government and restricted private business. American Recovery and Reinvestment Act (Stimulus), Obamacare, Cap and Trade, Financial Reform, all programs near or over $1 Trillion have expanded government spending on government employees and increased the taxes, and therefore burdens, on the private sector.

Currently our federal debt is $13 Trillion and our national Gross Domestic Product is $14.4 Trillion. We owe 90% of what we produce. The debt is growing at a pace of $1 million every thirty seconds, the GDP is growing at a pace of $1 million every two minutes. Our debt is growing four times as fast as our production.

We need our elected representatives to stop pouring hundreds of billions of dollars into spending that does not directly produce private sector jobs. Failure to do this will create an economy that is an upside down pyramid with the balancing on the private sector becoming less and less secure. For examples of this look at the economies in Europe with huge public payrolls and entitlements balances on a shrinking private sector no longer able to support the taxes required for those payments.

Here's a "jobs" bill: expand the 2001 tax cuts across the board; reduce taxes by 10% on small and medium size businesses; suspend revenue collections under Obamacare for a minimum of twelve months; kill Cap and Trade; cap Federal payroll and benefits at 2% growth per year for the next five years.

Finally, quit thinking that the Federal Government can spend my money better than I can. Small business owners want to increase their company payrolls not the payrolls supported by their taxes.


Friday, June 4, 2010

Why I Do What I Do

For those of you reading this who don't know what I do, I am a mortgage broker. I have been in the industry since 1988 and have a strong passion and commitment to my work. Every Friday I write and send to my past and current clients, real estate professionals and assorted others my "Weekly Rate and Market Update." It includes a Question of the Week that is generally sent to me to answer.
This week I used a question I am asked often from various areas, including within: Why do you stay in the industry? To answer the question I tell the story of a recent client. It perfectly summarizes why I do what I do.

Question of the week: Why do you stay in the industry?

Answer: This is a question I get from within the industry from time to time, and from within myself from time to time as well, checking in to see if I am still doing what I do for the right reasons. With all that has occurred in the last several years, and all the regulatory changes that are on-going, it certainly has been easy to question our participation and motivation. That said, I am a firm believer that everyone should ask this question of themselves regularly.

This week confirmed for me why I am in the mortgage business. While at times I enjoy what I do more than others, in the end helping a family achieve their dream of homeownership is the core of what I do. Along the way helping other families with financial management with refinancing is a big plus, but still secondary to the homeownership piece.

Every family’s home is special and I appreciate working with all my clients get the keys to their own front door. Some families however take a bit of a stronger hold on my heart as we pursue together their new home. These are the loans that strongly remind me why I am in this industry and will be in it for many, many years to come.

In April I was contacted by Eileen. She and her husband, Nick, wanted to purchase a condominium. They have a daughter with disabilities and wanted the permanence of their own home for themselves and for her as they raise her. There were challenges for us, we would be using a PERS loan, Eileen is a member of the Public Employees Retirement System which allows accessing retirement funds as a secured loan to use as down payment for purchasing a home. Because of the type of loan our lender partners were limited. As well we had less than 20% down so we would need private mortgage insurance, PMI, on a condo. Further complicating the issue was Nick teaches at night at a couple of different colleges so he can be with their daughter during the day.

One thing that came across very early was the commitment Eileen and Nick had to becoming homeowners. On meeting them and going through their qualification material I too became committed to their goal. Along with their agent, Jennifer, a team Eileen and Nick came together. Quickly they found the unit they wanted, unfortunately it was beyond their price range. But they were committed and this was the home they wanted.

Writing an offer below list price and at the edge of their price range, Eileen and Nick wrote a letter to the seller explaining why they wanted to purchase this property. Being honest about their situation and their desire for a home for their daughter had an impact and the sellers agreed to their offer.

Loan processes these past few years have become increasingly challenging with lenders tightening their standards and double crossing every “t” re-dotting every “i” and scrutinizing every comma. The primary reason is to ensure any loan they fund will be purchased by FHA, Fannie Mae or Freddie Mac. Knowing this and also the lender we would need to work with because Eileen and Nick were applying for a PERS loan, I warned everyone in the transaction, “By the time this transaction is completed we will probably go through the wringer. The lender will ask for additional paperwork, forms, etc that we do not even know about yet. There is a very good chance that at the end you will not want to do business with me again, and that is fine. I understand that and it is part of the business. But despite all this I will focus on one goal and that is the goal of Eileen and Nick to become homeowners. No matter what happens that is my goal.”

Thankfully, very thankfully, everyone in the transaction understood and were committed to the same goal. The professionals in the transaction acted as professionals (thank you Jennifer, Carol and Carmen among others) and when a snag popped up did not lose their heads calling and screaming at everyone.

It could have been one of those deals to get the label “Nightmare.” But instead it became one labeled “Career Validation.” No matter what was needed, instead of asking “why do they need that…” and trying to argue the request from the underwriter, the document or form was provided by whoever needed to provide it. No matter what the delay, instead of yelling and screaming about docs not being sent from PERS, or underwriting not signing off on a condition yet, the response was, “okay, let us know when you hear something.”

Everyone was on Team Eileen and Nick. Everyone wanted them to have this home for themselves and their daughter. Everyone worked together and kept working together to the finish.

Yesterday after more running around and collecting documentation asked for by the underwriter an hour before the funding deadline we finally provided everything we thought could be provided. As the 12:30 deadline approached I sat at my laptop staring at the clock in the corner.

At 12:31 I received an email and picked up the phone. “Eileen, we funded. You are going to be a homeowner.” Gratitude. Tears. On both ends of the phone.

Thank you Eileen and Nick for allowing me the opportunity to help you with your goal of homeownership. Thank you for showing me why I am in the mortgage business and what it is I get to do every day.

Our industry gets kicked around a lot. There are plenty of people who do damage to the industry with their rotten behavior and looking to make what they can on who they can. But for most of us in the mortgage business we are in it because of Eileen and Nick. And Curtis and Lisa. And Donna. Or Lee. Or Steve and John. We are in the business to enable and protect homeownership and allow families to fulfill their goals and objectives.

Thank you for allowing me this indulgence this week to tell why this business is so important and why most of us still in it remain. And a special thanks to all those who support my business and have used me for their mortgage needs throughout the twenty plus years I’ve been taking loan apps and making the phone call, “we funded.”
Have a question for me? Ask me!


Wednesday, June 2, 2010


It is that time of year again when elected officials in Sacramento realize their deadline to have a budget in place is rapidly approaching and they need to quit spending time proposing laws that require citizens to use light bulbs filled with hazardous materials, ban parking in cities, and close businesses and move jobs across state borders. We are in the time period when Sacramento must figure out how to pay for the excessive spending habits they have not reined in through previous budgets, or if they will continue their habits and find other ways to fill the approximately $20 - 25 billion deficit.

You may recall that last year a similar gap was filled mainly with new taxes and more borrowing by the state. A budget was finally passed when a few Republicans in the Assembly and in the Senate left party ranks and joined the Democrats in voting "aye" and then Governor Schwarzenegger backing down off his rhetoric about no new taxes and signing the bill. Of the Republicans that crossed the aisle to raise taxes a few of them are termed out and now running for statewide office, those facing re-election are facing voters with long memories of their budget votes.

For this year's budget dance the Governor has proposed his budget, without any tax increases, and immediately it was picked apart by the major media in the state (read: Los Angeles Times, San Francisco Chronicle) and the Democrats as being "unfairly balanced" on the poor. Not facing the reality of the fact that a budget where the bulk of the spending goes to either public employee salaries or services to the "poor." I say "poor" because it seems the definition of "poor" for purposes of receiving free services from the state keeps moving up the income ladder. Further, like many states but more than most, our illegal immigrant population enjoys the ability to partake of most of these benefits and services.

Having expanded the scope of medical, education, housing and nutrition services throughout the state while decreasing the opportunities for private businesses to open and expand, Sacramento has created a balance sheet that is light on services for taxpayers and employers and heavy on services for those defined a "in need" by state bureaucrats and politicians. Now that it is time to close a $20 billion gap between revenues from fees and taxes and spending the Governor has realized that the revenue side of the budget is tapped out. Any more taxes in an economy with unemployment close to 15% in the state and unemployment plus under-employment exceeding 20% will greatly reduce future revenue through reduced tax collection due to increased job loss, corporate relocations and drop in consumer spending. Schwarzenegger realizes spending must be cut.

Naturally in criticizing Schwarzenegger's budget individual programs are chosen and picked to show the inhumanity of his budget cutting $10 million from a program that helps the elderly exercise or $25 million from a program that provides free dental cleanings to children in-need. With every story about the budget we receive the individual human interest story of someone impacted by the cruelty of the Governor's budget. Inevitably there is no suggestion as to what should be cut to close the $20 billion budget. Note that not reported are the individual stories of the worker laid off because his company has higher tax and regulatory obligations.

On the Democrats side Assembly Speaker John Perez has proposed a budget that does not cut spending, increases taxes on oil production, extends the "temporary" tax increases passed in earlier budgets, postpones a corporate tax credit for expanding businesses and job creation and borrows $9 billion. Yes, borrows $9 billion to fill the budget deficit.

So as we eagerly await the June 30th deadline to pass a budget that will undoubtedly be missed yet again, we can assess the California economic landscape in which the budget debates will occur. Rising unemployment is reducing payroll tax revenue. Increases in business failures and closings are reducing corporate income tax revenue. Increased "wealth flight" is decrease personal tax revenue on interest, dividends and capital gains. Increased unemployment is reducing consumer spending reducing sales tax revenues. Continued foreclosures on residential housing continues property value declines in some areas while other areas have struggled back to flat values, decreasing property tax revenues. An increasing rise in commercial foreclosures will see a result of decreasing commercial property values, decreasing property tax revenues.

The economic engines that generate tax revenues are in decline in the state. One of the factors in our last several budget deficits has been an over-estimate of tax revenue collection. Raising more taxes in this environment will create a bigger budget deficit merely due to another under-estimate of tax revenue due to a budget increasing taxes, again.

California is Greece. Greece's economy crashed and it took an emergency bailout from other nations to save the country. But the bailout came with strings. Greece had to change its social democratic priorities and cut spending, cut entitlements and put the economy on a foundation of a private sector generating jobs not taxes for government salaries and benefits. Government programs and entitlements that created a budget that was incredibly upside down and balanced on private jobs and companies for the benefit of public sector jobs and entitlement recipients finally tipped over.

California's budget has become similarly upside and balanced on the on the private sector. Unless the majority in Sacramento understand the economics of our state economy and public spending the budget will tip further towards complete default in the near future.

Sacramento must balance a budget based not on more taxes and expected tax revenue, and especially not on more borrowing, but rather on systematic and institutional cuts to spending and allocation of resources. We have seen through the relative lack of loss in service due to furloughs that we can cut significant amounts from departments across the state with little productivity loss. Spending must be cut, any failure to do so will plunge the state into default and economic chaos in the very near future.

Who knows, maybe the plan is to run the state over the brink forcing Washington to come save the state with a huge bail-out of its own. Being the 7th biggest economy in the world how can Washington allow it to fail? Does "too big to fail" apply to states? Maybe that is the safety net for Speaker Perez and the majority as they start to move ahead with with their plan to spend, tax and borrow out of the budget deficit.

Thankfully our State Constitution requires a two-thirds majority requirement to pass a budget. I am hoping this year every member of the minority holds firm to not passing any budget that will increase taxes and borrowing to achieve a balance, but I'm sure there will be enough defections at some point in the process to push California closer to complete default.

Remember votes counts, they have led us to where we are now. Will yours help us change direction in the future?