GOP Candidates Are Crabs In A Bucket

A man walks is in a small town by the Chesapeake Bay. He walks by a store and sees a bucket of crabs without a lid sitting by the door. The man goes into the store and asks the woman behind the counter, "excuse me ma'am but you know your crab bucket out there has no lid. Aren't you afraid some will get out?"

"No they won't escape, they are Republican crabs."

"Why are they Republican crabs?"

"Because as soon as one starts to get ahead and get up out of the bucket the others reach up and pull him back into the bucket."

That is what I think about as I watch the Republican Presidential candidates go at each other on issues that they should not be focusing on. Instead of focusing all their efforts on the poor performance President Obama has had in the White House, his failed economic and fiscal policies, the rising unemployment during his tenure, the continued lack of confidence of consumers and business owners, the candidates are attacking each other and pulling each other down. This only plays to the benefit of Obama and his re-election as the media will use the sound bites of Republicans to discredit whichever candidate gains the nomination.

Republican candidates, voters and pundits need to focus on what matters to our nation: jobs, jobs, jobs and economic growth.

Focus on the $4 trillion spent in deficit spending since Obama took office that has not stimulated our economy.

Focus on the myriad of business restrictions and job killing policies from Obama's regulators.

Focus on ObamaCare that was put through Congress with only Democratic support and is hindering business expansion.

Focus on Dodd-Frank passed with only Democratic support that is restricting lending and the ability for small businesses to obtain credit.

Quit focusing on "gotcha's" in debates on other GOP candidates and attack the incumbent, his party and their policies that has stifled business growth and economic development. Present what will happen when you take office to eliminate these programs.

Focus not on your opponent in the primaries but our opponent in the general election in 2012. Quit acting like crabs in a bucket.

Creating Unemployment: Squeezing America's Economic Engine

I don't think our company, Stratis Financial, is much different than many companies in America. A few guys were dissatisfied with their existing employer, had no stake in the company or its future, a few issues came to a head soon everyone was looking to go somewhere else. Meeting to talk about our woes, one person says, "I'm looking into just renting a small space and going it alone." Pretty soon we were engaged in what would be needed to start a company where we all had a stake. A few months later we opened with leases for space and furniture. We financed computers, and took out equity loans on our homes to capitalize. We made personal guarantees on our financial agreements and also with our vendors. We were personally risking our personal savings, equity and credit because we believed in our vision and each other.

Finally ready and opening our doors in two locations we had four people on payroll that had to be paid on the 15th and 31st of every month. We went four months before any of us took any commissions for ourselves, continually returning our earnings from our sales back into the company. Our wives supported our vision and made sacrifices at home. We struggled but we slowly continued to grow.

We had a boom period that we used to pay debt down and off, update and upgrade equipment and technology, invest in our company. This was followed by a slow leak and then a complete bust. But we knew the drill, we tightened our belts, re-arranged some schedules and worked hard to ensure minimal impact on our staff and their families. We again used equity lines to capitalize the company and ensure operating funds. We struggled, but we kept our doors open and our staff kept their jobs. With the slow business we would have been justified in restructuring, laying people off, closing an office, consolidating. But we love the people we work with, the have pictures or our children mixed with pictures of their own. We are a family, we look out for each other. We struggle, we try to minimize their struggle.

Now we are growing again, because we struggled and stayed open we are attracting people who want to work with us instead of their current companies--if they are still open. But we are not rushing into growth. We are slow and steady and making sure everyone fits. Our over riding motto in bringing people into our company is "would you have them over to Sunday dinner?" It's not just about how many sales you can do, how fast you can do the work, it is about how well you do your sales and how well you do your work. Does the client come first and right on top of that quality? We are open because we adhere to our core values and principals. Better someone not get a loan they cannot afford than we get a closed deal and a commission. We are still open because it works.

We are using the growth of this year to reinvest in our company, retain earnings so we can be prepared for the challenges that continue to hit our business and industry and be prepared for 2010 and beyond. We are a small business, we need to be ready for what is coming next that could slow down our sales volume through regulations, policies and politics. We need to ensure that our business model allows our people to still have jobs and we are still able to help our clients attain and retain homeownership.

We are a small business but not unlike millions of other small businesses throughout the United States. The statistics vary but companies that employ less than 100 people account for approximately 35-40% of the jobs in this country. In the current economy the number of small businesses and self-employed individuals starting companies is actually growing. Out of work and tired of using their creative talents and skills for someone else the inner-entrepreneur and American spirit of adventure leads them to give it a go. They are risking their personal finances and credit to provide jobs for others so they can achieve their visions. They are bringing sack lunches to work and hurting other small businesses--restaurants--by cutting back on their nights outs so they can ensure they can make payroll in five days. Most of them are family run and employees are like family. Benefits like insurance and retirement are provided and shared contributions are made. Labor laws are followed and concessions made because of the personal nature between ownership and labor. Sometimes it is a struggle, but everyone works together to ensure doors stay open, customers are taken care of and everyone can pay their bills. In times of crisis personal loans are made.

They are the backbone and the economic engine for America and its economy.

Under the Pelosi health care plan recently passed by a bare minimum of votes most of these small American businesses are now categorized at "big business" with the definition being total payroll. If a business has a payroll of $500,000 or more it is considered "big business" and under the legislation fully responsible for health care insurance for their employees. It doesn't take much for a company to reach $500,000 in payroll, look at the family owned restaurant with an executive chef, a couple of dishwashers and busboys, some wait staff, personell upfront, perhaps employing fifteen to twenty people; simple math puts the average salary at just over $2000 per month. Consider the small manufacturer specializing in auto upholstery with fifteen employees and specialists in pattern making, sales people, shop manager, how hard is it to get to $500,000 in total payroll? Add 10-15% to the costs of the employer and what has to happen? maybe now we have 14 employees, or 13.

Under the constant push to pay for programs President Obama and Democrats seem to have set the income limit for "America's wealthiest" at $250,000 per year, frequently the verbage is $250,000 for a married couple. Consider the small business owners who have their ups and downs, on the up years they pay down and pay off debt incurred in the down years to keep their business open, continue payrolls, sacrificing to ensure those dependent on them are safe. In the up years profits are plowed into the debt and savings to repay and reload. While our family has not experienced this sort of income, it would be nice to be able to and know that our sacrifice and hard work to get to this income level is not instantly penalized so that we can support wasteful spending in Washington. Support another TARP or stimulus package. Many people see that income level and think of CEOs and attorneys and doctors and other "rich people." In reality a couple that has an upper level government employee and a tenured teacher with several years and creditials reach that mark as well. But it is the small business person who pays the taxes at the expense of their business.

More taxes for small business means less reinvestment in their business. Higher fees and costs means less money available for raises or bonuses. Higher costs imposed on small businesses means someone is probably losing a job. Small business owners have it all on the line, personal guarantees on leases, their monthly income directly tied to company profitability, payroll that at times comes out of their own pockets. Like a mom who feeds her child first and herself second, America's small business owners pay their dedicated and loyal employees first and themselves second. At some point however if it is between their child's education account or a receptionist, we are going to have to answer the phone ourselves.

Sadly I do not find it ironic but rather normal that in front of the cameras Congressional leadership and the White House are talking about jobs, jobs, jobs and trying to spin and rationalize the abomination of waste that is becoming evident from the stimulus package. Telling America they are working to create and save jobs while unemployment rises and they push more and more debt onto the balance sheet. Inside away from the microphones they are voting for more taxes on the very people that create and save jobs. Inside conference rooms they plan how to increase taxes on those who write payroll checks and decide to lay off or hire depending on their business revenue and cash flow.

History has proven time and again and in economies across the world that lower taxes on business leads to higher employment. Ronald Reagan's tax cuts from Jimmy Carter's oppressive marginal tax rates led to a massive economic recovery and slashing of unemployment. George W. Bush's tax cuts led to record tax revenue for the Treasury and over 95% of Americans being employed. Give American business, especially small business, more cash flow and they will reinvest it in their companies and more people will be employed. Take away cash flow, take more of the revenue and people will lose jobs.

With one year left until the 2010 midterm elections watch how the incumbents and party in the majority spin the discussion on jobs. They will rail against the "rich" and how we need more for the "common worker" and defend taxing employers to help workers. In the end increasing taxes on small employers that sign the paychecks for 40% of Americans means fewer paychecks.

Somewhere today a few guys will get together to talk about opening their own company. They will commit to leases and pulling together funds to put together some operating capital. They will hire some workers. They will make a huge leap and take a risk to start a small business. Let's hope they succeed....despite the intentions of their elected leaders.


For a look at small businesses cropping up in Long Beach, particularly Bixby Knolls check out the article Leslie had in this week's Uptown Gazette "Women Dominate Uptown Business Scene"

Don't Refill The Trough

After news media began reporting about a possible "Stimulus II" program being put together by the White House and members of Congress, the word "stimulus" disappeared from the lexicon of Washington Democrats. Instead of talking about another package of stimulus pork spending White House and Treasury Department officials have spoken about "range of suggestions" and "benefits." Smart enough to not put together one big bill with the spending and label, White House officials and Congress are looking to hide the spending in other bills going through the process.

When Congress convened in January it put together with the White House a $787 billion "stimulus" package labelled the American Recovery and Reinvestment Act passed with no Republican votes in the House and it took three Republicans (one now a Democrat) crossing the aisle and holding the vote open for one Senator to return from his mother's wake in Ohio to pass in the Senate. The entire process took two weeks to spend three-quarters of a trillion dollars intended to stimulate the economy by funding "shovel ready" public projects and prevent unemployment from reaching 9%--Obama's stated objectives.

Once the package was passed the details began to come out, and it was discovered that none of the money would hit the economy until September of this year and that by December 2009 only about 10% of the funds would be spent. The bulk of the spending would not occur until 2010, most of it in the Spring and Summer--conveniently before the November mid-term elections. In the meantime the unemployment rate has climbed to 9.8% in September and many areas are seeing job loss continue at a rapid rate. Clicking the play button on this site one sees the expansion of employment and then unemployment across the country from 2004 through mid September 2009.

With virtually no money from Stimulus I having impacted the economy, it is slowly putting the brakes on its slide and trending towards bottoming out. This is being done as the private sector restructures, slowly rebuilds and revamps for the next economy. With banks still not extending credit to small businesses, the backbone of the American economy, cash is amassing and cherry picking investment and lending opportunities. Part of the reason for lack of lending are shifting regulations from the Fed for banks and increased audits and pressure regarding the loans they are making. Many strong banks are withholding loans from applicants who do not have very strong qualifications for fear the Fed will step in and take them over, force a buy out or push more of the TARP regulations on them. Other banks are just sitting back borrowing funds at zero percent interest from the Fed and lending it to customers at 6% and only to those with the strongest qualifications, the old saying if you don't need a loan you qualify.

With that as the backdrop, $700 plus billion in Stimulus I still in the pipeline to hit the economy, banks getting flush with cash, unemployment at 9.8% and rising, American companies beginning to turn the corner and most economists predicting recession ending sometime in the late 1st quarter or early 2nd quarter 2010, Obama and members of Congress are itching to spend more money. I say why?

With a deficit approaching $2 trillion (do we even register trillion any more), a push to pass health care reform that will add another trillion to the budget, the Federal Reserve purchasing Treasury bills and mortgage back securities to the tune of over a trillion dollars by April 2010, the dollar dropping even further, our economy is building for a massive influx of inflation, which will bring higher rates, choke any borrowing that is happening and cut off consumer spending. Adding another $200 billion to this equation is feeding the inflation build up and is not needed economically.

Politically however, with poll numbers dropping and the media finally beginning to ask real questions of Obama and the White House, spending another hundred billion or two in benefits, pork projects in selected Congressional Districts certainly can't hurt as Congress gets ready to adjourn for 2009 and begin their re-election campaigns for the primaries in the Spring and general elections next November. And that is all there is to additional spending: political placement of government funds so incumbents can return to their districts touting how much federal funds they have brought to their districts. Forget the trillion dollar deficits and who will pay the bills, look what I have today!

Instead of trying to buy opinion polls and using federal dollars to save key incumbents to keep a majority in Congress, President Obama should tell a populace concerned about the budget and deficits that patience is needed, the economy is improving and until Stimulus I has had time to reach the economy federal spending on new projects and programs will stop. Instead plan on using a revitalized and reborn economy and the higher revenue that will come from taxes to pay down the deficit that has exploded.

Leave the economy alone, concentrate on the deficit and control the spending in Washington. No Stimulus II, no matter what it is called or where the spending is hidden.

Just Some Questions

Below are questions I have asked myself throughout the past week. Instead of writing what my answers to them would be I am interested in any answers you may have, or additional questions you have asked yourself.

For the week starting Monday July 20, 2009:

Why is the Obama Administration not releasing June financials?

It couldn’t be they are waiting until after Congress goes on recess to release figures that show the budget and operations aren’t doing so great, could it?

Have you Binged? (that is Bing –ed note binge- ed! As in Microsoft Bing search platform)

What percentage of health care costs are do to litigation or defensive procedures done in fear of litigation?

Are you acting stupidly if you state someone else acted stupidly without knowing the facts surrounding the actions?

How much is spell check, texting and Tweeting with the character limitations of Twitter hurting the language skills of our younger generations?

Fair food: corn dog or turkey leg?

In his press conference President Obama said doctors make medical decisions based on fee schedules, would pull out tonsils for a sore throat because it pays more, does your doctor make decisions about your health depending on how much s/he will get paid?

Are you in favor of a part-time legislature in California?

Have you watched gas prices as closely this summer as last?

What percentage of healthcare costs are because of procedures done defensively to avoid possible malpractice suits?

What is the worst movie you have seen, in the theater, in 2009?

So the California Democrats would rather cut education spending than drill off the shore of California and bring in $100 million plus?

Can you name the time and place of the last negative event from off shore oil production in California? Let’s make that the last five so we don’t have a one-time apparition, shall we?

Doesn't it make sense to clean up the waste and fraud in our existing Federal healthcare programs, i.e. Medicare and Medicaid, and solve inefficiencies there before increasing spending more than 15 times for similar programs?

Why is the United States building two nuclear power plants in India but not in the United States? Are we too good for nuclear power or is it too good for us?

What is your favorite Disney movie?

Is the happiest group in America right now Obama’s classmates at Harvard Law who will make fortunes guiding clients through loopholes and finding shelters to avoid the taxes Obama wants to impose on them?

Have you ever not shaken someone’s hand when offered theirs?

What is your favorite summer memory from when you were in elementary school? Junior High? High School?

Does your family have a summer vacation tradition?

Can you name a better sound than two young siblings playing by themselves and giggling uproariously?

Have you seen our $18 million dollars?

Cookies or Pie?

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Skate Parks, Pork, Road Signs, Pork, Jobs Lost, Pork....

In January I strongly wrote against newly sworn in President Obama's stimulus plan presented to Congress (Stimulus? Try Democratic Pork) and the $825 billion proposed spending. I am proud that Congress listened to me and paired down the final spending for the American Recovery and Reinvestment Act (ARRA) all the way down to $767 billion. Presented to Congress and the American taxpayer as a bill that would stimulate the economy by providing funding for jobs that would provide jobs and concentrate on "shovel ready" infrastructure projects, the final bill seemed to ignore the premise with many spending items shoved into the hastily crafted bill that have no longer impact on the economy, nor have any business receiving federal funding. The final bill actually extended the reach of the federal government, extending payments to those already receiving federal assistance and expanding the number of eligible recipients. Right out of the box the Act spent billions of tax payer funds on programs that would have zero impact on our economy.

The basic premise of the ARRA is that the government can spend money and pull America out of a recession. By taking more tax dollars from one American, washing it through Washington's bureaucracies and then sending what is left to state and local run governments and washing the funds through them to pay for projects, America's economy is better off than allowing the original holder of those dollars to decide where and how to spend or save or invest the money. This premise is incredibly flawed but one that is central to the Democratic economic theory that the more taxes collected and redistributed the better our economy will be. Unfortunately this theory was tried on a grand scale under President Franklin D. Roosevelt and failed to help the country out of the Depression, even more unfortunately is that today's politicians currently in the majority in Washington D.C. know nothing of history or economics. Governments cannot spend taxes from one segment of an economy to stimulate the entire economy, trying to do so worsens or lengthens recessions, or if in recovery leads to severe debt, higher interest rates and inflation when the recession ends. Look for the latter to come to America starting in 2010.

Locally, for me, in Long Beach, California there is some hand wringing and whining because of a report issued earlier this month from Senator Tom Coburn of Oklahoma. "100 Stimulus Projects: A Second Opinion" lists the top ten projects receiving ARRA funding that Coburn considers a waste of tax payer dollars, leading the list is a project in Coburn's home state for a waste-water treatment plant. The town already planned to build the project and applied for funds to help. In receiving $1.5 million in funding the town was ready to go, it was a "shovel ready" project. Unfortunately the funds also came with federal strings to the project that add 25% to the total cost of completion and increases the local residents utility bills by 60%. Thanks for applying.

What causes many in Long Beach to be upset with Coburn is listed at project number 96 is $620,000 for a skate park in our fair city. The skate park in question is already in existence in a park that is located in one of the poorer parts of the city where there are gangs and high crime. Local politicians and "community leaders" decry a Senator for Oklahoma of all places (the ignorance of bigotry rearing its big head) saying our city does not need this skate park! A meeting is being held! We need this skate park! All this is quite amusing in that, a) the funds have already been secured evidently so the funds will be coming anyway b) the City of Long Beach previously pulled funds for the skate park from the budget to zero complaints from any locals c) members of the Obama administration are on record as agreeing somewhat with the Coburn assessment saying the feel the project is not in the spirit of ARRA and d) the skaet park already exists! Yes the skate park that is receiving $620,000 in federal funds already exists, the money is not to build the skate park, but to make it more skate-parking with better ramps, bumps, and whatever will go into the design. This is not a waste of federal funds?

In the on-line and in bar conversations on the project I have asked two questions again and again and never received any answer: 1) How many jobs will the spending of the $620,000 create? 2) How long will those jobs last? Being asked by others is why it is costing over half a million dollars to pour some asphalt and shape it into humps, but that is for others to ask.

So why is a skate park renovation worthy of federal dollars when the local government deemed it not worthy of local dollars? Why the uproar? Half the people spewing venum at "that Senator for rural Oklahoma" on the blogs and comments of local websites have no idea the skate park already exists. My feeling is they see (R) after Coburn's name and therefore he must be bad, especially because he is from backward, hickville Oklahoma. But is this project really worthy of federal funds? Does it create jobs? Does it stimulate the economy? How many of those complaining about what Coburn as said have actually read his report? I have and here is a random sampling of projects that most people in Long Beach who support the skate park would (or should) decry as a waste of their tax dollars:

$150,000 for road signs in Illinois to announce that projects are paid for by stimulus funds--tax dollars to pay for signs to tell tax payers their taxes are being spent.

$5.5 Million to pay for a new factory in Georgia that will close a factory in Dayton and cost that town 1,200 jobs. Creating jobs by helping a corporation move and lay off currently working Americans. Your tax money going for more corporate welfare and costing Americans jobs.

$628,100 to Yale University, which has an endowment of $17 Billion to study if diet and exercise affect obesity.

$300,000 for a parking lot in a town in North Carolina that was in the local budget and ready to go. How many jobs does building a parking lot create? More or less than the amount needed to renovate a skate park?

$2.5 Billion for rural broadband, the funds going to the Rural Utility Services (RUS), which the Inspector General says is inefficient and wasteful in its use of funds--according to the Inspector General since 2005 90% of the loans approved by RUS have gone to communities that already have broadband.

$4.2 Million for Seapoose, Oregon (pop 6200) to raise the local railroad tracks eighteen inches to be level with the main road, despite local voters rejecting a bond measure to pay for this project--not good enough for local funds to be spent but good enough for the rest of America's taxes to be spent.

And on and on the list goes. Coburn picked just 100 of the projects in the ARRA totalling approximately $5.5 billion, and is taking heat in Long Beach and other communities across the country looking for the federal hand out. But if we look at what Coburn is saying in his report, as a United States Senator worried about American tax dollars and future debt obligations, he is right. The American Recovery and Reinvestment Act is $787 billion of wasteful government spending that in the end will create over $1 trillion in debt so skate parks and road signs and parking lots across America can be built. Beyond the actual funds being spent it is estimated that $55 billion will be lost in waste, fraud and abuse, not bad for a government program at less than 10%, but $55 billion nonetheless of your tax dollars being lost. According to Vice-President Joe Biden in early June, "Some people are being scammed already." I agree with the Vice-President, the scam started when the bill was passed, shoveling $620,000 to my city for park renovations just adds to it.

Is this the purpose of our Federal Government?

Just Some Questions

NASA is researching if we could live on the moon, is anyone who moves to the moon an illegal alien?

Can anyone give me one good reason to vote for a candidate that has support from any or all the public employees’ unions within his jurisdiction?

Do you agree that the rigging of the election in Iran in Ahmadinejad’s favor should move us closer to a resolution with Iran and its totalitarian and terrorist regime?

What are the chances the surgeon in Washington D.C. who saved Holocaust Museum killer and white supremacist James von Brunn was not white or Protestant? God at work ensuring he lives to faces his penalty in this life knowing he is alive because of someone he detests because of their race or religion?

When is a fee imposed by the government not a tax? What if the “fee” is on top of another fee or tax already being charged is it still not a tax?

If I gave you $600,000—even as a very low interest loan—what kind of viable business could you start and how many jobs would you be providing?

When you heard/read about PETA’s admonishing President Obama for killing a fly did you think it was from The Onion or Conan O’Brien? Did PETA finish marginalizing itself with the ridiculous protest over the killing of a fly?

What age is appropriate now days to provide our child with a mobile phone?

I ran a poll a few months ago asking what people would do if they receive an unanticipated sum of money from the Federal government, almost everyone who answered said they would pay down debt; did you?

Fries or onion rings?

What are your feelings to incurring more debt as a tax payer to pay down your personal debt?

Leslie and I had a brief conversation on this, to be continued I’m sure, can you have compassion without having integrity? Can you have integrity without having compassion?

Along those lines, which is worse a crisis of faith or a crisis of trust?

Why can government contractors ignore the local ordinances for construction as it relates to when they can work and sound? If they are working at 2:00 a.m. is it necessary for them to have the piercing “beep-beep” noise on their equipment when in reverse?

Is your local government as poor as mine in community outreach for public works projects?

How long does it take to drive from Long Beach to Scottsdale in an Odyssey with two kids?

Cookies or pie?

Just Some Questions

Now that I have established a good routine of providing incredibly rivetting and quality content to stimulate your intellect like no other with my twice weekly posts on Mondays and Wednesdays, it is time to add a bit more value. Starting this week I will have my "Just Some Questions" posts on the weekends. My objective will be to write down questions I ponder through the week that I have not taken the time to write about. My hope is that you too are thinking about these questions and corresponding answers, solutions or just throw up your hands as I often do. Welcome to "Just Some Questions" for the week:

Why doesn't Congress just go ahead and ban cigarettes? Why the charades of chipping away at individual rights to use a legal product trying to get people to not use the legal product?

Am I the only one doubtful that Arnold will keep his promise to shut downt the state rather than borrow any more money?

John Greet asked this great question in the comments section of my post "Political Fearmongering": If "non-essential services" can be stopped when the state "shuts down" why are they being provided in the first place if they are non-essential?

Long Beach City Council voted to ban cigarette smoking at bus stops with fines for those violating the ban, will cops really stop their patrols to write up people smoking at the bus stops? Will this give cops a good excuse to search someone and pat them down if they look shady and are anywhere near a bus stop with a cigarette?

What if you live in an apartment that has a bus stop in front of it and you smoke?

Pretend that Rush had said about the President's daughter what Letterman had said about Governor's Palin's daughter, what would the reaction have been? Is that acceptable? The different reactions that is.

My daughter asked me why we call it working "out of the house" when we are inside?

Shouldn't Ford be really, really pissed at this point?

Obama is intent on capping executive compensation, why stop with banks? How about a cap on compensation for attorneys? Say $500,000 per case or 20% of the verdict whichever is less?

Don't vegans have to be pro-life?

Cookies or pie?


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MONEY

In January 1981 I began my second semester of college. In the fall semester I had taken, and passed, Macroeconomics to fulfill part of the required course list for my major; now in the spring semester I would be taking Microeconomics. Both courses were taught by on campus legend Harvey Botwin who leaned on a text book written by economist Paul Samuelson. While Samuelson himself has become somewhat famous in economic circles for wildly missing on his macroeconomic predictions, his textbook, and Professor Botwin's lectures, provided a solid foundation of economic understanding and tools for economic analysis.

A significant portion of our Microeconomics class was spent on money. The exchange ones goods or services of greater value than the goods or services being offered in trade led most cultures to develop a system of currency so economic activity could occur. For currency to be effective it must be universally recognized as valid currency, its value must be universally accepted and it must be portable--one must be able to transfer the currency in order to complete a transaction.

Of great interest to me was the development of the currency system on the Island of Yap. Located in Micronesia, Yap is famous among college students for the term, "the stone money of Yap." The people of Yap, isolated from Western culture, economy and trade developed their own currency. The currency was easily recognized and accepted, the value was easily apparent and it was portable, as can be seen in the picture at the top of this post. In Yap the money was made of stone, hewn into circles with a hole in the middle. In Yap the larger the stone the more value the unit of exchange and units ranged from the size of our quarters and half dollars to the huge wheels seen in the picture. The holes allowed a pole to be placed through the "coin" and transported from payor to payee. It was effective as its value was recognized and accepted and it was portable. Did the people of Yap experience inflation? Certainly scarcity and over supply impacted the island economy, but to what extent I do not know.

Further exploring money in my college career I learned about inflation, the increase in prices in an economy not through scarcity of products but as a result of over-supply of money in the economy. With more money available to consumers more money can be bid on the goods and services for sale, resulting in inflation. If there is an extreme over supply of money in the economy then "hyper-inflation" occurs, think the Weimar Republic in the 1920s, Argentina in the 1980s and early 1990s, Zimbabwe recently. Hyper-inflation is when prices are rising over 50% per year, in many cases it runs away to inflation rates of 100-200% per year. The cost of a loaf of bread in the morning is $1.00, at the end of the day the same loaf of bread is selling for $1.20. Currency becomes almost worthless in hyperinflated economies because instead of $1.00 for a loaf of bread it is $100 or even $1000.

The amount of money in an economy is controlled by the government--it has the printing presses to create currency. By printing more money the government adds currency to the economy and devalues the currency currently in circulation--the $100 bill you have in your pocket is worth less if the government prints puts more $100 into circulation than are taken out of circulation. To much printing and the government is creating inflation in the economy as each $100 has less value, more than $100 is needed to purchase the goods or services that used to cost $100.

Monetary supply by printing is not the only way the government impacts the economy. The other way is the taking on of debt and issuing debt obligations--called bonds. Bonds are sold to investors and investors expect a rate of return on their investment--interest payments. The rate of return, or interest, is dependant on the amount of bonds that are available for investors to purchase. In order to get investors to buy their bonds a rate of interest must be offered by the issuer that is attractive to the investor who must balance the risk of not being repaid the bond, the other investment opportunities available and the rate of return being offered. The more bonds that are available on the market the higher the rate of return that must be offered to investors to entice them to purchase the investment. If there are only 100 bonds available from a really strong company that almost certainly will pay off the bond when it is due, then the scarcity of the bonds will create a high price--and subsequently a low rate of return. Conversely if the company were to issue 1000 bonds more investors would be able to purchase the bonds, there is not scarcity so the company would need to offer a higher rate of return to sell the 1000th bond. More bonds on the market higher interest rates.

If I said you could invest in a company for $1000.00 and it was somewhat risky if you would get your money back, and also when the bond is to pay off in five years there would be significant inflation in the economy--making your $1000.00 today worth only $900.00 then--would you demand a lower or higher rate of return on your $1000? Of course you would demand a rate of return at least as high as the expected inflation, plus a premium for the risk involved in the investment. Instead of a 5% rate, you would probably factor in a 10% rate of inflation, plus the risk that the investment may not be paid off in five years so you would want a higher return early on to make up for that risk, so to invest you may require 15%, 17%, 20% return on your $1000 to be paid in five years.

Yesterday the United States Supreme Court upheld the Obama Administration's orchestration of thetake over of Chrysler by the United States government, giving some of the company to the United Auto Workers and some of the company to Italian automaker Fiat. In the process investors who held millions of dollars of bonds issued by Chrysler saw their investments wiped out--zero return.

General Motors was restructued through bankruptcy by the Obama Administration. In the restructuring tier one investors in General Motors who had invested in hundreds of millions of dollars of bonds issued by the company were given less than thirty cents on the dollar--a discount of 70% of their investment; while the Federal government was given 60% of the company and the United Auto Workers approximately 20% of the company.

In the past five and one half months the Obama Administration and Congress have passed spending bills and budgets that surpass $2 trillion. Which means that the United States government will put two trillion additional dollars into the economy and put over two trillion dollars of bonds into the investment market.

Economies depend on investment to grow. Investors depend on risk-reward scenarios that will ensure a reasonable expectation that their investments will pay-off, the less reasonable the expectation the higher the rate of return they will demand. Financing high interest debt to grow a company is very risky and most companies are not willing to take on the risk and the high debt payments, along with salaries, rent, cost of goods, etc. that are rising in an inflationary economy.

With the wiping out of Chrysler and GM bond holders investments the Obama Administration has signalled to all investors in the U.S. economy that their investments in American corporations are at significant risk, not because of economic factors but because of political whim and power. This risk of government taking your investment and giving it to another entity, such as a labor union or a foreign company, adds considerably to the rate of return companies raising capital for growth and expansion will to pay to attract investors; i.e. higher interest rates.

With the addition of trillions of dollars into the United States economy the government is putting a huge supply of currency into the economy, making the currency in your pocketbook worth a little less every day. With the addition of trillions of dollars of debt into the capital markets, the government is creating a huge oversupply of bonds, in order to attract investments those bonds will have to have higher and higher rates of return, i.e. higher interest rates.

With the knowledge that corporate debt is riskier due to government intervention, that there will be an oversupply of currency in the economy and that there will be an oversupply of debt in the capital markets, investors are already demanding higher rates of return on their investments to account for inflation that will erode their returns.

Money, we all have it, we all need it. How much we have and how much we need are the results of many factors, including the actions of the United States President and Congress. Given their actions the last five months we will need a lot more it in the near future just to buy what we are able to buy today--that is what inflation is all about, look for it at your neighborhood grocery store soon. If we lived in Yap we would all be out in the yard looking for bigger stones to buy a carton of eggs.

What To Do With Gitmo Prisoners?

On the campaign trail Barack Obama promised to close the detention facility holding foreign nationals at Guantanamo Bay. This was an important part of his campaign and many Americans may have cast their votes for Obama based on this promise.

To follow through on his promise he must send the prisoners somewhere to be incarcerated or he must release them so they can go back to being terrorists.

If he keeps them incarcerated the question is where should these prisoners be held?

Hopefully this map will help.

Lady Justice and SCOTUS

She carries a double edged sword to represent Reason and Justice in her right hand, in her left she holds scales to measure the support and opposition of the case before her, she wears a blindfold to prevent judgement based on the identity of the accused or the accuser. Judgement will be with Reason and Justice, balancing the facts of the arguments without consideration of those involved in the case. Fair and blind, Justice metes out her judgements based on facts and law.

Somewhere in almost every courthouse in America is a statue, a painting, an image of Lady Justice. She is the icon on our nation's Judiciary branch. A part of the checks and balances we learn about in school, our Judiciary branch is meant to be separate from the other two branches, the Executive and the Legislative, at its highest levels the Judiciary is subject to appointment by the Executive and confirmation by the Legislative. Not subject to the whims of the people and the ugly politics that can erupt during elections for other offices, the Judiciary is to stand alone using the Constitution and the standards of Justice to determine the legality of the actions of the other branches and the citizens.

Justice, the quasi-goddess, is meant to be blind; justice in the form of judges and justices however is typically not blind--perhaps sight impared, but not completely blind. This is because humans and not mythical figures serve in our courts. Humans that have religious beliefs, have social mores and norms with which they were raised, have their personal ethics and morals developed through their personal experiences, have their ideological bases which guide their intellect. While we are a nation of laws, while we have a Constitution that binds our society, while we have a system of governance that is representative of the will of the people, how the laws are applied, how the Constitution will be interpreted, what extent the powers of the governors will be exerted over the governed are decisions made by humans, sitting in a building, adorned with Lady Justice.

Yesterday many Americans became aware of the existence of the Supreme Court of the United States (SCOTUS) for the first time. The most anonymous branch of government, the Judiciary, has at its pinnacle the most anonymous members of the Federal government, the Justices of SCOTUS. Most Americans cannot correctly answer how many Justices sit on the Supreme Court. Of those who correctly answer that there are nine justices cannot name any of them, and only a very small number can name all nine correctly. But these nine individuals carry as much power as the President of the United States, the Speaker of the House and any Senator, they are the final arbiters of law in our nation.

Currently the nine Supreme Court Justices are: Chief Justice John Roberts, John Paul Stevens, Antonin Scalia, Anthony M. Kennedy, David Souter, Clarence Thomas, Ruth Bader Ginsburg, Stephen Breyer and Samuel Alito. Other than the Chief Justice, list is in order of when each of the Associate Justices was sworn onto the Court, starting with Stevens in 1975 and ending with Alito in 2006. Once seated Supreme Court Justices have life tenure, they leave the bench either through voluntary retirement, impeachment by the Senate or death. No member of the court has ever been removed by the impeachment process, so in the history of the United States vacancies on the court occur only through the voluntary retirement of a justice or if he or she dies while serving on the bench.

At the beginning of this month Associate Justice David Souter informed President Barack Obama that he was retiring from the Supreme Court. This act by Souter allows Obama to fulfill one of the most important powers of his office, appointing Souter's replacement on the Supreme Court. Once appointed, the nominee must then go before the Senate and undergo a very important confirmation process. After hearings held by the Senate Judiciary Committee, that committee will then vote on the nominee, a positive vote will send the nomination to the entire Senate to vote on confirmation, a negative vote will require Obama to put forth another nominee.

Yesterday Obama nominated Sonia Sotomayor, a Federal Appeals Court Judge, to be fill Souter's seat on the Supreme Court. While the confirmation hearings for Sotomayor will not begin for some time, the confirmation process has already begun in the senate of public opinion and media relations. For the next several months, until she is confirmed by the Senate, and she will be unless some major suprise in her background is revealed during the confirmation process, Sotomayor's life will be on public display. And every detail will be put on the scales of public opinion as a reason she should or should not be confirmed to the Supreme Court.

By all accounts Sotomayor has a very liberal judicial philosophy. She will spark the debate between judicial conservatives who feel that the Judiciary should interpret law based on the Constitution and laws created by the Legislative and Executive branches and judicial liberals who feel the Constitution is a guide within which to create law from the Judicial branch to meet the needs of modern times. For the former judges interpret law and have a narrow view of the role of the Judiciary, for the latter judges may amend and create law from the bench and they have a very broad view of the Judiciary's role in our governance. Because Barak Obama won the election in November for President of the United States he gets to use his judicial philosophy in determining his nominees for Federal judgeships. Because the Democrats hold the majority in the Senate they get to use their collective judicial philosophy to confirm any appoints made. Because of all these factors sometime in late September we will witness the swearing in of Associate Justice Sonia Sotomayor to the Supreme Court of the United States.

Sotomayor's impact on the decisions of the court will be minimal until the next vacancy occurs on the court, or the next, or the next. Given her age, and presuming good health, one can expect her to serve for perhaps six or seven Presidential terms of office, giving her the potential to have a significant impact on SCOTUS decisions in the long term. Given that Justice Souter was part of a consistent 5-4 minority on SCOTUS decisions decided by one vote, her replacing Souter as one of four minority votes means little change in the prevailing majority's judicial philosophy and in the decisions rendered. Should one of the five in the consistent majority, Roberts, Alito, Scalia, Thomas and often Kennedy, vacate the Supreme Court during an Obama administration however, then Sotomayor's appointment and confirmation can, and probably will, be part of a 5-4 majority for those with a liberal judicial philosophy.

Of interest is that Presidential appointments to the Supreme Court do not always turn out how the appointing President intended. Of the four members of what is termed the liberal block on SCOTUS, two were appointed by Republican Presidents: Justice Stephens by Gerald Ford and Justice Souter by George H.W. Bush. While it is doubtful that upon being seated Sotomayor will change her judicial philosophy, it is certain that the culture of the court will shift with her addition to the bench.

Life, Liberty and the Pursuit of Happiness...For Some

Today we commemorate veterans of the American military who lost their lives in service to our country in defense of our freedom and liberties. Freedom and liberties enshrined and enumerated in the Constitution. Freedom and liberties protected by our Judicial system. Freedom and liberties provided through representative governments in all fifty states and nationally. Freedom and liberties that through the decades and centuries of our Republic have expanded to include more and more Americans with equal rights, freedoms and liberties. Those who died fighting to create America in the Revolutionary War were fighting to establish a new country, a new nation honed under the Declaration of Independence and Thomas Jefferson's words that, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.” When the Constitution was finally adopted almost a decade after the ending of the Revolution it was not written, but known at the time, that the laws applied to white men, and in many cases white men who owned land. Women and blacks were not included in the Constitution as they had no political power and no rights other than those given them by their husbands, fathers or owners.

As Americans fought in more wars the nation they were defending and the freedom for which they fought was expanding the rights set down in the Constitution to include women, minorities and seemingly all Americans. Seemingly. Social conservatives, like social liberals, are proud Americans. Social conservatives, in general, revere our military and their duty to serve and protect the Constitution of the United States and our defend our liberties and freedoms. Social conservatives do not wish the freedoms and liberties they enjoy to extend to others in our country, they wish to continue to deny equal access to government services to gays that they as heterosexuals enjoy. Life, liberty and the pursuit of happiness, for some, for those who are hetero sexual; limited liberty and limited pursuit of happiness for those who are homosexual. In the opinions of those who deny equal rights and access to homosexuals the men and women in our military are protecting equal rights for all, non-gay, Americans; and more limited rights and access to those who are not--for those who are gay.

The time has come to correct the discriminatory application of our Bill of Rights, of Jefferson's words, the time has come for two fundamental changes in policy and law to ensure equal access and liberty for America's homosexuals. Gays in the military and gay marriage must be addressed and policies changes if we are to be truly a country with equal rights and opportunities for all.

A gay man or woman can be elected to serve as a mayor, or governor, or even as the President of the United States--serving as Commander in Chief; but he or she cannot serve openly in the United States Army, or Navy, or Air Force, or Coast Guard or Marines. A gay man or woman can serve in the Federal Bureau of Investigation, the Central Intelligence Agency, the Tulsa Police Department or the Wisconsin Highway Patrol protecting American citizens, upholding law and order and defending the Constitution and our freedoms; but he or she cannot serve openly in any branch of the United States Military. A gay man or woman can work for a private contractor on a military base in Germany, Japan, Alabama or Texas; but he or she cannot go through Basic Training to become a soldier or Marine. A gay man or woman can work inside a United States Embassy in Paris, or Ankara, or Santiago; but he or she cannot wear a uniform of the United States Military and guard that same embassy.

In every aspect but one a gay man or woman in the United States can protect and defend our nation; they cannot serve openly in the United States military. It is time to overturn the "Don't Ask Don't Tell" policy that denies homosexuals the opportunity to serve openly in our Armed Forces. The policy is a joke and the longer it stays in the place the more of a farce it becomes. Gays have been serving in the Armed Forces for decades, just not openly. When we honor those who gave their lives to defend our nation we are certainly honoring homosexuals who were killed in combat--just don't tell anyone they were gay. When we honor our Veterans past and present in November we are honoring homosexuals who have served, and are serving, in our military--just don't tell anyone they are also honoring homosexuals for their service. Gays have served and are serving in the Army, Navy, Air Force, Coast Guard and Marines--it is time to allow those currently serving and those who will serve in the future to do so openly with pride in who they are and the service they perform.

Policy two is becoming the most divisive issue of this era, gay marriage. Like abortion it has become a polarizing issue that cuts into political parties, churches and households. In California those in favor of gay marriage saw a Constitutional Amendment passed with Proposition 8 that stated marriage in the state can only be between a man and a woman. The timing of this issue being put on the ballot was unfortunate for those in favor of gay marriage as it coincided with the Presidential election of Barack Obama and saw record voter turnout in the state for black and minority voters--demographic groups opposed to gay marriage. Had the measure been on the ballot at any other time the chances were far greater that it would have failed.

Unfortunately Proposition 8 never should have made it to the ballot. Unfortunately the members of the California Assembly and Senate are political cowards who are great at giving speeches and taking donations but poor at leading and taking a stand. It is my assumption that the overwhelming majority of homosexuals in California are not Republicans, it is further my assumption that the majority of political support and contributions from homosexuals in California are made to elect Democrats to office. This support in time, effort and money has been for nought as Democrats in the Assembly and Senate have refused to take on the issue of gay marriage in California and pass legislation legalizing the act; unlike legislatures in Vermont, Massachusetts and even Iowa.

Following the passage of Proposition 8 the more activist and vocal members of the homosexual community wasted no time in castigating members of various religions and private individuals for their support of Prop 8, to me this has been a waste of time and energy and has done nothing more than create more opposition to their cause. Rather than screaming vitriol at those who could not have passed Prop 8 on their own (i.e. registered Democrats and independents who voted for Prop 8--which are the voters who caused its passing); they should be screaming at the politicians they have helped elected in election after election who have refused to put the issue through legislatively. Democratic elected officials were very prominent at rallies up and down the state prior to the election voicing their opposition to Prop 8, but the words were hypocritical and empty given their united lack of action on the issue. Afraid of any backlash in their home districts the Democrats kept gay marriage of the legislative agenda, the result was Prop 8.

Many people ask me, "How can you be a registered Republican and support gay marriage." My reply is that marriage is licensed by the State of California, as such it should equally apply to all couples regardless of sexual orientation. Two men or two women getting married and having all the same rights and responsibilities as Leslie and I enjoy in no way harms our nation, harms my marriage or harms anyone else. Opponents espouse that allowing homosexuals to marry will lead to "other" marriages, polygamy and even bestiality--ridiculous arguments that have no basis other than conjecture. They decry such unioins will demean "traditional" marriages, which by saying this they demean their own marriages as being defined by others rather than by themselves as husband and wife. As will be shown in those states where the elected officials had the courage and integrity to ensure equal access to government services and rights to all Americans, there is no damage to society or the state through gay marriages.

My solution to the gay marriage debate is very simple. Most of those opposed to gay marriage are opposed because they feel "marriage" is defined historically and Biblically as the union of one man to one woman. They object to labelling unions between a man and a man or a woman and a woman as "marriage." The State of California allows the issuing of "marriage licenses" therefore there exists a problem in syntax and definition. But the State of California bars the issuing of such a license to anyone but a man and a woman to legalize their union as "marriage."

Change the name of the license. Instead of issuing a marriage license the state can amend the name of the license to a Licence of Union, or something similar. It would be the only such license in the state and available to any couple desiring the legal status currently defined as "marriage" in the State of California.

For those who want a sanctioned marriage then churches can provide their own "certificate of marriage" and it would be up to each church, religion, congregation to determine who is and is not eligible for certificates of marriage from that institution. As part of this provision however I would find a way to preclude any couple from using the courts to force an institution to provide certificates to homosexual couples if said unions are not part of that religion or churches doctrine. Therefore if the Presbyterians or Unitarians want to issue certificates of marriage and Catholics and Mormons do not, then they are free to issue or not issue as long as their policy is consistent and equally applied.

A gay man or woman can perform the marriage of a heterosexual couple in many different churches and religions in our state who allow gay clergy--but they cannot be married themselves to their partners. A gay man or woman can work for the County Clerk's office and issue a marriage license, but cannot receive one to marry his or her partner. A gay man or woman can be a Justice of the Peace and perform a marriage ceremony for a man and a woman, but cannot participate in such a ceremony with his or her partner. Like precluding gays from openly serving in the military it is hypocritical and discriminatory for the state to issue a license for some to marry but not others. It is time for the elected representatives in Sacramento to have the courage and integrity to back up the empty words they shouted into microphones and from stages supporting gay marriage. Change the name of the license, create an equal status for all couples desiring of legalizing their romantic unions in the form of marriage or matrimony or whatever definition they choose to use.

Life, liberty and the pursuit of happiness, this applies to all Americans not just most. As we commemorate those who gave their lives in defense of these principals let us look at those who are excluded from their meaning.

Are You An Extremist or Domestic Terrorist?

Are you a domestic terrorist? Are you an extremist who poses a threat to the security of the United States of America? By writing this blog post am I subjecting myself to scrutiny by the Department of Homeland Security? If you comment on this post are you subjecting yourself to being labeled a terrorist or extremist who would be on security watch lists?

Law enforcement officials throughout America are being warned about a rise in "extremist activity"; the DHS "has no specific information that domestic...terrorists are currently planning acts of violence" but they want law enforcement to on the watch for, and report any activity from extremists.

What is an extremist? Here is the definition from the DHS report

"...extremism in the United States can be broadly divided into those groups, movements, and adherents that are primarily hate-oriented (based on hatred of particular religious, racial or ethnic groups), and those that are mainly anti-government, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely. It may include groups and individuals that are dedicated to a single issue, such as opposition to abortion or immigration."

Extremists, or domestic terrorists, could then also be a group that protests and marches against a particular church because of a particular issue--say gay rights activists (extremists? terrorists?) protesting the Mormon Church because of Prop 8. Or what about PETA members who throw blood on individuals wearing animal furs or skins? Extremists that need to be watched by DHS and law enforcement?

Do you ever reject federal authority? State authority? Local authority?

Oh, I omitted one word from some of the quotes above: "rightwing." The whole report deals with a speculation of an increase in "rightwing extremism" and "domestic rightwing terrorists." So if you are a leftwing extremist--say someone who has lived in a tree in Berkley for a couple of years, or someone who wears Pink and blocks Federal buildings or disrupts and creates disturbances on college campuses, or protest outside of churches yelling and screaming at members and distrupting services then you need not worry about the DHS; since your views are more closely aligned with that of the Administration and new heads of the DHS you are not considered extremist.

For all the protests and clamor and vitriol that has been spewed by the left over wire tapping, worries about the Feds knowing what books people check out of libraries, fear that the BushRoveCheney cabal was targeting them--all unfounded--I wonder if the press, the editorialists, the pundits, will object to this labelling and suspicion of millions of Americans merely because they hold ideas counter to the those now in power.

Just to make it easy on the DHS and any local law enforcement, or national, who happen across this blog: I am against illegal immigration and the use of our taxes to provide them free health care, education and other support; I am against late-term abortions and partial birth abortions, while I support abortion being legal I feel it should be a last resort and minors should have to have parental consent; I am very much for states' rights and feel the Federal government oversteps its bounds and the mandates of the Constitution and is doing more so each day of the Obama administration; I am also against so much power that has been accumulating in the state government having been usurped from the local government; I am against universal health care and feel if you have kids you should provide for them--if you can't do that then don't have them; I am for a strong United States military and feel we should remain in Iraq until Afghanistan is stabilized and Iran becomes a democratic nation.

There are many in this country who feel my opinions are extremist, others who feel they are moderate and still others who feel they are right on--so am I an extremist, a moderate or correct? I guess it depends on who is in the White House and who is running the Department of Homeland Security. Regardless of the label one chooses to place on me, just having these opinions, or others, should not raise suspicion that I may be planning specific acts of violence or terrorism; they simply mean I am American and think for myself--whether others like it or not.

Random Thoughts Waiting For IT

Yesterday my hard drive crashed, the dreaded blue screen "scanning disk" message appeared followed by the "unable to read" message.

Good bye data! Thankfully I have subscription to great backup program. Unthankfully hours and money are spent to restore the many software programs I use and then the data. Ay-yi-yi.

While waiting for different steps and procedures in the process I started a list of very random thoughts to occupy myself, here they are in no order...since they are random!

When heading into, in the midst of or coming out of a recession job growth and creativity is a very good idea. Most jobs in America are created by small and medium sized businesses. Because of their margins they are generally the most susceptible to changes in tax rates and fees. Point A.

There are many in America who feel health care is a right, as is health insurance to assist in paying for medical care. Some feel the government should take on the responsibility of providing health insurance, many feel that employers should take on the responsibility of providing health insurance. While it is not the employers responsibility to ensure employees have auto insurance or homeowners coverage or life insurance, it has become not only common practice but often a requirement for employers to offer and/or provide health care insurance for their employees and their families. This costs employers money. Point B.

The word on the street is that President Obama will not propose it, but he will definitely support it. What is it? Some Democrats in Congress looking for more revenue they can shovel as pork to their donors are proposing removing the tax-free status of employer provided benefits. Point C.

Connecting the dots, let's force employers to offer, and in many cases pay for, health care insurance to their employees and let's also make them pay taxes on it. Points B and C do not connect to Point A, creating jobs. Points B and C lead to Point D: job loss, which is loss in income taxes, and continued recession. Simple geometry.

Having worked on an alien laptop (a 2001 Toshiba Satellite) for a day and a half I realized how much I hate using a mouse and will most likely never again have a computer/laptop that does not have a touchpad mouse. As efficient as computers make our lives how inefficient is it to take one's hand off the keypad to manipulate a mouse and then return to the keyboard? I love my Synaptics Pointing Device!

Several upper level appointments derailed from taking office due to personal responsibility issues, failure to live up to promises, inability to extemporaneously communicate with ease and substance, senior advisers and authorities making statements against core values and beliefs, consistent marketing that presents product in a negative tone and light. If these actions were the actions of the CEO of a company where you held a lot of stock in your portfolio would you buy more, hold or sell your position? Anyone out there who supported Obama getting buyer's remorse fifty days in? For many Republicans buyer's remorse set in with President Bush when he joined forces with Teddy Kennedy and pushed through No Child Left Behind which expanded the role of the Federal government; some came back after 9/11, some stayed away. What is the sentiment from lukewarm supporters after Obama's appointment gaffes, handing his fiscal policy to Nancy Pelosi and Harry Reid, having a Secretary of State seemingly unconcerned about human rights, signing a spending bill with almost 9,000 earmarks despite campaign promises to go line by line through all spending bills and eliminate earmarks, not to mention the pork in his stimulus bill, increasing our nation's debt 200% in 40 days, and in virtually every speech has nothing but negative messages about our nation's present and future after wagging his finger at the "politics of fear" from Republicans. Again, anyone having any buyer's remorse?

After working on Internet Explorer 6.0 I missed the tabbies of IE 7.0. How did we manage on IE 1.0??

Darwin's theory of evolution was that species over time, a lot of time, adapted to the environment--thicker or thinner fur, change in colors to avoid or promote detection, gills. Man has undergone changes to walk upright and having to shave some parts. As I was without keyboard based email and utilizing my Blackberry more the last few days I noticed a significant adaption I had made that was missing. I had clipped too short my thumbnail. This dramatically changed my ability to type using the left side of my Blackberry keypad, I am eager for this nail to grow rapidly so I might have a more normal texting experience.

How come the Democratic politicians are taking the road with the California Teachers Association to protest cuts to education in California? Didn't they cause the fiscal situation we are in--albeit with complicity from a handful of Republicans with each budget. CTA has exclusively funded Democrats for office in California, Democrats have completely controlled the budget process, spending has gone up over 40% in the past five to six years, and they have the cojones to protest? An example of chutzpah is a teenager who has murdered his parents pleading for mercy because he is an orphan--Democrats and the teachers' unions in California have killed the fiscal health of our state and now are claiming they are underfunded: chutzpah. If one were to list the three parties most responsible for our fiscal mess I would say the Democrats in the legislature, the public employees unions who funnel millions and millions into their campaigns, and the blind California voters who just look for the (D) when punching a ballot.

I think I have found a great cheesecake recipe, but I have only made it once. It was terrific but was it a fluke? I am hoping to find out this weekend. Keep your fingers crossed.

Don't forget to check out my weekly rate and mortgage market updates on my professional website at www.DennisCSmith.com/MyBlog, though this week it may be delayed due to previously noted computer issues.

Do The Math On Taxes

Math Problem #1: Tax burden increase on Californians. Remembering all the rhetoric from Democrats the past several years about “the working family” and “saving/protecting the middle class” and the “working poor”, remembering their rhetoric let’s see how their huge tax bill they passed in Sacramento last week (with a few Republican accomplices) helped these families. There are tax calculators all over the web for you to put in your own numbers, here’s one to save you the Google search. If you take a reasonable middle class family, Mom and Dad both work—let’s say they are both teachers and while not new not yet at the average salary and make $45,000 each for a total of $90,000. They each have a car, let’s say a minivan and a small SUV or crossover worth about $25,000 each for a total of $50,000 and they also have two kids. Under the taxes just passed in Sacramento this family’s tax payments will increase by $1227.

Now let’s say there is a hip young professional with no kids, has his master’s degree and works for the state college system as a senior administrator pulling down $140,000 annually and drives a sporty BMW X5. With no kids and a higher salary the tax burden on this young man will increase $966 per year. Making 55% more money that our married family and with no children to support gives a tax advantage of $261 per year to Californians.

So next time you hear anyone from Sacramento talking about budgets and helping America’s or California’s families ask them if they voted for the tax increases in February 2009—if they are in office and a Democrat they did—and then know they could care less about families and “working people” as they are typically defined.

Math Problem #2: President Obama and the Democrats hit the national campaign trail hot and heavy in 2008 giving speeches about how they were going to also help the middle class and unless you were in the top 5% of income earners in the United States you would not see your taxes go up. This past week Obama began the tax talk and has spoken about increasing the marginal tax rate for America’s highest income earners to help pay down the deficit—including the $2 trillion they just added to the deficit with the Porkies I stimulus plan.

A few weeks ago Obama and Congress announced that they were going to cap the pay of individuals who are employed by firms who received TARP (Troubled Asset Relief Program—the $750 billion bank and Wall Street bailout from October 2008) to $500,000. This was met with widespread applause and happiness from many in America who feel that if the banks have gotten $350 billion of tax payer money—never mind that it was traded for stock—that those in charge should have their income capped at a “reasonable level.” Given that the former head of Merrill Lynch was seeking a $10 million bonus for leading his company into an $11 billion loss and extinction the sentiment is very understandable. But the universe operates on cause and effect and not every plan is perfect.

This plan has a few flaws however and this is where some math will come in. First the caps also apply to commissioned individuals—those on commission get paid based on what they earn for the company. With the new caps after a very successful broker hits his $500,000 limit with say Chase he can/will quit and go to Citi and earn his next $500k taking his clients with him. What will occur is a huge merry-go-round of talented sales people through Wall Street brokerages as they maximize their personal income under the TARP compensation limits. But this is just part of the flaw. Let’s get to the math.

Under the current tax tables individuals earning over $372,950 are in the 35% tax bracket. So capping income at $500,000 caps the marginal tax amount on earnings over $372,950 at $44,500 to use round numbers ($500,000 – 372,950 = 127,050 x 35% = $44,500). Given the numbers on Wall Street I am going to use for my math problem the number that 200 individuals have earnings over $5,000,000 and work(ed) for TARP companies.
If there are 200 individuals with income of $5 million their marginal tax amount is $1,619,500 (rounded up $32.50) per person, or approximately $324 million collectively. With Obama’s compensation caps these individuals will now pay $9 million in marginal taxes in the 35% bracket, a loss of approximately $315 million to the Treasury. Sniffing around the internet my estimates of 200 individuals and $5 million is very conservative and it is likely the compensation cap imposed by Washington on Wall Street will result in a loss of income tax revenue far greater than $315 million. But at least we all feel good about capping what those greedy b**stards make! Right?

Conspiracy Theories

My hand has been slapped a few times by the publishers and editors of the Long Beach Post because they want me to tie the issues I write about on My Front Porch directly into Long Beach, while I take the position that if you feel we are a global community then every issue relates locally as well as nationally and internationally, they do not tend to agree so many of my thoughts on national and international issues are left out of my contributions. It is their site however it is their content requirements I abide by for my posts. I will use this forum which has one one-hundreth of the views of the LBPost (if I am lucky) to put forth some of my crazier ideas. That said here are some theories I have been ruminating about that pertain to my community only in that they pertain to every community. I use the term conspiracy theory as these go to the dark side of current or perhaps future events; note they are all just my opinions and I have no proof of any of them being real...yet!

Obama ending Hillary's career: A lot of people are wondering why President-Elect Obama would nominate Hillary Clinton as his Secretary of State. My conspiracy theory is that now that Obama has knocked out the biggest power players in the Democratic Party in Hillary and Bill Clinton he is going for the jugular and finishing them off politically. By nominating Hillary to SecofState, Obama gets her out of the Senate where should could continue her campaign for President in 2012 or 2016; as SecofState I believe she can no longer fund raise for campaigns; as well part of the deal between them is Bill will disclose donors to his Presidential Library. So the nomination and subsequent confirmation shuts off the flow of funds the Clintons have become accustomed to since leaving office--or at least stems the flow from a gush to a trickle. The confirmation hearings could, and should, get pretty nasty if the Republicans on the committee treat Hillary the way so many Bush nominees have been treated the past eight years in Senate confirmation hearings. Who will bring up Vincent Foster first? Campaign donations from phantom donors in New York's Chinatown? Bill's international jet setting with Ron Burkle and "friends" ? By putting Hillary in the Cabinet Obama is able to control her exposure and her message. At some point there has to be a falling out, no one controls a Clinton, and when that happens, when Hillary is no longer a member of the Cabinet her political career is over.

Hillary gets even richer: When she is shoved out of the Secretary of State position my theory is that Hillary finally divorces Bill since she has no more use for him and hits the speaker circuit and corporate boards and makes even more tens of millions. If there is anything the Clintons love more than themselves and power it is tens of millions.

Chavez invades Cuba: Because they never really think things through Socialist dictators do what pleases them and angers their enemies. I think that Venezuelan "President" Hugo Chavez will "invade" Cuba before the end of 2008 to force President Bush to react and probably mobilize U.S. forces into the Caribbean. Recently Russian President Dimitri Medvedev visited both Venezuela (with part of his navy) and Cuba; giving three world leaders who have no positive emotions for President Bush, or the United States, getting together a few months before we transition from Bush to Obama.
"Hey Dimitri, what would you think if I were to send my troops into Cuba to, um...let's say to put down an 'uprising'?" asks Chavez making quote signs in the air.
Medvedev thinks for a moment and says, "Let me ask Fidel and Raul when I see them tomorrow. But I like where you are going with this!"

Pakistani based Islamists Attack U.S. The same group(s) responsible for the attacks in Mumbai last week will try something similar in U.S. after Obama is sworn in as President. Obama is on the record as saying we should go into Pakistan. Attacks in the U.S. based out of Pakistan will force his hand and pretty much mandate U.S. incursions into Pakistan. This will destablize Pakistan, which is what the Islamists desire, further provoking India into a war and also serve as an issue to recruit more terrorists for their suicide missions. With thousands of boys being indoctrinated across Pakistan in terrorist controlled madras school they have plenty of potential recruits.

Big 3 Automaker Threats. The Big 3 automakers will continue to threaten Congress with shutdowns and closure until they get their money, then do it again in ten months to get more. After that with mid-term elections approaching the Big 3 and the UAW will get by on earmarks so their friends (D) in Congress do not lose their re-election bids in 2010 and then continue to create a fully government subsidized American automaker industry.

Vegans and Environmentalists will unite to shut down my barbecue. This is the one I fear the most. In order to reduce the number of animals slaughtered so that I, and hundreds of other Americans, can enjoy the ritual of barbecuing and eating meat, the vegan coalition will join forces with the uber-liberal factions of the envionmentalists to ban barbecuing in California because of the emissions from our grills. Not only does the barbecue emit smoke, if done properly, but it requires the used of wood and you know where that comes from! So I am denuding the forests, polluting the air and killing innocent bovine just so I can enjoy a perfectly tender and tasty slice of tri-tip---I must be stopped!