Thursday, December 29, 2016

DEMOCRATS..SNAKE OIL SALESMEN AND MUCH, MUCH WORSE...

One thing about the Democrats and Obama is they know how to stir the pot by using false and malicious accusations.

For an example, if you like the possibility of charter schools you are a bigot.  If you are against abortion, you are a destroyer of women's rights.  If you stand against appeasement, you are a war monger.  If you believe in the Second Amendment, you're a racist.   If you believe in not disgracing the American flag, at best you are against free speech.  If you are not a major supporter of welfare without being vetted for a job, you are not appreciative of people with needs or people who may not be as well off as you.  If you believe that raising the minimum wage does more harm than good, you are a heartless jerk.  If you believe students that borrow money to go to school should pay back their debts, you are a capitalist when you should be a socialist.  If you don't believe that men made into women and vice versa should be allowed to use whatever bathroom they want, you are a bigot. 

The Democrats make thoughtless attacks on any views but their own. 

P.S. Just remember the "reason" the German populous couldn't fight Hitler even if they wanted to, is because they didn't have guns. Sixty million people died. Let that sink in.

Wednesday, December 28, 2016

"DELUSIONS" OF THE AMERICAN JEW...

The great majority of Jews in the election voted for Hillary.  The delusional thinking that peace with Palestine would change the Mid East situation is not only ridiculous, but to Israel it's down right dangerous.

Israel is surrounded by millions of people who want their destruction, whether there is peace with the Palestinians or not.  There can not be peace with religious fundamentalists as long as they think they are winning. 

Thursday, December 15, 2016

GOLD BUBBLE ("WHEN INTEREST RATES RISE, GOLD WILL CRASH") ORIGINALLY PUBLISHED SEPTEMBER 2010

A friend of mine bought a home for $300,000 ten years ago. By 2007, the price of similar homes in their neighborhood had tripled in value.
During the period when the price of housing was rising so rapidly, banks were criticized for collecting deposits in one impoverished area of the country and lending it out in other more prosperous regions. The quality of the loans was not a factor, the equitable distribution of loans seemed more important. People all over the country were ecstatic over their increase of wealth through home ownership.
The government, in spite of everything, had created Fannie Mae, Freddy Mac and everything possible to increase home ownership. Practically no one was telling homeowners to liquidate their homes. Construction of homes was booming, millions of people were employed in the sector and no one dared to stop this lucrative bubble.
When the house I mentioned above was purchased in 1999, it would have taken approximately 1000 ounces of gold to pay for the home. Today, it would take only 250 ounces of gold to buy the same $300,000 house. Housing prices have “crashed” and gold has soared. In effect, gold has gone from $350 per ounce in 1999 to $1300 per ounce today.
Gold is basically a useless commodity. The price is a “bubble” that may sustain itself forever and ever, but it is a bubble. You can’t eat gold, it’s hard to carry, it earns you no money and its industrial uses are limited. Again, no one dares to tell people to sell their gold even though you can now buy it in vending machines. No one dares to tell the mining industry to stop the production of gold, for fear of destroying yet another industry that is responsible for the economic livelihood in many struggling countries.
Keynes said that in the end investing is nothing more than a game of musical chairs and that when the music stops; we don’t want to be the ones without a chair.  When interest rates rise, gold will crash.

Thursday, December 8, 2016

UNIONS..THE REAL REASON COMPANIES LEAVE THE US (ORIGINALLY PUBLISHED 8/1/11)

The bottom line is the following, a two trillion dollar cut in projected expenditures over ten years, for the Federal Government,for all intense purposes, is not a cut at all. It's too far out, totally unforecastable and too small to have any real meaning. We have written about this before and explained the folly of the politicians rhetoric directed toward the economically naive portion of the population, emphasizing budgetary balance.

The fact is that the federal government, minus defense, is significantly a unionized workforce. In spite of constraints on the federal unions to strike, some problematic events seem almost certain to occur if nothing is done to recognize this issue.

These unionized employees have become accustomed to regular raises and continually improving retirement benefits from the tax paying portion of the population.

But the tax base is not growing at a fast enough clip. As time passes, unless things change, the raises will be forced to stop which will lead to illegal work stoppage threats. History suggests that most unions want what they want when they want it, with little concern for reality.

As the number of people in government, both federal and local, reaches record highs, the ability to provide raises will end and strikes and slowdowns will become one of the next crises that the nation will face.

Only increasing profits, personal income, capital gains, dividends and interest will provide stability.

Wednesday, November 16, 2016

TRUMP PROTESTERS SAME AS THE OCCUPIERS.. (ORIGINALY PUBLISHED 1/24/12)

The same affliction to our sanity involves the media abuse of the slogan "top one percenters". Recently the median salary of the public university presidents place them all in the top one percenters.

The Presidents of Harvard, Yale, Princeton, Michigan, Amherst, Williams, Stanford are all in the top one percenters. The same is true for hundreds if not thousands of University Professors.

Okay, so is the head of the American Red Cross, the American Cancer Society, the President of the United States, Nancy Pelosi, Al Gore, Hillary and Bill Clinton, Herman Cain, Jesse Jackson, Jeb Bush, Michael Bloomberg, lots of Senators and Congressman and the head of the AARP (a real disaster). NBA and NFL's top players such as Dwayne Wade, Kobe Bryant, Shaq, Dan Marino, Tom Brady, Michael Vick,; Musicians and Artists like Beyonce, JayZ, Sting, Bruce Springsteen, Janet Jackson, Taylor Swift, Toby Keith, Garth Brooks, Jennifer Lopez, Hank Williams Jr., Mariah Carey, Harry Belafonte, Barbara Streisand Actors, Actresses and Media celebrities such as Angela Jolie, Steven Spielberg, Justin Bieber, Brad Pitt, George Clooney, Jeff Bridges, Matt Damon, Jerry Seinfeld, Jennifer Aniston, Oprah Winfrey, David Letterman, Tyra Banks, Kim Kardashian, Larry King, Anderson Cooper, Wolf Blitzer, Ariana Huffington, Arnold Schwarzenegger, Tom Friedman, Jim Cramer, Eddie Murphy, and top people that run hundreds of thousands of employees and many of those like Bill Gates, Larry Ellison, and Steve Jobs who created unbelievable changes in society and millions of jobs, are in the one percenters club. I could keep listing people...the media lies...look at the truth.

I was in Austin recently and there was an Occupy Wall Street group. I decided to sit down on the lawn with some of them and found out from about 15 different conversations that everyone of these "Occupiers" knew absolutely nothing about salary levels and economics. One young woman was telling another young woman how much she loved her. They really didn't know each other. Maybe I overstepped my bounds but we were kind of chatting and I said to the better dressed young lady; "Why don't you give this woman you love your hat - she seems to be getting sunburned". That went about as far as I could throw an elephant. For some strange reason the media hypes and the police in this situation were busy placating the group as they trashed a substantial piece of property. None of the people I spoke with knew anything at all about who the "one percenters" were.

Saturday, November 12, 2016

A LEFT WING OF GANGSTERS...(ORIGINALLY PUBLISED 11/4/11)

When you talk about sleaze its almost impossible to beat the lying hypocrisy of the fat man, Michael Moore and his stupid cap. But if you want more hypocrisy think about the fact that Jon Corzine was so greedy that he acted as if the financial crises of 2008 took place a hundred years ago. Solyndra was an example of amateurs working for the government with the power to give out $600 million dollars for what was ostensibly a start up. Obama knows that our problem is cars not electrical generation. The one thing these three groups have in common is their attachment to the Democratic party and the "culture of corruption" along with the deception that lies deep within our President's soul. It just isn't coincidence that these three situations all exist at the same time. Look within the Celestine Prophecy to grasp the intimidation of the weak by the democratic party's desire for power at almost any cost.

Monday, October 10, 2016

THE FORGOTTEN MAN IS AMERICA - NOT THE SPECIAL INTEREST GROUPS (ORIGINALLY PUBLISHED 9/6/12)

It's almost impossible to convince the "forgotten man" that increased taxes on the so called rich is a bad idea. The environment is one of very high unemployment, declining standards of living and interest rates for treasuries which are close to zero.

There was a day when the politicians of America sought individual votes but then they learned that it was easier to group the electorate into "special interest groups" and convince groups rather than individuals to vote for them.

That was the beginning. In a fabulous book written by Amity Shlaes called the "The Forgotten Man" we can see the historical development of how the mass of the population has been forgotten. There are tens of millions of people who go to work in this country, pay their mortgages, educate their children, don't end up in jail, pay their bills, don't require welfare and live their lives with no representation in the government.

If you are part of a special interest or minority group you have representation. If you are just a plain old "forgotten man", the backbone of the country, you have very little representation if any. The politicians have actually made the forgotten man feel guilty. Why in the world should anyone pay their mortgage or their debt if so many people are allowed not to? This is one of the coming crises of rewarding those who fail and penalizing those that succeed.

It's time for the forgotten man to stand up in a concerted way without riot and revolution and say enough is enough. You are responsible if you bought a house even if you didn't know what you were doing. More and more people will "opt out" of the system as they realize if you succeed you are the enemy.

Friday, October 7, 2016

BLOG OF THE DAY...

There probably is no  major media company that has failed as miserably as the New York Times.
The CEO takes at least 7 million in compensation and probably lives in an apartment worth 10 or 20 million dollars.

Today's article about the failures of Donald Trump totally leaves out his fabulous recovery from near bankruptcy and the fact that he is a billionaire several times over.  His company is private.  There are probably not 10 individually owned companies as successful as the Trump empire.

Take a look at Trumps children and use that as a measure of success.




Monday, October 3, 2016

BEFORE YOU VOTE...

Before you vote you may want to know who was really responsible for the housing crisis.

Then you must read a book called "Reckless Endangerment".  It is written by Gretchen Morgenson and Joshua Rosner.

Tuesday, September 27, 2016

BUBBLES A NECESSARY EVIL? (ORIGINALLY PUBLISHED 11/18/10)

I looked at the tax receipts and expenditures for the federal government for the past twenty years. This period covers Presidents Clinton, Bush and Obama. There was a surplus for a few years in the late 1990’s.

A U.S. Treasury report of May 2008 stated that “Much of the growth during the late 1990s can be attributed to the extraordinary performance of the stock market and its effects on individual income tax receipts”. It further stated that “Capital gains income more than quadrupled between 1994 and 2000. Tax receipts from capital gains realization more than tripled during this period, even though the tax rate on capital gains was reduced beginning in 1997”. As to the increase of taxable income the report stated “Taxable personal income grew faster than GDP during this period. Much of the rise in wages was related to the exercise of stock options and bonus income".

On July 17, 1995 the NASDAQ stock index closed above the 1,000. On March 10, 2000 the index reached a high of 5,132. The NASDAQ bubble of this period under a Democratic President Clinton and a Republican controlled congress contributed significantly to creating a budget surplus. Unfortunately the NASDAQ (DOT.COM) which kept strong receipts flowing into the treasury was destructed by the crash of Bubble Number One. A surplus of any significance was only achieved for a couple of years.

When President Bush took office the budget surplus was already declining. Then the staggering September 11 attacks took place. President Bush and the Congress enacted an emergency tax relief program to attempt to stop the slide in economic activity. The results of those tax cuts are best described in the same Department of Treasury report. The report states: “After 2004, tax revenues again grew faster than the economy. Between 2004 and 2006, capital gains realizations grew by approximately 60 percent. Growth in corporate income tax receipts was especially strong recently, nearly doubling in levels between 2004 and 2007”.

As the economy began to recover bubble number two, the housing market got completely out of control. When this bubble burst the economy was in a free fall. The very large deficit of 2009 and 2010 were caused by a response to Bubble Number Two. Again both Presidents Bush and Obama and the Congress along with the Fed responded very effectively.

Where we sit today our country is still facing double digit unemployment in many areas. Increasing taxes is not supported by official U.S. Treasury commentary. The deficit is not a partisan problem.

Requiring two bubbles to keep this economy in a prosperous state for the last two decades is an unfortunate state of circumstances. The problem is that it’s almost impossible to stop bubbles in free economic democracy. Stay tuned…

Monday, September 26, 2016

WHAT TRUMP (ORIG. ROMNEY) NEEDS TO SAY TO GET ELECTED..(ORIG. PUBLISHED 8/13/12)

I am personally against abortion but if you want an abortion you should be able to get one without any problems. 

Gun Control is like the problem we face with illegal drug use.  It's impossible to keep guns out of the wrong hands completely just like its impossible to believe that illegal drug use will ever go away completely. We should continue to maintain laws that protect the innocent and persecute the guilty in both matters. 

I am not in favor of rich people, poor people or any other particular group, I am only in favor of economic policies that work to make our country better for as many people as possible. 

I am not against Medicare, Medicaid or Social Security, but I am in favor of policies that will make them last permanently.

I won't appease any particular group or interest in order to be elected. 

I am in favor of an education system that raises the accomplishment of a much larger segment of our school populations.  I will find a way to sit down with the top school union representatives and work out a mutually agreeable plan that will get this well on the road during my administration. 

My administration will be color blind, religion blind, gender blind, handicapped blind, minority blind and sexuality blind.  

I will pick people who will do their jobs for all Americans even when decisions create controversy.

I will not run the traditional political play game of buying votes.

I will do the best I can even if I am not elected to a second term if I win the first.

I will not allow Israel or any of our allies to be scapegoated by politics. 




Thursday, August 25, 2016

BLOG OF THE DAY(ORIGINALLY PUBLISHED 3/2/11)

With all the rhetoric about everything,very little is said about the greatness of America's ingenuity. Caterpillar, Boeing, Microsoft, Drug companies, Google, Facebook, Cisco, IBM, General Motors....I could go on and on and on. In the process of globalization, it's easy enough to copy our high labor content products but how many great drugs have come out of China, Venezuela, Russia, North Korea, Mexico...I could go on and on and on.
Yes we make what seem to be continuous mistakes and we don't solve some big problems, but to call the American contribution to human and industrial development anything but great is to be looking in the wrong direction.
When China announces its going to make a commercial jet its just a copycat. That's all.
Unfortunately, the copycats of the world are a significant competitive force. When our own government doesn't realize that much more money is saved by the creation of new drugs, than is achieved by all the generics in the world, is to add "insult to injury." Stay Tuned...

Sunday, July 31, 2016

TRUMP -DOES HE HAVE IT CORRECT? ( ORIGINALLY PUBLISHED 5/2/14)

It will be easy to criticize me for taking a serious matter and trivializing it.  The Russians are holding some Germans as prisoners.  They obviously don't care what Germany thinks.

Any further discussion of Crimea seems to be over and the Russians have walked off with many millions of people.  Europe has no military clout. It is obvious if Russia decides to reclaim Ukraine there won't be anybody to stop them.  We haven't been able to stop the Syrian situation, the Cuban situation, the Iranian situation, the Venezuelan situation and on and on.

The issue is not about Ukraine; it is does Russia have designs on further incursion into Europe?  If it does, no combination of forces in Europe can stop them.  Putin sees that underneath recovering economies and strong stock markets lies a broad undertone of socialist and populist voting positions.

Russia needs a bigger population and its clear they intend to get one, one way or another. Trade trumps threats.  We lose, they win and the long term is unknown.

Welcome to a Putin's Russia instead of a Gorbachev one.


Wednesday, July 27, 2016

CHAINS OF MANY KINDS...HOUSING, HISTORY, GOVERNMENT AND FREEDOM (ORIGINALLY PUBLISHED 8/14/12)

Sixty years ago we bought our first house. It was $11,000.00. About ten years later we sold it for $30,000.00. Basically housing prices rose steadily for sixty years. Along the way home ownership became a cult idea. It started with Roosevelt and ended in a crescendo of speculation and absurd overpricing. No one really knew why a house was worth so much and why everybody should have one. There were lots of theories. Are we now faced with a cyclical downturn in housing demand? Or have we reached a tipping point where more and more people say “Hey I don’t need a 3,000 square foot house… I just need a 1,200 or 1,600 square foot home.” That would be a break in the mania, not just a typical cyclical decline. I don’t think too many people would argue with the idea that everyone should have all the “good things in life”, the only real difference of opinion would be how to accomplish that goal.

Abraham Lincoln once had a debate with Stephen A. Douglas. They were both running for Senator of Illinois. Douglas said the slaves of the south were better off than the northern immigrants. His rationale was that slaves were property and generally treated better than the northern laborers. This appeared to be true at the time. Lincoln’s response was that the difference between the northern laborers and the slaves was that northern laborers would eventually be upwardly mobile, one after the other. One would a start business, many would begin to hire their own employees and another would rise up in someone else’s business. Whereas he said that slaves, on the other hand, couldn’t go anywhere. They had their chains.

Unfortunately there are many kinds of chains. One can be chasing an impossible dream that housing prices will rise forever, or that internet prices will rise forever, or that people will stay pessimistic forever or that the government will provide for you forever. We are reaching the point where millions and millions of people are working for the government. We are increasingly restrained by an enlarging government which is viewed as beneficial but instead, in many ways, is becoming a new form of imposed chains.

Almost every significant unionized industry in America has failed. Now the largest unionized segment in America is government. I’m not against unions, anymore than I am pro-incompetent management. But they have both often caused more harm than good and been well compensated along the way.

People don’t leave what they believe to be secure environments. With unionized government jobs you’re unlikely to leave. You give up on opportunity. You generally vote for those in control that convince you that this is a good deal. You are mentally captured by what they seem to be providing and give up almost any chance for significant opportunity. Are we now on the road to the subtle enslavement state? You may be free to go, but how can you. Lincoln was right when he implied that “chains” come in many different varieties.

Government can only be paid for by taxes. If wages and salaries aren’t rising, and stocks aren’t rising, and houses aren’t rising, there isn’t going to be much to pay for future government. Freedom to succeed will ultimately create  a more economically equal society. Reducing that freedom, whether well meaning or not, will ultimately prolong the problem. Certainly taxation without representation, where a small percentage of the people pay almost all of the taxes, will not work. The ultra wealthy who attempt to shield their real tax reducing methods, while shouting for equality, don’t help solve our problems.


Monday, July 25, 2016

HILLARY/SANDER'S HERO - SAUL ALINSKY...(ORIGINALLY PUBLISHED 6/13/12)



Saul Alinsky pontificated in his Rules for Radicals that to destroy the American system that a realistic radical is completely unconcerned about the verification of facts and that they are only interested in their agenda. He states that the purpose of radicals is to sew discontent and to seek to create an environment so they can influence the generally ignorant population to support political goals that would otherwise be unsupportable in the face of the facts.

Friday, July 22, 2016

KABUL, PARIS, ORLANDO...IT'S ALL THE SAME..BOSTON MARATHON - NOW ORLANDO TRAGEDY - GARBAGE CANS BEFORE SAFETY...(.ORIGINALLY PUBLISHED 4/22/13)

We have not written a blog in a while.  There are so many people writing so many things with so many points of view, we weren't sure we had anything to add to the dialogue.

During World War II, one man was a brilliant master of propaganda and mind control.  Imagine what that person could do today with the Internet and social media techniques.

Unfortunately, we face very cunning enemies, both domestic and international.  They have figured out how to use a large element our of population to allow them to attack many of our democratic principles.

Profiling is not allowed, if you are looking for a particular type of person you are hard pressed to disclose it.  We are surprised by the repetitive nature of serious crimes, yet loath to enhance break throughs in our protection systems.

The best and most important example is our schools.  Although there are guards at airports, post offices, hotels, malls, street corners, apartment buildings, stadiums, concert arenas, etc. there are intelligent people who do not want to accept the necessity for much greater protection of our kids in schools.

It's almost as if we unconsciously accept the concept that "they were expendable" because we would rather not face the reality of the current world situation.  We would rather close our eyes and accept the easy way out, that blindly believes that there won't be another and another and another occurrence of tragedy.

We may not like it because its against everything we stand for, but the hostility of what we face should be apparent to all.  The Boston Marathon terrorists could have just as easily planted a nuclear type device.

If the Boston tragedy isn't enough to prove this point true, how much more will it take to convince you what we are really up against.


Tuesday, July 12, 2016

JOBS...THIS IS A LOSING ROAD (ORIGINALLY PUBLISHED 11/29/11)

There is nothing new about this. It's old hat, it's sad, it's destructive but it's the real story.

On November 22nd we titled a blog "Stop worrying about Globalization...Start Worrying about Ourself". We can't reiterate the importance of that blog except maybe a bit through the following vignette.

We had to make a change in one of our computer programs. We asked the two young people at the American company's service office operating in the Philippines a number of questions. We knew the answers, but we wanted an update.

Some of the questions were: Did you go to college...yes. How old are you...27. Do you like your job...yes. Is there room for advancement...yes. Would you consider yourself upper, lower or middle class...middle.

These young people remotely scurried through our computers with the agility and talent of a computer PhD which they were not. They spent an hour assisting us on the phone, they were extremely polite and the overall experience, from our point of view, was top notch.

THESE PEOPLE WERE PAID THE EQUIVALENT OF $11,0000 USD PER YEAR. If an American college graduate wanted to do this job they would probably earn $50,000 plus per year. This would be an additional $40,000 paid for the same service. It is one of the main reasons why jobs available to Americans has struggled.

Furthermore, as we have stated over and over again, the largest blocks of the unemployed would have no ability to do these jobs. We can create all the technology jobs we want but the minorities unemployed in this country will not be helped for an awful long time. Not only have we lost our manufacturing ability but we have lost the labor cost differential and its not going to change for a long time.

Just remember if you are a foreign company, the probability of giving these types of jobs to Americans is an extremely low number.

We need a government who will support our people's call for the equalization of unfair cost and currency advantages.

Thursday, June 16, 2016

WE WILL ALL BE DEAD BY THE TIME THINGS CHANGE.(ORIGINALLY PUBLISHED 11/23/11)


Anyone who is against profiling is just plain wrong. If you are looking for a woman you don't stop men. If you are looking for someone who is 7ft. tall and is male you don't stop a 5ft. tall grandmother. If you are looking for blacks, you don't stop whites, and vice versa. Profiling is necessary, prejudice and bias are not. Period, end of subject.
Guns are bad. I'm a registered member of the NRA and have a concealed weapons license, but guns are bad. If we didn't need them they should be outlawed, but we do need them. When the underlying fears of crime, etc. go away, guns will go away. Period, end of subject.
A fetus is a baby the second it's conceived, not three months later. Abortion, equal to the killing of a baby, is obviously a bad thing. Unfortunately, babies are conceived into all kinds of circumstances where they are not wanted by the carrying Mother. Which is worse, forcing a Mother to term or terminating an unwanted baby? This question will never be agreed upon by the opposing opinions. Both sides should choose their own path and moral order. Period, end of subject.
Obviously war and fighting are horrendously bad things but letting your guard down by appeasement or weakness can be even worse. Period, end of subject.
People should be able to practice any sexual activity they want to as long as its between consenting mentally able adults where abuse of either parties is not taking place. Period, end of subject.
Illegal immigrants is another subject that has to be put to rest. Obviously illegal immigration should be stopped or why have the law. If we want these people coming into the country it should be done legally. Aren't we still a country of laws? If we don't want them coming here and doing what they do then we should just face the consequences of higher labor cost especially in food production. Period, end of subject.
The reason I'm writing this is because these are some of the important issues clouding the political agenda. We have more than enough to focus on within education, poverty, sickness, crime and terrorism. Period, end of subject.
When the Democrats talk of special interest groups they forget that the biggest perpetrator of group thinking is our current President followed nose to nose by his Republican opponents. It's time to stop all the baloney as we slide backwards. Period, end of subject.

Wednesday, May 4, 2016

THE PEOPLE HAVE DECIDED PHASE I - DONALD TRUMP - A MESSENGER OF REALITY OR A RACIST? - YOU DECIDE...(ORIGINALLY PUBLISHED 7/8/15)

The "Merciless Indian Savages" so says the Declaration of Independence.  Hard to find words but in the Declaration, nonetheless.  Were they Savages?  We certainly don't think of the American Indians as 'Savages' today.  If one were to call the current Indian population, "descendants of  savages', immediately the media would outcry that the "speaker" was a racist or a bigot.

All Indians obviously were not "savages", maybe some were.  Maybe even alot were, but not all.

Today the buzz word is immigrants.  We know that there is a vast difference between legal immigrants and illegal immigrants.

Why would it not be obvious that illegal immigration should not be allowed.  If we want illegal immigration just take down the immigration laws.

Change the word immigrants to people.  Change the word immigrants to poor people.

Now the question becomes not  who the people are that are coming to the country illegally but do we want the illegal people.  It's hard for me to believe that Donald Trump is a racist.  It shouldn't matter if the people coming into this country illegally are black, white, yellow,purple or green.  It should matter if we want a country of laws.

I wrote a while ago that PS 73, where I went to school in the Bronx, would act as my anchor for whether significant improvement is occurring in the poorer sections of our country.  A review of the test scores at my old school indicates abject failure among the primarily Black and Hispanic children attending the school. A blight on the system, not the children.

That subject is buried, never really brought out as an unacceptable failure, similar to our inability to deal with the illegal immigration situation effectively.  Seventy years after I left that school, the same old building is where the current children attend.  Donald Trump may have presented very inadequately on the illegal people in and coming into this country.  He certainly has presented us with a challenge to decide if we are a nation that fixes problems or accepts the status quo because of political expediency.

Thursday, April 7, 2016

WHEN GETTING RE-ELECTED IS MORE IMPORTANT THAN DOING GOOD FOR THE PEOPLE (ORIGINALLY PUBLISHED 10/5/11)

In any dialog among or between people, especially in debate or argument, name calling is considered inappropriate. Consequently, although I would like to call our President a liar, I will refrain.

He uses the "inciting" words of let's close the tax loophole. The choice of the word loophole attempts to rally the economically uneducated. There are no loopholes in the tax code.

Charitable deductions are the government's attempt to incentivize contributions to charity. The interest on mortgage deduction is an attempt to incentivize the purchase of homes. (Could you imagine advocating the reduction of an incentive for home purchase under current economic conditions?) The lower rate on capital gains is another incentive for us to invest our savings for the longer term.

There may be a few so called tax incentives (loopholes) that don't serve an economic purpose. These are few and far between. President Obama recently quoted Ronald Reagan. He completely took out of context what President Reagan said. Watch out for Obama. Most of his advocacy is self serving and destructive.

Buzz words like loophole are meant to rally your spirit to vote for him. Look more closely at the impact of his suggestions.

THE LIES POLITICIANS TELL (ORIGINALLY PUBLISHED 7/11/11)

Public corporations prepare financial statements. One of these statements is generally called an income statement or profit and loss statement.

Simply put, a company first reports revenues, then subtracts its expenses that created those revenues and then reports whats left as pretax profit.

From the pretax profit federal taxes are subtracted. What's left is called Income after government taxes.

This income is generally used for three or four things. One is to pay dividends, since the majority of shares in America are owned by pension funds, mutual funds and individuals, the dividends are paid to the American public. The second thing the money is often used for is to buy back company shares. When this happens the money is paid to selling shareholders who then deposit it in their bank, reinvest it or spend it. Thirdly the money is spent on capital expenditure; putting up plants and buying equipment. Whatever little is left is retained in the corporation in order to maintain more employment and stability for the company.

NOW THE GOVERNMENT COMES ALONG AND SAYS "WE WANT MORE TAXES". TAXES ARE AN EXPENSE LIKE ANY OTHER EXPENSE OF RUNNING A BUSINESS. THE IMMEDIATE REACTION OF THE COMPANY IS TO THINK ABOUT RAISING PRICES OR REDUCING EXPENSES TO OFFSET THE TAX INCREASE, THEREBY REDUCING CONSUMPTION.

THE NEXT THING THAT HAPPENS IS THAT THE MUTUAL FUNDS, THE PENSION FUNDS AND OTHER SHAREHOLDERS RECEIVE LESS, CAPITAL EXPENDITURES ARE REDUCED, EMPLOYMENT IS REDUCED, AND A TAX INCREASE GENERALLY DOES NOTHING BUT ATTEMPT TO TRANSFER MORE MONEY TO THE GOVERNMENT. THE GOVERNMENT CAN THEN HIRE MORE PEOPLE AND MAKE THEM MORE BEHOLDEN AND THEREFORE VOTE FOR THE PARTY THAT RAISED THE TAXES AND PRODUCED NON-GROWTH GOVERNMENT JOBS.

THIS IS CALLED A NEGATIVE CAPITAL FORMATION ENVIRONMENT. IT'S SOMEWHAT MORE COMPLICATED THAN THIS SIMPLISTIC EXPLANATION AND ALTHOUGH IT MAY MAKE THE FINANCIALLY UNEDUCATED FEEL THEY ARE GETTING A FAIR SHAKE, IN REALITY IT DOES THEM MORE HARM THAN GOOD.

THE STANDARD OF LIVING MUST GO UP (ORIGINALLY PUBLISHED 7/18/11)

Charlie Rose was interviewing Larry Summers. He asked him what steps have to be taken in order to get growth to accelerate.

Mr. Summers listed five points. I thought they were all smart. Then Charlie asked Mr. Summers "What about the social compact the government has with the people?"

It never hit me so clearly as it did that moment, the government is like a corporation, it's just a piece of paper.

So who was he talking about that had this social compact with the people? He couldn't be talking about the government because the government is just a provider of services for which it taxes the people.

BUT IN TODAY'S WORLD, MOST AMERICANS DON'T PAY ANY FEDERAL INCOME TAXES OR PRACTICALLY NONE. THAT LEAVES A SELECT VERY FEW PEOPLE WHO HAVE MADE MONEY AND NOW ARE THE ONES BEING ASKED TO HAVE THIS SOCIAL COMPACT WITH THE PEOPLE.

In other words, if you are successful in American, you are a charity machine to everyone else. The democratic party argued that this approach prevents revolution and allows some people to succeed. The implications of this kind of a society are negative for the masses. A standard of living that hasn't increased for ten or twenty years won't until there is a system where everyone is taxed for those services received thru their "compact with the government". That is one of the things that has to be done to create growth.

BLOG FOR THE DAY...(ORIGINALLY PUBLISHED 8/14/12)

I said in an earlier blog that the political rhetoric, name calling and class warfare commentaries would inhibit the solving of the problems that exist in our society.

To make this discussion even clearer if someone makes a lot of money they either spend it or invest it. If they build a huge house, their money is transferred to the contractors, brokers, furniture manufacturers, plumbers and everyone else. If they buy stock the money is transferred to the seller, it’s not put under pillows. The same is true for money left to heirs, it circulates through the economic system.

The poorer among us don't want to hear about creating more wealth.  Unfortunately a dynamic, growing, thriving business community is exactly the recipe that will assure an increasing percentage of the population achieve the so called "American Dream".

WHO IS REALLY TO BLAME...(ORIGINALLY PUBLISHED 10/17/11)

There is a man by the name of Stanley O'Neal. He is a black man. He was also the CEO of Merrill Lynch. He also presided over Merrill Lynch during the near bankruptcy of the firm.

After the finanacial crisis of 2008, Vanity Fair magazine wrote a scathing article about the enormous failures of this man and his enormous contribtuion to the housing and related crisis. (November 2010)

The name of the article was "The Blundering Herd". STANLEY O'NEAL WALKED OFF WITH HUNDERDS OF MILLIONS OF DOLLARS OF COMPENSATION. According to the article Mr. O'Neal left the firm with "161 Million in retirement benefits and Merrill Lynch stock."

Why in the world did the Occupy Wall Street people march to the homes of white people who had relatively nothing, if anything at all, to do with the financial crisis of 2008? Why hasn't our President spoken to this man's (O'Neal) enormous failures and greed.

Picking people for jobs of any sort based on gender, race religion, etc. is self defeating but being politically correct, when there are facts that suggest the falseness of that approach, is equally as dangerous.

DISTORTION OF THE TRUTH (ORIGINALLY PUBLISHED 9/23/11)

There's another crazy article in the New York newspaper where a "ultra liberal" professor, who is very good with words, pontificates about the so called "wealthy Americans pay remarkably little in taxes". He doesn't point out that one of the main reasons may be that they have invested their money in tax free bonds. The tax free nature of the bonds is federal government policy in order to provide lower interest rates to states and municipalities. The low capital gains rate is government policy to increase investments in capital assets and to protect the savings in mutual funds, pension funds, 401ks, etc.

The writer then maliciously claims that Representative Ryan (who I often don't agree with) wants to exempt the very rich from bearing the burdens of taxes. No matter how you slice it, most of the taxes in this country are paid by the successful. In any case, so few people are in the "rich" category one has to ask, why not spend your time figuring out how to make more people rich.

Let's get it straight. No matter who you tax it takes money away from them, reduces their consumption of goods and services and drives the country further downward. Basically the attack on the few rich people increases unemployment and reduces economic activity. The silly writer talks about the top 100th of 1 percent of income distribution and how much their supposed income rose. That number can easily be affected by just a handful of people and is of no consequence. Who cares about the top 100th of 1 percent anyway?

The writer also talks about a sustained attack on organized labor. Its too bad the writer doesn't point out that almost every major industry that's been unionized has been a total catastrophe. The last time I looked organized labor was already causing dysfunction in the auto industry even before it can really recover.

As regards financial deregulation, it had very little to do with the economic disaster of 2008. Government policy, greed and a bubble were more responsible for what occurred.

I won't comment on the rest of this politically, left wing and inaccurate editorial except to tell Elizabeth Warren and the writer of this article that you should both go live in another country, in one bedroom with a shared bathroom. Then you should give the rest of what you have away, so you can pay your share to "fulfill the social contract" that you don't understand in the slightest.

Wednesday, January 20, 2016

HIGH FREQUENCY TRADING...(ORIGINAL POSTING 8/6/11)



When the housing boom was taking place it developed huge vested interest in the continuation of the housing bubble. A voice in the dark could point out the absurdities of what was happening but the enjoyment of inflated prices and profits overwhelmed sanity, logic, discipline and history.

In my opinion, we are now being faced with a "time bomb" that will far exceed long term capital management, the insurance protection decline of the 1980s and the financial collapse of 2008. This huge "Black Swan", huge beyond comprehension, will hit when least expected and we will wonder why it wasn't dealt with before. The answer will be found underneath the rubble of certain greedy Wall Street types and vested political interests.

We cannot permit automated machine type trading, with no relationship to companies outlook, etc. to dominate the volume of trades in the stock market. There is no excuse, none whatsoever, for creating a machine driven gambling casino mentality in order to justify the existence of capitalism.

Here is what's going to happen. A computer driven decline will occur and the brakes will fail due to human error or whatever causing the equity wealth of the country to be sharply cut again. Because there will be something happening in the world at that time, recovery will not be as fast as it was in the late 2000's. All computerized trading, of the type we are referring to, should be made illegal and stopped before its too late.

The vested interest will tell you otherwise and make their case. Just like in the long term capital case they are mostly using other people's money and are more concerned with their chance of winning than losing. The monies not theirs anyhow and there is no concern for the system, only their own profits.

Look at the erratic swings in the stock market that have occurred in the last few weeks. We draw this as a small example, a very small example, of what is coming if we don't stop this type of computerized trading.

CAPITALISM WILL FAIL IF THIS IS HOW IT'S CONDUCTED.
P.S. Please remember that I am a very strong supporter of capitalism and many of the activities that our financial firms participate in. The probably isn't a better system than ours.
 

Shepard Osherow. All Rights Reserved