Friday, July 8, 2016

The Dallas Story Captured in One Word

Here is Friday's front page of the Dallas Morning News. It captures the sick and sad news of chaos in Dallas and describes how five police officers were murdered Thursday night:

And that's exactly what it was ---- AN AMBUSH.

The world is in chaos and so are we as a society.

Law and order have broken down and disorder rules in many of our largest cities and urban neighborhoods today ---- including many of our nation's governing, political and academic institutions.

Let's each and all resolve to hang in there --- and prove beyond a shadow of a doubt that America is a much better society than what happened this week in Dallas, Minneapolis, Baton Rouge and elsewhere.

We the People are in charge.

That's my take.

Thanks. Bob.

Thursday, July 7, 2016

Hillary's Clear Political Path to the Presidency Includes False Promises of 'Free Stuff' for the Young ... It's Indeed a Rigged but Winning Strategy

Hillary's response to the report of her lying about emails was a simple and nonresponsive one --- free college and loan forgiveness for indebted students. And she probably will get another hall pass from voting Americans for doing so. In fact, she'll probably get more votes.

Here's why Hillary will get enough votes from enough of We the People to replace Barack as the nation's Liar-In-Chief.

Bernie Sanders beat Hillary by a whole lot with younger voters in the Democratic primaries.

On the other hand, Hillary really stomped Bernie with black voters.

The teachers union endorsed Hillary at the outset. Their support means Hillary won't endorse any loss of dues paying public school teachers since parents and their kids won't be allowed free choice as where to attend schools.

Thus, more public school students will equate to more union dues paid by greater numbers of well paid and often unqualified tenured public school teachers. This is turn will contribute to higher taxes paid by these same students as adults when they have to pay for the future salaries and unfunded pensions of their current teachers and school administrators.

And when college is 'free,' that means more 'students' will be enrolled, whether able or willing to do the work or not. That in turn means more government funding for the additional students, which in turn means higher pay and pension benefits for college teachers and administrators. It's the 'butts in the seat' road to more money for colleges, pure and simple.

Now let's explore the vote getting strategy which will undoubtedly ensure a Hillary victory over Donald in November.

Hillary now advocates 'free' college and the forgiveness of student loan obligations for the young and heavily indebted Bernie supporters. Offering 'free' stuff is a definite vote getter, even though the newly converted young Hillary voters and their 'smart' college student counterparts will undoubtedly get the shaft down the road --- but only after Hillary has left office, of course.

Hillary is now all-in for 'free stuff.'  Translated that means she is buying the support of teachers unions and (unlike the elite education for her kids, other Democratic politicians and the Obama children as well) opposes providing all Americans with free choice with respect to which schools their kids will attend. That translates into higher pay for public sector workers since more students means more money coming from government, aka taxpayers. And that in turn means more pay and pension benefits for teachers as well as more dues for Hillary supporting union leaders.

And on top of that, the parents whose kids who attend poorly performing urban schools are going to vote massively for Hillary anyway. And when these same kids grow up unable to compete effectively in the globally competitive job market, their taxes will be increased to pay for all the guaranteed and unfunded pension benefits provided to the dues paying teachers and their union leaders.

Clinton tuition plans suggests more Sanders policies may be absorbed says this about the prospects for more vote getting 'freebies' likely to be promised by Hillary:

"Hillary Clinton took a page from Bernie Sanders’ campaign playbook on Wednesday by embracing free tuition for some American college students. And if Sanders has his way, it won’t be the last time she echoes her primary-season rival.

On Wednesday, the presumptive Democratic presidential nominee proposed offering tuition-free college to students from certain families, as well as a three-month moratorium on student loan payments to all federal loan borrowers. In a statement, Clinton said her plan would make sure families “can send a child or loved one to college tuition-free” and give student debt holders “immediate relief.”

Read: Hillary Clinton embraces some of Bernie Sanders’ ‘free college’ ideas.

Sanders hailed Clinton’s move, which came about three weeks before the Democratic convention. But Sanders, who has still not endorsed Clinton’s candidacy for president, is unlikely to stop trying to push Clinton to the left. In addition to tuition-free college, he has suggested Clinton would need to support a $15 federal minimum wage and health care for all to win his endorsement. . . .

On Wednesday, at least, Sanders was singing Clinton’s praises, saying her tuition plan could “revolutionize” higher education. During the campaign, Sanders proposed allowing all students to attend a four-year college tuition-free. Adam Green, co-founder of the Progressive Change Campaign Committee, said in a statement that Clinton’s proposals “should be welcome news for Bernie Sanders supporters.”

Among those supporters: young people, and lots of them. The Washington Post reported last month that Sanders won more votes among those under 30 than Clinton and her Republican rival Donald Trump combined. The Post cited a Tufts University report showing more than two million young people cast ballots for Sanders in the 21 states that voted by June 1. For Clinton and Trump combined, the number was fewer than 1.6 million."

Summing Up

The unfunded election promises will continue to mount and the nation's already excessive indebtedness will continue to grow.

The overwhelming majority of Clinton supporting nonwhite parents will continue to send their kids to lousy inner city K-12 public schools where poorly performing teachers will continue to receive rich salaries and guaranteed full pensions upon their retirement at age 50 or earlier.

And when today's 'free' college students later become adult taxpayers, they too will be forced to pay for the current unaffordable salary and pension promises being made today to their teachers and administrators.

Yes, the teachers, their unions and other public employees will campaign vigorously to elect Hillary and get their hard fought for payback upon her election.

See how simple it is. Hillary and the public sector employees, along with their unions, will be the winners and our kids' futures, as well as those of the rest of We the People, will be the losers.

Donald's right about at least one thing. The game is rigged.

That's my take.

Thanks. Bob.

Wednesday, July 6, 2016

Obama In His Own Words ... Admits to We the People That He's a Liar ... But To Barack, Bill and Hillary, It's Just Part of Being Presidential

Some may wonder about my assertion that in addition to Queen Hillary, President Obama is a liar as well. (See my prior post.)

Here are five reasons why that's the case:

(1) Obama says that Hillary is the most qualified candidate ever to run for the office of presidency;.

(2) He's the sitting President and has successfully run for that office twice;

(3) Hillary served in Obama's administration as Secretary of State and prior to that was First Lady when her husband Bill was in office;

(4) During his presidency, Bill lied repeatedly about his relationship with Monica Lewinsky (such as the meaning of the word 'is' and 'I didn't have sex with that woman, Miss Lewinsky.') and perhaps many other things. Hillary then lied about Bill's relationship with  Monica, Paula Jones and several other women. Obama was and is aware of all this; and

(5) Obama believes that Hillary, who he says is the most qualified candidate ever to run for the presidency (assuming he's not lying when he says this), is more qualified to be President than he and Bill were when campaigning for the highest elected office in America. (We'll leave out of the comparison people like George Washington, John Adams, Abraham Lincoln, Dwight Eisenhower and Ronald Reagan.)

Accordingly, Obama believes Hillary is either a bigger or lesser liar that either Bill Clinton or Barack Obama.

If Obama believes that he is the bigger liar and for that reason Hillary is more qualified to be the President, then that says a lot about him.

On the other hand, if Obama believes she is a bigger liar than he is, then that also says a lot about his view of presidential qualifications.

And if Obama believes that Hillary isn't a liar, then that says the most of all.


My take is that according to Obama, Hillary and Bill, lying is just part of the job duties of the presidency.

And that's why I've long believed and said repeatedly that politics sucks as it is practiced in today's America.

Yet We the People continue to listen to the lies and proceed to elect the liars.

What's that say about us?

Thanks. Bob.

President Barack Obama and President-In-Waiting Hillary Clinton, aka the Liars-In-Chief

Former American journalist and broadcasting great Edmund R. Murrow once said, "The obscure we see eventually. The completely obvious, it seems, takes longer."

With that in mind, He Said/She Said: Hillary Clinton vs. James Comey on Her Email Practices has these eye opening thought provokers for those Americans willing to open their eyes and see the easily seeable:

"Here’s a comparison of statements Hillary Clinton or her campaign have made about her email practices while secretary of state and statements made by FBI Director James Comey on Tuesday:
* * * *
CLINTON: “I did not email any classified material to anyone on my email. There is no classified material. So I’m certainly well-aware of the classification requirements and did not send classified material.” (Hillary Clinton, press conference, 3/10/15)

COMEY: “110 emails in 52 email chains have been determined by the owning [government] agency to contain classified information at the time they were sent or received. … Separate from those, about 2,000 additional emails were up-classified to make them confidential. Those emails had not been classified at the time that they were sent or received… [Some] chains involved Secretary Clinton both sending emails about [top-secret-level] matters and receiving emails from others about the same matters.”
CLINTON:I take classified information seriously.” (Hillary Clinton, CNN interview, 2/1/2016)

COMEY: “Although we did not find clear evidence that Secretary Clinton or her colleagues intended to violate laws governing the handling of the classified information, there is evidence that they were extremely careless in their handling of very sensitive, highly classified information.”
CLINTON: “Nothing I sent was marked classified or that I received was marked classified.” (Hillary Clinton, Democratic Presidential Town Hall on Fox News, 3/7/2016)

COMEY: “It’s also important to say something about the marking of classified information. Only a very small number of the emails here containing classified information bore markings that indicated the presence of classified information. But even if information is not marked classified in an email, participants who know, or should know, that the subject matter is classified are still obligated to protect it.”
CLINTON: “I have directed that all my emails on in my custody that were or potentially were federal records be provided to the Department of State, and on information and belief, this has been done” (Hillary Clinton, sworn statement filed in U.S. District Court, 08/10/15)

COMNEY:The FBI also discovered several thousand work-related emails that were not among the group of 30,000 emails returned by Secretary Clinton to State in 2014.”
CLINTON: Asked if she “wiped” the server, “What, like with a cloth or something? Well, no. I don’t know how it works digitally at all.” (Hillary Clinton, press conference, 8/18/2015)

COMEY: Clinton’s lawyers “cleaned their devices in such a way as to preclude complete forensic recovery.”
CLINTON: “The Secretary’s office was located in a secure area. Classified information was viewed in hard copy by Clinton while in the office. While on travel, the State Department had rigorous protocols for her and traveling staff to receive and transmit information of all types,” (, “The Facts About Hillary Clinton’s Emails”)

COMEY: “She also used her personal email extensively while outside of the United States, including sending and receiving work-related emails in the territory of sophisticated adversaries. Given that combination of factors, we assess it is possible that hostile actors gained access to Secretary Clinton’s personal email account.”"

Summing Up

President Obama said today that there has never been a more qualified person, male or female, running for the U.S. presidency than Hillary Clinton.

He may even mean what he said, although he most likely doesn't believe his own words, since he is a politician.

But whether he means it or not, either way it's a really telling admission by him.

In other words, he's either lying or he's being serious about Hillary's presidential qualifications.

As for Hillary, she's just lying --- again and as always.

And then there's Donald.

Politics sucks. It really does.

Thanks. Bob.

Thursday, June 30, 2016

The Administrative State ... Not a Good Thing

When attending law school long ago in the late 1960's, a very enlightening, and perhaps the most interesting and relevant course I took, was titled 'Administrative Law.' It's time for a refresher as our governing administrative agencies, and their intrusion into our daily lives, have grown exponentially over the past several decades.

Government Hits the Wall is subtitled 'The first Brexit vote actually took place in 1980 when the U.S. elected Reagan.' It has this to say about the huuuuuge administrative state that reigns throughout the world today:

"The vote by the people of the United Kingdom to separate from the European Union was actually Brexit the Sequel. The first Brexit vote took place 35 years ago in the United States, with the election of Ronald Reagan, who carried 44 states.

Reagan, in his first inaugural address in 1981, could not have been more explicit about what his election stood for: “In this present crisis, government is not the solution to our problem; government is the problem.”

Brexit is shorthand for “government is the problem.”

Liberal intellectuals have mocked Reagan for reducing his theory of government to a bumper sticker. But he elaborated on the idea with words that would have fit in the Founders’ debates:

“We have been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else?”

The political values of the American and European left—heard today in every sentence spoken by Hillary Clinton and Bernie Sanders or Elizabeth Warren—reside in an argument that is essentially this:

A good and just society comes through an economic and social compact between citizens and their government. If citizens will transmit sufficient tax revenue to the government, it will hire experts in public administration (to Reagan an “elite group”) who will deliver socially desirable benefits to everyone, and will do so with equity. It is an appealing promise.

People who believe this, and some still do sincerely, regarded Reagan’s inaugural formulation as the words of an antigovernment “ideologue.” Still, ideology matters, and they have their own founding ideologue, Woodrow Wilson.

In his 1889 book called “The State,” the future progressive Democratic president of the U.S. wrote: “Government does now whatever experience permits or the times demand.” Across the 20th century, that broad claim summarized the justification for building the administrative state, here and in Europe.

That sound you heard in the United Kingdom last week was the administrative state finally hitting the wall.

It was the British people saying that the compact has been broken, not by them but by the administrative and political elites who dropped their side of the bargain.

The only way the bargain can be sustained is if the administrative state produces, or at least allows, sustained national growth. It now slows economic growth, which like a slow poison has weakened feelings of national well-being. Anti-immigrant resentment is a subset of this failure.

The creators of the European Union signed the enabling Maastricht Treaty in 1992 because they recognized that the economic underpinnings of the social compact were disintegrating. Everyone knew the purpose of this big step was summarized in a single, typically dry formulation: Each member would maintain “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP.”

It didn’t work. Nearly all the members cheated on the benchmarks, economic growth weakened, and youth unemployment became chronic, driving France’s young men and women to London for jobs.

The “administrative state” hasn’t been a phrase known to drive people into the street. Until now. What we are witnessing is a global government fail—across Europe, the Middle East, in Beijing, Delhi, Tokyo and Washington, D.C.

If votes were held today in Italy, Spain, France or Norway, many would vote to abandon the long postwar consensus on letting the bureaucracies decide how to simultaneously produce economic strength and social justice.

No better symptom exists of the compact breaking apart than the European Central Bank, the U.S. Federal Reserve and the Bank of Japan. They epitomize the exhaustion of elite administrative intelligence. For seven years, they failed at restoring even average economic strength, disappearing now into a black hole called negative interest rates.

The Obama presidency has been an American version of the European Commission from which the Brits fled. Except that U.S. courts still review, rather than rubber-stamp, the Obama Commission’s executive orders ranging across labor, the environment, the internet, financial institutions and universities.

Had U.S. courts not pushed back against many of the Obama government’s rules and “guidance” directives, the famous “pen-and-phone” authority, this presidency would have come close to putting the states in the same relation to Washington as that between the once-sovereign states of Europe and Brussels.

If Woodrow Wilson was the American godfather of this transformation, Hillary Clinton is its handmaiden. She knows the drill. With four more years of an Obama-Clinton presidency and possibly Democratic control of Congress, the 100-year-old progressive goal of making the 50 American states obey one set of administrative specialists who reside in a single city will be close to complete."

Summing Up

There is no Santa Claus.

People cannot forever and always live beyond their means. Neither can nations.

We can't reap, individually or collectively, that which we don't first sow.

The simple addition of three factors: (1) the number of individuals performing value added work; (2) how long they work; and (3) how productive (output per unit of input) they are while doing that work will inevitably determine the total amount of wealth to be shared among the citizenry.

Government's take, aka its administrative, regulatory and governance activities, will subtract from that total value added output, and that's the simple truth.

The monetary authorities produce nothing. That's also the simple truth.

Today's debt levels subtract from tomorrow's ability to spend. That's true as well.

Thanks. Bob.

Friday, June 24, 2016

British Voters Shock the World ... When Choosing a Knowledgeable Financial Adviser, Use the 'Dual MOM' Approach and Work Hard to Pick One Who Also Has His 'Long Term' Skin in the Same Game

The political and financial worlds are in shock this morning as the British people have unexpectedly voted to exit the European Union. Get ready for a hard fall in stock prices.

What this all means, politically, financially and otherwise, including Europe and the rest of our world, will only be determined over time, of course.

But one thing is certain --- it adds to the global strife and uncertainty surrounding terrorism, immigration, globalism, politics, entitlements, fiscal responsibility, governance, recessions, protectionism, world trade, income inequality and economic growth. Chaos reigns throughout the world.

Who the new British Prime Minister will be after David Cameron resigns in a few months will be interesting to observe. Donald Trump is having a good day with all this chaos going on, and that's
for sure.

Predictions are dangerous -- especially those about the future, as the surprising Brexit vote has demonstrated once again.

What's an individual saver and investor to do? I'm doing nothing today, and you should consider doing that same thing --- nothing.

So let's look at the relevance of solid ongoing financial advice and its importance to individual savers and investors in this unfolding and ongoing world in chaos --- politically, financially and otherwise. What's an individual to do?

Well, here's my advice, for what it's worth --- stay in the saving and investing game over the long haul.

And when selecting a financial adviser to work with and learn from over that same long haul, recognize and accept the simple fact that it's very important to do your homework upfront.

That's because there are a whole bunch of self serving charlatans out there who know nothing about the world of successful long term investing.

It's also important to choose one who has skin in the same long term investing game that you'll be playing to win.

And the fact is that too many perhaps well intentioned but high priced advisers, while not phonies, know very little about successful long term investing. And those often high priced and underperforming advisers can be dangerously hazardous to your long term financial health and well being.

Deciding if a Financial Adviser Is Right for the Job has this to say about the difficulty involved in selecting a qualified financial adviser:

The Certified Financial Planner Board of Standards hired Azmyth Kaminski, a D.J., and cut off his dreadlocks, removed his body piercings and put him in a suit. He learned a few financial phrases and sat in a conference room. Then the board brought in couples looking for a financial adviser. Credit CFP Board

"A few years ago, the board that administers the certified financial planner designation decided to test the idea that investors will ask pointed questions of a prospective adviser and not be fooled by a slick presentation.

So the Certified Financial Planner Board of Standards hired a professional D.J. named Azmyth Kaminski, shaved off his dreadlocks, removed his body piercings and put him in a suit. It taught him a few financial phrases and sat him in a conference room. Then it brought in people looking for a financial adviser. . . .

So how did he do? After Mr. Kaminski spent about 15 minutes with each person, all but one were ready to work with him, Mr. Maugeri said.

While Mr. Kaminski may have charisma, he obviously had little insight into financial matters. But the experience presents an interesting conundrum for people seeking advice: how best to determine if a financial adviser is qualified for the job. . . .

Too often people fixate on ferreting out the worst advisers. . . . The bigger issue is often not whether a broker is a swindler. The odds of that are not high. It is whether the person advising you is qualified to do the job.

And figuring out the answer takes a lot of legwork. . . .

John Bowman, managing director of the Americas at the CFA Institute, which administers the chartered financial analyst designation, said investors should ensure that the person making the investment decisions — as opposed to the adviser creating a financial plan — has the qualifications, knowledge and experience to make those selections. . . .

But how do you know if that person is truly qualified . . . ? One answer is that credentials help. They show seriousness about the profession. And that, mixed with the ability to listen to and understand your particular position, can help you reach your goals.... Mr. Bowman said. “I would just challenge them with the same question, ‘How do you feel prepared and competent to handle this person’s life savings?’”

The risk is that someone decided to hang out a shingle and become an adviser with little knowledge or because a previous career did not work out.

“Our profession has a low barrier to entry,” Mr. Bowman said. “I’m talking about all of those people out there who aren’t bound by an ethical code or have certain core competence. We need to start pulling up fortified walls to protect people.”

The chartered financial analyst designation is about a person’s ability to assess investments and provide advice on them. The certified financial planner credential speaks to the person’s ability to help clients create plans for their financial lives. . . .

Credentials, no matter how rigorous, go only so far, of course. . . .

As to the D.J. who posed as a financial adviser, Mr. Maugeri said that one person still wanted to use him as a financial adviser even after finding out the truth.

“It told us a lot about how consumers choose a financial adviser,” Mr. Maugeri said. “And how so much of it is impressions and saying the right thing.”"

Summing Up 

So when selecting a financial adviser, please take enough time to be careful, thoughtful, knowledgeable and very selective. 

Making a good choice will do wonders for your family's financial health and well being, and the best choice entails picking one who has skin in the game right alongside yours.

On the other hand, choosing a bad one is costly in too many ways to count.

In other words, MOM is too important to waste, so employ the 'Dual Mom' approach when signing up with a low cost, high value adding and educational sharing financial adviser.

It will very much be worth the effort.

That's my take. 

Thanks. Bob.

Thursday, June 23, 2016

Social Security and Medicare Solvency ... Kicking the Can Down the Road and Onto the Backs of Future Generations

Medicare premiums will be going up a whole lot for some people next year. And due to our aging society, so will the ever growing number of elderly Americans who depend on Medicare and Social Security for their medical care and financial security. See Higher Earners Face Steep Hikes in Medicare Premiums.

But that premium increase is just another short term 'fix' for our debt ridden country. It won't address the very serious long term entitlements affordability problem which has long been ignored by our can kicking political class of vote seekers.

So if the long term viability and affordability of Social Security and Medicare aren't even being discussed this year, then what will happen in future years and decades? Well, that's where the future generations of voters, and not the current crop, are destined to get the political shaft. And that's precisely why politics sucks.

The simple and harsh truth is that Medicare is currently unsustainable cost wise. So is Social Security, but neither is a topic being talked about by our name calling totally partisan politicians. Hillary and Donald are too busy attacking each other instead of getting Americans prepared to deal with the real problems facing an aging, heavily indebted, overpromised and underfunded society.

Our kids and grandkids will be getting the bill, of course, and the longer we wait to tackle the problem, the bigger that bill will be. But that's not an issue for our current crop of politicians. Unpleasant facts aren't part of their agenda this political season, nor any other.

We're getting older as a society. More and more, Americans are living longer and fewer Americans are entering the workforce. In other words, the ability of We the People to pay for the financial needs of our under saved retirees is getting more difficult each day. And to add fuel to the financial fire, productivity gains, the way to increased wealth as a society, are historically sluggish as no relief to our slow-go economy is in sight --- or in our political plans, for that matter.

On top of these inconvenient facts, our ever growing debt load, as well as that of the rest of the world, is becoming unmanageable. Although interest rates are currently at historic lows, our debt burdens and government deficits will become even bigger when they do increase.

No, it's certainly not a pretty picture. And what are the vote seeking politicians proposing to do about this fiasco? Ignore it, that's what.

American sound bite driven politics has digressed to being all about promising voters with free goodies in the here and now while ignoring and therefore being unable to make good on all these unaffordable promises down the road --- free college, for example.

Social Security, Medicare funds face insolvency over 20 years, report finds says the following:

"A new forecast shows that Medicare’s hospital-insurance trust fund will be depleted in 2028, two years earlier than estimated last year, according to a government review released Wednesday.

Wednesday’s report also showed that Social Security will exhaust its reserves in 2034, an estimate that is unchanged from last year. After that, beneficiaries would face an across-the-board cut in their monthly payments if Congress doesn’t act.

The annual report card from the trustees of both programs contrasts sharply with an election debate that has shifted away from how to restore solvency for Social Security and instead is focusing on whether benefits should be increased. Wednesday’s report shows that both programs’ trust funds see annual outflows exceed income early next decade, making the solvency challenge a more urgent concern for whoever becomes the next president.

Social Security’s disability-insurance program, meanwhile, will exhaust its reserve fund in 2023. It was facing depletion this year, but Congress last fall approved funding changes that temporarily restored solvency.

More than 49 million Americans collected Social Security retirement benefits last year, 10.8 million received disability benefits and 55.3 million were covered under Medicare."

Summing Up 

I doubt if we'll be hearing much, if anything, about this huuuuuge entitlements affordability issue from Barack, Hillary, Bernie or Donald the next few months.

And I am thoroughly convinced that no serious proposals about dealing with it will be forthcoming this political season. Politics sucks.

Meanwhile, the debts pile up, along with the unfunded promises.

Our kids don't need free college. What they need are responsible adults dealing with today's biggest problems so they won't have to deal with them tomorrow.

But that's not going to happen anytime soon.

That's my take.

Thanks. Bob. 

Tuesday, June 21, 2016

Homeownership Myth vs. Potential Wonderful Reality ... Using KISS, Common Sense and MOM Can Result in Desired Outcomes

Our most recent post discussed cost benefit analysis (CBA), debt service obligations (DSO) and Income/Investment Opportunities (IIO).

Today we'll expand the conversation and look at some of the myths and truths surrounding homeownership and its broader connotations.

First, homes are not good long term investments compared to stocks. The simple fact is that homes have not appreciated at a rate greater than the rate of inflation over the past century. And the recent house price fiasco still has millions of 'happy' homeowners financially 'under water.'

On the other hand, stocks have outperformed inflation by ~5% annually on average. Over thirty or forty years, the estimated ~5% annual advantage for stocks over home price appreciation will grow to become a huuuuuge chuck of money --- like a 5 to 1 beat or so over time, using the compounding rule of 72 as our guide.

So the idea of homeownership, albeit a good one, is not to be confused with a 'no brainer' investment opportunity, despite what the realtor, mortgage lender, home seller or home builder may say.

When the real estate commission and the lack of instant liquidity are included in the homeownership equation, the only sensible approach is to buy and stay for many years or not buy and rent in the interim until such time as we are ready to buy and stay.

Why a 30-year home mortgage may leave you house poor is subtitled 'Your first instinct to finance a house purchase isn't always right' and offers solid advice for the responsible would be home buyer and saver.

Don’t take any aspect of home finance lightly, especially if you are a first-time buyer.

Many people in the U.S. assume when buying a home that a 30-year mortgage loan is their only real choice, but you can save a lot of money by going with a 15-year loan if you can afford it.

Spreading the payments over 30 years of course makes loan payments more affordable, but you will pay so much more if you go this route. And if you think you can’t swing a 15-year loan, you should still learn about all available options. The potential savings might be so large that it’s worth considering “buying less house” or reducing your expenses another way to get it done....

Comparing loan terms

Let’s start by comparing a 30-year fixed-rate mortgage loan with a 15-year fixed-rate loan. We’re only looking at fixed-rate loans here, because interest rates are so low that it doesn’t really make sense to consider a variable-rate loan at this time....

Most borrowers will have to come up with a 20% down payment to qualify for a loan. But your mortgage lender can help you to learn whether you qualify for a lower down payment through the Federal Housing Administration (FHA) or another government program.

Fannie Mae and Freddie Mac, the government-sponsored mortgage giants that buy the great majority of newly originated residential loans in the U.S., have guidelines that also allow down payments of less than 20% for “conventional mortgage loans,” which have balances up to $417,000. But in return for the lower down payment, the borrower pays a monthly private mortgage insurance premium. The insurance protects the lender or investor, which won’t have the customary 20% cushion to protect its interest.

To keep things simple, we’ll use the 20% down payment for this example. Your down payment is $52,000, so you will borrow $208,000. You will also have to cover the costs associated with purchasing the home and taking out the loan. These closing costs typically range from 2% to 5% of the purchase price, according to Zillow. If you are a first-time home buyer, this can be a brutal surprise.

According to, the average interest rate for a 30-year fixed mortgage loan is currently 3.66%, while the average rate for a 15-year fixed mortgage loan is 2.72%. These are extraordinarily low rates — possibly the lowest you will see in your lifetime. . . .

For simplicity, we’ll round the interest rates for our example to 3.65% for the 30-year loan and 2.70% for the 15-year loan.

30-year vs. 15-year loan

Based on our purchase price of $260,000, the 20% down payment of $52,000, loan amount of $208,000 and interest rate of 3.70%, the monthly principal and interest (P&I) payment for the 30-year loan is $957.39.

You might be ready to celebrate, but keep in mind this does not include any monthly escrow payment for insurance and taxes that will be required by the lender. Of course, you will also have the escrow payments with the 15-year loan, so we’re just comparing P&I here.

With an interest rate of 2.70%, the monthly P&I payment for the 15-year loan is $1,406.59.

Detailed comparison

Many people have a terrible habit when deciding on home or car purchases of only considering the affordability of monthly payments, rather than the entire cost for the life of a loan.

The total interest paid over the life of the 30-year loan will be $136,659. Total interest paid over the life of the 15-year loan will be just $45,186. So if you can afford the 15-year loan, you will save $91,473.

Common arguments in favor of the 30-year loan include the likelihood that you won’t stay in the home even for 15 years, and that its best to “buy the best house you can afford,” because then you will see a greater benefit from home-price appreciation over time. The mortgage credit crisis of 2008 and 2009 should be enough to prove that these are both weak arguments. You might not be able to sell your home if you are ready to move in just a few years, since its market value may have dropped significantly. You might even be “upside down,” with the market value being lower than the remaining loan balance.

Building equity faster

Fixed-rate mortgage loans have amortizing loan payments, which means the balance of the payment applied to principal and interest changes each month. Sounds boring? It’s critical to your understanding of why the 15-year loan has such huge advantages.

The first monthly payment of $957.39 for the 30-year loan is made up of $641.33 for interest and $316.06 for principal. After five years, the weighting of the payment is $578.38 for interest and $379.01 for principal. After 60 payments, you’re still building up equity very slowly. Your loan balance is $187,204.

You have built just $20,796 in equity over the five years, so including the down payment of $52,000, your total equity is $72,796, or 28% of the $260,000 purchase price.

Because the 15-year loan payment is so much more heavily weighted toward principal, in five years your situation will be a lot more favorable. The first monthly payment of $1,406.59 is made up of $468.00 in interest and $938.59 in principal. After five years, the weighting of the payment is $334.91 interest and $1,071.68 principal and your remaining loan balance is $147,778.

So after five years with the 15-year loan, you have built $60,222 in equity. Including the down payment of $52,000, your total equity is $112,222, or 43% of the purchase price of $260,000....

And if the 15-year loan doesn’t look right for you, other payment terms are available. . . . you can easily get fixed-rate mortgage loans with 20-year or 25-year terms (or even 10-year terms) that Fannie and Freddie are willing to buy from lenders. A shorter term means a lower interest rate, faster equity build-up, and plenty of savings on interest as you get the debt monkey off your back much sooner.

When making your mortgage finance decision, be sure to think about your entire financial situation. Are you saving for retirement? Will you be able to do so if you buy your dream house? Maybe it would be better to look for balance in all aspects of your financial life, so you can afford a home, minimize interest payments, and save for retirement and college tuition for your children. Such careful purchasing and borrowing decisions can save you a lot of money — and pain."

Summing Up

Utilizing the CBA method of financial analysis, and thereby avoiding unnecessary DSO, will facilitate IIO.

Following the KISS and MOM common sense approach will make a huuuuge difference to knowledgeable home buyers.

Buying a home and paying off student loans, car loans or credit card balances, or setting aside money to save for retirement, should not be mutually exclusive or time phased sequential goals.

Doing the right things financially for ourselves and our families should not be mere fantasies or 'impossible dreams.'

As the above example illustrates, the home buyer is well advised to take out a 15 year mortgage and avoid paying an additional ~$100,000 in interest expenses over the duration of the loan.

And when the 15 years are up, our smart buyer will own that house free and clear.

Or, perhaps even smarter, the smart buyer can elect to use that growing equity and interest savings all along the way to take out a low interest rate HELOC (home equity line of credit) and use the growing 'equity' to pay off student loans, car loans, credit cards or even put some additional money in the individual IRA account.

So why don't we all do ourselves a favor and adopt the CBA way for all big ticket financed purchases, including college, cars, credit cards and homes?

Simple KISS and MOM rules apply.

That's my take.

Thanks. Bob.

Cost Benefit Analysis (CBA), Debt Service Obligations (DSO) and Income/Investment Opportunities (IIO) ... KISS and MOM Rules Apply

CBA (cost benefit analysis) leads to increased IIO (income/investment opportunities) due to fewer DSO (debt service obligations).

Employing the KISS (keep it simple, stupid) and MOM (my own money) method of behavior and thinking will work wonders with respect to creating expanded individual opportunities and a better quality of life and happier adulthood.

For example, how much do we spend by borrowing, aka student loans, for education, both in terms of time and money? Can't we get that same or better education by spending or borrowing less money? Of course we can.

More knowledge leads to higher future income and investment opportunities, and more debt leads to higher future debt service obligations. More knowledge for less debt is the basic idea.

Think about it in KISS terms --- debt not owed is future income not dedicated to interest and principal payments and greater income and investment opportunities.

Now consider the following KISS related questions, please.

Why not attend and graduate quickly from a low cost school? And why not work part time while getting that degree?

And why make unnecessary credit card purchases resulting in required monthly payments forever of the minimum amount? Why not avoid taking on these sure to be super high debt obligations in the form of both interest and principal payments?

And why not defer buying that house and rent instead until the down payment is sufficient to make the investment a credible one instead of speculation about whether foreclosure is down the road?

And when buying that first house eventually, why not buy a lower priced nice home instead of the highest monthly payment home that we really can't afford? It won't make us happy campers.

And when it comes to buying and financing that car, the same KISS based 'why do it to ourselves' rule applies. Why resign ourselves to making 'low affordable' monthly car payments forever? Why not really own a car or cars someday?

And the same KISS thinking applies for other purchases as the more we borrow now, the more costly the purchases will prove to be in the real world of the future.

CBA is about spending as little as possible to get as much as possible. It applies to both time and money. It also applies to knowledge.

So take some time to reflect on CBA and how it can make your life better, easier, happier and more fulfilling. KISS really works.

When buying, caveat emptor behavior is essential. The seller has his own goals in mind, and they aren't the same as yours.

MOM (my own money) rules apply.

That's my take.

Thanks. Bob.

Friday, June 17, 2016

E Pluribus Unum and American Exceptionalism vs. Hyphens, Multiculturalism and 'Tribalism'

We have a whole lot of strife going on in America and around the world these days. What's to be done, other than listen to the politicians prattle on about how 'they' are going to take care of us make us safe?

Why not engage in self help by taking things in our own hands and treating others as we would have them treat us? The Golden Rule approach by each of us wouldn't solve our nation's many problems with the many 'sickies' out there, of course, but it would make us a better society -- a much better society.

And while we can't do much, if anything, about the problems in the rest of the world, we can address in earnest those in our own country. Treating each other as equal Americans without regard to ethnicity, national origin, sexual orientation, race, sex or religion would be a meaningful point of emphasis, or at least that's my view.

So let's each set aside the hyphens, multi-cultural and tribal self references, such as Asian-Americans, Muslim-Americans, African-Americans, Latin-Americans, LGBT-Americans, Jewish-Americans and so forth when talking to or about each other. Ok?

The historic Great Seal (aka national emblem) of the United States says simply --- E Pluribus Unum --- and its simple translation is --- Out of Many, One. So it has been since our nation's beginning and so it must forever be.

We once believed that we were a nation of equals. Do we still choose to be? That's the question we each need to answer for ourselves. I emphatically say yes!

In other words, here in the U.S.A., do we choose to belong to, and identify with, separate 'tribes' or do we choose to be Americans first and foremost? I'm for being Americans. How about you?

But emphasizing multiculturalism and tribalism aren't the same thing as a one for all and all for one mentality. They simply don't go together --- not even close.

The simple fact is that identifying as members of the American community and not as members of various 'tribes' or hyphenated names made America the greatest and most exceptional nation the world has ever known.

So today, and in honor of my long departed special Father (who died August 10, 1974) on this Father's Day, I commit to working smart, hard and together to do my part and make it that way again.

America: History's Exception has this summary of what made American Exceptionalism a wonderful and unique reality in the history of the world:

"We should seek to preserve the ideals that made America successful.

The history of nations is mostly characterized by ethnic and racial uniformity, not diversity.

Most national boundaries reflected linguistic, religious, and ethnic homogeneity. Until the late 20th century, diversity was considered a liability, not a strength.

Countries and societies that were ethnically homogeneous, such as ancient Germanic tribes or modern Japan, felt that they were inherently more stable and secure than the alternative, whether late imperial Rome or contemporary America.

Many societies created words to highlight their own racial purity. At times, “Volk” in German and “Raza” in Spanish (and “Razza” in Italian) meant more than just shared language, residence, or culture; those words also included a racial essence. Even today, it would be hard for someone Japanese to be fully accepted as a Mexican citizen, or for a native-born Mexican to migrate and become a Japanese citizen.

Many cultures reflected their suspicion of diversity by using pejorative nouns for the “other.” In Hebrew, the “goyim” were all the other non-Jewish nations and peoples. “Odar” in Armenian denoted the rest of the world that was not ethnically Armenian. For Japanese, the “gaijin” are those who by nationality, ethnicity, and race cannot become fully Japanese. In 18th-century Castilian Spain, “gringo” meant any foreign, non-native speakers of Spanish.

The Balkan states were the powder kegs of 20th-century world wars because different groups wanted to change national boundaries to reflect their separate ethnicities.

The premise of Nazi Germany was to incorporate all the German “Volk” into one vast racially and linguistically harmonious “Reich” — even if it meant destroying the national borders of Austria, Czechoslovakia and Poland.

The constitution of Mexico unapologetically predicates national immigration policies on not endangering Mexico’s ethnic makeup. The United States steadily evolved to define Americans by their shared values, not by their superficial appearance.

Countries, ancient and modern, that have tried to unite diverse tribes have usually fared poorly. The Italian Roman Republic lasted about 500 years. In contrast, the multiracial Roman Empire that after the Edict of Caracalla in AD 212 made all its diverse peoples equal citizens endured little more than two (often violent) centuries.

Vast ethnically diverse empires such as those of the Austro-Hungarians, the Ottomans, and the Soviets used deadly force to keep their bickering ethnic factions in line — and from killing each other.

Modern states such as multicultural or multi-tribal Rwanda, Iraq, and Lebanon have often proved deadly failures. Europe is trying to emulate the multiracial but unified culture of the United States. But the European Union may well tear itself apart trying to assimilate millions of disparate migrants who are reluctant to fully assimilate.

America is history’s exception. It began as a republic founded by European migrants. Like the homogenous citizens of most other nations, they were likely on a trajectory to incorporate racial sameness as the mark of citizenship. But the ultimate logic of America’s unique Constitution was different. So the United States steadily evolved to define Americans by their shared values, not by their superficial appearance. Eventually, anyone who was willing to give up his prior identity and assume a new American persona became American.

The United States has always cherished its “melting pot” ethos of e pluribus unum — of blending diverse peoples into one through assimilation, integration, and intermarriage. The history of state multiculturalism is one of discord, violence, chaos, and implosion.

When immigration was controlled, measured, and coupled with a confident approach to assimilation, America thrived. Various ethnic groups enriched America with diverse art, food, music, and literature while accepting a common culture of American values and institutions. Problems arose only when immigration was often illegal, in mass, and without emphasis on assimilation.

Sometime in the late 20th century, America largely gave up on multiracialism under one common culture and opted instead for multiculturalism, in which each particular ethnic group retained its tribal chauvinism and saw itself as separate from the whole.

Hyphenated names suddenly became popular. The government tracked Americans’ often complicated ethnic lineage. Jobs and college admissions were sometimes predicated on racial pedigrees and quotas. Courts ruled that present discrimination was allowable compensation for past discrimination.

Schools began to teach that difference and diversity were preferable to sameness and unity. Edgar Allan Poe and Langston Hughes were categorized as “white male” or “black” rather than as “American” authors.

Past discrimination and injustice may explain the current backlash against melting-pot unity. And America’s exalted idealism has made it criticized as less than good when it was not always perfect.

Nonetheless, for those who see America becoming a multicultural state of unassimilated tribes and competing racial groups, history will not be kind. The history of state multiculturalism is one of discord, violence, chaos, and implosion.

So far, America has beaten the odds and remained multiracial rather than multicultural, thereby becoming the most powerful nation in the world.

We should remember that diversity is an ornament, but unity is our strength."

Summing Up

Happy Father's Day.

Yes, America is truly unique in its shared values approach and goal of having an 'E Pluribus Unum' society of equals.

We're not there yet and perhaps never will be, but that's no reason to stop trying, and trying hard.

As poet Robert Browning Browning said, "Ah, but a man's reach should exceed his grasp, or what's a heaven for?"

Let's each and all work hard to deemphasize the use of hyphens and 'group thinking tribalism' when viewing ourselves and our fellow Americans.

Asian-Americans, African-Americans, Latin-Americans, Muslim-Americans, Catholic-Americans, Jewish-Americans, LGBT-Americans, Native-Americans and so on aren't what will continue to make us the greatest and most special nation on earth.

We're simply Americans.

That's what American Exceptionalism is all about.

E Pluribus Unum.

That's my take.

Thanks. Bob.

Guns and Government ... Gun Control? ... Government Arms Itself While It Wants to Disarm We the People

Obama and the Democrats are all about domestic gun control as the way to stop international terrorism.

In other words, We the People disarm and the bad guys keep on doing what they've been doing. Talk about stupid is as stupid does. It's like shooting fish in a barrel, and we're the fish. The world is the barrel.

But not so for the government guys. They take our money and arm themselves to the teeth. What's wrong with this picture? A whole lot, in fact.

Why Does the IRS Need Guns? is subtitled 'After grabbing legal power, bureaucrats are amassing fire power. It's time to scale back the federal arsenal:'

"Special agents at the IRS equipped with AR-15 military-style rifles? Health and Human Services “Special Office of Inspector General Agents” being trained by the Army’s Special Forces contractors? The Department of Veterans Affairs arming 3,700 employees?

The number of non-Defense Department federal officers authorized to make arrests and carry firearms (200,000) now exceeds the number of U.S. Marines (182,000). In its escalating arms and ammo stockpiling, this federal arms race is unlike anything in history. Over the last 20 years, the number of these federal officers with arrest-and-firearm authority has nearly tripled to over 200,000 today, from 74,500 in 1996.

What exactly is the Obama administration up to?

On Friday, June 17, our organization, American Transparency, is releasing its oversight report on the militarization of America. The report catalogs federal purchases of guns, ammunition and military-style equipment by seemingly bureaucratic federal agencies. During a nine-year period through 2014, we found, 67 agencies unaffiliated with the Department of Defense spent $1.48 billion on guns and ammo. Of that total, $335.1 million was spent by agencies traditionally viewed as regulatory or administrative, such as the Smithsonian Institution and the U.S. Mint.

Some examples of spending from 2005 through 2014 raise the question: Who are they preparing to battle?

• The Internal Revenue Service, which has 2,316 special agents, spent nearly $11 million on guns, ammunition and military-style equipment. That’s nearly $5,000 in gear for each agent.

• The Department of Veterans Affairs, which has 3,700 law-enforcement officers guarding and securing VA medical centers, spent $11.66 million. It spent more than $200,000 on night-vision equipment, $2.3 million for body armor, more than $2 million on guns, and $3.6 million for ammunition. The VA employed no officers with firearm authorization as recently as 1995.

• The Animal and Plant Health Inspection Service spent $4.77 million purchasing shotguns, .308 caliber rifles, night-vision goggles, propane cannons, liquid explosives, pyro supplies, buckshot, LP gas cannons, drones, remote-control helicopters, thermal cameras, military waterproof thermal infrared scopes and more.

• The Environmental Protection Agency spent $3.1 million on guns, ammunition and military-style equipment. The EPA has put nearly $800 million since 2005 into its “Criminal Enforcement Division.”

• The Food and Drug Administration employs 183 heavily armed “special agents.”

• The University of California, Berkeley acquired 14 5.56mm assault rifles and Yale University police accepted 20 5.56mm assault rifles from the Defense Department. Texas Southern University and Saddleback College police even acquired Mine Resistant Vehicles (MRVs).

Other paper-pushing federal agencies with firearm-and-arrest authority that have expanded their arsenals since 2006 include the Small Business Administration, Social Security Administration, National Oceanic and Atmospheric Administration, Education Department, Energy Department, Bureau of Engraving and Printing, National Institute of Standards and Technology and many others.

People from both ends of the political spectrum have expressed alarm at this trend. Conservatives argue that it is hypocritical, unconstitutional and costly for political leaders to undermine the Second Amendment while simultaneously equipping nonmilitary agencies with heavy weapons, hollow-point bullets and military-style equipment. Progressives like Sen. Bernie Sanders have raised civil liberties concerns about the militarization of local police with vehicles built for war and other heavy weaponry.

Meanwhile, federal authorities are silent on the growing arsenal at federal agencies. In fact, we asked the IRS for an asset accounting of their gun locker—their guns and ammunition asset inventory by location. Their response? “We don’t have one [an inventory], but could create one for you, if important.”

Our data shows that the federal government has become a gun show that never adjourns. Taxpayers need to tell Washington that police powers belong primarily to cities and states, not the feds."

Summing Up

Our national 'leaders' don't deserve the respect of We the People.

They continue to represent a leadership fiasco in every way.

Politics and sound bites are all that matter to them.

Living within our means, wasting taxpayer money,acting as fiduciaries in the best interests of We the People, education, economic and national security don't matter even one little bit to them.

Hypocrisy reigns supreme in Washington!

Politics sucks. Self reliance matters more than ever these days and for the foreseeable future.

That's my take.

Thanks. Bob.

Thursday, June 16, 2016

Gun Control ... Let's Start in Chicago

Gun control is being advocated by President Obama and Hillary Clinton as a way to prevent future Orlando and San Bernardino type ISIS attacks on American citizens. That's nothing more than an attempt on their part to ignore the issue of worldwide terrorism and our nation's non-response to it during his presidency and her probably presidency to be.

And We the People are the victims, if not accomplices, to this misdirection. Gruberism is alive and well in politics.

What about Chicago, both Obama's and Hillary's home town, as well as where their crony Rahm Emanuel is the mayor? Why not talk about what's happening there?

How Chicago's Streets Became the Wild West says this in pertinent part:

"Someone was shot in Chicago every 150 minutes during the first five months of 2016. Someone was murdered every 14 hours, and the city saw nearly 1,400 nonfatal shootings and 240 fatalities from gunfire. Over Memorial Day weekend, 69 people were shot, nearly one an hour, topping the previous year’s tally of 53 shootings. The violence is spilling from the Chicago’s gang-infested South and West Sides into the business district downtown. Lake Shore Drive has seen drive-by shootings and robberies.

The growing mayhem is the result of Chicago police officers’ withdrawing from proactive enforcement, making the city a dramatic example of what I have called the Ferguson effect. Since the shooting of Michael Brown in Ferguson, Mo., in August 2014, the conceit that American policing is lethally racist has dominated media and political discourse, from the White House on down. Cops in minority neighborhoods in Chicago and other cities have responded by backing away from pedestrian stops and public-order policing; criminals are flourishing in the vacuum.

Chicago Mayor Rahm Emanuel warned in October 2015 that officers were going “fetal” as the violence grew. But 2016 produced an even sharper reduction in proactive enforcement. Failures in city leadership after a horrific police shooting, coupled with an ill-considered pact between the American Civil Liberties Union and the police department, are driving that reduction. Residents of Chicago’s high-crime areas are paying the price.

Most victims in the current crime wave are already known to police. Four-fifths of the Memorial Day shooting victims were on the Chicago Police Department’s list of gang members deemed most prone to violence. But innocents are being attacked as well: a 6-year-old girl playing outside her grandmother’s house earlier this month, wounded by gunfire to her back and lungs; a 49-year-old female dispatcher with the city’s 311 call center, killed in May while standing outside a Starbucks a few blocks from police headquarters; a worker driving home at night from her job at FedEx, shot four times in the head while waiting at an intersection, saved by the cellphone at her ear.

Police officers who try to intervene in this disorder often face virulent pushback. “People are a hundred times more likely to resist arrest,” a police officer who has worked a decade and a half on the South Side told me. “People want to fight you; they swear at you. ‘F--- the police, we don’t have to listen,’ they say. I haven’t seen this kind of hatred towards the police in my career.”

Antipolice animus is nothing new in Chicago. But the post-Ferguson Black Lives Matter narrative about endemically racist cops has made the street dynamic much worse. A detective told me: “From patrol to investigation, it’s almost an undoable job now. If I get out of my car, the guys get hostile right away.” Bystanders sometimes aggressively interfere, requiring more officers to control the scene.

In March 2015, the ACLU of Illinois accused the Chicago PD of engaging in racially biased stops, locally called “investigatory stops,” because its stop rate did not match population ratios. Blacks were 72% of all stop subjects during a four-month period in 2014, said the ACLU, compared to 9% for whites. By the ACLU’s reasoning, with blacks and whites each making up roughly 32% of the city’s populace, the disparity in stops proves racial profiling.

This by now familiar and ludicrously inadequate benchmarking methodology ignores the incidence of crime. In 2014 blacks in Chicago made up 79% of all known nonfatal shooting suspects, 85% of all known robbery suspects, and 77% of all known murder suspects, according to police-department data. Whites were 1% of known nonfatal shooting suspects in 2014, 2.5% of known robbery suspects, and 5% of known murder suspects, the latter number composed disproportionately of domestic homicides. Whites are nearly absent among violent street criminals—the group that proactive policing aims to deter."

Summing Up

In the aftermath of the Orlando tragedy, Obama's and Clinton's attempts to change the subject instead of addressing the need to destroy ISIS and global terrorism is pathetic.

Talking about guns as the cause of all these terrorist attacks around the world, including here, is political Gruberism phoniness, pure and simple.

And while it will do absolutely nothing to keep Americans safe from terrorists, it may help Hillary's chances of succeeding Obama in the White House.

If so, that's shame on us, my fellow Americans.

Thanks. Bob.

Taxpayer Supported Education ... Healthy Free Market 'Voucher' Based Competition vs. Government Managed Monopolies ... Who's in Charge?

I feel the need to vent about our 'no voucher allowed' public education monopoly and its ill effects on students, parents and our nation as a whole.

When it comes to public education, We the People are indeed 'Sheeple,' as Jonathan Gruber once said when promoting the implementation of the intentionally misnamed Affrodable Care Act, aka ObamaCare.

So here goes, my fellow American People or Sheeple, as the case may be. In other words, if the shoe fits, wear it!


Why do teachers and other members of the huuuuuuge and well paid public education 'establishment' favor government monopolies and oppose school vouchers for all, thus standing in the way of directly enabling and encouraging free market competition? Well, they do so because it's in their best and self interests to keep competitors away. They are anti-competition and died in the wool monopolists. That's why.

Consumers, aka students, parents and the public at large, on the other hand, would be better served and have their interests better protected by competition and free choice in the market for education. Taxpayer supplied vouchers are the answer, and they wouldn't cost one single penny. In fact, money could be saved.

Choice about whether and how to spend money MOM style are strong features of a competitive market focused and consumer driven economy. That's the American way or what I refer to as the MOM (my own money) way.

But in a government run and taxpayer funded costly and low quality education monopoly which is controlled by teachers and teachers unions, most parents and taxpayers continue to oppose taxpayer friendly low cost and high quality customer focused market competition. Why?

Why do we oppose free choice, better results and greater opportunities for our children? Why do we deny to them and our nation the opportunity to have a more capable workforce which in turn will lead to a stronger economy in which those very same children can work as adults?

Teachers are primarily interested in the well being of teachers. And teachers join unions to be represented when bargaining for higher pay and retirement benefits, fewer hours worked and improved working conditions. That's how they negotiate with the rest of We the People and our chosen government leaders. And that's why they pay union  dues to union leaders.

It's not about the kids --- not at all. It's all about the teachers and other employees.

Teachers and their union leaders are not fiduciaries who are required to act in the best interests of the students, parents and taxpayers. They are self interested employees, and there is nothing wrong with that as long as we don't believe otherwise.

In straightforward language, neither teachers nor teachers unions exist to serve and protect the general well being and best interests of the students, their parents and the community as a whole.

They are self interested employees in a government managed monopoly and therefore are essentially unaccountable to students, parents and the taxpaying public at large.

Notable & Quotable: Teacher Tenure has this to say about teacher tenure and the real interests of teachers:

"From an amicus brief submitted June 7 to the California Supreme Court . . . challenging teacher tenure in public schools . . . :

The statutes at issue impair the fundamental right to education. They categorically prioritize the job security of teachers—regardless of their competence—over the educational needs, interests, and rights of California school children. . . . The upshot of handicapping the ability to efficiently identify and remove grossly ineffective teachers, and providing institutional bias in favor of incompetent teachers, is to contract the marketplace of ideas within public schools by institutionalizing educational mediocrity. The California Constitution, however, establishes public schools for the benefit of children, not teachers, and the Education Clause talks about the right to public education as “essential to the preservation of the rights and liberties of the people,” not as a right essential to the economic security of the teachers selected by the State to make that right a reality."

Summing Up

Government managed monopolies are high cost, low quality, anti-competitive, anti-free market and anti-consumer.

Teachers are employees who belong to monopolies, aka government protected teachers unions. 

Teachers unions exist solely to represent the interests of their due  paying members, the teachers.

Acting in the best interests of the students, their parents and the public at large  are not part of their agenda.

We the People have to wake up, and our priorities have to change. The best interests of today's students and tomorrow's adults are at stake.

The future of America is on the line.

That's my take.

Thanks for letting me vent. Bob.

Wednesday, June 15, 2016

Free Trade Will Continue to Make America Stronger and American Consumers More Prosperous

Is free trade good or bad? Is competition good or bad? Is being able to buy goods and services for less money good or bad? How about productivity, skills and knowledge?

And the correct answer to each and every question posed above is the same --- good. And that's because global trade has made and will continue to make America and Americans the most prosperous society the world has ever known.

Despite all the election year rhetoric, global free trade is good for Americans, and so is an individual consumer's free choice. Both global free trade and individual free choice make us as consumers more prosperous and as producers more competitive.

And if for whatever reason (made in America?) we opt to buy that which is more expensive and/or of lower quality, nobody will or should try to force us to do otherwise. It's our money we're spending, and free choice is a bedrock American principle and way of life.

For an illustration of what this false narrative being put forth this political season concerning the freedom to choose what we buy is all about, let's assume a company located in Mexico, China, Vietnam or elsewhere agrees to produce and ship to our vast American market its products at no charge, aka free.

If high value products imported from Mexico, Vietnam or China were to be offered to American consumers for free, we would be crazy not to allow Americans to accept these 'no charge' gifts. And as free-to-choose Americans, as consumers our lives would be enriched immediately and greatly.

Now let's assume that the offered price of these imported products is greater than zero but less than 50% (or 40%, 30% and so on) of what they would cost to make here in the U.S. As consumers we would still be inclined to buy the products at the best delivered price and value, regardless of the source.

Buying the most for the least had made us the most prosperous and competitive nation in the history of the world. Free markets work to our advantage as well as the advantage of our workers and consumers. Running away from competition and setting up barriers to imports are never the right answers.

And besides the global competition, there's always the alternative of using robotics to replace human labor which proves to be too costly for the freely spent dollars of free-to-choose American consumers.

Vastly more expensive Amazon, Wal-Mart and Target offerings, more costly Nike and other shoes and apparel, higher priced Apple and Samsung smartphones and computers, and priced out of the market Toyota and Honda cars are not what the vast majority of Americans will want or be able to afford to buy.

The vast majority of We the People want to buy what we want to buy at the lowest price. See Wal-Mart and P&G: A $10 Billion Marriage Under Strain for a good overview of how competition in the private sector serves demanding consumers.

So despite what Donald Trump, Hillary Clinton, Bernie Sanders and others may say, restricting imports and increasing tariffs aren't the easy answers to our employment and compensation issues. In fact, the more trade the better, because healthy global competition, along with a higher skilled, more knowledgeable, productive and higher compensated American workforce, will make all our lives better.

Milton Friedman's Favorite Book on Trade should be required reading for all Americans, including Donald Trump. It offers this compelling argument and advice:

"Adam Smith wrote the most influential case for economic liberty, “The Wealth of Nations” (1776), but the best book on free trade probably came from our side of the Atlantic.

Though fewer people remember the American economist Henry George, (his) book “Protection or Free Trade” (1886) was . . . the most rhetorically brilliant work ever written on the subject. In it George demonstrated how free trade benefits a nation that opens its markets, even if other nations close theirs. “If foreigners will bring us goods cheaper than we can make them ourselves,” he declared, “we shall be the gainers.”

As George pointed out, trade is voluntary, driven by individual buyers and sellers. “Trade is not invasion,” he wrote. “It does not involve aggression on one side and resistance on the other, but mutual consent and gratification. There cannot be a trade unless the parties to it agree.”...

What about the argument that tariffs are needed to support vital domestic industries? George observed that these political favors will inevitably go not to the deserving but to the strong and unscrupulous. See if this sounds like Washington today: “infant industries have no more chance in the struggle for governmental encouragement than infant pigs with full-grown swine about a meal-tub. Not merely is the encouragement likely to go to industries that do not need it, but is likely to go to industries that can be maintained only in this way, and thus to cause absolute loss to the community by diverting labor and capital from remunerative industries.”

Using tariffs to protect domestic producers from lower-cost foreign competition also harms businesses further down the supply chain. For instance, a tariff that raises the price of steel increases the cost of everything made from steel. And there are more jobs at stake in steel-using industries (commercial construction, transportation, machinery) than in steel-producing industries. . . .

War was the analogy in what are perhaps George’s most famous lines: “Blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.”

Something to ponder as 21st-century politicians threaten retaliatory tariffs against foreign competitors—which would simply force Americans to pay more for many things. “No other nation,” George reminded us, “can thus injure us so much as we shall injure ourselves.”"

Summing Up

Trade is good, and so is competition.

We need to look no further than the monopolistic U.S. post office and government run educational system to see the costly and debilitating results of a lack of competition.  

Having a productive, highly skilled and knowledge based world class competitive workforce are necessities.

Let's allow our fellow Americans to buy from others those comparable or better products that they will make available at a lower price and higher value than we will domestically.

And as Americans let's work hard at improving our skills and knowledge so we can provide global markets with the world's highest quality products and services.

That's both the winning and the American way.

Thanks. Bob.

Tuesday, June 14, 2016

Flag Day Today ... American Exceptionalism

Saluting the Flag and Something More is subtitled 'A neglected June 14 ritual could use a revival, helping foster a love for country, this nation 'born in liberty.''

It has this message for each and all of us:

"On June 14, 1973, Mrs. Saul, my fifth-grade teacher at Beaver Brook School in Danbury, Conn., took the 12 of us in her class outside to the flagpole to celebrate Flag Day. It had been nearly 200 years since the same date in 1777 when the Revolutionary Congress adopted the Stars and Stripes as the new country’s emblem. June 14 has been designated as Flag Day ever since—though it’s a sad certainty that most Americans will pass the day without noticing. . . .

By 1973, as the Vietnam War continued and Watergate unfolded, the country had entered the era that continues to this day, in which the regnant narrative is more about what America has done to repent of than to celebrate. A ritual like honoring the flag was on the way out. . . .

We 11- and 12-year-olds understood that what we were doing was somehow important, and that this flag we were celebrating was more than a red-white-and-blue banner. It was a sacred symbol that pointed toward something beyond itself, that pointed to the thing it represented—to America, the country we’d been learning about, the nation “born in liberty” and “dedicated to the proposition that all men are created equal.”

Without saying so, Mrs. Saul was doing something profound: She was teaching us to love our country. In the process, we were being drawn into the circle of all those celebrating that day, and into the larger circle of those who had loved America throughout her history—and who had been doing what Benjamin Franklin in 1787 had said we must do, or else.

The 82-year-old Franklin was exiting Independence Hall in Philadelphia, where he and others had just finished creating the Constitution—and our nation—when a certain Mrs. Powell confronted him. “What have you given us, Dr. Franklin,” she asked pointedly, “a monarchy or a republic?”

Franklin’s response is famous: “A republic, Madam—if you can keep it!”

Standing around that flagpole 43 years ago, we were doing our small but vital part in “keeping” the republic. We were thus becoming Americans not in name only, but in our hearts and minds. America is the only nation not defined by ethnicity or religion, but by an unprecedented idea: liberty for all. So to truly be an American one must understand that idea, and must buy into it, and live it.

What we did that day was not indoctrination into some nationalistic, tribalist cause—God forbid—but an invitation to something noble and true and eternal. We were being connected to the “mystic chords of memory” of which Lincoln spoke, and to the sacrifices of all those who had died for the country, and to those still returning in coffins from Vietnam.

We were becoming part of something intended for everyone, but not yet possessed by everyone....

So, my dear fellow Americans, a question: How well have we been “keeping” this wild and fragile and unprecedented idea of a republic born in liberty? Let me be the first to admit: I’ve been sorely negligent. I reckon I’ve got to make up for about four decades of lost time. This Flag Day, I’m getting started. I hope you’ll join me."

Summing Up

Count me in!

American Exceptionalism is real and We the People are lucky to live in the Land of the Free and the Home of the Brave.

Now it's time for We the People as free individuals to take back our country from the politically correct politicians who are ruining it.

Speaking clearly about our values is a great beginning.

So is not depending on the politicians to do for us that which we can better do for ourselves -- almost everything!

That's my take. 

Thanks. Bob.