Category Archives: Money

Not Spending Enough??? 2

In The News, Money • Tags: , ,

Source: Economy Watch – Bernanke says demand too weak to bring down jobless rate.

Consumers are not spending enough and businesses are not investing enough to put a big dent in unemployment, Federal Reserve Chairman Ben Bernanke said Monday

How many years have we heard about the dreadful effects of consumer debt in the country.  It is typically reported that the average family has more than $8,000 in credit card debt!  Everyone, including most economists, say we are just living beyond our means. But now here is the number one financial guy in the country saying we are in the trouble we are because we are not spending enough!

Someone needs to tell these guys that you can’t have it both ways without some serious increases in the average guy’s hourly wage increased spending won’t happen. Since wages haven’t gone up in almost twenty years now I don’t see us coming out of this high unemployment period anytime soon.

But what do I know….

The Trouble With Wall Street Is……

Cultures, In The News, Money • Tags: , ,

The trouble with Wall Street is well, Wall Street. Those folks in New York City, especially Manhattan, think they are the center of the universe.

Lets move our financial institutions to Omaha Nebraska.  That will give them more common sense than they would ever be able to gain on that little island in New York.  Warren Buffett has done pretty well with himself by staying there all these years. He has weathered most of the melt-down in pretty good shape. He doesn’t let the flashy lights of fame and fortune cloud his judgment.

The people who live in or near New York City don’t really have any idea of what the rest of the country is about or what our priorities are. I lived in that area for four years waiting to finish out my corporate life before claiming my pension and leaving soon thereafter.  When many in that area learned that I was from Indiana the first question they asked was  ”what is there to do out there in the Midwest?”. To them anything outside of  their area is simply a “cornfield with lights”. They don’t understand that there is life without having to live packed together with millions of other people.

I won’t reserve this mentality for only those in the Northeast as those California folks think much the same way but on a different topic. They can’t understand the changing seasons have an appeal to some of us. They can’t understand why any of us would want to live where it gets cold or where there is no ocean.

So, getting back to the original premise of this post lets move our financial district to Omaha. Maybe some saner minds would then prevail for the very fact that not many of those Manhattan folks would follow their jobs to the “cornfield with lights”. But then again maybe I am wrong about that.  Greed is a powerful thing…

But what do I know….

Many have little savings as retirement looms

Maturity Matters, Money • Tags: , , ,

Source: Many have little savings as retirement looms – USATODAY.com.

Ravages of the stock market. The people Redmond encounters most who are lacking sufficient retirement savings weren’t necessarily delinquent or negligent. Many had money saved but were wiped out by the sour stock market in the past decade and poor investment strategies, Redmond says.

That’s what happened, in part, to Robert and Connie Cabana of Tampa, who are both in their 60s. Robert built up a sizable 401(k) working as a financial executive at Verizon. Connie was a business assistant for a local irrigation supply company. Connie was laid off four years ago; Robert was let go three years ago.

But the serious hit to their retirement, which wiped out half their 401(k) savings, resulted from the stock market and an overexposure to risky stocks, they say. Now, 75% of their 401(k) is gone, and they have “very little” left, Robert says

I can remember in the early 1990s wondering if I would have enough to retire on. Fortunately for me the 1990s Clinton era was a prosperous one. My savings more than doubled during those years. I was never one to take a lot of risk so I was pretty much unaffected by the dot.com melt down that occurred in 2000 as I got most of my savings out of the markets before that happened. But I did have a friend that insisted that the “good times” would go on forever. He, like the people in this article, lost a good portion his 401(k).  I haven’t heard from him in years. I wonder how he and his wife are making out in their retirement?

I can remember the stories from the pundits about how people are not prepared for retirement throughout all my adult life.  First there were the oil embargos of the 1970s then there was the savings & loan fiasco of the 1980s followed by the melt down of the dot.com era and now due to deregulation the near meltdown of our entire financial structure. But this is the first time I have seen times remain as dreary as they have for more than ten years now. I can see the “malaise” has grown exponentially since President Carter’s famous speech.  Maybe if we had actually listened to President Carter and freed ourselves of dependence on foreign oil back in the 1970s we would be in much better shape today. Who knows what that alternative history might have been if one of our past presidents had been brave enough to make that happen! Who know how many young lives would have been spared if we didn’t need so much middle eastern oil?

Will any future generations ever be prepared for a secure retirement? It’s hard to say.  About the only thing you can do is keep putting a little of each paycheck back and hope for things to get better. There is not much else an average guy can do.

Where Are You John Sherman When We Need You??? 6

Corporations, Cultures, Government, In The News, Money • Tags: , , , ,

For those of you who aren’t up on your U.S. history lessons, John Sherman was the Congressman who about one hundred years ago introduced the first major piece of legislation to rein in corporate greed. The legislation was call the Sherman Antitrust Act. Here is some of what Wikipedia says about that:

The Sherman Antitrust Act (Sherman Act,[1] July 2, 1890, ch. 647, 26 Stat. 209, 15 U.S.C. §§ 1–7) is a landmark federal statute on competition law passed by Congress in 1890. It prohibits certain business activities that reduce competition in the marketplace, and requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of being in violation. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by the United States federal government. However, for the most part, politicians were unwilling to refer to the law until Theodore Roosevelt’s presidency (1901–1909).

As mentioned above most of the politicians of the time were very leery to use this new law against the Robber Barons of the day until ten years later when a Republican president named Theodore Roosevelt came along. It still amazes me how almost all of the anti-big-business leaders of these times were from the Republican party. Of course the Republican party is now widely known as the party of big business! When did this major shift in party allegiance happen?  I guess I will have to study up on that.

Getting back to the matter at hand, President Bush and followed up by President Obama bailed out the financial industry because they “were too big to fail”.  If somehow we could have resurrected John Sherman to break up this monopoly power before it became so big we possibly could have spared ourselves all the grief we have been going through as a country for the last four years. Too bad that there just doesn’t seem to be anyone in congress now with the fortitude to take on the big business interests.

But, in reality I should really be looking for someone to put the laws that were repealed in the last twenty years back in place. That is where we got into all the troubles. Within a decade of deregulating the Savings and Loan industry the 1988 meltdown occurred.  Within a decade of deregulating the banking sector the 2008 meltdown occurred.  Why can’t our representatives in government learn from history and just leave these types of things that John Sherman and those like him put in place alone? This is just an example where the Republican party seem to have the belief in the innate goodness of our corporate institutions.  Yes, with this deregulation they got government out of the way and soon inevitable self-consuming greed took over with the resulting meltdowns happening soon thereafter. When will they ever learn? But maybe the more important question is when will we the voters ever learn when to tell our elected officials it is time for them to leave?

It seems literally impossible for another Republican to take charge of these types of matters. Most of those folks are just too beholding to big business to ever try to rein them in. So, currently that leaves the Democratic party to take up the mantel. I don’t see that as much of a possibility either. Where all this “too big to fail” will end I just don’t know.

Where are you John when we need you??

But what do I know….

Public workers’ time-buying perk costs states… 2

Government, In The News, Money • Tags: , ,

Source:  Public workers’ time-buying perk costs states – USATODAY.com.

Here we go again with short-term gains with long-term consequences. It seems that public employees in twenty-one States can give their boss (meaning us taxpayers) pennys on the dollar now and reap much larger benefits later. Here are some words from the above article:

The practice, called buying “air time,” lets state, municipal and school employees pay to add up to five years to their work history so they are eligible to retire and collect a lifetime pension. Workers already eligible for retirement can buy extra years to boost a pension by up to 25%…

The New Hampshire Legislature barred air time in 2007 after finding it was costing the retirement system $25 million to $40 million. “It allowed a lot of people to game the system,” says state Rep. Kenneth Hawkins. “That’s part of the reason we’re $3.7 billion underfunded.”

Most recognize that pension funds, both public and private, are at a tipping point especially during the last decade of a very stagnant economy. At least New Hampshire has barred this practice. If it doesn’t happen in the private sector why does it continue in the public sector? Of course the answer to that is the politicians who control these things won’t be around when the time-buying rooster comes to roost. The money is helpful in balancing budgets now but will be deadly down the road when all these increased benefits have to be paid off.

You can’t blame the public employees who take advantage of this scheme. They see a good thing and use it. I probably would too if it had been offered to me. I’m sure it brings in a lot more money than sticking it into the current stock market. We need to get some public officials who will treat our money  with the same respect that they treat theirs.  It seems that too many of these yahoos just treat it as if we taxpayers were and unlimited piggy bank meant to be raided.

But what do I know….

States expand lucrative pensions to more jobs 3

In The News, Money • Tags: , , ,

Source: States expand lucrative pensions to more jobs – USATODAY.com.

In Illinois, where highway maintenance workers earn up to $148,000 a year with overtime, early enhanced retirement can pay a $75,000-a-year pension at age 50 after 25 years on the job.

Every day lately we seem to hear of another State that is on the verge of bankruptcy so I just don’t understand how they can be expanding pensions for more workers.  I had a fairly lucrative salary when I was in the corporate world and retired after thirty years on the job but my pension doesn’t come close to the $75,000/year for a highway maintenance worker with 25 years on the job.

From the sound of this article this doesn’t seem to be something that is being pushed on to the State by some “greedy union” as my radical right friends always say.  I know highway workers have a higher risk job than many but their injury incident rate is not that much different from a factory worker.  I haven’t heard of a single pension fund that seems to be fully funded now days.  Why are States adding more of a burden to an already overburdened account?

I think the answer might be that most politicians, and particularly State governors, realize that adding to costs that will be realized years after they have left office won’t affect their chances of getting re-elected in the coming few years. This is pretty much like the CEOs who now look almost exclusively at the near term as they is where their salaries are determined. What happens down the road is of little concern to them.

This seems to go hand in hand with a Will Rogers quote I came across lately

As we become more enlightened we will extinguish our office seekers every two years. ¬– November 8, 1927 Will Rogers

If we could just manage to elect our officials and hire our CEOs with the future in mind this sort of thing would likely disappear.  Mitch Daniels, who was President Bush’s “my man Mitch” recently solved his budget problems  in my State by selling off a valuable State assets with a 99 year lease. He decided to sell our northern toll road to an Austrian company. For that action he has become one of the darlings of the Republican party. Never mind that his actions will result in billions of dollars in future revenue being lost after he is long gone from office.

If only as Will says “as we become more enlightened”. In the eighty-five years since this quote we are still not more enlightened and we probably never will be. Sorry Will, you missed on this one.

But what do I know….

Daring ‘em to Make Good… 3

Corporations, Government, In The News, Money, Politics • Tags: , , , , , ,

We elect our Presidents, be they Republican or Democrat, then go home and start daring ’em to make good. – April 1, 1935  Will Rogers

Sometimes I can really get down to that deep thinking. I mean the pure foundational stuff.  I think what Will said above is foundational stuff for a democracy. We elect our presidents and all the other people’s representative and then go home and dare them to get it right!  This worked pretty well for the first two centuries of our existence. There were a few duds during that period but generally the people we elected  at least tried to “make good”.

But something in the process seems to have broken as we entered the 21st century.

  • Maybe  it got broken because we have done something that prevents the really good guys/gals to come forward to “live up to the dare”?  –  Being a guy that has done some pretty serious studying of history I can see that the political processes we have now is pretty raunchy.  It has been bad in the past but never to the extreme as now. I can’t see where anyone would want to put themselves through the process of becoming one of our political leaders.  Have we just ground out the civility in seeking elected office so that only the “pretenders” with hyper-inflated egos will even attempt to endure our election process?
  • Maybe it is got broken  because the people doing the choosing got lazy?  –  Being a representative democracy is tough stuff. It takes work to choose the right leaders. Maybe we have just become too lazy in choosing our leaders. We don’t do our homework any more to try to wean the pretenders and wannabes from the crowd. We fall victims to 30 second sound bites instead of studying the issues. Maybe we are just too lazy to maintain a democracy anymore?
  • Maybe it got broken because of all the money that corrupts the process?  –  When the Supreme Court decided that corporations are people and they should have free exercise in buying the candidates and elected officials we started down a road with no return. When we as individuals must compete with $trillion corporations it is pretty easy to figure out who is going to come out ahead.  Maybe we have sold our democracy to corporate and elitist greed?
  • Maybe it go broken because we have outlived the positive aspects of a capitalist society?   –  This one gets really deep! I don’t want to blow a gasket in my brain so will only touch the surface.  Our capitalistic society is based on greed. That is not a bad when there are checks and balances to add in a moralistic factor. Pure capitalism just doesn’t have any compassion for anything but profits. Everything else is a very distant second if it is even considered. This type of greed was also pretty dominant about 100 years ago but it was stomped down by hard-fought unions and a Republican President named Roosevelt. But, even compared to that time the moralist factor seems to have died out in the 21st century. Our society seem to have devolved down into the survival of the fittest mentality.  Another way of saying that is “I got mine so screw you!!” We just seem to have lost the compassion for our fellow-man any more and no one seems to be able to rescue it.  Are we  finally succumbing to the dark side of capitalism?

To wrap this up it is probably a combination of all of the above. I just hope that we can come back from the edge of the cliff once again but I have my doubts this time around.

But what do I know…..

Its Got To Come From Somewhere….

In The News, Money • Tags: , ,

The difference between the rich and the poor grows greater every year. Our distribution of wealth is getting more uneven all the time. A man can make a million and he is on every page in the morning. But it never tells who gave up that million he got. You can’t get money without taking it from someone.  - 1933 Will Rogers

This is one of the most provocative quotes I have in my collection from Will Rogers. Given the statistics that show in the last ten years that the wealth of the 1%ers has more than doubled while the rest of us have seen our wealth, if you comically want to call it that, go down.  It is pretty much a zero-sum game. For the wealthy to get wealthier the rest of us must get poorer. That is just plain old economics.  When will our government stand up for the common guy??

But what do I know….

Thank You Supreme Court??

In The News, Money • Tags: ,

Source: Billionaire gives $5 million to pro-Gingrich group – Local News – Indianapolis, IN – msnbc.com.

The Washington Post first reported the $5 million contribution. Politico reported last month that Adelson was prepared to spend $20 million to help Gingrich.

Here is another example of the consequences of the recent Supreme Court decision that “money talks”.  But of course the court said that is just one person exercising his right to free speech. I, and most rational people, would think that the possible $20 million will offset almost a million other people who simply can’t contribute more than a few bucks.

The ruling that allowed this to happen is a gross misinterpretation of what the founding fathers intended. But this is not the first time the Supreme Court has overstepped its bounds. Look at the Dred Scott decision to see another of the many glaring examples.

The insanity of our current political processes is, as it has in the past, leaked into our judiciary and legislative processes jeopardizing our very existence as a democracy. When, or how will it end?  I shutter to think of the possibilities….

Healthcare Spending… 1

Healthcare, In The News, Money • Tags: , , , ,

Source: Report: 1% of Americans paid 22% of health care costs in 2009 – USATODAY.com.

Just 1% of Americans accounted for 22% of health care costs in 2009, according to a federal report released Wednesday. That’s about $90,000 per person, according to the Agency for Healthcare Research and Quality. U.S. residents spent $1.26 trillion that year on health care.

Five percent accounted for 50% of health care costs, about $36,000 each, the report said.

What this report doesn’t come right out and say is that simply having major surgery puts you automatically in the top 5% of consumer spending  for that year and often in the top 1%.  I had a minor heart event about five years ago that cost about $40,000 so I was part of the “hogging” five percent who are driving up health care for the rest of the population that year.

Another thing this study does not say is that the top 1% and 5% are not the same people year over year but instead just those unfortunate ones who need a surgical procedure during that given time. It is not as if we could deport 1% of our population and therefore drive down out one fourth of our healthcare costs, but I imagine there are some politicians looking into that. (ha). They seem to be willing to shove just about anyone under the bus to drive down Medicare spending and eventually end the program itself. :)

I’m not against a doctor earning a good living. They do have to go through years of schooling and internships to get there. But the money some get for a one hour procedure is as outrageous as what some CEOs get for that same period of time!  My heart doctor got over $12,000 for the less than one hour in the cath lab for my heart work. Does he really need that much? My family doctor gets a couple hundred for the same period of time.  And of course us normal slobs in the shrinking middle class get less in three months than my heart doctor got in that one hour.

I’m not a super educated economist but figuring this our doesn’t seem like brain surgery (at $40,000/hour) to me. If you want to drive down healthcare costs we need to be looking closely at the operating room.  The other 98% of the time we spend in the healthcare system doesn’t amount to much compared to that brief time in that sterile room.  Maybe the answer to these high costs lies in the same place as making our cars. Let’s train robots to do all the operating room stuff and put some of these overpaid surgeons into family medicine where they are sorely needed (pun intended).

But what do I know….

Biggest One Day Gain!!!

In The News, Money • Tags: , ,

 

You gotta love all the spin masters on Wall Street these days. I noticed these headline here several times this year.

BIGGEST ONE DAY GAIN!!!

But what they don’t talk about is that the day before was the biggest one day loss so all that the gain did was put us back to where we were the  day before yesterday.  These guys will do just about anything to try to justify their big year-end bonuses.

But what do I know….

An Investment Strategy No One Talks About…. 2

In The News, Money, Politics • Tags: , , ,

Source: Wolfram Blog : Stock Market Returns by Presidential Party.

The New York Times recently published an “Op-Chart” by Tommy McCall on its Opinion page showing what your returns would have been had you started with $10,000 in 1929 and invested it in the stock market, but only during the administrations of either Democratic or Republican presidents. His calculations showed that if you had invested only during Republican administrations you would now have $11,733 while if you had invested only during Democratic administrations you would now have $300,671. Twenty-five times as much!

This must be one of those deep dark secrets that the Republicans don’t want anyone to know about! Isn’t the Republican party now the party of the purse and the Democrats the party of the people?   Someone need to tell our radical right friends that if they were to vote for Democrats that their purses would likely get much fatter. Isn’t more money what life is all about by those yahoos?  Every time they vote for a Republican president they end up either losing their precious money or at the best not getting any windfalls except for an occasional tax break for a few of them.

I think the Republican party has just lost its way the last fifty years or so.  When the party was invented by the Lincoln folks they were very much the people’s party; where did the big change happen? So all you guys who want to rake in the big bucks in the coming years vote the Obama ticket in 2012. You might have to swallow your pride but according to a hundred years of history your wallet will thank you.

But what do I know……


We Can’t Possibly Take a 10% Cut In Our Military!!

Government, In The News, Military, Money

The title of the post is coming out of the mouths of many of our military people since the super committee, like the rest of congress,  couldn’t seem to agree with each other on anything. That means across the board cuts in all discretionary spending including the military. Even the newly appointed DoD secretary Leon Panetta is spouting off. Many of the military backers in Congress are trying to find a way to get out of this dilemma.  They say a 10% cut would put us back to pre-WWII levels. That is what they say but lets look at the facts.

In reality since the military expenditures in the U.S. have increased more than 10% in the last two years alone it will only put them back to 2008 levels or so. We spend so much more on our war machine than the rest of the world a 10% cut will do little to disrupt the disparity that currently exists. Here are some numbers from 1020 in that regard:

China has a population of about 1.3 billion people and spent approximately $77 billion on its military. That comes out to about $59/citizen/year.

India has a population of about 1.2 billion people and spent approximately $33 billion on its military. That comes out to about $27/citizen/year.

The U.S. has a population of about 0.35 billion people and spent approximately $690 billion on its military. That comes out to about $2,000/citizen/year.

I am not a big math whiz but it seems like  when we combine China and India they have a population approaching 10 times our and spend less than one-sixth of us. A 10% cut in the U.S. military budget won’t put us into a “war machine” race with anyone. I really don’t think we should panic too much about that.

Would it really be so bad if we had to buy a few less $1 million smart bombs?

Would it be so bad if we put a few less of our kids in harm’s way?

Would it be better to take the money out of our jobs programs?

Would it be better to take the money out of helping those who can’t afford it with healthcare?

Given that we are currently #27 in  the world list of educating our citizens would it be better to fire some additional teachers?

I agree our government spending is pretty out of control and needs to be reigned in. But to me taking it from the military budgets seems to make the most sense of absolutely any of the other possibilities. Can you imagine how prosperous we could be if we aligned with the rest of the world on our military budgets. We would be able to balance our budgets, provide healthcare for all and even have some left for fixing our crumbling infrastructure. Who appointed us policemen of the world anyway? Why do we seemingly carry that burden alone?

But what do I know….

‘Occupy’ protesters find allies among the wealthy

Cultures, In The News, Money • Tags: , , ,

Source:  ‘Occupy’ protesters find allies among the wealthy – US news – Life – msnbc.com.

There is some very interesting stuff going on with the Wall Street Rallies lately. The latest theme of these rallies are “We are the 99%”. This draws from the fact that currently 1% of the U.S. population controls about 50% of the total wealth in the country. Due to the high umemployment at a time with correspondingly high bonuses for the super rich (1%)  the people are finally starting to realize that something is wrong with the current way our capitalist system is operating.

This  1% number rivals even the medieval serfdom times in the Middle Ages!  And given the exodus of middle class jobs and high unemployment the serf mentality seems to also be taking hold. Getting back to the interesting thing as mentioned in the beginning of this post, it seems some of the 1%, or at least those near the 1% are joining the 99%. To the right is a picture of one of those individuals. I’m sure there are many in the “real” 1% who are screaming that “Those are just the spoiled rich kids who don’t appreciate the power that was given to them….” In some ways that is probably true but since a good percentage of the 1% got to where they are by the elimination of the inheritance taxes deemed “death taxes” by the spinners hired by the 1%.

To many in the 1% their wealth is I suspect kind of secondary to them. The accumulation of the money and power is what they are actually addicted to. The money itself doesn’t mean as much as the power. I read somewhere recently about how stressful J.P. Rockefeller II life was due to the pressures of inheriting such tremendous wealth. I’m sure those who are without a job in today’s world and are having trouble putting food on the table or the keeping the bankers from foreclosing on their homes don’t have much simpethy for the “poor stressed rich people”

I certainly celebrate the 1% who are standing with the 99% to put more power to the people. When this condition reached its peak in the 1700s in Europe it resulted in the French Revolution. That was certainly a bloody one for the 1%.  I certainly hope that doesn’t happen again but we do need to fix this total inequality before it does.

So, here is to you 1%ers who have a conscience.

But what do I know….

Inequity in the U.S. 1

Cultures, In The News, Money

Here is a quote from Jim Wallis over at Sojourners that will be the foundation for this post.

Since the Occupy Wall Street movement began, the talk about inequality has been greater than I can remember it being for a very long time. This has been the elephant in the room in our discussions about the economy that nobody wanted to say out loud. In the last hundred years, there have been two peak periods of great inequality in American society—just before the Great Depression, and in 2008, right before our current Great Recession. And in the mysterious and secret global transactions between investment bankers and hedge fund traders, the profits continue to grow.

From 1973 to 1985, the financial sector peaked at 16 percent of domestic corporate profits. In the 1990s it reached postwar period highs by going between 21 and 30 percent. But this decade it hit 41 percent. These profits weren’t from products, and weren’t always from finding the best use for capital, but from money-making more money for a new class of super-rich financial traders. And now, when their risk taking, greed, and selfishness created a mess for so many others, we bailed them out and left everyone else to suffer in the economic wilderness of unemployment, home foreclosures, pension losses, deep middle-class insecurity, and rising poverty rates.

 

It is indeed encouraging to me also to see the amount of attention that financial inequality is getting in the U.S. today.  Almost everyone who is knowledgeable on the topic admits that the conditions in the financial sector currently pretty well mirror what they were prior to the Great Depression of the 1930′s As the quote above mentions this sector of the economy is not about enriching lives in general or making products and services that are beneficial to the general population. It is about making money with money. Hedge funds for example are nothing more than gambling on what direction the stock market will likely go. They produce no benefits to any one outside the person trying to game the system.

President Bush bailed out these guys just before leaving office and it seems that, as Jim pointed out above, it left everyone else to suffer unemployment, housing foreclosures, pension loses and the resulting very deep middle-class insecurity.  Some are now pointing out these times as being the “Post Hope America”. Given the bitterness found throughout much of our world today there might be, but I hope not, a reality to that phrase. Will the Wall Street protests accomplish any good toward these ends? Who knows. But like most root level protests they must stay active for several months if not years before they are deemed serious by those yahoos in Washington. The only thing that might result in a quicker recognition is a wholesale change in the people in congress.  But that will even be over a year before it can happen!

But what do I know.

Poor Little Rich Kids…..

Cultures, In The News, Money • Tags: , , ,

This excerpt from a Wall Street Journal article peaked my senses. It seems the rich, who we give massive tax breaks,  are aware that their kids will probably blow through their inherited wealth after they are gone.  What a bind to be in!  I bet they take all this planning and  trustees as tax deductions. It seems very ironic that while most of us are just trying to stay out of the poor house, and in any other house at all, there are those who worry about the other end of the spectrum.

Instead of “cleverly written trusts” and “carefully chosen trustees” how about just letting them make their own way in life like the other 98% of us do? Who knows, maybe Paris Hilton would even be a productive member of our society if she had not inherited so much of granddaddy’s wealth. :) Up until recently (the 1980s that is) the government taxed wealthy estates so that a significant part of the accumulated money could go back for the common good.  Our country was even established around the ideas that aristocracies are a drain on society. They thoroughly renounced the European version when we formed our country. In fact it was not long after our revolution that the French also rebelled against their aristocracy in a very bloody fashion.  So how is it now that we do so much to retain our version of aristocracy that makes up the top 1% of our population but controls almost 50% of the country’s wealth?

OK, here I go again with the “Walters plan” for accumulated wealth.  I know we can’t force the super rich to allow their children to make their own way in the world. But let’s treat the money they pass on to their children as “income” and therefore subject to the usual income taxes.  To me income is income no matter where it comes from. If you get money that you didn’t work for and you haven’t paid any taxes on  it is considered income to you. Another part of the “Walters Plan”  is where we establish a more equitable income tax structure. Don’t tax the billionaires at a lower rate than the people who empty their trash. Let’s set a level of tax free income so that a person can get the basic necessities and then tax everything else at a certain rate and with no tax deductions. These big tax loop holes that congress seems to endlessly write for the rich, and for many others for that matter,  are one of the reasons we are in the deficit hole we are in.

But what do I know.

Where Are You When We Need You??

Cultures, In The News, Money, Politics, Quotes • Tags: , ,

None of them from any party are going to purposely ruin the country. They will all do the best they can. -July 8, 1928 Will Rogers

If I had run across this quote ten or maybe even five years ago I would have undoubtedly agreed that it applies to our times. But given what has occurred since then I am just not so sure anymore. There just seems to be so much mistrust, I might even call it hate in some circles, that I am just not sure now. It seems that one party is more willing to see the country fail rather than see their enemies in the other party be successful at anything and the other party is not that much different in their feeling towards them.

I just don’t know how we got ourselves in this situation. Where did all this recent animosity come from? Why are we now such a divided nation? I think a big part of it is the economic chaos that we find ourselves in the last decade. Everyone is fearful that they will soon join the ranks of the unemployed that bitterness has just overtaken them. They form an “us” vs. “them” mentality. No one seems to be exempt from all this layoff stuff any more and with all the middle class producing jobs leaving the country in search of almost slave labor wages who can blame them. I know that the job I retired from eleven years ago now reside in India for the most part.

Will we ever get a truly inspirational leader, with the gumption to put his words to action, to take us out of our doldrums?  I was hoping that Mr. Obama was up to that task but he has proven to be short of the skills needed to accomplish that.  Where are the great ones when we need them?

But what do I know…..

I need to get off this “downer” stuff for a while. It is drawing me into its clutches. On to some lighter things for the rest of the week.

Do Retirement Savings the Old Fashioned Way…

In The News, Money • Tags: , ,

Let me start of by saying that I am by no means an investment professional but that doesn’t keep me from having an opinion. And I will also admit that looking backwards is a lot easier than looking forwards, especially in money matters. That being said there is something to saving for retirement the old fashioned way and that is to save the money while you are in your income earning years. Fortunately I retired just before the dot.com bubble burst. I had already moved much of my savings into more, some might say very, conservative areas that were somewhat unaffected by the coming down markets. I was more fortunate than many of my follow front-of-the-herd baby boomers in that regard.

It seems that, especially during the boom years of the Clinton administration everyone was betting their retirements savings on doubling or tripling via the stock market’s constant upswing.  The feeling was “if I can just put $10,000 into the stock market it will be worth $30,000 to $40,000 in a few years. Many people were planning on retiring with the new found wealth in the their forties instead of waiting for the usual sixties.

And then came the Bush years of stagnation. When Mr. Bush came into office the stock market was right around 10,500. Now more than ten years later it is at a little over 11,000. that make for an annual percentage basis of about 0.3% annual gain. If you had bought $1,000 worth of U.S.Savings Bonds in January 2000 it would now be worth $1500 or the same amount of profit as your $10,000 would likely have gained in the stock market over the same period of time.

I know all you financial advisers out there are saying “what you say might true be but these are unusual times”.  To that I say over the very long term you might be right but this has been going on for almost twelve years now. To many that is well over one-third of the earnings years and there seems to be no reason to believe that things will change any time soon. Given the vitriol atmosphere in the congress now there is little reason to believe that your government will ever be able to help bring back prosperity even if they could in the first place.

So, here we are again back to the old-fashioned way. If you want to be more assured that you will be able to live comfortably in your senior years you are going to have to give up some of the “stuff” you deem important today. This includes things like that $3 cup of coffee, the vacation home, the $300 monthly budget for new clothes, and the new car every three years. Instead put it away for retirement. It doesn’t seem to matter much where you put it; if putting it in your mattress makes you feel secure then put it there. Just put it aside where you can’t get to it too easily.

One of the things that we let our corporations get away with is shedding any responsibility for their employees future well being. The company pension plans of my generation are long gone now so the only thing you can be assured of is the social security you will receive. It will be the only thing that will provide even the most basic safety net.  And, no I don’t think we U.S. voters, especially us senior citizens, will allow anyone to take that away. But then again what do I know :)

Policemen of the World…

Government, In The News, Military, Money, Quotes

America can carry herself and get along in pretty fair shape, but when she stops and picks up the whole world and puts it on her shoulders she just can’t “get it done.” – Will Rogers March 15, 1933

Wow, it is amazing that Will wrote these words almost eighty years ago. They couldn’t be more true today.  The Republicans want to continuously talk about wasteful government spending but they seldom talk about reducing our military budgets. We spend many many times more per citizen than any other country in the world on our war machine! Why is that? I’m just a simple guy but I can see where Will’s words are on target especially today. We can no longer afford to be the policemen of the world, if we ever could!

If we could just put our spending on guns, bombs, and such on par with everyone else  in the world we could “get along in pretty fair shape” again. We could almost immediately cut more than $5 trillion over a ten-year period for that alone. Why do some of those yahoos in the congress think it is better to ask their grandmas to do without a meal once a day instead of not building a few million dollar bombs? Instead of asking her to cut her pills in half to make them last longer we should cut our war spending in half. Let’s pull some soldiers out of harms way and bring them home to their love ones where they belong.  That seems like a win-win proposition to me.

Mr. McConnell, you seem to be the chief complainer in Washington now days. I’ll tell you what, you can have this idea as your own. You don’t have to give me any credit for it at all. I’ll even help you to make it happen by talking up the ideas to all my Democratic friends. Wouldn’t it be something to get a few Republicans and Democrats to vote the same way on a bill! Lets bring some, hell lets say most, of our soldier/policemen home so we can put ourselves in pretty fair shape again. As Will said when we pick up the whole world and put it on our shoulders we just can’t “get it done”.

But I’m just a simple guy so what do I know….

America’s Number One Export? – Part 3 2

Cultures, In The News, Money • Tags: , , ,

OK, here is another shot at trying to decide what we in the U.S. are true experts about and therefore export more of than any other country. I don’t claim to be a sage about this sort of thing but I think I am on to something with this one.

Is there a commodity that the U.S. exports much more of than any other country?

Could our number one export be our Consumerism? Maybe its our Marketing? Maybe it is both: Consumerism/Marketing.

This it kind of like the chicken/egg type thing. I don’t know which spurred the other but the result is the same. We simply must have whatever is the latest “in” item. If we are buying a home it simply must have granite counter tops, cherry cabinets, and stainless steel appliances. Everything else is totally unacceptable! If it is clothes is must be from the latest “in” designer. Of course our blue jeans cost $100 per pair; anything else makes us look cheap. Our cars have to have the top of the line foreign models with bluetooth, wi-fi, in-dash gps, and two DVD player. Anything else will just not show the world what we are. How about super white teeth; bleach baby bleach (no matter that our teeth will crumble in our mouths in a decade or so..)

Of course having to have the latest and best is not a new thing with us but we seem to have gotten it fine-tuned now. When the marketeers decide we need something else we will quickly jump on the band wagon. If we want to claim that we are the biggest exporter of consumerism/marketing we have to make sure that we downplay the dark side of this export and that is consumer debt. We are far and above number one in that area too.  The average U.S. family has almost an $11,000 credit card balance of which we are paying in excess of 18% annual interest. The cumulative U.S. family debt makes our federal deficits seem like pocket-money.

But what do I know….