Tuesday, September 30, 2014

Imagine No Religion And What It Would Mean For Society

Imagine if John Lennon Got His Way
in his song 'Imagine'
We have been struck by the number of attacks on religion and religious freedom over the past several years not only from the Obama Administration (Hobby Lobby just to name one) but also from various citizens and non-profit groups at large.

Always remember: The Founders thought freedom of worship was equally as important as our freedom of speech, freedom of the press and right to assemble or else they would not have crammed them all into the First Amendment for all the world to see forever in history.

You can worship dung beetles in America if you so choose. It is entirely your prerogative to do so. (The ancient Egyptians worshipped, and some cultures in Africa still worship, the dung beetle or scarab as a symbol for the god who pushes the sun across the sky every day)

Let's say the anti-theists get their way and everything religious is wiped away from the face of America. Let's assume John Lennon got his way when he wrote his song 'Imagine'* and there was 'no religion too' and all the people were living their lives in peace. (like that is ever going to happen. c'mon...get real)

Let's try to look at what America and the world would look, act and feel like in a totally religion-less, non-spiritual realm.

Would it be far better or far worse than the America and the world we know today?

It would be like Clarence the Guardian Angel telling George Bailey in 'It's A Wonderful Life' that life now would be as if Jesus, Abraham, Moses, Mohammed and Buddha 'had never been born'.

Now that you have re-calibrated your brain to life without all those annoying Christians or pious Jews or peace-loving Muslims telling everyone what to do with themselves every day of their lives, we only have one question:

'What would we fill that ethical and moral vacuum with now?

How would we go about trying to govern ourselves and participate in the world events now that all vestiges of religious belief and 'appealing to a Higher Order' are gone, wiped out from the face of the planet?

Some have suggested that we could operate totally under 'natural law'.  This is the concept that human beings are such rational beings that each of us can observe things that occur in nature and in the natural order of things and deduce that they are universal and therefore universally-held and agreed-to by all people.

The Founders were deeply influenced by the philosophy of such writers dating back to Thomas Aquinas through Thomas Hobbes and John Locke.  Many of them thought 'natural law' was so self-evident to everyone that we could actually fashion a government based on it alone.

Well, we don't know about you, but it sure seems as though the Founders really thought that mostly the 'good side' of human nature would shine forth on a daily basis.

Not the 'bad side' of human nature that we all know lies within us each and every day. We see examples of deleterious behavior both large and small on a regular basis not only in our lives but in the lives of other people around us and around the nation and globe.

Although it is quite the stretch, let's now assume that every single person now living in America has the capacity to observe and learn and think rationally at all times. Apparently, this would also assume that people do not ever make rash decisions born out of anger or emotion and they take their own sweet time to analyze every situation and deduce what is the 'right' decision to make for the optimal outcome each and every time.

Be that as it may, how would our American democratic republic look and operate on a daily basis differently from what we have today?
  • Would we see such 'second-chance' laws such as American bankruptcy statutes that have to be one of the most lenient in the history of the world? Or would people be thrown into debtors prison for failing to pay back loans as people were as recently as the 19th century?
  • Would we see any sort of 'assumed innocent until proven guilty' statutes in the criminal code plus repeated avenues for appeals upon appeals upon appeals as we see in American jurisprudence? Or would we see immediate meting out of justice such as shooting alleged criminals at dawn or death by hanging in the public square?
  • Would we see any massive out-pouring of generous philanthropic financial support for the millions of people who go to charitable and church-based hospitals, schools, colleges, shelters and food banks? Or would rich people just keep it all to themselves and consume billions of dollars somehow themselves?
We all 'hope' that without any religious beliefs, the 'better angels of our nature', if you will pardon the expression, would show up on a second-by-second basis in our daily corporate and community lives, don't we?

But if 'nature' gives us any clues as to how religion-less human beings might act, the chances are pretty high that a religion-less society would produce the following results with terrifying ramifications not only for the United States but for the world at large which has benefited from our exportation of democracy and democratic republican principles since our inception:
  • The strongest and smartest will always prevail...and keep and eat all that they 'kill' or create in a business, for example. No profit-sharing plans for employees; no health benefits; no pensions. Work for the corporation til you drop...and then good luck later in life.
  • Colonies would form to support the Queen Bee at the head of every city, business or entity. Your identity would be solely related to supporting the 'king' or the 'president' of any state or locality, much like the feudal kingdoms used to operate in the Dark Ages of England.
  • When people get sick, much like the weakest in the herd, they would be left behind to fend for themselves. No one would take the risk of treating a patient, particularly if they have a deadly disease such as the Ebola virus which we have already witnessed Christian medical missionaries who were willing to risk their own lives to fly to Africa to treat victims of that dreaded disease there for no other reason than it was 'the right thing to do'.
We could go on forever translating the 'dog-eat-dog' or Darwinian principles we can easily observe in the animal kingdom and apply them to our own daily human experience.

Something about arguing that just allowing our 'basic human nature' to govern us on a daily basis, both privately and corporately, doesn't give us a lot of comfort, truth be told.

Suffice it to say that left to our own devices based solely on human nature and inherent, hard-wired DNA and chromosomes, it is unlikely that human beings would act on much else other than their own self-interest and survival. Especially when it came to competing with others for scarce food or resources.

'Natural law' might work in some areas as the Founders wished. But on the whole, 'nature' is a deadly, dangerous place for most animals in and up the food chain on a daily basis, isn't it?

Is that really the way you want to see the United States of America work on a daily basis, without any religious or Higher Order reference underpinnings at all?

You might want to think seriously about that before you answer it.

*Imagine there's no heaven
It's easy if you try
No hell below us
Above us only sky
Imagine all the people
Living for today
Imagine there's no countries
It isn't hard to do
Nothing to kill or die for
And no religion, too
Imagine all the people
Living life in peace
You may say I'm a dreamer
But I'm not the only one
I hope someday you will join us
And the world will be as one
Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people
Sharing all the world
You, you may say I'm a dreamer
But I'm not the only one
I hope someday you will join us
And the world will live as one


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Friday, September 26, 2014

One Reason Why Socialized Medicine in France Costs Less Than American Health Care

'Je suis un Americain.
Comment pourriez-vous dire?'
Does anyone care to make a rough guess of how many obese or severely obese people we saw in 8 days in Paris recently?

Mind you, we were out every day at the various parks and tourist attractions from the Eiffel Tower to the Louvre to the Jardins de Luxembourg; riding the Metro, the train or in the taxis; or just walking the streets of Paris to see the various neighborhoods from the Latin Quarter to the Place des Vosges to whenever the mood led us.

Also mind you, these Parisians eat a basket of croissants and baguettes in the morning at a 2-hour breakfast; break for a hearty petit dejeuner around noon for another 2 hours of eating and a bottle of wine or two or three; and then, after a few lattes during the day and a pastry here or there along the Rue de Whatever, they cap the day with a plate of fromages and more baguettes at 5 pm with wine only to be followed by a heavier dejeuner later in the evening such as 3 fried pork chops or a plate of hot sausages on spiced lentils. And another bottle or two or three of French wine, of course.

How many of the Parisians we saw in Paris were obese or severely obese as in America?

0. Zero. Not a single solitary one. Not anyone in a scooter. Not anyone in a wheelchair because of obesity issues at least. No one having to use any sort of device or aid even as simple as a cane to help them along because of overweight issues.

We thought we saw one late in the week but walked past him only to find out he was speaking in a Brooklyn accent that could only be from Brooklyn, New York and not anywhere else on the planet.

The only place we saw some rounded, more corpulent people was when we toured the art museums and saw a Reubens painting here or a Cezanne there with women who were decidedly not 'thin' by any stretch of the imagination.

As soon as we returned to the States, we realized that the basic shape of Americans is now a rather large pear whereas the Parisians we saw looked more 'normal' as in relatively thin and angular. Like Americans used to look 40-50 years ago.

How in the world can a society of people such as the French eat so much (and so well) and still look like the healthiest people on the planet?

We saw thousands of people, if not tens of thousands or hundreds of thousands, walking everywhere in Paris. They walked to work, to the park, the museums, the shops, church...wherever they wanted or needed to go,

Parisians seemed to want to walk over driving or riding in taxis. If their destination was a long distance away, they walked to the Metro or RER train stop several blocks away and then walked to their destination when they reached their Metro or RER stop.

If they were not walking, they were riding a bike. Paris has 1800 rent-a-bike kiosks all over the place but the first 30 minutes is free. There are 20,000 bikes, all of which seemed to be in use all the time.

With that in mind, we took a brief look at some of the readily available data comparing French health to American health conditions.

Americans are about twice as likely to develop diabetes as a typical French person. Americans are also about twice as likely to develop heart disease as a typical French person.

Know what 2 of the main leading causes of higher health care costs are in America today?

Diabetes and heart disease.

As of 2010, the per capita expenditure for Americans ran close to $9000/year which is surely much higher today.

The per capita expenditure for the average French person? Just under $4000.

The one area where the French exceed the Americans in disease is in their rates of cancer. No doubt due to the enormous amount of tobacco they consume, mostly cigarettes along the Champs Elysees as they sit and drink wine and eat fromage and baguettes and croissants and pastry and watch people as they go by.

But they do not see any obese people. We tried and we did not see any of them as we saw immediately in the US airports when we returned.

That is not surprising. 2/3rds of Americans are now considered overweight or obese. 1/3 are simply considered obese of which 6.7% are considered morbidly obese.

The US has roughly twice the obesity rate of France. Obesity leads to so many health complications, diabetes and heart disease just a couple of them.
'We're #1! We're #1!'

So what does this mean? Does socialized medicine in France keep the costs of health care down or does the more healthy lifestyle of Parisians help keep the costs down because they are avoiding the extremely expensive side effects and consequences of being obese?

We don't have all the data points academics would demand to make a sophisticated analysis of the health care comparison between the US and France.

However, based on a rather large data set that we saw with our very own eyes over an extended period of time in Paris, we saw with pretty much certainty that Paris does not have the obesity problem we have in America.

To contrast what we saw in Paris with an average everyday occurrence in America, here's conceivably a day in the life of an average American with a good job in an office building somewhere:
  • Get up. Eat some sugar-laced Mini-Wheats or Entenmann's pastries for breakfast.
  • Drive to work but go through a drive-thru Starbucks first to get a calorie-driven double-whip mocha latte with at least 700 calories in it before you put in 3 packs of 'all natural' cane sugar as if that is going to help you somehow.
  • Park in the parking deck. 
  • Take an elevator to your office.
  • Sit at your office all day long staring at a computer in an ergo-dynamically perfect office chair to take the strain off your back
  • Take the elevator down to the Burger King in the food court of your building and buy a Whopper with cheese ('Have your diabetes/heart disease your way!') with a side of greasy fries on the side. 1000+ calories at least
  • Take the elevator back up to your office and ergo-dynamically perfect office chair.
  • Take the elevator back down to your car.
  • Drive the car through a drive-thru window on the way home and buy (whatever you want). 1000+ calories minimum.
  • Sit down in front of the television to watch the news and then some favorite movie for the 10th time.
  • Eat some ice cream while doing so. Add on another 400-600 calories for sure.
Americans can go through an average work day without expending one ounce of energy on exercise or walking or running or lifting anything heavier than a Big Mac. We might burn up a fair number of calories on basic body functions such as our beating hearts and basic metabolism that keeps us alive but that is about it.

In our American Dream effort to find every comfort in life, we are literally killing ourselves by ingesting maybe 2000 calories more per day than we burn up.

No wonder we have perhaps the highest obesity rate the world has ever known outside of colonies of sumo wrestlers.

And with that, we have the highest per capita health care costs in the world. Obesity and exorbitant health care costs from complications due to obesity go hand-in-hand like two very large peas in a pod.

No wonder French health care costs are lower than America. It has less to do with socialized medicine than the fact that the French people take far better care of their bodies than Americans do.

They enjoy eating and drinking, don't get us wrong. But they seem to walk it all off whereas here in the States, we do not .

Sadly for many reasons.


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Tuesday, September 23, 2014

'Where Are The Thomas Jeffersons, James Madisons and Alexander Hamiltons of Today?'

They are all around us.

They are not running for public office. Yet.

We just returned from an exciting day-long seminar series at Baylor School in Chattanooga, Tennessee where we met with 19 young scholars and campus leaders through The Institute for the Public Trust we are running to find and train new leaders to run for office.

If you want to regain your hope for the future of America, spend any time with any young scholar or campus leader you can find and sit and listen to them for any length of time.

America's best times are ahead of us. Not behind us. These young leaders convince us of that.

We asked Stewart Harris of the Appalachian Law School in Grundy, Virginia and the Madison Center on the Constitution at Montpelier to come to Baylor to talk about why the Founding Fathers were such great visionaries, leaders and revolutionaries not only relative to their times but to all times in all nations since then.

There were many reasons why they succeeded at establishing our democratic republican self-government when so many had failed over the entire previous history of mankind. Not the least of which was their high level of education; their backgrounds, their families and perhaps sheer Fate, Destiny or Pure Statistical Luck of the Draw that so many of them lived at the same time in a relatively small geographic area.

It struck us as we were listening to Stewart speak to these young Baylor Leaders of Tomorrow that maybe we put our Founders on too much of a pedestal when it comes to their 'knowledge' of things in this world.

Not their native 'intelligence'. Clearly, if IQ tests existed back then, the collective IQs of Benjamin Franklin, Thomas Jefferson, James Madison, Alexander Hamilton and any of the other dozens of signers of the Declaration and/or who attended and perhaps signed the US Constitution (not all the attendees did so) might surpass the collective IQs of 100 US Senators, 435 Representatives and 1 US President now in office today.

That might not be too much of a stretch when you really think about it.

When it comes to actual 'knowledge' of the world, consider these musings:

  1. Did the Founders know anything about nuclear energy, DNA or the operations of the cosmos as we do today?
  2. Did the Founders know anything about computer science, artificial intelligence or biomechanical engineering, subjects that many serious students today in American universities study as undergraduate majors?
  3. Did the Founders have any concept of advanced business management techniques, statistical analysis and complex financial investment and budgeting as any young graduate of the nation's business school do before they enter the work force?
We could go on all day about what even the average citizen in America 'knows' today that far exceeds the database of knowledge that was available to our Founders in 18th century America. Or Europe for that matter since many of them spent extensive time in France and England studying and working before returning to start the American Republic.

Mr. Harris went on to identify several other characteristics of our Founding Fathers to set them apart as great leaders, not all of which would be considered 'great' in anyone's eyes today or maybe even then.

Alexander Hamilton could be a self-important jerk on occasion with id/ego problems that were hard to believe. His heightened sense of moral (at least in public) rectitude lead him to accept a duel with then-sitting Vice President of the United States of America (!) Aaron Burr when a nice apology and quiet words of conciliation would have allowed Mr. Hamilton to live longer than his short 49 years of life here on earth.

Can you just imagine the uproar if Vice President Joe Biden challenged former Treasury Secretary Hank Paulson to even a mud-wrestling match on the West Front of the Capitol? (Who wouldn't pay big money to see that one?)

The point of this observation is that we do not suffer from a lack of 'knowledge' in America today. 

We suffer from a lack of courageous, convicted leadership on the part of our very best citizens to run for public office.

The Founding Fathers and Geniuses such as Franklin and Jefferson would have thought they had died and gone to heaven if they had these basic tools of American life and business today in their hands and at their disposal: a laptop; an IPhone, an IPad and a working wifi internet connection.

24 hours a day.

The computing power in any average citizen's IPhone, not a NASA engineer, in 2014 is perhaps 1 million times the computing power of the Apollo guidance systems that took our astronauts to the moon in 1969.

And people use them for games and for posting beef stew recipes today. Good grief!

Look at what the Founders did with just quill pens and rudimentary printing presses! It took weeks if not months for news to travel overseas or up and down the East Coast!

In many ways, we think it is fair to say that we 21st century Americans are 'smarter' than even Thomas Jefferson and Benjamin Franklin, two of the smartest Americans or human beings who have ever walked this planet.

We may not be as natively 'intelligent' or even curious as those gentlemen were. But we sure do know a lot more about everything than they could have ever dreamed in their wildest imagination.

So what is the problem today?

Our very best citizens do not run for public office. Jefferson, Madison, Hamilton and Franklin did.

Plain and simple. It isn't rocket science to figure that out.

Imagine a US Senate today without Majority Leader Harry Reid or Minority Leader Mitch McConnell or any of the other 98 Senators who just don't get much of anything done of any consequence any more and haven't for the past 5 years.

Instead, imagine that the most successful or recognizable person in each of the 50 states allowed themselves to be considered for election to to the highest elective office in the nation, The U.S. Senate.

Who might they be?

How about a Senator Bill Gates from the state of Washington? A US Senator Warren Buffett from Nebraska. Senator Oprah Winfrey from Illinois. Senator Michael Jordan from North Carolina. Senator Francis Collins of Maryland. 

How about any of the bleating talking heads on talk radio or cable would even try to run for public office? Like him or hate him but you got to hand it to US Senator Al Franken of Minnesota who was a SNL regular before turning into a biting political commentator: He walked his own talk and ran for the US Senate rather than bleat and bray about it on the street corner where not many people really care anyway...and he won in Obama's landslide of 2008.

That is the level of distinction and achievement we saw from our Original Founders. They made their way in something other than politics before running for public office where they could take those talents and experiences and bring them to the common table of political discourse to help solve the big and truly intimidating problems we face as a nation.

Think it might be nice to have more accomplished accountants, financial managers and CEOs running the federal budget? Doubt we would have a $17 trillion debt going on $20 trillion before President Obama leaves office in the next 2.5 years.

Think it might be nice to have more accomplished scientists such as Francis Collins who heads the NIH? There are people now serving in Congress and state legislatures who couldn't tell you a molecule from a mole hill or a beauty mole.

Think it might be nice to have some more distinguished military leaders such as retired generals or admirals serving in the US Senate or Congress? They might know what to do about ISIS more than the 80% of the current sitting US Senate and Congress who never served in any military service. Including President Obama who never wore the uniform of our armed services either.

You get our drift here?

We know for a fact that we have the next Thomas Jefferson, James Madison or Alexander Hamilton now living in our midst.  We have many living in the state of North Carolina alone. We know because we have seen them, met them and trained them to run for public office.

We hope they do so. Sooner than later. We see no reason why every Baylor student now in our class series over this next year, or any of our over 500 graduates now, will not run for some elective office from county commission to city council to school board to state legislature to Congress and serve at least 1 term at any level.

Who knows? Maybe one will run for the White House one day as well.




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Tuesday, September 16, 2014

What Comes First: Liberty, Equality or Fraternity?

Liberté (freedom: blue), égalité (equality: white),
Fraternité (brotherhood: red)
There has always been a tension in modern western civilizations between the individual liberties of every person and the collective needs of every citizen.

Representative democracy in the form of democratic republican forms of government is a relatively new phenomenon in the history of mankind, isn't it?

It really wasn't that long ago that human beings lived relatively short and brutish lives. In the roughly 3 million years of human development, it has only been in the last 225 years or so that people have tried to govern themselves as opposed to having some dictatorial king, czar or tribal warrior keep them under his or her thumb and tell them what to do, think and believe.

As fate would have it, the United States adopted the US Constitution in the same year as the French Revolution toppled their monarchy, 1789. Much of what inspired the American Revolution in 1776 inspired the French in 1789 when they stormed the Bastille prison; they were sick and tired of callous, indifferent, vainglorious leadership in the form of their king at the time, Louis XVI and his wife, the Queen Marie Antoinette.

Both desired something truly 'revolutionary' and 'radical' in the history of man. Both wanted freedom to control their own destinies.

Perhaps the French said it best with their national motto now embedded in their Constitution:

Liberté, Égalité, Fraternité
 

What does this mean really in today's 21st century France, or America for that matter?

Is it a 'vertical priority list' in which 'Liberty' comes first for everyone; then 'Equality' and then 'Brotherhood' or looking out for each other?

Or is it more of an equally-shared 'horizontal priority list' where each condition is to be honored and respected by everyone in 33.3% shares every day or every year for every person?

We think it is a combination of both for America which we will explain. It entails the extent to which each person in each nation views the proper role of government in their daily lives and how each nation is to be governed by their federal and state governments.

The French?

While France is simply an amazing country when it comes to the freshness of the food (their strawberries and tomatoes taste as vibrant and fresh as farm-fresh American fruits and vegetables used to taste 50 years ago, just to cite one example), their history and their arts and culture, the French clearly have placed 'Fraternité' and 'Égalité' far above 'Liberté' in 2014.

56% of the French GDP goes to government spending versus about 21% of GDP for America. They brag about the richness and thickness of their social welfare system, including health care. Even with exploding health care and Social Security retirement costs associated with Boomers retiring by the hundreds of thousands every month now, the French have got us beat by a country kilometer or two.

Small businesses in France are subject to a 66% tax which clearly discourages new investment. Excessively high tax rates and over-regulation by government authority is nothing more than confiscation of freedom by those in power who like to use the coercive powers of government to make everyone comply with their wishes.

'Coercive confiscation of freedom' is always a dangerous proposition, no matter which political philosophy may prevail at any particular point in time. Thomas Jefferson objected to the concentration of power in Congress in the hands of just a few...even when he agreed with them philosophically and politically for just this reason.

What person in their right mind would say this in their calculation for a new business plan to be implemented in France:
'Sure, France is such a wonderful country and their food, art and culture is so terrific that I am willing to risk every asset I have and borrow as much money as I can and suffer through the indignities and difficulties of starting any small business so I can pay 66% of what profit we earn each year to the French government. On top of the 17% VAT that we will have to pay along the way as well.'
There are proposals in France to cap an individual's ability to earn income over 1 million euros by confiscating or taxing it at 100% once you earn that much in any given year.

How they get soccer stars to come play for French professional teams is a mystery under those conditions. Think LeBron James will ever play for the professional basketball league in Paris? Doubt it.

The French clearly value leisure time far more than Americans do. One French observer says: 'The French work to live. Americans live to work' which may be a bit of an over-stretch but shows clearly the difference in priorities between the two cultures today.

The French value the 'horizontal priority scale' where equality and fraternity enjoy large and equal shares of attention. They must realize this comes at the expense  of the freedom of the entrepreneur to make as much money as possible without any constraints whatsoever. They are actually quite proud and upfront about it.

America was founded in 1789 primarily as a nation dedicated to the proposition that 'all men were created equal' so clearly stated by Thomas Jefferson in the Declaration of Independence in 1776. However, it was clearly in the context of allowing a person the individual freedom to determine his or her future as he or she sees fit, not what the government or any other person says how your life should play out.

Many of the Founders understood the inherent contradiction of forming a nation 'dedicated to the proposition that all men were created equal' as Abraham Lincoln so eloquently spoke about in the Gettysburg Address, while they also condoned the perverse institution of slavery, including slave-owner Founders such as Thomas Jefferson, George Washington and James Madison.

They knew slavery had the capacity to tear the nation apart. They were proven correct about 70 years later.

We think the United States falls more in the 'vertical priority list' of 'Liberty' first with equality and brotherhood perhaps equal seconds.

Or at least it used to.

We think the generosity of the American people comes in terms of the voluntary nature of their charitable giving. Check out who sends the most aid to natural disasters whenever they occur around the globe. It is almost always the United States who sends the most aid to help those in need in America and around the globe.

We also always marvel at the sheer magic of how people's lives are transformed whenever they have a good job working with great leaders and other workers. They make money to feed themselves and their families; the company pays for the majority of their benefits, including health care and much of their retirement plans and, to top it off, these people pay taxes that support the social programs to support those who are not as well-off and are in need of assistance.

We need more private sector jobs. Not less of them.

We have not advocated the utter destruction of the federal government or any essential services that it now provides millions of people.  We agree with Ronald Reagan when he said in his First Inaugural Address:

'Now, so there will be no misunderstanding, it's not my intention to do away with government. It is rather to make it work--work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it. 
We prefer to think that our government is something that should be used to help us live productive lives rather than be an adversary at every turn which it can be when run by people who love more government and less freedom, especially in the private sector.'

We don't think President Obama or any of his close advisors have ever read these words from President Reagan's First Inaugural Address. They have 2.3 more years to do so and get it right.

What should anyone care if anyone from Bill Gates to Warren Buffett to the Koch brothers to LeBron James makes $100M, $1 billion or $10 billion in any given year in terms of salary, stock bonuses or Nike contracts?

They haven't stolen anything from anyone, have they? They haven't illegally tapped into your bank accounts and frustrated LifeLock or any other security program and stolen all of your money, have they?

In almost all cases of people being wildly successful in American business life such as Bill Gates, they have started a company or provided a service that has made the lives of hundreds of millions, probably billions of people around the globe far less brutish and far more pleasurable and enjoyable than our forefathers in American or the revolutionaries in France could have ever dreamed in 1789.

Even LeBron James can be counted as having created thousands of jobs. What would the guys at ESPN do every winter without LeBron jamming his way through the cold dark winters?

The case can be made that if the next Administration in the White House wants to be truly 'revolutionary' and get back to the roots of the American Republic to allow more freedom to prevail, we can and will leave the rest of the world behind in our dust once again. We can escalate the creation of new jobs with new technologies America always seems to come up, the 3-D printer just being one of the latest in the long line of creations that include mass production of the automobile to the PC.


Let France and England and every other nation become more socialist and tax the entrepreneurial spirit out of their creative citizens much as the bioengineering and food regulations have apparently squeezed that taste out of American strawberries and tomatoes.

Why do we have to let our elective representatives do that in America?


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Tuesday, September 9, 2014

Isn't The 'Best' Jobs Policy Just Getting A Job?

Rich Golfers Doing Good?
When is a 'job' a 'good job'?

Usually when you have one. As opposed to when you don't have one.

The word 'job' is sort of odd, isn't it? It comes from an uncertain origin, probably around the 1550s in Olde England where a 'jobbe of worke' meant a 'piece of work' as contrasted with continuous labor*

But the importance of 'having a job' can not be underestimated, can it? Without a job, a person can't support him/herself; his/her family and generally suffers from a lack of identity and a certain air of dignity.

We have all experienced this from time to time, especially over these past 5 years. If you haven't, thank your lucky stars or God Above.

We were struck recently by a story we saw over the weekend regarding the Evans Caddy Scholarship Program during the BMW PGA Championship in Denver, Colorado.

Many people think being a caddy on a golf course is a low-level, demeaning job. It is usually very hard work often lugging 2 huge golf bags on both shoulders for rich white guys at fancy clubs in the morning and afternoon in awfully high heat and humidity across much of the nation during the summer.

'Looping' some people call it. 'Hard as hell' many younger caddies call it.

Everyone is probably aware of the 'Caddy Scholarship' made famous in 'Caddyshack' when Judge Smales asked Danny how he liked being 'Mr. Scholarship Winner Danny Noonan':



Caddies went the way of the dodo bird for the most part in the mid-1970s as more and more golf courses went to renting golf carts because they could make more money and get more golfers around the course in less time. There are still some clubs around the nation that still use caddies but they are few and far between compared to 50 years ago.

But caddying also deteriorated because of the public perception that it was 'beneath' anyone to do in modern-day America. Some people consider caddying 'hard demeaning work'. Some even go so far as characterizing it as 'white men keeping young African-Americans down on the plantation' which seems a bit excessive to be honest about it in 2014 America.

Caddying is a very hard, sweaty, tiring manual labor job, there is no question about it. But is the deterioration of caddying a 'good thing' or not for America and America's youth, especially during the summers when they need a job of any kind?

The Evans Caddy Scholarship program has sent over 10,000 caddies to college on full scholarships. 10,000 full college scholarships paid for by mostly rich white guys who have made money and been successful in business, law, medicine, academia, you name it.

Isn't that an indication that rich mostly white people can at least sometimes do very good things with their money, time and effort? After all, when was the last time you heard that a poor person was able to set aside a couple of million dollars and set up a scholarship that could help thousands of other people down the road? It would be next to impossible to do, yes?

Most of the time, business people in America are their own worst enemies. They don't tell their positive stories often or well enough. And when they make mistakes, they are so mind-numbingly clay-footed and tin-eared that they deserve all the ridicule that can be heaped up on them.

Cue any news story on the collapse of Wall Street in 2008 and 2009. You'll see what we mean.

Here's a classic case of the private sector providing entry-level jobs for mostly young people that achieves many social goals most of us say we want to see any way we can get them. On top of learning how to be a good caddy; show up on time, be polite and respectful to others, read the greens; find the errant tee shots and managing the money and tips they get each summer, every caddy doesn't face the complete opposite of what they see today: not working every day for instance.

Isn't that a far sight better than any social welfare program or after-school basketball league the taxpayers can and have been asked to fund over the years?

What do you think a young person learns on the golf course when they see a golfer such as Cameron Tringale call a penalty on himself and forfeit $50,000 in earnings as recently happened on the PGA this summer?

It is a far different lesson learned than watching Ray Rice slug his girlfriend in an elevator, isn't it?

Our honest question is this: With teenage unemployment at all-time highs, especially among African-Americans and Hispanics during the summer months when they are out of school, what is better: To have a tough, hot, sweaty, demanding job as a caddy....or to not have a job at all?'

The entire nation would benefit from golf courses and clubs doing away with electric carts altogether and reinstating caddy programs for their members and guests.

#1: You would get more exercise walking than riding a cart and flailing at the ball 120 times or so during each round.

#2: Young people of all races, creeds and colors would get a chance to learn what it is like to work really hard for hard-earned pay and most likely, avoid indolent summer days where there is no job.

It is amazing to reflect on what the Evans Caddy Scholarship Program has done for these 10,000 young people over the years. It is also amazing when you realize it was started at the initiative of one man, Chick Evans, and 26,000 golfers voluntarily contribute $12 million annually to support the scholarship fund.

They don't have to do that you know. They do it because it is the right thing to do and they chose to use their financial resources to make it happen.

So the private sector does work, right?

When you think about how many hundreds of thousands more young people could have the same opportunity if we put a premium on hard work once again in America instead of stigmatizing what used to be considered a good entry-level job for young people, you have to slap your forehead and wonder why this is such a hard thing for so many people to understand.

*Online Etymology (further explanation of the word origins for 'job) 'of uncertain origin, perhaps a variant of gobbe "mass, lump" (c.1400; see gob) via sense of "a cart-load." Sense of "work done for pay" first recorded 1650s. Thieves' slang sense of "theft, robbery, a planned crime" is from 1722. Printing sense is from 1795. Slang meaning "specimen, thing, person" is from 1927. job. (1) A low mean lucrative busy affair. (2) Petty, piddling work; a piece of chance work. [Johnson's Dictionary] On the job "hard at work" is from 1882. Job lot is from obsolete sense of "cartload, lump," which might also ultimately be from gob. Job security attested by 1954; job description by 1920; job-sharing by 1972.



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Monday, September 1, 2014

'For Tar Heel Time, Set Your Clocks Back 100 Years'

"Jackson has lost his left arm; I have lost my right."
General Robert E. Lee, May 3, 1863
One of the best classes any undergrad could take at The University of North Carolina at Chapel Hill in the mid-1970s was the Civil War history class taught by Dr. James Leutze.

He brought the facts and figures of that bloody war to life each day in class. The Civil War generals and politicians and people seemed to magically come alive with each and every passing class.

One of the most searing images was his recounting of how Confederate General Stonewall Jackson was mistakenly shot in his left arm at the Battle of Chancellorsville by his own troops as he was reconnoitering the Union lines after his brazen and successful flanking maneuvers that brought victory to the Rebel troops.

We were so taken by this story that we trudged through the muck and mud one day soon after graduation trying to find where his amputated left arm had in fact been buried. Under a small copse of trees, right where Dr. Leutze said it would be, we saw the small headstone. (photo above) We marveled that the doctor and his team who had amputated thousands of limbs up to that point in time during the War Between the States would take the time to find Jackson's severed left arm in the pile of dead limbs outside of the field hospital and give it a proper burial near Ellwood Plantation in Orange County, Virginia.

General Jackson died 8 days later on his way to Richmond and was buried later in Lexington, Virginia never to be reunited with his left arm in death.

We bring that story up not only to praise Dr. Leutze's teaching ability but to point out his fine attention to the details of history. Anyone who knew about where Stonewall Jackson's left arm was buried sure knew how to dig through a lot of research and come up with the truth.

Dr. Leutze went on to do great things in the UNC system, most prominently at the University of North Carolina at Wilmington where he now serves as Chairman Emeritus. We met with him several times when he came to Capitol Hill to discuss matters of importance to the UNC system as well as specifically UNC-Wilmington.

He has written a scathing opinion piece about the Republican Governor and General Assembly for the News and Observer titled 'For Tar Heel Time, Set Your Clocks Back 100 Years' that you might want to read. (text below as well)

We bring this up not to lambaste Dr. Leutze whom we hold in high regard. We bring this up more to point out the significant difference between 'politics' and 'history'.

History entails looking at all the facts of any event or time in the past and try to bring some sense of proportion to the modern reader. Politics, on the other hand, looks at one side of any issue, present or past, and tries to beguile the registered voter into 'seeing things your way', not the other way.

For one thing, maybe some eager junior editor sought to gin up reader response with such a provocative headline. Does he really mean that the Republicans now in charge of running the state of North Carolina government has actually taken the 8th largest state in the Union back to 1914 living standards right before World War I broke out?

Surely that can't be true, can it?

In this opinion piece, Dr. Leutze departs from looking at the totality of recent history, say the last 3 where Republicans have finally had a chance at running this great state of ours after 140 years, and takes the usual liberties that any seasoned politician, consultant or partisan would take.  This is entirely fair to do in a democratic republican form of government such as ours. Both sides do it so 'c'est la guerre' as the French would say.

But is Dr. Leutze writing here as a dispassionate historian or as an active partisan of modern-day politics?

Let's take a look at some of Dr. Leutze's claims and see if they really hold water as a historian first. We know he is a great historian because he was telling the truth about Stonewall Jackson's left arm and we saw it for ourselves.

How about this claim that 'North Carolina has turned back 100 years' as the title of his opinion piece claims? Is that really 'true' or just 'hyperbole' that anyone can expect in the public square today?

Claim #1: 'The new GOP-dominated legislature passed the nation’s most restrictive voter ID law (which just like) the constitution of 1898 effectively suppressed African-American voting'

It remains to be seen whether the new voter ID laws will lead to any advantage in any voting patterns among any demographic group be it along racial, ethnic, gender or age lines. There is one reason and one reason only why we just don't know if there will be any diminution of voter turnout in any cohort or sector of the voting population:

The new laws don't even go into effect until the 2016 elections in the first place!

So how can it be proven that the new voting laws will suppress ANY voter turnout along any lines when they have not even been implemented yet?

If you are a law-abiding citizen, you have got to have a photo ID of some kind to partake of ANY activities at any of the offices or stores in North Carolina or the United States of America.

  • DMV 
  • Airports 
  • Hospitals
  • Pharmacy 
  • Blood Donation 
  • Banks
  • Writing a Check 
  • Using Credit Cards
  • Gun Shop 
  • Social Security Office
  • Pawn Shop
  • Jail 
  • Courts 
  • Unemployment 
  • Public Schools 
  • Adoption Agency
  • Parole & Probation 
  • Auto Insurance 
  • Traffic Stop
  • Passport
  • Post Office
The only place in America where you do not need a photo ID or any sort of positive identification today is apparently the voting booth.

Claim #2: 'The plutocrats seem content to let North Carolina go back to Rip Van Winkle’s slumber'

Again, we don't mind some hyperbole in any political discussion.

But we have to ask: 'Who and what are the plutocrats in North Carolina today anyway? And is North Carolina really in a 'Rip Van Winkle slumber' today in 2014?

The tobacco, textile and furniture barons of the late 19th century and most of the 20th century are gone as are hundreds of thousands of the relatively stable manufacturing jobs that went overseas to lower wage cost countries. Many small communities in eastern and western North Carolina would give anything to have those jobs back instead of seeing most of their population now on unemployment or most of their buildings boarded up.

Who are the 'plutocrats of North Carolina' today unless they are the founders of the high tech and health care giants that thankfully still call North Carolina home and employ tens of thousands of highly skilled people who come out of our Research Triangle Park universities and laboratories?

For every Art Pope on the right side of the political spectrum, there have been 10 on the liberal side of the North Carolina political spectrum willing to fund any and all liberal causes for the past half century. Are rich people on the left not 'plutocrats' simply because you agree with them?

Claim #3: 'The new GOP-dominated legislature lowered taxes on the wealthy – causing a half-billion revenue shortfall – thus starving schools and infrastructure'

You know what is really odd? No one on the progressive liberal side of the aisle ever brings up the inconvenient truth that the real reason why schools, including primary, secondary and higher education and infrastructure face shortfalls in funding is because of close to $2.5 billion that was spent on over-runs in the mismanaged state Medicaid program under the Democrats' rule prior to the GOP takeover in 2012.

The computer systems were antiquated and insufficient to handle the claims made on Medicaid by the state hospital and physician care community. On top of that, the General Assembly under Democrat control never considered moving to a Medicaid Managed Care plan adopted by 39 other states in the Union, some of which have now saved billions in their Medicaid program.

Where can those savings ostensibly be spent? On teachers' salaries; the UNC system; community colleges, infrastructure (although we would prefer that every road in North Carolina be re-paved first) and yes, further tax cuts.

There had to be some economic effort to jumpstart job growth under the Republicans when they took over all of the reins of government in North Carolina in 2013. Republicans prefer tax cuts as their economic stimulus packages; President Obama and liberal Democrats prefer 'job-ready' infrastructure spending projects as their economic stimulus packages.

It is like the swallows returning to Capistrano every year at the exact same time. It is just what both parties 'do'.

The added cost of Medicaid over-runs plus the lost savings for each of the past 5 years brings the marginal cost of Medicaid to over $5 billion that has been spent on that one single program in the state budget that did not need to be spent had Medicaid been run in a more responsible, fiscally sound manner.

'1/2 billion in revenue shortfall' pales in comparison to these $5 billion in lost Medicaid savings.

Claim #4: 'Redistricting had been so masterful that they won nine of 13 seats despite the fact that almost 200,000 more votes were cast for Democratic than Republicans in the state’s combined congressional races'

With all due respect, this is a non-starter issue if you have been on the short-end of the stick of redistricting as a Republican in North Carolina. Here's what the Republican representation was for congressional delegation just for selected sessions in the 80's (out of 11 total): 1981-82 (4); 1983-84 (2); 1985-86 (5); 1987-88 (3); 1989-90 (3); 1991-92 (4 out of 12)

Congressional redistricting has been done by the majority party for the advantage of the majority party in every state since the Founding of the Republic in 1789. To assert that the GOP majority did something nefarious in 2011 when they won control of the legislature for the first time in 140 years and they now have 9 out of 13 congressional seats, soon to be 10 after this fall's elections in 2014, the very same thing could be said about the Democrats when they were in charge but you almost never ever hear it said today.

So what can be learned today? There is a huge gulf of difference between 'history' for history's sake and 'politics' for politics sake.

Reinhold Niebuhr once said: 'Politics is the art of finding approximate solutions to basically insoluble problems'.

It would help if both sides could use the same set of data before launching broadsides into each other.

(text of Dr. Leutze's opinion piece below)

For many years, North Carolina was known as the Rip Van Winkle state because it was so backward. Stingy public officials and business tycoons wanted low wages and low taxes so there was little investment in civic needs. Roads and other public facilities were ignored while education of the state’s youth was minimal.

The state was governed by the whims of a plutocracy of landed aristocrats, then tobacco barons, monopoly industrialists and eventually bankers and insurance executives. They had little use for an educated workforce or civic infrastructure. Too often they viewed things through a racist or misogynistic prism.

The constitution of 1898, established after the political coup in Wilmington, effectively suppressed African-American voting. The state’s leadership refused to ratify the 19th Amendment for women’s’ suffrage, (symbolically ratified in 1971) and kept Native Americans from voting until the 1950s. The leaders also kept taxes low and regulation lax.

As late as the 1950s, historian Hugh Lefler noted that North Carolina was not moving in the right direction. Industrial wages had stagnated, per capita income near the basement (46th out migration increasing, and tax revenues failing to meet critical public service needs.

In the 1960s North Carolina experienced a transformation, melding with the modern world.

Governors Kerr Scott, Luther Hodges and Terry Sanford moved to join the mainstream. While Scott, Hodges and Sanford initiated the modernization momentum, it was in 1977 when Jim Hunt became governor that the state began the steady climb in education, civic improvements and broader prosperity. Critical to Hunt’s success was recruiting the business community and selling it on his agenda of public education, government services and modest environmental protection as critical to industrial and economic advancement.

The Research Triangle Park blossomed into a high-tech, high-wage and high-skilled business recruiting dynamo. Charlotte emerged as one of the nation’s leading financial centers while other areas of the state saw schools, community colleges and universities provide a trained labor force. The state’s national ranking rose under Democrat Jim Hunt and Republican Jim Martin (28th capita income in 2000). It seemed this new course had been irreversibly set.

However, today that trend is in jeopardy. The shadows of the state’s Southern regressivism had never vanished. Paralleling Hunt’s career was that of Jesse Helms, with his hallmark arch-conservatism and race-baiting rhetoric.

Starting in the mid-1970s, Helms and other conservative Republicans set up think tanks to give academic rigor to their ideology, recruiting bright lawyers and conservative journalists. In North Carolina one recruit was Art Pope, heir to a discount retailing fortune. Pope turned his energies toward establishing the John Locke Foundation and a stable of spinoffs. He joined with out-of-state forces like the Koch brothers and their Americans for Prosperity.

Ironically, it might have been the election of 2008 that sparked the GOP sweep of 2010. The Red State Project headed by Ed Gillespie and Karl Rove determined that to control a state and ultimately the federal government, they needed to take a sufficient number of state legislatures in a census year – thus controlling legislative redistricting. With that prize in view, Pope and Americans for Prosperity poured in millions. Republicans swept to victory in both the state House and Senate in 2010. They then imposed a redistricting plan that maximized the GOP strength and will likely keep them in place for at least the next decade.

While the 2010 GOP campaign mantra might have been jobs, jobs, jobs, it was quickly jettisoned to focus on divisive social issues, appealing to the newly labeled “tea party” base.

Just as had been done after 1898, they attacked voting rights, taxes, public schools and added to them contemporary issues of gays and abortion. The new GOP-dominated legislature passed the nation’s most restrictive voter ID law and lowered taxes on the wealthy – causing a half-billion revenue shortfall – thus starving schools and infrastructure. They added mean-spirited cuts in unemployment benefits and Medicaid and eliminated the Earned Income Tax Credit. In four years they laid waste to 40 years of moderate progress.

In 2012 the new Republicans added the governor’s mansion to their booty. Redistricting had been so masterful that they won nine of 13 seats despite the fact that almost 200,000 more votes were cast for Democratic than Republicans in the state’s combined congressional races.

The business community Hunt had so carefully and effectively courted abandoned the progressives. The N.C. Chamber imported a director from Kansas who emphasized the old standbys: low taxes, low government spending, weak regulations. The plutocrats seem content to let North Carolina go back to Rip Van Winkle’s slumber.

Now comes the 2014 election. In this off-year contest, incumbent Democrat Kay Hagan is locked in a tough race against Republican House Speaker Thom Tillis. When Tillis won the GOP primary, it was curiously hailed as a victory for the mainstream despite the fact that Tillis leads tea party forces in the legislature. Over $20 million of out-of-state money has poured in to defeat Hagan – control of the U.S. Senate hangs in the balance. Will the election be determined on the effectiveness of voter suppression efforts or will voter discontent for what is going on in Raleigh outweigh discontent with Washington government and the U.S. Congress?

Dr. James Leutze is chancellor emeritus of the University of North Carolina-Wilmington.














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Saturday, August 23, 2014

The Social Security Trust Fund Surplus Explained. Again.

'Confusing, Social Security is, hmmm?'
We have a friend, let's just call him 'Yoda'* because he knows everything there is to know about Social Security and then some.

You ever hear that something is not 'rocket science'?

Well, apparently, understanding the convoluted and byzantine cash glows of Social Security is 'rocket science'. No mere mortal average citizen understands it all and very few people in Congress or the White House understand it either.

Yoda not only graduated from Princeton but has a Ph.D in computational quantum chemistry from Berkeley.

He needs it. He is one of three Trustees on the Board that oversees the operations and health of Social Security and Medicaid.

We posted our last musing on the fact that SS payroll taxes do not cover 100% of all the cash that goes to senior citizens in their monthly SS check. We were trying to make the point that it is not a pay-as-you-go program as many think nor is it a true financial vehicle whereby every dollar you pay in SS payroll taxes goes into some individual interest-bearing and capital-appreciating account at Fort Knox with your name on it.

Which is true.

However, the chart we posted confused some, us included, when it had the largest share of indirect payments to SS recipients coming from 'interest' instead of direct payroll taxes.

So, of course, we contacted Yoda for assistance.

Here is his reply below. Read it and see what you think and we will conclude with some remarks at the end.
'The basics of SS Trust Fund operations are available at this link:
The second table, showing the components of Soc Sec trust fund receipts, is probably most relevant to your question.  Interest payments have actually been made from the beginning. They didn’t just start in 1983 (when the Alan Greenspan Commission on SS raised payroll taxes not only to cover current SS expenses but also to buy up the national debt (see Moynihan) – it’s just that starting in 1983 they became much more significant.
They’d never been more than $3 B a year until 1983, then they jumped to $8 B, and by 1991 they were topping $20 B a year and rising.
Basically any surpluses Soc Sec runs result in a bond being issued to the trust fund, and that bond earns interest which is paid from the general fund.  Pretend that we just started the program from scratch and in its first year we collected $10 B in payroll tax revenues and paid out $8 B in benefits.  That would result in $2 B in Treasury bonds being issued to the trust fund.
Those bonds earn interest.  Those interest payments are made from the general fund, just like any other interest payments the federal government makes on Treasury bonds.
I do think you’re right to think of the interest payments from 1983-2010 as basically being “imputed” in a sense because all that was involved was crediting the trust fund with interest and causing its balance to grow.

It’s not like the government had to go out and raise this money, it just issued a credit from the general government accounts to the trust fund accounts, adding to Social Security’s future spending authority.

Though, those interest credits DID count against the government’s statutory debt ceiling, because the debt ceiling includes debt held by the social security trust funds.
But starting in 2010, the interest payments became more “real” in the sense that payroll taxes were no longer sufficient to finance benefit payments. So part of the interest payment from the general funds to the trust funds went immediately out the door in cash to pay benefits. The remainder of the interest payments just added to the trust fund balance the way that they had historically, but since 2010 the federal government has been supporting benefit payments with cash payments of interest from the general fund.
Basically, since 2010, Soc Sec has been supported in part by payments from the general fund and it has added to the federal deficit because payroll taxes are now insufficient to finance benefit payments.  To the extent that benefits are financed by incoming payroll taxes, they don’t add to the federal deficit.

But to the extent that benefit payments are financed by interest payments from the general fund, they do add to the federal deficit because those interest payments are made from the government’s general fund and have no external revenue source.'
See what we mean about having a Ph.D in quantum computational physics when it comes to understanding Social Security cash flows? It is complicated. Very complicated.

Two points to keep in mind:
  1. The huge annual Social Security 'Surplus' you may have heard about being paid into the Trust Funds each year is gone. At one time, the excess receipt of SS payroll taxes over outgoing expenses was expected to last until well into the second decade of the 21st century, 2026 or so was the targeted expiration date.
  2. At some point or another, sooner now rather than later as planned in 1983, your payroll taxes will have to go up or your parent's (or maybe even you) Social Security benefits will be cut by 5%, 10% or up to 25% to make up for the fact that the Social Security 'Trust Fund' (sic) will be completely depleted.

    When it comes time to 'redeem' the bonds held in the SS 'Trust Fund' account, the only way to do that is to raise taxes or cut benefits. No other way. Unless you want the Fed to make up fake money again and bail SS out to the tune of multiple trillions of dollars again.

    We still maintain that the Social Security 'Trust Fund' (sic) still needs to asterisked just to differentiate it from the traditional 'true' trust funds you think of where money goes into some money manager's company; is invested in a wide array of bonds and stocks or real estate; grows in economic value; collects interest and dividends for the duration and, when the time to tap into the trust fund comes around, those segregated funds are available for you to use in your retirement, etc.
But at least we all now more fully understand the cash flows in Social Security. Yes?



*Chuck Blahous is the director of the Spending and Budget Initiative, a senior research fellow at the Mercatus Center at George Mason University and a public trustee for Social Security and Medicare. 
Blahous is the author of Social Security: The Unfinished Work and Pension Wise: Confronting Employer Pension Underfunding and Sparing Taxpayers the Next Bailout, as well as the influential study,“The Fiscal Consequences of the Affordable Care Act.”
He was formerly the deputy director of President Bush’s National Economic Council, special assistant to the president for economic policy, and executive director of the bipartisan President’s Commission to Strengthen Social Security.
He worked in Senator Alan Simpson's office where we met him during the 1994 Bipartisan Commission on Entitlement and Tax Reform set up by President Clinton.

Blahous received his PhD in computational quantum chemistry from the University of California at Berkeley and his BA from Princeton University.

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Wednesday, August 20, 2014

You Think Your Social Security Check Comes Just From Your Contributions Every Paycheck?

'Hey, Wait a minute! I thought I paid for everything
in my Social Security plan!'
Think again.

Social Security has been sold for close to 80 years now as a 'retirement plan' for senior citizens. It has been sold as a 'pay as you go' plan where you pay your payroll taxes every week and supposedly, you believe that it goes into an individual private savings account or something where it builds in value for the future.

Nothing could be further from the truth.

SS was originally conceived to be a way to pull millions of seniors out of abject poverty during the Great Depression of the 1930's which made the recent Great Recession look like a kindergarten party at the park. Get money to your grandma and grandpa or great-grandma and great-grandpa so they didn't starve to death during those terrible economic times.

It was originally sold as a 'social insurance' fund but morphed into a 'retirement plan' mode the more politicians made it sound like you had worked all your life and set aside money for your own Social Security plan.

Which you did not. Which you have not. Which you will not under current structure and operation.

Everyone you talk to who is on Social Security will swear up and down on a stack of Bibles: 'I paid all my life into Social Security every paycheck every week. Daggum it! I deserve to get it all back and then some now that I am retired!'

And elected officials in Washington have quivered at the very thought of telling them the truth ever since.

The AARP terrifies each and every one of them. However, the AARP doesn't consider themselves to be a 'political action committee' or a 527 or any sort of active political organization. It operates under a variety of 501(c)3 non-profit entities along with some for-profit divisions which make it a multi-billion dollar annual business, not just a small group of people advocating for the poor seniors.

Which they use to be the single most terrifying lobby group America has ever known. Mention one word about Social Security or Medicare reform and 44 million seniors who vote in EVERY election* will vote against you even if your opponent is Ernest T. Bass.
'I know. I was right dere in it'

According to the above chart above from the Committee for a Responsible Federal Budget, a whole lot of money comes from you, the general taxpayer, lately especially in the last 4 years or so to pay for current SS benefits. $230 billion to be exact from 2010-2014.

'What is that you say, sonny? I can't hear as good as I used to' you can already hear. 'I paid every nickel into SS and I am going to get every one of my nickels out!'

A whole lot of general revenue taxpayer money has been pumped into SS lately along with billions of dollars of taxes from SS benefits of higher-income people. This is all money that does not come from the payroll taxes any senior has paid into SS over the years.

So how can anyone really and truly say that Social Security is totally a 'self-funded' program by recipients?

Take a good look at this article 'General Revenue & The Social Security Trust Funds' and see what you think.

We have long argued that everyone would be far better off if we could truly put our SS payroll taxes into a defined contribution plan similar to what they did in Chile in 1980 and retire with far more assets and monthly income streams than the average $1700/month most people can expect to receive once they start receiving Social Security.

Having facts such as these from CFRB is helpful to start that ball rolling.


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Monday, August 18, 2014

Corporate Anthropomorphism and The Right to Assembly

'Oh No! I Am Home To A Big, Bad
INTERNATIONAL CORPORATION!'
'What is a corporation: A) an association of people or B) an inanimate object like a machine or a computer?'

It is always interesting when we hear people assign human qualities, emotions, virtues or faults to a company or corporation.

'Corporate Anthropomorphism' we'd like to call it.

Recently, on a relatively obscure financial issue, we have heard politicians from President Obama to Senator Dick Durbin (D-IL) and even Secretary of State John Kerry say that corporations that 'invert' their operations, or move them to somewhere overseas are 'unpatriotic' in some way.

George Will wrote a column that got us to thinking about this in more depth: 'In a Stew Over Inversion'

'Corporate Inversion' is defined as the following:
Re-incorporating a company overseas in order to reduce the tax burden on income earned abroad. Corporate inversion as a strategy is used by companies that receive a significant portion of their income from foreign sources, since that income is taxed both abroad and in the country of incorporation. Companies undertaking this strategy are likely to select a country that has lower tax rates and less stringent corporate governance requirements.*
If corporations are inanimate objects such as a machine or a computer, how can they be 'unpatriotic' or have any other human characteristic?

Think about it. If someone said: 'My computer started acting up today. It must be unpatriotic', that would be crazy. You would laugh them out of the room.

Computers are machines. People make them. When people stop using them, they are thrown away and they are recycled or torn apart for parts or junked. They have no intrinsic value other than to help us live better, more productive lives.

Is a corporation a 'machine' or a 'computer'? The legal shell of it might be in some way. But those legal shells were created by Congress and state legislatures to provide certain protections from legal liability so people would be incentivized to take risks to grow that business without putting every personal asset at risk.

At the heart of any company or corporation are people led by some executive, president or board of directors who make decisions on a daily basis designed hopefully to extend the life of that company by making more products and selling them for more than it costs to produce them.

So when it comes to calling a big, bad corporation 'unpatriotic', aren't critics basically saying that the people who run those corporations and work for them are 'unpatriotic' for making such business decisions as 'inverting' them overseas?

Here's what we think is so interesting about this:

  • 'Big bad corporations' are considered 'human' by critics and politicians when it seems as if it might be a favorable potential political issues to their side such as inversion. 
  • 'Big bad corporations' are not considered 'human' when it comes to issues such as political free speech and campaign finance when it seems as if bashing them might be a favorable potential political issue for their side.
Which is it then? Are corporations made up of human beings? Or are they just mere 'machines'?

And what about the 'right to assembly' as defined in the First Amendment?
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Aren't people who work for or run any company or corporation basically 'assembling peacefully' to work together for some common purpose such as producing vaccines for the Ebola virus, finding cures for cancer or making fuel-efficient automobiles for us to drive to work every day?
If so, why should they be denied the right as an assembly of people to participate in elective politics through funding or speaking out on the issues of concerns to them collectively....just as unions can do and have done for the past century?

Are unions 'human' or not as well? Or are they just like corporations where laws passed by our duly-elected legislators protect their right to 'assemble' and 'to petition the Government for a redress of grievances' such as work-related safety and conditions?

It is just something to think about the next time you hear some politician rant on about 'corporate inversions' or some other thing they think will rile up the electorate to vote for their side this fall.

* http://www.investopedia.com/terms/c/corporateinversion.asp




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