Tuesday, May 19, 2015

Want to Build Wealth and Retire Rich?

'Want a 'minimum wage' retirement or a 'Park Place Retirement?'
As hard as it is to believe, we recently received some information about 'retiring early' to receive Social Security benefits.

How can that possibly be? It seems like just yesterday we were running for Congress in 1984 talking about reforming Social Security and setting up individual retirement accounts for everyone.

A senior political advisor took me aside one day and said: 'You have to stop talking about reforming Social Security! You are scaring the hell out of the other Republican candidates on the ballot!'

'But it has to be done!' I responded in an exasperated youthful idealistic impatient impudent manner.

'We all know that it has to be changed!' the senior advisor said. 'We just don't want to talk about it in THIS campaign!'

Therein lies the problem. That was 31 years ago in 1984. Today it is 2015, heading into the 2016 presidential election cycle. Nothing has changed. Nothing has been improved. Both SS and Medicare are headed towards technical and actual insolvency based on past legislation about who pays what into each 'trust fund' (sic) and who receives benefits from each 'trust fund'.

When the out-flow of SS/Medicare exceeds the inflow of SS/Medicare payroll taxes, you know something is terribly wrong and it is unsustainable.

There is NEVER going to be the perfect time to talk about reforming Social Security and Medicare in America. Not with 44 million+ senior citizens receiving checks and benefits every month from both monstrous entitlement programs. Who vote every election. State, local and federal. Even in off-off year primaries.

Maybe the tactics of Social Security reformers in the past has been all wrong. Instead of talking about 'preserving and protecting Social Security', maybe it is time to start appealing to the inner desires of every single human being, rich, poor and neither rich nor poor but middle-income, especially those of you who are under the age of 30 right now and ask this basic visceral question:

'How would you like to retire rich and wealthy through the magic of compound interest and with very little work on your own?'

Who could possibly say 'NO!' to that one? Everyone wants to do well on their own and provide for themselves and their families, don't they?

Any political party that can adequately market this to the younger cohorts of American voters, and then get them sufficiently motivated to vote consistently mostly on the issue of reforming Social Security to their personal benefit , will certainly dominate for the foreseeable future.

Here's the problem in a nutshell:

  1. Under the current old SS model, people who were early recipients of SS from 1935-1989 or so made out like bandits in terms of 'return on investment', i.e. their payroll taxes paid over their working lives versus what they received in actual SS benefits during their retirement years.

    Parents and grandparents who entered the SS system in 1935 or so could expect to pay a maximum of $40 or so...per year. Not per month. per year. The next year it might rise a whole $1...per year to $41/year and so on. Many received that amount and much more including any assumed rate of interest in perhaps 3 years of retirement.
  2. People who entered retirement from 1990-present or will enter retirement up to 2020 or so will enjoy a modest rate of return on their 'investment' (sic) (again, i.e. payroll taxes paid which are not really invested capital) relative to what they put into SS. 1-2% average return is all they can expect.
  3. People who retire after 2020 will be lucky to receive a zero rate of return over the course of their retirement, meaning they will be lucky if they live long enough to get back every dollar they have paid into SS over their working lives of 45 years or so before they die.*
Guess what? If you die before you reach the SS full retirement age of 66 today (which is heading up to 67 in a few years so get prepared for it), you get bupkis, nothing, nada from Social Security. Hasta la vista and too bad for you and all that.

It doesn't have to be that way. For any American, black, white, Asian, Hispanic, rich, poor or otherwise.

Now that we are faced with the reality of looking at such things as receiving Social Security (?) checks on an early basis, the stark facts of the lack of reform for the past 35 years are becoming glaringly self-evident.

The average person can expect to receive about $1300/month in SS benefits in full retirement assuming they worked most of their lives and paid into Social Security every pay period. The max a person can expect to receive is about $2600/month no matter how much you made in salary because of the various limits on payroll taxes and benefits.

The thought of Warren Buffett or Bill Gates receiving a monthly SS check of $2600 is almost too ridiculous to believe. They don't need it and they shouldn't be counted as an 'entitled' recipient just because they reach the golden retirement age.

If you think you are going to be making it big off of Social Security when you retire, think again. You are not.

The real tragedy of American politicians and voters not supporting a rational improvement to Social Security 35 years ago or longer means that most American seniors are going to receive close to a 'minimum wage retirement' instead of the amount of wealth they could have amassed had they been able to put the same amount of Social Security payroll taxes into a bonafide individual retirement account over the past 3.5 decades.

It is difficult but not impossible for a minimum wage worker for the entirety of their working life (only 2% of the people who start at the minimum wage stay at that level for the long-term) to build up a $1 million nest egg to retire on at age 65. (see How to Become a Millionaire on Minimum Wage)

If you don't want to retire with a $1 million+ nest egg and you want to make sure everyone retires at the lowest amount of monthly income possible and you are under the age of 30, just keep voting for people who promise to 'never touch Social Security!'....and you will achieve your goal.

The real shame of it is that with a private individual retirement account such as the one described above, everyone could have a decent retirement fund on which to retire PLUS, they could pass it along to their heirs AT ANY AGE THEY PASS AWAY, NOT JUST AFTER AGE 66!

This would be especially important to African-American males whose life expectancy today is about age 68 versus their white counterparts who live on average 77 years.

If an African-American male pays into Social Security their entire working lives and dies 1 minute before midnight before their 66th birthday this year, he won't receive back any Social Security benefit.  His family will not inherit any of the accrued value of his Social Security 'contributions' (sic) (i.e. again 'payroll taxes') built up over the previous 45 years of hard work and forced taxation under the current system.

How fair is that?

Think about that the next time you think defending the status quo in Social Security is 'the right thing to do'. We most likely have created one of the most unfair ways to hold people and families back imaginable in America by not updating and modernizing Social Security over the years.

It is like we are still driving our grandparents' 1935 Ford instead of a modern-day Prius or Tesla. You wouldn't do that either, would you? So why are you still supporting the old version of Social Security when there are more modern ways of providing for income security for our nation's seniors going forward?

* information from the Green Book published annually by the House Ways and Means Committee

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Thursday, May 14, 2015

Remember When Adults Used to Govern Via OBRA, COBRA and TEFRA?

'If you know how to charm the COBRA,
you can get a lot done in Congress'
Of course you don't. Unless you are like ancient nowadays.

Consider this your history lesson for today if you are under the age of say, 40.

The first time one of these species called an 'omnibus reconciliation bill' (OBRA to begin with) was used to address the American fiscal situation in earnest was 1980.  If you are now turning 40 years of age, you would have been all of 5 years old back then so there is no way you could have appreciated what was going on back then when adults used to run Congress, the US Senate and the White House.

Believe it or not, there used to be a time when Harry Reid was a nondescript junior senator from Searchlight, Nevada who had very little impact on much of anything in the US Senate. As were almost all of the remaining US Senators who are still serving in the Senate today who were elected prior to 1988. (Leahy, Hatch, Cochran, Grassley, McConnell, Shelby, Mikulski, McCain)

Senators and Congressional Representatives back then actually cared about things such as the budget, the budget deficits and the national debt. They were not always successful in addressing them but to solve them, you have to at least first 'care' about them, yes?

You might be seeing more about the 'budget reconciliation' process emanating out of Washington in the coming months so we thought you might want to know what it is before the press distorts its relevance and importance as they always seem to do with weighty important issues that affect all of us.

'Budget Reconciliation' came out of the 1974 Budget and Impoundment Control Act passed under President Nixon as a way to bring some semblance of sanity to the even-then chaotic congressional and presidential budget process.

Imagine what it was like before then. 435 Members of Congress plus 100 prima-donna 'POTUSes-in-Waiting' US Senators and a President all haggling over the spending priorities for the coming fiscal year of the US federal government....without a common budget process or order to follow?

It would have been like everyone in a large family in the kitchen at the same time throwing all sorts of expensive stuff into the communal stew, with everyone wanting 'someone else' to pay for it, of course.

After this bill was passed, the hope was that Congress and the US Senate would act like adults and set forth spending priorities each year for the nation and suggest the 'ways and means' to pay for it. (which is why the oldest committee in the US House is called the 'Ways and Means Committee' by the way)

The bill followed the Constitution to a T in the sense that it called for a concurrent budget resolution to originate in the US House and then be passed by the US Senate...and that is it. No signature by the President to pass it into law. No possible veto.

It did call upon the executive branch to present a budget each year, mainly because it was the funnel where all federal agencies could make their budget requests known to the elected leaders in the White House and on Capitol Hill and then the President would submit it to Congress in total.

Where, more times than not, it would be declared 'DOA' or 'Dead on Arrival' by whichever opposition party was controlling either the House or the Senate or both at the time.

So far, so good. At least Congress would have a general budget target to shoot at and, in reality, agree with 95% of the time which meant they could spend the rest of the year fighting over that last 5%.

Once Congress passed the budget resolution, instructions were to be sent to Authorization and Appropriations Chairmen that outlined the overall amount of money their committees would have to spend in the upcoming fiscal year on federal programs that came under their jurisdiction and oversight. (The key instructions were the amounts sent to Appropriations Chairs since that is where the real money is spent and allocated each year. Authorization Committees just oversee and monitor programs for all intents and purposes)

That is where the fun begins. Or at least used to before Majority Leader Harry Reid essentially shut down the entire annual budget process for the previous 6 years. No budget resolution; no budget reconciliation process; no budget control in essence.

With the Supreme Court considering the healthcare subsides this summer and the fact that now with Republican control of the Senate and House again where they have already passed a budget resolution, you need to understand how budget reconciliation might play out this summer and fall.

Here's a very helpful and informative article by our friend James Capretta, 'Remember Reconciliation?'  which points out the simple truth that under budget reconciliation rules, as long as it involves the raising of revenues or changes in spending, both of which affect the raising or lowering of deficit projections, a simple majority of 51 is necessary to pass the bill as opposed to the 60 needed to shut off debate in the Senate via cloture.

Read it so you will at least understand the basic outlines of how budget reconciliation used to work in the days of OBRA I, 1980 and then II,III (Omnibus Reconciliation Act) and on up to about OBRA X; COBRA 1985 (Consolidated Omnibus Reconciliation Act) and later, TEFRA (Tax Equity and Fiscal Responsibility Act of 1982 which, according to many people wound up being neither)

The great thing about OBRAs is that they actually allow our elected Congresspeople and Senators to act like the statesmen they all say they want to go to Washington to be and we all want them to be for the good of the nation. It might be complicated but under OBRA rules, the very programs that are causing our deficit nightmares, entitlement programs, especially Medicare, Medicaid and to some extent, Social Security, can be dealt with in huge bills under the cover of night when everyone is exhausted.

It is the only way any elected official in Washington will ever be able to tackle these monstrous spending programs and get a grip on them through reforms and outright spending reductions in certain programs.

We, for example, proposed $177 billion in Medicare/Medicaid spending reductions from the proposed spending baseline in the FY 1993 Budget Alternative on the House Republican Budget Committee out of a total of $500 billion in 5-year savings.

When the 1997 Balanced Budget Act finally passed, $135 billion of those savings remained in the final form that passed Congress and was ultimately signed by President Bill Clinton.

Guess what? There is not one person you can talk to this week who could tell you what reductions were represented by $1 of that $135 billion in flattened spending in either Medicare or Medicaid over the 5 years from 1998-2002. In the grand scope of things, those spending reductions/reforms just did not amount to any onerous or dangerous cuts to essential entitlement programs as many on the left would have everyone believe.

Budget Reconciliation is a budget tool you should be looking forward to and supporting this year. Tell your elected representatives and senators they should learn to use it too.

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Monday, May 11, 2015

What Have We Learned During the Obama Years About The US Economy?

'You see, Sherman, the economic policies of former
President Jimmy Carter were an unmitigated disaster.
You Millennials do not want to repeat them.'
We talked recently with the bright young man who is going to work for the Federal Reserve this summer as a followup to our last post about the uncharted waters we are now navigating in the post-2008 Crash/2009 Great Recession years under President Obama.

The main thing we were glad about was that we did not interpret anything he said to us in an egregiously wrong manner. He said he has been reading economics books since the 7th grade because he 'loves this stuff' and apparently the folks at the Fed felt like he was good enough to come help them this summer.

We'll leave aside the question of what kind of 13-year old loves reading dry, dusty tomes about the 'dismal science' and just leave it at that. We are glad there are people such as him and Ben Bernanke who do 'love this stuff' so they can figure out how to get out of messes such as the one we face today.

During the course of the conversation, it became apparent that the Fed has been scratching their heads at a lot of things, not just the expanded balance sheet.

Apparently, the past 6 years has stood a lot of economic assumptions economists and policy-makers have held dear and sacrosanct over decades straight up on their heads. Meaning the past 6 years have pretty much disproved almost all that was taken for granted before 2008.

Such as:

  1. Low interest rates will lead to much higher economic activity in both the personal and commercial sector. (Not. Interest rates are effectively near or at zero and we have not had the economic boom most economists otherwise would have expected)
  2. Low inflation rates will lead to much high economic activity in both the personal and commercial sector. (Not. Inflation rates are effectively at or near zero real rates of inflation and we have not had the economic boom most economists otherwise would have expected)
  3. High budget deficits will 'crowd-out' other borrowing and lead to higher interest rates across-the-board (Apparently not true as well. Maybe there is not enough borrowing going on in the private sector for interest rates to be pushed up by the government competing for funds nowadays, who knows?)
Every one of these shibboleths were held as the gospel truth by conservatives in the 1980's through 2008. High interest rates and inflation rates during the Carter years through Reagan's inaugural year in 1981 were held responsible for the dismal job market and economic recession that, at the time, was the worst since the Great Depression.

'Fiscal insanity' in the form of 'enormous budget deficits" ($79 billion in 1981) and a 'huge' national debt ($789 billion held by the public in 1981) was leading the United States into 'financial ruin'. Which led to the landslide election of Ronald Reagan over President Jimmy Carter with the highest number of electoral votes ever by a non-incumbent presidential candidate (489-49)

If there was a time machine, and we could go back and tell President Reagan and any other candidate who ran for office in 1980 that our current budget deficits would 'only' be $486 billion and our national debt would be almost $14 trillion held by the public (over $18 trillion when intra-government debt is considered), their heads might literally explode.

There is something else going on during the Obama years and it could be as simple as the following things:
  1. The labor participation rate has plummeted to its lowest level since the Carter years, 1980, meaning that fewer adults of working age who can work are choosing to work. Many are Boomers who entered the workforce in the 70's who are now retiring in massive numbers between 2010-2022. However, many are older workers who were laid off during the Great Recession and have not been able to find meaningful work since then so they take early retirement or go on disability in amazingly high numbers relative to past experience.
  2. Many businesses are being very cautious about how many people they do hire in the wake of Obamacare and the myriad of new regulations that have spewed forth on the America workplace since President Obama got elected. A recent report suggests that the Dodd-Frank banking legislation alone will cost the US economy up to $1 trillion in lost economic output in the next decade.
Both of these could help explain the sluggish job market where even a number announced last week for new jobs created in the month of April, 223,000, was considered sub-par for what is needed to get everyone who wants to work full-time back to work.

The stunning thing about the lack of robust job growth during the Obama years versus the Reagan years is the simple fact that the civilian work force is about 50% higher today than it was in 1980. It stands to reason that with over 50 million more people in the age groups who to want to work, the job creation under President Obama in a recovery would be at least the 300,000 jobs per month that were created during the recovery period under President Reagan in his first term from 1981-1985. (See Bureau of Labor Statistics)

Yet, it has not been even close to those numbers during the Reagan years. How can a population with 50% more people in it who want to work in 2015 not create more jobs per month than were created in 1982, 1983 and 1984 at the very minimum?

The next presidential election is going to be important (they all are) but especially important for the young college graduates who entered the dismal job market in 2009-2012, millions of whom are still trying to find that meaningful job for them on a full-time basis that will make full use of their interests and talents.

Many Millennials have already lost up to 6 years of full pay/salaries in their careers, 6 years where they could be putting away savings in investment vehicles that will compound over time in a far more impactful manner than any amount of money they can sock away in their 50's, for example.

So does that make who becomes the next President very important to your future, Millennials? Ask anyone you know who started working in the Reagan years if they wished that there could have been 'four more years' of President Jimmy Carter and his failed policies.

They'll tell you right away.

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Monday, May 4, 2015

The Federal Reserve: In Unchartered Territory

'Let me see if I fully understand QE3
and the Federal Reserve expanded
balance sheet..'-Sir Isaac Newton
We had the occasion recently to catch up with a recent college graduate friend of ours (we have trained hundreds now in The Institute for the Public Trust) who is now in the last year of his Ph.D program in statistical economics, whatever that is.

He is a gifted advanced mathematics person with a great sense of humor and interpersonal skills, which is rare for most statisticians and economists we have met over the years, truth be told.

Economics is the 'dismal science', you know, as coined by Thomas Carlyle in 1849. Many economists we heard in testimony on Capitol Hill sounded more like mortuary owners to be honest about it. They have predicted 10 of the last 3 recessions goes the old saying so they come by their characterizations naturally.

We asked him what he was doing and he said he was going to work for the Federal Reserve this summer. Not bad for a bright young recent college grad to be working at one of the most important and powerful quasi-government agencies.

He is interested in markets and since the Fed is where all the transactions are made for the issuance of new America debt, they have asked him to come in and do some research on how these markets are behaving now. Which stands to good reason since, as we have written about many times now, there always comes a time in any nation's economy where too much debt issued starts to cause a major problem for the host country and the time to head those problems off is way ahead of that day of reckoning, not after the collapse of the currency has started to happen.

So far, so good. We always want to see and encourage bright young people to enter public service on the behalf of the rest of us, simply because that is what our Founders did by example as a model they wished for the rest of us to follow.

So we asked him if any of his internship would cover any of the 'expansion of the Fed balance sheet' we have heard so much about and in a brief flurry of comments, this is what he said:

'The people I have interviewed with say that we are in uncharted territory in this regard and we have never done anything like this before in American history. They say there is really a great degree of uncertainty about what the right plan of action is to reduce this expanded balance sheet.'

'So they are asking you to come in and help them, is that what I am hearing?' I had to inquire.

'Well, yes. Sorta. Yeah, mostly. They are hoping for a fresh perspective on things' he said.

'You know, I know you are a smart young feller and all that. But if the US Federal Reserve is bringing in fresh young Ph.D doctoral candidates, especially ones I know and like and whom I know spent a whole lotta time drinking beers (at Players, Players Retreat, He's Not Here, Mitch's Tavern, take your pick) during their undergrad days, that doesn't give me a whole lotta confidence that this is going to end well!' I told him honestly.

That is like that old saw you used to hear when people would say the scariest moment in your life will be if you are wheeled into an emergency room and the doctor takes off his mask before performing surgery on you and he says: 'There ya go now. Don't worry about anything. It is me, Sharky. Your fraternity brother from college. Just leave everything to me' as you drift off into an anesthetic state remembering all the crazy things he did at the fraternity house during his four years there.

Here's something not many mere mortals on earth have ever read, much less ever known about or heard talked about: The Balance Sheet of the US Federal ReserveGo ahead; read it and see if you can make any sense of it on the first reading.

We are not going to even fake trying to understand all the intricacies and cash flows of the Fed in this short of amount of time. We have spent 5 years and close to 600 posts so far trying to boil down the intricacies and confusion of the US federal budget to an essential gruel that can be ingested by most people and understood over time and the Fed is just a horse of a very different color we believe.

Take a look at this chart though if you want to see how alarming the 'expanded balance sheet of the Fed has become in a very short amount of time:

From the onset of the Great Recession in 2009 to today, the Fed Balance Sheet expanded from a historical 'normal' rate of about 6% of GDP to almost 20% of GDP in a very short amount of time. Current estimates of the expanded balance sheet are about $4 trillion.

What does this mean for you, the average Joe Citizen of America?

Not much. Unless you consider the fact that finding the exactly right solution is akin to Tom Brady throwing a football the length of the field and threading the needle through the out-stretched arms of 3 tall cornerback defenders into the safe arms of one of those short Patriot receivers in the corner of the endzone in the last second to win the Super Bowl.

It 'can' be done. But the chances of it being done perfectly is very, very slim indeed.

We'll try to find some more explanation on reducing the Fed's balance sheet and try to parse this out some more since it will affect us all one way or the other. Countries that have tried to 'expand their balance sheet' and 'expand their money supply' to avoid some current economic crisis have inevitably awakened the inflation demons in the past so don't get too comfortable with the next-to-zero inflation and interest rate environment we have been stuck in the last 6 years.

Some European nations have gone so far as to issue 'negative interest rate' bond instruments meaning you give them $1000 of your money to hold in safe-keeping...and you get back $975 of it after some specified length of time. Think about that for a moment if you think we are in 'normal' economic times.

So keep in mind the comments of our young friend as you go about your day. We hope he is a savant on the order of magnitude of an Isaac Newton who, in the very brief span of 18 months in his young life on a relative's farm from 1665-1667 where he was sent to avoid the scourge of the Black Plague in London at the time, discovered the basic principles of calculus, optics and gravity. In less than 18 months.

Our young friend is going to need that same supernova explosion of new ideas to grapple with the Fed's expanded balance sheet and how to get us through it without igniting the fires of inflation that have accompanied every other expansion of money in history.

'Godspeed, John Glenn' is all we can say.

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Tuesday, April 28, 2015

Political Mitosis in America

No, you are not looking at some bacteria or paramecia under a microscope.

You are looking at a graphic representation of the fracturing of the American political spectrum into irreconcilable factions, 'political mitosis', if you will, of the very factions and party fortresses George Washington warned us about in his final address to the nation in 1796 after 2 terms as our only unanimously-elected President of the United States of America*

The Rise of Partisanship and Super-Cooperators in the US Congress is a study you might want to read especially if you are of the research bent looking for facts and figures done by academics who do these sorts of things.

Why bring this up anyway?

We were speaking with some folk of different political persuasions over the past week and wondering if, during the Obama Administration for the past 6 years, we are any closer to each other in terms of race relations, budget balance and sanity, national debt reduction, feeling collectively safer under our foreign policy; solving any environmental or energy issues or making progress on creating millions of new jobs for the people who want and need those new jobs...or not.

Some people tried to say that the President had done a good job...under the circumstances, meaning mostly that he was dealt a bad hand when he took office and the economy was in the tank. You can decide for yourself whether or not President Obama has been a 'uniter, not a divider' as President Bush said he wanted to be before him.

As much as we Americans like to dream that our President, whoever it may be at the time, is supposed to be our shining light example of virtue, honor and The American Way, the truth of the matter is that he is not the Pope of the Catholic Church, nor should we ever want our President to be so.

Being President of the United States is perhaps the toughest job on Planet Earth. Maybe James Madison knew that when he comtemplated the possibility of a Triumvirate US Presidency where 3 people would share power as they did in Roman days, or, as another idea that (thankfully) failed, setting up the Supreme Court to be some sort of counsel to the single President that could or approve of his policies he set forth.

Despite our differences, however, on the efficacy and job performance of this President, President Obama over the past 6 years, almost everyone pointed to the hyper-partisanship that is out there in almost every political race nowadays from the US Senate to Congress to the state legislatures to the municipal seats and down to even the local school boards.

Let's face it: We are perhaps more polarized than at any time since the Civil War.

For good reason. Which we will return to in a moment.

Take a look at the scattergrams noted above in this academic report. Going back to 1947, there sure was a lot of 'blue', denoting Democrat control of the US Congress and US Senate in Washington.

That held true until the cataclysmic elections of 1994 where the Republicans under Newt Gingrich completed a process he started in 1978 to wrest back control from the Democrats for the first time since the days of Speaker Joe Martin from 1952 to 1954.

You can see from the scattergrams that the Congress cleaved into 2 distinct camps, one red and one blue with each becoming more red and more blue with each successive election cycle since 1994.

Don't let the 'blueness' of the scattergrams confuse you. One reason why there seemed to be more cooperation in the years leading up to 1994 was that there were close to a hundred Southern Democrats in the US House who were counted as 'blue' for representational purposes but who, in effect, were center-right voters on issues, not center-left to way-left-of-center as the majority of House Democrats are today.

One thing that has happened since 1994 that has contributed mightily to the collapse of consensus has been the almost complete eradication of two species of political elected animal: White Male Southern Democrats and Liberal to Moderate Republicans Anywhere.

In 1981 when Ronald Reagan took office, there were 91 white male Southern Democrats in the US House. They were mostly fiscal conservatives who held the line on spending; didn't like to raise taxes but would if a good deal came their way on agriculture subsidies for tobacco, cotton or peanuts, for example or defense; and were more inclined to not take too visible or active of a position on the social issues brewing of the day such as abortion.

This year in Congress, there may be 2 white male Southern Democrats left in office. The rest of them have either been defeated by more liberal Democrats in the primaries; they have converted to the Republican Party or they have retired or passed on to the Great Beyond.

On the other hand, liberal-to-moderate Republicans such as Senator Bob Packwood of Oregon have been defeated in primaries by more conservative Republicans or they have converted to become a Democrat as Senator Jim Jeffords of Vermont somewhat infamously did in 2002 or they too have retired or passed away.

Many voters in either the Southern Democrat or liberal-to-moderate Republican camp, those who tend to be fiscally conservative and more libertarian in social policy, have resigned their membership in either party and have willfully elected to register as Unaffiliated or vote as an Independent in the states where they can register as such, North Carolina being a prime example. Close to 30% of all officially registered voters in North Carolina are Unaffiliated and, as many say, 'proudly NOT a Democrat OR a Republican!'

What is going to fix this hyper-partisanship?

For one thing, better leaders who are equipped to lead by reason, facts and compromise would help. Our Founding Fathers were some of the most partisan people we have ever had in elective office, bar none. Thomas Jefferson hated the concentrated federalist ideals of Alexander Hamilton for example, which Hamilton reciprocated back towards Jefferson for his, as Hamilton would have said, unrealistic notions of a peaceful agrarian society.

Then-sitting Vice-President Aaron Burr challenged Alexander Hamilton to a duel in Weehauken, New Jersey in 1804 and mortally wounded him over personal and political differences and matters of gentlemanly behavior back then. That would be like then-sitting Vice President Dick Cheney challenging then-Senate Majority Leader Harry Reid to a duel with shotguns at 20 paces in 2007, which, come to think about it, does not seem as far-fetched as it should.

The Founders and many of our previous elected great leaders all knew how to debate and compromise, even when they completely disagreed with one another on basic policy issues. That is what current activists and politicians on both ends have failed to learn from their example in history.

So what is the main reason for this inflexibility and when will it end?

We have always encouraged people interested in this subject to read a seminal work on generational characteristics and attributes, 'Generations' by Neil Howe and William Strauss.

Bill Strauss was an original member of the comedy troupe 'Capitol Steps' you may have heard of in the past if you have ever been around Washington DC for any length of time.

Neil Howe worked on the Pete Peterson effort to reform entitlements and used to come by the congressional office of former Congressman Alex McMillan with whom I worked on a regular basis as we tackled such issues on the House Budget Committee and President Bill Clinton's Entitlement and Tax Reform Commission of 1994.

The sub-title of the book is haunting: 'The History of America's Future 1584-2069'. It is 'haunting' in the sense that almost everything Neil and Bill wrote about the impasses we would face politically in 1991 has come true over the past 24 years now, and counting.

It is 'doubly haunting' because Neil wrote a note on the first page to our 3 sons, the last who was about to be born at the time, which said this:
'Hope you Millennials will save us from ourselves'

Hope they do too.

The bottom-line of Strauss and Howe's book?

Their premise is that American generations have gone through 4 very distinct character traits starting with the Puritan idealism of 1584 when they landed in the New World.

The cycles have been repeated 5 times now and they always go in the same order: 1) Idealist; 2) Reactive (to the idealism of the preceding generation); 3) Civic and 4) Adaptive.

The Idealist Generations are the ones who cause so much trouble in American history, mainly because they are so idealistic about everything it seems. The Transcendental Movement of the early 19th century, for example, led to the abolitionist movement to end slavery, for good reasons. However, there were people on the other side who were equally as passionate about their opposition to the end of slavery and, of course, we all know that led to the Great Civil War in which more Americans died on either side, 600,000 to 1 million, Yankee or Rebel, than in all the other wars combined in American history. By far.

Neil and Bill said that we were in the same Idealist cycle whereby the Flower Power Children of the '60s who were born in the largest baby cohort ever in American history, the Baby Boomers post-World War II, would grow up one day and run for political office and start and run businesses and law firms and hospitals.

And they would maintain that same sense of 'idealism' they nurtured in their youth such that they 'could not see where anyone could possibly disagree with them!' and 'there was certainly no room for compromise!'

Sound familiar?

We don't need to look very far to see where the idealist character traits of older Baby Boomers has taken the United States of America, do we? $18 trillion+ national debt and still growing by leaps and bounds; a stagnant economy where minimal job growth each month is hailed as some sort of 'success' (sic); no consensus on energy or environmental policy; a deterioration of race relations as exemplified by the Baltimore riots, impassioned debates over social issues such as abortion and gay marriage, the list could go on and on and on.

Do we have to wait until every aging Baby Boomer dies before we can see any progress again on compromising for the common good? Or will we hold steadfast on our purity and stakes and principles like both sides did before the guns were fired on Fort Sumter 154 years ago?

Read Generations when you get a chance. It will open your eyes to the deep-seated problems we face in a way you may not have considered before.

*(more complete quote) 'I have already intimated to you the danger of parties in the State, with particular reference to the founding of them on geographical discriminations. Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the spirit of party generally.

This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind. It exists under different shapes in all governments, more or less stifled, controlled, or repressed; but, in those of the popular form, it is seen in its greatest rankness, and is truly their worst enemy.

The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of public liberty.

Without looking forward to an extremity of this kind (which nevertheless ought not to be entirely out of sight), the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it.

It serves always to distract the public councils and enfeeble the public administration. It agitates the community with ill-founded jealousies and false alarms, kindles the animosity of one part against another, foments occasionally riot and insurrection. It opens the door to foreign influence and corruption, which finds a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.

There is an opinion that parties in free countries are useful checks upon the administration of the government and serve to keep alive the spirit of liberty. This within certain limits is probably true; and in governments of a monarchical cast, patriotism may look with indulgence, if not with favor, upon the spirit of party. But in those of the popular character, in governments purely elective, it is a spirit not to be encouraged. From their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose. And there being constant danger of excess, the effort ought to be by force of public opinion, to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume'

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Sunday, April 19, 2015

'You Are Entitled to Your Own Opinion. You Are Not Entitled to Your Own Set of Facts'

Former Democrat US Senator Daniel Patrick Moynihan of New York used to punctuate his speech with the following quote as he debated the finer points of welfare reform, entitlement reform and budget sanity:

'You Are Entitled to Your Own Opinion. You Are Not Entitled to Your Own Set of Facts'

If the Democrat Party ever returned to the point of view that old-line liberals such as Senator Moynihan and most Southern Democrats used to hold that budgets must be balanced, entitlements must be radically reformed, waste in government must be eliminated and taxes should be kept as low as possible, they may obviate the need for any political party to challenge them.

That doesn't look like it will ever happen in the aftermath of the Obama years. Does it?

There has been a lot of talk lately about 'income disparity'; the minimum wage and the 'low' (sic) unemployment rate. A lot of it is fueled by polling, much of the time with the general public, many of whom are not registered to vote and therefore, not really critical to future elections (until and unless they register to vote though in the meantime).

A lot of it is fueled by political operatives and spinmeisters seeking to gain political advantage one way or the other. Most of it is predicated on their knowledge that the vast majority of the American public is either not interested in digging to the bottom of these complicated issues to know the truth; they implicitly trust their elective representatives to 'be honest' (sic) and do the background work for them; or they plain just do not care one way or the other at all.

Let's take a closer look at these 3 issues named above and see if we can help you, at least, become a source of solid wisdom by getting you in touch with the raw data you need to help others see things in a new light:

1) 'Income Disparity'

There has been 'income disparity' since the dawn of mankind.

The biggest and strongest used to get the majority of the food necessary to survive in prehistoric times. Kings and queens used to rule their subjects through feudal systems that allowed them to live in vast luxury while most of their subjects lived in squalid conditions. Even up until the 20th century, the disparity between the truly very upper-class of income earners and net worth owners was enormous.

One of the most successful democratizing forces in human history, free market capitalism, has brought hundreds of millions of people in America and around the globe up into relatively high standards of living that anyone in the 18th or 19th century would have found simply unbelievable.

The mere fact that a vast majority of American households have air-conditioning, refrigerators, cell phones and very expensive Nike shoes is proof-positive that something very special has happened in America and other nations where democracy and capitalism have been allowed to flourish. The number and percentages of Americans who have gone up the livability index over the decades is simply astonishing when compared to other less developed nations or even our own relatively short American history.

Know how many people in America make over $1 million per year in net income according to the IRS? We know all the NFL, NBA and MLB professional athletes are comfortably in this high-income category as are all the entertainers, actors, rap stars and reality stars such as Kim Kardashian that everyone knows about.

No one seems to ever be upset that LeBron James or Lady Gaga make millions of dollars per year, do they? Tell the same people that some corporate executive is making $5 million running some business he/she started, nurtured, suffered through and built and they go crazy like the big bad businessman has stolen something from everyone else in the society simply by providing a product or service they want to buy.

The answer is about 250,000 income-earners earn over $1 million in income in any given year.* Out of an overall population of about 140 million tax returns, which includes joint returns between spouses.

That is just 0.1% of the entire population of America.

The number of people making over $10 million per year who filed returns? Based on 2009 IRS data, 8,274 people. 0.006% of all people living in America.

When we are talking about 'income disparity' in America, we are talking about a very tiny fraction of very successful people versus the vast majority of people who make less than $200,000 per year. It is hardly an epidemic of biblical proportions that a lot of people are making out like bandits while the rest of America suffers from them 'stealing' money from the rest of us as the news media would want to have you believe so the rest of their narratives make some sort of sense.

97% of Americans make under $200,000/year which doesn't sound as bad as the media tries to make the issue of income disparity look, does it?

2) Minimum Wage

Didja see the story about the guy in San Francisco who has decided to pay all of his workers $70,000/year? Even people who presumably would have worked otherwise for minimum wage for a number of years before getting raises based on merit, length of employment with the company and ability?

We hope he succeeds. It is his money and his company. He can do whatever he wants to with his money and company is our honest opinion.

It will be interesting to see how the more talented people with more work responsibilities will respond to this flattening out of the pay scales. There is something in everyone's wired human nature that tends to compare their work effort and output with others in any setting be it work, government or professional athletics.

Think Michael Jordan would have ever acquiesced to being on the same Chicago Bulls team where Scottie Pippen and Steve Kerr and the benchwarmers all made the same amount of salary as he did at a far lower level than he actually earned as he led them to 6 NBA Titles? Doubtful. Very doubtful.

For some reason, perhaps again because of the bias of the media, people don't begrudge the fact that LeBron James and Michael Jordan can make $1 billion playing a game with short pants on but some businessman in a 3-piece suit who runs a company with 100,000 employees to watch over and take care of by making the right business decisions gets creamed if it is reported that he makes $10 million in salary one year with $25 million in exercised stock options.

It is just out of whack when it comes to objective reporting.

We have talked about the minimum wage debate before and how skewed it is in the media versus reality.

The truth is that very few people start their working careers at the minimum wage...and stay there for the entirety of their working lives. The Bureau of Labor Statistics issued a report in 2001 that found the following:
They found that 63 percent of the minimum-wage workers in their sample were employed at higher-than-minimum wage jobs 1 year later. Also, Bradley R. Schiller found that “only 15 percent of the 1980 entrants still had any (minimum wage) experience after three years, “which suggests that long-term minimum wage employment is rare.

The really odd thing about the argument from proponents of a higher minimum wage to say, $15/hour at McDonald's, is that it is accelerating the replacement of minimum wage labor with electronic kiosks where NO human is needed to take your order for a Big Mac and fries. The choice for many companies is to go with no minimum wage at $15/hour and find other ways to replace such workers as McDonald's is doing with technology.

3) 'Obama has caused the lowest unemployment rate since Ronald Reagan!' 

We have written about this many, many times before but it bears repeating once again:

The important thing in any jobs report is not the unemployment rate (because it can be manipulated) but the number of Americans actually working in a good job that is not part-time or temporary.

The latest jobs report was dismal enough, showing a slowdown of the creation of new jobs in the month of March at 126,000 for the month which was well below projections. Job creation numbers for the previous 2 months of 2015 were also revised downwards from the announced 'official' numbers.

We don't know for sure but we have the feeling that a majority of 'official' jobs reports during the entirety of the Obama Administration, now in its 6th year and still counting, have been revised downwards in terms of the number of jobs created each month. We just haven't checked them all yet.

Want to know how you can really tell if an economy is moving upwards and strengthening under any President? Count the number of Americans who were at work in full-time (FTE) jobs before he was elected and then count up how many are currently at work in FTEs today and compare the difference.

That might not be the most 'fair' way to compare the economic policies of any President because the incoming Administration is saddled for at least the first year or 2 with the policies, good or bad, from the previous Administration. But that is the way Reagan, Bush 41, Clinton and Bush 43 have been evaluated so that is the way Obama will be looked at by future historians in the rear view mirror.

145,362,000 people were working  full-time in October 2008 before the Crash occurred and the Great Recession ensued.

148,331,000 Americans were working full-time as of March 2015. 2 million of them were working part-time because that is all the work they could find.

That is a net increase of about 3 million jobs over 5 years. 600,000 net new jobs per year. 50,000 per month.

Granted, 5.5 million jobs were blown apart by the Crash of 2008 and ensuing Recession through 2012. President Obama always complains he was dealt a bad hand when he took over from Bush 43 and that 'it would take some time to recover' those jobs. If you add in these lost jobs as part of the recovery under Obama, it only takes his job creation numbers up to 133,333 jobs per month since 2009, still far below the 300k jobs created each month under Reagan's policies.

Know how many jobs were lost in the Carter-induced recession of 1980-1982?  3 million jobs, all from a much lower jobs basis to begin with. President Reagan's free market economic policies recovered all of them quickly in 1983-84 and then continued that job creation for the majority of his 2 terms in office.

It is fair to say that a good part of the energy of the American economy (and taxpayer money in the form of bailouts and support and expanded balance sheets of the Fed) was spent on not losing any more jobs from 2008-2012 and that it is a good thing that we have now expanded jobs past what it was in 2008 prior to the Crash.

But is this the best we can do as a nation? There are now 9.6 million Americans who are unemployed and still looking for work, that is.  Millions of Americans have plain dropped out of the workforce altogether over the past 6 years. Last month, our labor participation rate of working age adults who are in the workforce or actively looking for work dropped to 62.8%, the lowest participation rate since the middle of the desultory Carter years in 1978.

If it doesn't 'feel' like we have a booming economy, it is because it is not a booming economy.

Booming economies are accompanied by expanded job opportunities up-and-down the wage scale; hard assets increase in value and inflation rates start to inch up as more demand competes for scarce supplies of money, intellectual capital and materiel for products and services.

The way to 1) lift people off the unemployment line; 2) shift discouraged workers from being discouraged to look for work to actively looking for work; and 3) push up wage scales from the minimum wage on up the wage scale and reduce income disparity is, you guessed it, pass economic policies that will increase economic activity, not frustrate it.

Whatever you may think of President Obama as a person and as a politician, even he and his economic team readily admits that the American economy is 'not performing as well as everyone would like it to perform'.

Well, why not then? If what the Obama White House has proposed has not worked, why not try something different, yes?

We think the Obama White House should take a lesson from the pages of history where even FDR's Treasury Secretary testified before Congress in 1939 and said that everything they have tried to jump-start the economy through government intervention and programs had failed...and it was time to do something different.

It probably will not come from the Obama Administration, ya think?

The next President has a chance to jump-start this economy starting Day One and get millions of Americans back to work and on their way to providing better lives for their families and themselves.

January 20, 2017 can not come fast enough for them.

*It was 235,000 returns from 2009 data. We are estimating as the economy has recovered somewhat since then up to around 250,000.

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Thursday, April 16, 2015

Corker/Cardin Iranian Nuclear Agreement Review Act of 2015

Senator Bob Corker (R-TN) and Senator Ben Cardin (D-MD)
This is what happens when adults enter the room.

US Senators Bob Corker (R-TN) and Ben Cardin (D-MD) recently bucked the downward spiral of Capitol Hill into a dysfunctional mess by working across party lines to come up with the Corker/Cardin Iran Nuclear Agreement Review Act of 2015

The CCINARA for short. They could have come up with a better acronym but at least it is not as bad as some others we have had over time such as COBRA, OBRA and TEFRA.

We have made no secret of our deep concern over this effort by President Obama and Secretary of State John Kerry to: A) lift sanctions on Iran, one of the most ardent supporters of state-sponsored terrorism in the world and B) give Iran nuclear capability without any real movement towards insuring the safety of Israel in the Middle East or not renouncing their support of state-sponsored terrorism around the globe.

That seems to be a clear case of 'Heads, Iran wins; tails, America loses'. And so does the rest of the peace-loving and peace-keeping nations around the world.

We have asked at least a half a dozen former military leaders such as admirals and generals and former State Department diplomats and staff what they think is going on in Obama and Kerry's head to get this deal done under the cloak of 'executive privilege' and without any US Senate oversight advice and consent.

Not one of them can come up with any rational, coherent or cogent reason why any leader of the United States of America would push headlong into such an agreement unless he really believes he has some sort of magical powers to turn bad people into saints. It goes against common logic and historical American foreign policy postures.

But the real head-scratcher in all of this has been President Obama's fervent desire to keep this agreement out of the hands of anyone on Capitol Hill such as the US Senate, a place that he conveniently used on his way to being a 'one-and-doner' and then on to the White House.

President Obama somehow managed to be the #1 draft pick in the entire nation and walk right into the White House in 2008 after a very brief and not-too-distinguished career in the Illinois state legislature and a clipped term in the US Senate. He has been trying desperately ever since to 'fundamentally change America' (his words, not ours) at the same time he has been learning on-the-job what it takes to follow in the august footsteps of George Washington, Abraham Lincoln, FDR and Ronald Reagan.

We can't see where any of those other great American leaders would take at face value the actions of a terrorist-supporting nation such as Iran where they chant 'Death to America!' and 'Death to Israel!' and say: 'Hey! Let's sign a deal with them lifting economic sanctions that will re-fuel their funds to support more terrorism and hey, by the way! let's give them the capability to build a nuclear weapon to use as well!'

It defies all logic and reason.

Stepping into this Alice in Wonderland scenario came US Senators Bob Corker, Republican of Tennessee and Ben Cardin, Democrat of Maryland with their recent deal noted above.

We thought this was a good chance to point out a couple of things about our democratic form of government that actually gives us all a shimmering glimmer of hope that adults will stand up and figure out that our nation needs such grown-up leadership before it gets too much later.

First of all, you will notice that Senator Corker is indeed a Republican and Senator Cardin is indeed a Democrat. That in and of itself is something of a miracle after the last 18 years of virtually no bipartisanship behavior on the part of the US Senate or US Congress save the extended committee of the whole Congress debates on going to war in Afghanistan post-9/11.

They somehow figured out how to work together and forge a consensus not only of a majority of US Senators, 51, to support the CCINARA but a super-majority, 67, who could override a previously-promised Presidential veto of any effort to force President Obama to submit this Iranian deal to Congress for their review and approval.

Think about that for a moment. Senators Corker and Cardin somehow figured out how to work together and compromise enough to get 54 Republicans, 1 Independent (Angus King of Maine) and 12 Democrats to support their bill.

We haven't seen that sort of cooperation since 1997 when Bill Clinton signed the Balanced Budget Act with those dastardly Republicans in the House, Newt, Dick and Tom.

Second, we think this is a good sign that the adults in the room, or at least the US Senate for now, understand they are never going to get 100% of what they want in any session of Congress until and unless, like the Democrats did in 2009-2010, have 60 US Senators. Senators Corker and Cardin apparently worked their tails off to corral the 67 votes necessary to force Obama to kneel before the US Senate and agree not to veto it and they did it all by compromise and rational, calm adult conversations and trust.

We think it is critically important to remind everyone that the Founders of this Republic never intended for one person or one party to have absolute total authoritarian power...ever. Thomas Jefferson used to say that he was against the concentration of power in a small faction of leaders in Congress, even if he agreed with them!

The simple fact that President Obama assumed it was ok for him to embark on a deal of this magnitude without any input or oversight from Congress should send shudders up the spin of even the most ardent Obama supporter.

Why? Because what is good for the goose is good for the gander.  If Obama had been allowed to get away with this, imagine how you would feel in the future when President George Bush X is in the White House and making plans to invade Freedonia for its strategic mineral reserves without any input whatsoever from the Democrats in Congress.

The Founders, and then later, Speaker and then Senate Majority Leader Henry Clay, believed in 'legislative supremacy' where the people would take precedence over the whims and goals of one person in the White House. Senators Corker and Cardin's deal is one small step for mankind back to asserting that 'legislative supremacy' in the eternal tug-of-war between the legislative branch and the executive branch of our federal government.

Third, we hope this will be a lesson in how our Constitution is supposed to work where people campaign during campaign season (whatever that is nowadays) but then go to work for the nation as a whole once elected. We can not have our government run by polls or essentially by national referendum every time there is something important to do such as balance the budget or reform healthcare. Again.

Fourth, this should be a very good lesson in the dangers of having a president willing to 'go it alone' as if he were a king or a dictator on any large foreign policy matter. Democrats thought dealing 'arms to Iran' as part of the Iran-Contra deal that involved Oliver North was such a shocker that they formed the Iran-Contra Committee to investigate this fully and bring Ronald Reagan down a notch or two in the mid-1980's.

Imagine if they thought Ollie North was trading 'nuclear weapons to Iran' in exchange for running guns and money to the Nicaraguan insurgents against Daniel Ortega! They would have really been hot and bothered back then.

The Constitution is pretty clear about foreign policy in America. Clear as mud that is.

The President is the Commander-in-Chief, there is not doubt about that. But the US Senate has the 'advice and consent' function that most Presidents have used to build consensus around international treaties, both in trade and nuclear disarmament negotiations with our friend abroad and our enemies.

The US House has the power of the purse-strings meaning no President can go to war if Congress doesn't authorize funding to actually pay for the war.

Congress also has the constitutional power to 'declare war' which they haven't done so since World War II which is one other way Presidents have been able to keep some significant degree of flexibility when dealing with such things as the Chinese communist invasion of Korea and the Vietnam 'police action' started by JFK and exploded, literally, under LBJ.

Since the Constitution is as 'clear as mud' on this subject, you will never see the Supreme Court rule one way or the other on which branch of government has more power to prosecute wars for America. They would say 'go fix it yourself first by amending the Constitution if you want to. Knock yourselves out but leave us alone here at the Supreme Court when that train leaves town!'

We are grateful that Senators Corker and Cardin have shown such adult leadership in the US Senate on this critical Iran Nuclear Arms/Energy Agreement.

Maybe there will be more like that to follow. We can only hope and pray.

* detailed commentary with link to actual bill for you who really want to dig deep.

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Friday, April 10, 2015

'Dr. Strangelove Part Deux or 'How I Learned to Stop Worrying And Love The Persian Atomic Bomb!'

'Let's see: Persian Iran Has The Uranium Bomb....'
We feel as if we are watching a really bad sequel to one of the great dark comedy movies of all time, Dr. Strangelove, as we observe the almost unbelievable unfolding of negotiations between President Obama and Secretary of State John Kerry and the Iranian leaders.

We readily admit we are not foreign policy experts..but then again, hardly any of the people commenting on this issue in social media are foreign policy experts either.

We have been close enough to and sitting in meetings though in the past where matters of such weighty foreign policy as glasnost and perestroika and aiding freedom fighters in Nicaragua and Angola were considered and discussed that we think we can comment on this Iranian deal with some degree of insight.

Some people act like if they stayed at a Holiday Inn Express last night, that all of a sudden makes them a Prince Metternich or a Winston Churchill, expert in all foreign policy matters or something.

It doesn't work that way in foreign policy. You need to read volumes of history and actually be in the foreign policy game for decades before you can really have any gravitas in this important issue to all Americans.

Former Secretaries of State Henry Kissinger and George Schultz have written an important piece you should make sure you read which brings to bear their combined 120 years of foreign policy experience on their skeptical view of this 'Iran Deal' that President Obama is saying is so good for America and peace-loving nations around the globe.

Just to boil this down to an elementary level, we thought we would try to summarize what we are dealing with in a way most people may be able to digest and not wait for some breathless commentator on cable talk shows tell you what they think you should think of this deal.

For beginners, take a quick look at the history of Persia which became Iran around the time of World War II. Apparently, the name 'Persia' had too many negative connotations for the Brave New World post-Hitler, Mussolini and Hirohito, and for good reason: in the history of the world, Persian armies and navies have probably been involved in more conflict than almost any other nation. Persia has to be in the top 5 war-like aggressive nations of all time known to man. Here's just a few we could glean from various websites:

Persian Revolt (552–549 BCE)
Conquest of Lydia (547 BCE)
Conquest of Babylonia (540–539 BCE)
Conquest of Egypt (525 BCE)
Invasion of Indus Valley (518 BCE)
Greco-Persian Wars (499–449 BCE)
Battle of Cunaxa (401 BCE)
Artaxerxes' II Cadusian Campaign (385 BCE)
Revolt of the Satraps (372–362 BCE)
Macedon invasion of Iran (355–328 BCE)
Parthian Empire (247 BCE–224 BC)
Seleucid–Parthian Wars (238 BCE–129 BCE)
Armenian–Parthian War (87–85 BCE)
Roman–Parthian Wars (66 BCE–217 CE)
Sassanid Empire (224–651)
Roman-Sassanid Wars (232–440)
Byzantine–Sassanid Wars (502–628)
Ethiopian–Persian Wars (570–578)
First Perso-Turkic War (588–589)
Second Perso-Turkic War (588–589)
Third Perso-Turkic War (627–629)
Muslim conquest of Persia (633–644)
Saffarid Dynasty (861–1003)
Ghaznavid Dynasty (962–1186)
Khwarazmian Dynasty (1077–1231)
Mongol invasion of Khwarezmia (1218–1221)
Timurid Dynasty (1370–1507)
Campaigns of Timur (1380–1402)
Timurid Civil Wars (1405–1501)
Safavid Dynasty (1501–1736)
Persian-Uzbek Wars (1502–1510)
Battle of Chaldiran (1514)
Ottoman–Safavid War of 1523 (1532–1555)
Ottoman–Safavid War of 1578 (1578–1590)
Ottoman–Safavid War of 1603 (1603–1618)
Ottoman–Safavid War of 1623 (1623–1639)
Hotaki-Safavid War (1709–1722)
Russo-Persian War of 1722 (1722–1723)
Hotaki Dynasty (1709–1738)
Ottoman-Hotaki War of 1722 (1722–1727)
Afsharid-Hotaki War (1720s–1738)
Afsharid Dynasty (1736–1796)
Afsharid–Ottoman War War of 1730 (1730–1735)
Nadir Shah's invasion of India (1738–1739)
Afsharid–Ottoman War War of 1743 (1743–1746)
Civil War between Afsharid and Qajar (1747–1796)
Persian Civil War-(1779-1794)
Georgian-Persian War-(1795-1796)
Afghan-Persian War-(1798)
Russo-Persian War-(1804-1813
Afghan-Persian War-(1816)
Turkish-Persian War-(1821-1823)
Russo-Persian War --(1825-1828
Afghan-Persian War-(1836-1838
Afghan/Anglo-Persian War-(1855-1857
Persian Revolution -(1906-1909
Mohammed Ali's Invasion -(1911)
Anglo-Russian Invasion and Occupation of Persia -(1911)
World War One -(1914-1918)
Soviet Invasion of Persia -(1920-1921
Persian Revolution -(1921)
Arab Rebellion in Khuzistan -(1932)
Anglo-Soviet Invasion and Occupation of Persia -(1941-1946
Kurdish Rebellion -(1941-1944)
Azeri Rebellion -(1945)
Kurdish Mahabad Rebellion -(1946)
Anti-Mossadeq Coup -(1953)
Iran-Iraq Border Battles -(1969-1970)
Kurdish Rebellion -(1970-1980)
Iranian Seizure of Gulf Islands -(1970-1980)
Dhofar War-(1973-1975)
Islamic Revolution in Iran -(1979-1980)
U.S.-Iran Hostage Crisis--(1979-1981)
The First Persian Gulf War (also known as the Iran-Iraq War)—(1980-1988)
The Tanker War -(1984-1988)
Iran's Proxy War with Israel -(1980s-Present)
PEJAK Kurdish Rebellion -(1998-Present)
Proxy War with the United States -(Current)
Jundallah Sunni Rebellion -(2003-Present)
2009 Presidential Election Protests and Violence---(2009)

You will note that the United States of America was not even in existence for 84%+ of Persian/Iranian history. It would be very hard to explain the current Iranian antagonism towards western culture and civilization totally on the United States, yes?

Persia/Iran has always been antagonistic towards western civilization and culture! Ask the Athenians!

While President Obama is saying now is the time to 'trust' the Iranians, take a look at this report put out by the ironically named ISIS (Institute of Science and International Security) and see what you think about the trustworthiness of the Iranian leadership over the years. One commentator has said that Iran has a 100% non-compliance rate for any nuclear materiel deal they have signed with anyone over the years.

That is not a good way to build trust with the rest of the peace-loving nations of the world, is it?

Here's a US State Department report put out in 2013 (!!!) by President Obama's very own State Department headed by Secretary of State John Kerry that clearly states that Iran has been at the helm of state-sponsored terrorism for a long, long time and shows no desire to change any time soon.

One excerpt from this report ought to make your grits steam this morning:
Iran remains a state of proliferation concern. Despite multiple UNSCRs requiring Iran to suspend its sensitive nuclear proliferation activities, Iran continued to violate its international obligations regarding its nuclear program. For further information, see the Report to Congress on Iran-related Multilateral Sanctions Regime Efforts (November 2013), and the Report on the Status of Bilateral and Multilateral Efforts Aimed at Curtailing the Pursuit of Iran of Nuclear Weapons Technology (September 2012).
That study was published in 2013. What has happened since then to turn the ayatollahs who control Iran into Eagle Scouts who will abide by the Scout Oath:
'On my honor I will do my best, To do my duty to God and my country, and to obey the Scout Law; To help other people at all times; To keep myself physically strong, mentally awake, and morally straight'
'Honor' in anything is earned, not presumed. It takes time to achieve and then time to be recognized; it doesn't happen overnight or in a press release as President Obama seems to believe now about the Iranian leaders.

We grew up in the era of Nixon going to China and then opening up relations with Russia, far more powerful and dangerous nations than Iran to be sure. One reason why Nixon was believable was his hard-line stance against communism for decades. When you hear 'Nixon going to China', that means someone who has credibility to protect and defend American interests has gone into the lion's den to negotiate with the enemy...and you know he/she has our best interests at heart.

President Obama has failed to build that sort of trust in the American people. From his very first 'Apology for America Tour' around the globe soon after being elected, his foreign policy has been riddled with failure after failure to advance American interests.

We asked several Obama faithful this week to name just one amazing success in Obama's foreign policy, aside from allowing Seal Team VI to take out Osama bin Laden several years ago. So far, we have heard nothing back from them but the sounds of crickets in the background.

Some proponents of this Iran Deal echo the words of Ronald Reagan as he negotiated with Mikael Gorbachev on nuclear arms treaties: 'Trust But Verify'.

We want to believe this is possible but so far, we have not been told anything about how President Obama and Secretary Kerry would make sure this would happen in the future after they are long-gone from the national stage.

The only way this would seem even remotely possible would be for Iran to allow international advisors not only surprise visits and audits but to actually allow foreign personnel to sit in the research labs and in the processing centers on a daily basis to monitor every single transaction that takes place. Without that, we are just wishing and hoping that the character of the Iranian leadership has somehow had a chromosonal transplant from a peaceful, less-warlike DNA donor and now seriously wants to sing 'Kumbaya' and 'Michael Row Your Boat Ashore' around a campfire with the rest of the international community.

As part of the 'Trust but Verify' motif, we would suggest the very basic requirements of being part of the international community of nations before signing any deal with Iran:
  1. Have Iran sign a deal guaranteeing the right of Israel to exist in the homeland.
  2. Have Iranians stop shouting 'Death to America'
  3. Have Iran renounce its sponsorship of terrorism in every form around the globe.
  4. Have Iran participate in multi-lateral peace-keeping efforts in troubled areas with the US and other European and Asian nations
  5. A cooling-off period of 10 years where Iran abides by all of these requirements before we discuss signing any sort of nuclear deal.
What does Iran need nuclear energy for anyway in the first place? Are they afraid of running out of oil or something soon? Has there ever been any country that wanted nuclear energy solely for the purpose of heating homes and providing electricity for their citizens without progressing towards having a nuclear bomb at their disposal?

We will leave you with these thoughts to ponder and not even try to get into the complicated interpretations of the Book of Revelation to John in the New Testament or any of the apocalyptic readings from the Jewish or Muslim traditions.

Suffice it to say that had the authors of such eschatology known that one day, excitable fundamentalist leaders of Persian Iran might have their hands on such a thing as an 'atomic bomb' in that region of the world, the imagery they used would have been even more descriptive and terrifying that they already are.

As in this scene from 'Dr. Strangelove' except with a Muslim terrorist riding the bomb shouting 'Allahu Akbar!' instead of Major Kong:

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