The Robin Hood Dilemma

Great words from Thomas Jefferson about Government

2010-01-27T19:48:00.001-08:00

From Thomas Jefferson's First Inaugural Address.

Recently quoted by Governor McDonnell, newly elected Governor of Virginia.

"Still one thing more, fellow-citizens—a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities."

Sounds good to me.

The MLB Sterioids Era - Mark McGwire

2010-01-14T10:51:00.000-08:00

Normally I keep my blogging to the financial world. But I am a lover of all things Baseball. So
I will comment on some baseball stuff.

So, as everyone who pays attention to sports has heard and seen, Mark McGwire has finally admitted to using performance enhancing drugs. What a surprise!?

Here is what I think. It was pretty obvious that McGwire was doing 'something' to his body. Whether it was only andro or steroids or some other substance. I think people suspected that in
that infamous 1998 season. People probably suspected it before that season. Just look at a rookie picture of McGwire and one from 1998 and he is almost double the size (though he hit a lot of home runs in his rookie season too).

No one really talked much about steroids during that pivotal year for baseball (1998). Let's remember that the 1994 Strike was disastrous to baseball. It lost probably millions of fans as players and owners squabbled over money. Some people could not forgive the forfeiture of a season and the cancellation of the World Series itself. By 1998 Baseball was far from its glory days. As McGwire and Sosa hit dozens of home runs before the All-Star break, people began to get excited. Everyone watched in anticipation of the unthinkable; breaking both Babe Ruth's former record and Roger Maris' then current record. Hit has not been done in over 40 years. No one thought anyone would come close again, and now two athletes were going for it in the same season. The friendship that developed between McGwire and Sosa added to the hype and legend of the 1998 season. As McGwire approached the Babe's and Maris' records we all watched as he smashed one more home run after one more home run.

At that time no one was crying foul, that they were juicing. Baseball fans and MLB were loving it. The publicity was great, adding to the resurgence of baseball and its popularity. The MLB has reaped the benefits of that season and subsequent season such as Bond's record breaking season in 2002. But now MLB is vilifying the very people who brought baseball back.

No one says anything about how MLB and the public turned a blind eye to what was obviously going on. As long as the home runs were being hit, ticket sales were up, and no one was getting hurt, who cares, right? Then as steroids began to become common place in high school and college sports people started to get worried. A few kids died. Now, the professional players have to be punished.

Is something not wrong with this scenario? Don't get me wrong. I am not in favor of steroid use. It is wrong and it is cheating. I wish no baseball player had ever taken them, and I wish the records they broke could be widely accepted. But, let's not vilify all of them. Remember, most of it was not 'illegal' (such as the andro that McGwire used and HGH that Pettite used). Also, people knew and did nothing then, and only now that the fun is over is anyone attacking the players.

The burning question is how to take this Steroids Era in comparison to the history of baseball through the century plus years. Let's remember that the rules have changed from year to year and decade to decade. How can we really compare statistics anyways?

Before Babe Ruth, what we call ground rule doubles were home runs, and if a home run bounced out of the bleachers it was still in play.

The spit ball used to be legal. How many more hits and home runs would have been hit if it were always illegal?

How many home runs would the Babe hit if he had to face pitchers today, throwing 95 mph fastballs, 88 mph sliders, 90 mph splitters, and 80 mph change ups?

Players today play more games in a season then they did in previous Eras.

The mound height changed, the balls changed, the bats changed. All of this affects performance.

We play in different ball parks. None are larger than the Polo Grounds but many of our current parks are quite a bit bigger than older ones.

Today the players travel to more places and further away. No one had to travel from New York to Los Angeles to Florida in a 7 day period in Babe Ruth's time.

The specialization of pitchers is something new. No one before the 80s or 90s had to face a 7th inning specialist, 8th inning set up man, and 9th inning closer, with one or two lefty specialists thrown in the mix. How would Babe Ruth fair if he had to face a left handed specialist, followed by a set up man, then Mariano Rivera or Trevor Hoffman?

My point here is that each Era has offered its own set of rules, traditions, and difficulties. It is hard to compare statistics. Was Sandy Koufax better than Pedro Martinez? Was Ted Williams better than Ichiro or Albert Pujols? No one is going to beat Cy Young's records because he played a different game. No one pitches both games of a double header and pitches all 18 innings for 2 complete games in a day. We have 5 man rotations, and back in the day it was 2 or 3 pitchers, and sometimes the starters came in as a relief pitcher despite pitching the day before.

The Steroids Era will be a controversial one forever, no doubt. But, it is hard to say how it compares. If Barry Bonds and Mark McGwire were facing Roger Clemens and they hit a home run, does that one count? Does it count if they hit it off Andy Pettite when he was on HGH, but does not count when he was clean? We are not sure how many people were using some form of performance enhancing substance. Steroids, I believe, must be considered part of this Era, just like the spit ball was once part of another era. Gaylord Perry used Vaseline to rub up the ball, and he is in the Hall of Fame. Sand paper, corked bats, stealing signs, etc. All sorts of ways people have cheated for decades. There are, no doubt, other players who cheated who are in the Hall. Where do we draw the line? Is Pettite eligible because he admitted using HGH only once, to return to the field quicker? How about Clemens? Did he use only when he got too old, or how long did he use it for? We have no idea or proof. Same with McGwire and Bonds. Which home runs or wins are tainted?

To determine Hall eligibility, it needs to be defined what the Hall of Fame is. Is it a gentleman's club or is it a place to enshrine the greatest players who played the game. The greatest players in their era. If it is a gentleman's club then Ty Cobb and Barry Bonds are definitely out. If it is for the greatest players to play the game, in their respective eras, then Shoeless Joe Jackson, Pete Rose, Barry Bonds, and Mark McGwire should all be in. It should also include Roger Maris and Dale Murphy, by the way.

Lastly, there are hundreds of minor leaguers and lower end major leaguers who used HGH, Steroids, and other performance enhancing drugs. They never made it. Maybe the only reason they got as far as they did was because of the performance enhancers. Maybe it had nothing to do with it and they just were not good enough with or without drugs. It is hard to tell since it still takes talent, drugs or no drugs, to hit a ball that is traveling at a variable high speed, react in 0.4 seconds, know whether it is a curve ball, fastball, or change up, decide to swing or not, hit the ball on the sweet spot of the bat with enough bat speed and angle, to hit the ball 350 ft - 400 ft. Baseball is a hard sport to succeed in, even with performance enhancing drugs.

It is a true shame that players such as McGwire, Bonds, and Alex Rodriguez would have been great without the drugs, in fact they were great before being tainted by the drugs. Their reputations will never recover, which is good punishment indeed.

This is what I think, for what it's worth.

Health Care Debate

2009-09-17T17:36:00.000-07:00

As the health care debate heats up and Congressional voting commences, I have a few comments.

First, I never thought I would say this, but Obama's most recent speech about Health Care was actually quite inspiring. He does a great job when he has a prepared speech, but struggles when he is put on the spot. I think he should stick to prepared speeches and he may have more success.

There are a number of issues that cause a lot of contention. I must say, this administration's attempt at showing us Americans how we are going to pay for this new plan is at best lousy. The new proposed bill from the Finance Committee has a price tag of $856 Billion over 10 years, with mysterious ways of paying for it. Sure, why don't we go into more debt and tax businesses and individuals more to provide free health care to the poor. There has to be a better way. Can no one come up with one?

Instead of increasing taxes on the rich or on businesses, why don't we go after people who are abusing the tax system and under-paying their taxes. Cash companies such as restaurants and laundry mats will show yearly losses on their income statements, and not report their cash in take. This is tax evasion that is obvious, but the IRS seems to turn a blind eye. Many of these small business owners have large houses with big mortgage payments, nice furniture, big TVs but all the stuff is bought by illegal cash or used as a business deduction. How is a Big-Screen TV in the business owner's home, a business expense for a laundry mat anyways? I am sure we can squeeze a few hundred million dollars in revenue by going after companies and individuals who are stealing from the IRS.

With all this debate of about a public option, I have though about it and decided that if done the right way I am not actually all that opposed to the "public option." It does have to be a free market proposition, but it is acceptable to have government oversight and regulation. I think a co-op of some sort, where Health Care providers in each state can bid for business of people who do not have access to company health benefits, would work out pretty well. It all has to do with costs. The average family health insurance plan costs $13,000 per year. At almost $1100 a month for a family that is a huge chunk out of a family's budget if a company does not support the employee.

As an idea, why can't we just get away from company sponsored health plans the way they are currently set up, and add the cost of insurance to the salary of the employee. Each family can then choose for themselves what insurance company to buy health insurance from. The government can offer tax breaks to help offset the costs for lower income workers, even exempting health care income (the average $13,000 employer health care cost) from regular, medicare, and SS income tax requirements. That can be tax free income to families so they can pay for their own health insurance. As Obama has pointed out we need competition.

Right now, employers pay a lot of money and spend a lot of time and resources working on the health benefits of their employees. By eliminating this from businesses, they can increase productivity as time is not taken away from the actual work that is supposed to be done. In my place of employment, our HR department spends a lot of time working on the health benefits of employees and works closely with our health insurance provider. This time could be spent elsewhere. Time is taken up in meetings and seminars about benefits. All time that could be spent increasing productivity.

The extra money will increase the total wages of a family and if it is possible to shop around for coverage that may cost less, a family's disposable income will rise. They would be able to spend it on other things that could boost the economy, but it could also be used to pay for any co-pays or out of pocket expenses. It could be used as a sort of health spending account that everyone gets. A tax free way to pay for health insurance premiums, co-pays, out of pocket health costs, prescription and over the counter medicine, vision care, dental care, and maybe even life insurance (I think the insurers would not mind if more people got life insurance, right?) You can add gym memberships as well.

As it stands now it is the employer that shops around for coverage but often the employer stays with the same company for many years, possibly forgoing cheaper options because of the time it takes to switch from one provider to another. By adding 40 million more people to the insurance companies list of clients that should increase their profits and enable the to lower costs.

There are many regulations limiting how many insurance companies can sell insurance in a State, but if we can increase the number of competitors in the industry it is possible to decrease costs due to increased competition for the business. Health Insurance companies have an oligarchical power over pricing, which does not help in reducing costs. This is one reason why the government wanted to have a public plan, because of the lack of competition in the insurance industry.

So, if we can increase competition to decrease costs and eliminate employer sponsored insurance coverage and just pay workers more (preferably an increase in the salaries by the cost of insurance the companies no longer have to pay), it will be possible, I think, to solve this problem.

I do think it will be important to give enough incentives for everyone to buy health insurance. Tax breaks work and creating legal requirements to have insurance may work as well. We do it for car insurance, why not do it for a much more important Health Insurance? You will have the right to NOT pay for health insurance and maybe pocket the extra income, but if you are sick you pay the full price, whether through payments plans, wage garnishments, tax levy's or any other form of forced payment. If you have no insurance and you use the emergency room you need to pay for it. The whole bill. It is unacceptable to abuse as system where doctor's and medical professionals cannot refuse care, but you can refuse to pay for it. That is outright stealing. If you are someone who foregoes the responsibility to have health insurance (especially if the government and companies assist in helping you pay for it) you should have to pay the full repercussions of not being responsible. If that ends up bankrupting you then so be it.

We need to eliminate lifetime caps in coverage and the should-be-illegal practice by the health insurers to drop coverage whenever they see fit (especially when a patient needs that coverage most). The things many insurance companies do should be illegal. To drop coverage on a cancer patient because of some fine-print legalese or some business decision is unacceptable. As long as you pay your premiums and are as honest as you can be you should be afforded all the benefits that come with your health insurance coverage plan. There should be no life-time caps. If I pay my insurance premium I should be covered. If my insurance covers for cancer, they should not be able to stop coverage because the cancer treatments cost too much. That is a breach of contract, if not a legal breach then most definitely a moral breach. It should be illegal to drop coverage for any reason as long as premiums are being paid. In fact, Health insurance companies should be the one's to step up aid as their customers suffer the most, not kick them while they are down. I would like to see an insurance company that can find the business sense to stay profitable but be able to go to the bed side of a man dying from cancer and say that they will do all they can do to help him. Wouldn't that be a health insurance company you would like to be a customer of?

There are many things we can do to make things more affordable for all Americans. I hope our leaders are smart enough and responsible enough to do things right.

Health Care and Taxes

2009-07-27T18:12:00.000-07:00

I do not think there are too many people in this country that would be opposed to some kind of health care reform. The amount of wasted money is outrageous. Hard working Americans that do not get health care because they cannot afford it, while those who sit and do nothing and get paid by the government to watch T.V. get at least minimal health care. There is a disconnect in this country in terms of health care.

The problem is this, how do we pay for it and how do we start to reform such a major issue? It has been tried before, time and time again to no avail.

It is true we have a President who is willing to do something about the problem. That is nice, except I disagree with what he wants to accomplish.

The topic I want to write about is in regards to my favorite objection: taxes.

The main way to pay for this reform that our President is striving for is to raise taxes on the wealthiest Americans. He proposes we tax those who make more than $200,000 a year. My issues is that this dollar amount is not that rich. You are middle class in New York City or Los Angeles. if you are a Doctor, you are paying off $160,000 in debt or more. The people who make these dollar amounts are the successful people in our country. The people that make our country the most competitive and the most successful, and the people that provide the most productivity in this country. They are the ones that buy the luxury houses, the cars, go on vacations, and already pay the bulk of the taxes. Something seem out of whack here. Why are we going to tax the doctors or pharmacists who provide this heath care?

We will deter people from becoming doctors and pharmacists who will provide the care we are trying to pay for. If a college student, already in debt by $200,000 is contemplating going to medical school, the almost insurmountable added debt load of another $200,000 is daunting enough. Doctors are already over-worked and slowly becoming underpaid, for what they do. As their pay decreases, hours go up, and debt load from tuition increases, it becomes less and less lucrative to spend an additional 8 or 10 years before making a 'good' salary. Then, once you get their you lose 50% of your pay to the government.

Wait a second? What is going on? I feel this is outrageous as we contemplate increasing taxes on people who contribute more than 80% or more of the population. It is backwards. Why do we not do anything about the tens of millions of lazy Americans who do nothing but take from those who produce. That is what has to stop and those are the people we must get the money to pay for the health care. Take away benefits from those who do not deserve it and you will be surprised how much money there will be left to pay for health care on the hard working men and women whose families suffer because despite their hard work they cannot pay for their health care needs.

Instead of going after the productive, let us look to the useless people who take and never give. It is time for them to give. No more entitlements, no more free everything.

Let's fix these banks. Let's fix this economy.

2009-03-08T12:27:00.000-07:00

I am not a professional policy maker and I am not an economist.

But, I am a thinker and have had enough education and experience that
I think I can fix this economy, at least better than our current leaders are doing.
Then again, I do not think at this point anyone can make it worse.

First, it is necessary to understand how this economy works. Yes, there are
things such as employment, national productivity (GDP), company earnings,
personal spending, commodity prices, etc. However, a lot of how this works
is behavioral. I think people need to be studying behavioral economics to fix this
situation.

There was a lot of hope with Obama coming into office. Even I was hopeful. After all,
Hope and Change is why he won, and what we heard for almost 3 years. Suddenly Obama
wins and is quiet until he takes office. Once he is in 'POWER' he comes out, not with Hope and Change, but with Doom and Gloom. Where is the positive President we were hoping for? Where is the Fearless Leader who will take us back to prosperity? He is nowhere to be seen.

The Stock Market is often a measure of confidence. There is a large group of people who invest, and they are considered a gauge of the confidence of the people. Right now it stinks. There is no confidence in our future. Each time policy makers speak, especially the President, the market goes down. Each time there is a bailout the market goes down. There is no end in sight.

Right now the Administration is lacking in credibility. Obama has not done yet what he promised, except threaten to raise taxes and spend gobs of money. Congress has no bi-partisanship. There is continued bickering among all the Congressmen and Senators, worrying more about their own projects then the people who voted them in.

It seems that half the nominees of Obama either have tax issues or withdraw their name before confirmation. I have never seen something like this before. The Treasury in particular cannot even fully staff themselves, amidst one of the greatest financial tragedies of American History. No one wants to work for Geitner or Obama.

So, with all this going on it seems no one has confidence that the people elected will save us from this awful mess we find ourselves in.

Here is what they can do.

1) Be Positive. Yes, things are bad, but look at history. Learn from history. Teach the history. Things are bad, but not that bad. We are not as bad even as we were in 1980 - 1981. Things are not as bad as during Vietnam or World War II. Things have far to go before we reach something like the Great Depression. Things are still okay. We are still watching cable T.V. while talking on our I-Phones. We are going to McDonald's and shopping at Walmart. Could you do that in the Great Depression? I think we over exaggerate our current plight.

2) Fix the banks.

How?

Temporarily hault the need for Mark-To-Market accounting. Right now a lot of the banks assets are marked to $0, even though they still have some value. After all, many of their toxic assets right now are homes that have value.

Because of the accounting system they much mark the asset to $0 because right now there is no market for these toxic financial instruments. If it is temporarily changed to Mark-To-Model it is possible to have the assets valued.

If the government creates a private/public capital fund, creates the model to be used for the accounting, and have the banks sell the assets to this fund at the model value these toxic assets could be taken off the banks books with a value above the current $0.

This will stop all the write-downs and in fact there could be write-ups. A stipulation can even be put in place to ensure that if the value years from now does not reach the model value that at that point the banks can cover the funds loss on that value. This will give a few years for the banks to recover before possibly having to pay for any value discrepancies between the market and model values.

In many cases the fund can make a large amount of money as the value of the assets increases. After all, it is not like 100% of houses will go in default or 100% of home owners will stop making their payments.

It is said that if this is done there could be bank stocks that could more than double in one trading day. That would be a boost of confidence in the market.

3) Stop unnecessary spending.

All this talk about fixing health care is going to kill this economy. The stocks of hospitals, HMO, and pharmaceuticals took a deep dive this past week as the fear of Obama's policy finally hit one of the so-called safety stocks (especially the drug stocks). It will cost $100 Billion a year to do what Obama wants. It will decrease profits for 100s of companies. It will hurt the economy in the short run. Yes, it will help in the long run, and I agree we need to overhaul the health care system in this country. However, not now. Talk about it after we have recovered and can afford it.

The current proposed 2010 budget is appalling. A $3.6 Billion budget is unacceptable especially when it will need an increase in tax of the wealthiest Americans to be successful. That announcement has increased the decrease in confidence of our economy. Last time I checked it is the wealthy and upper middle class that already shoulder the largest burden of the taxes, and many of these individuals are the ones that move the stock market, make the jobs, spend the money, and feed all the people who don't work in this country. Bad idea in a recession President Obama, but then again I guess you did not read what they did after the Stock Market crash of 1929 and during the Great Depression. I think he believes that FDR saved our country by spending money and doing all the projects we learn about in history. However, if you actually read the history things did not get better, but often got worse. It was World War II that saved us and kick started our economy. I hope it is not a war that saves us this time, but good prudent and intelligent policy.

A Whole Bunch of Money Spent

2009-03-08T12:18:00.000-07:00

Can you fathom all this money the government is spending. I do not argue that
to some extent it is necessary due to the horrible economic situation we are in.
However, do we need to spend THIS much money? With so many "so-called" smart
people we have running our country is it not possible to find a more efficient way to
complete this successfully?

The over $800 stimulus plan is a virtually uncountable some of money. If you were to
spend $1 Million every day since the Birth of Christ you will still not have spent all of the
stimulus package.

The thought that these greedy and sleazy politicians reaction to the complaints of the 'pork'
in the bill is that it is only a couple of percent of the bill so it is okay. What in the world are these
greedy and spoiled politicians thinking? Yes, maybe one of the pork projects is only 0.01% of the bill, but that could still be $80 Million. Wait a second, last time I checked the total amount that my immediate family will ever make in our lives is probably going to be less than that. The total income of the apartment complex I live in (including the apartment complex corporation) will not make that much in one year (or even 5 years). Every dollar counts, and until the politicians in Washington realize this, our country will never be great.

All politicians need to be held accountable, and I would say that any politician still working for pork barrel spending should be impeached, for he/she is violating the responsibility and trust that they were elected to uphold. It is no better than Gov. Blago in Illinois. Something to think about next time you vote for any public official.

The Stimulus Package

2009-02-19T11:34:00.000-08:00

Well, I have been silent for a while, but here I go.

Did you know that the $787 Billion Stimulus Package signed into law is so big
that if you were born at the time of Christ, and spent $1 Million every day through
the end of 2009, you would have spent about $733 Billion. In fact we could go until
the year 2160 and still not quite reach it. That is a crazy number, and to think they spend
a measly month and a half coming up with it.

By the way, the bill is over 1100 pages long. I am not quite sure if anyone actually has
read the whole thing yet, or at least not the whole thing before they passed the legislation. Again, what a crazy idea.

Don't get me wrong, I am for 'A' stimulus package. This package that was passed will have to do (since it is already signed into law). I am just disappointed that there is so much stupid waste in the bill. Again, don't read this the wrong way since I am all for re-sodding the National Mall (to make it pretty for all the tourists). It is fine with me to pay hundreds of millions of dollars for STD prevention and birth control. I am okay with many of the 'wasteful' spending, as long as they are bills of their own. These are not things you spend money on when you are trying to avoid the biggest economic catastrophe since the Great Depression. Come on people!

We elected Obama to change Washington. To come in with new ideas, new ideals, and new politics. However, it is all the same as before. Nothing has changed. How is this any different than Bush? In fact, because of Obama's lack of speed in fixing anything, and his lack of leadership over his own party has caused things to get worse. The economy is in a tailspin and Obama is hanging out smoking is cigarettes, and riding on Air Force One and calling it a 'spiffy ride.' We said this before we elected him, that this is not a job that has the wiggle room for 'on the job training.' I am afraid his training will cost the country's prosperity.

A stimulus package is great, but it is not the end all, be all plan that people hope for. When it comes to averting a depression or severe recession I think the sentiment of the people is key. Right now you have Obama leading the charge that the world is coming to an end unless we pass the stimulus package, fix the banks, fix housings, etc., etc. The man who rode the wave to victory with the message of hope and change is strangling the psyche of the American people. All of this negativity breeds more negativity. People lose hope, stop shopping and investing. Businesses brace for the worst and cut costs and employees. Without some positive energy our country is doomed to fall further into what quite possibly could be a world wide Great Depression II. I hope not, but I see nothing from our Leaders and Politicians that would prove that wrong. When will Washington finally learn? When will they get the message? When will they actually serve the interest of the common good and the American people, instead of themselves and their own reputations and wallets? I do not know, but I fear it will be never

The Obama Victory

2008-11-05T12:25:00.000-08:00

Congratulations to Obama. Though I am no fan of his, he is still my President-elect.

There is much to be fearful of with this new administration. However, today I would like to write of the things to be happy and thankful for on this post-election day.

Today is a day when all minorities can rejoice. For the first time in the history of this great nation, we have shown to ourselves and to the world that the job of President can indeed go to anyone who can be elected. It is not an old white man's gentleman's club. A virtual nobody 24 months ago, Barrack Obama ascended to the highest post in the country with a landslide victory on this Historic November day.

For all the minorities who have been oppressed over these many decades, this is a victory for them. It is something that all Americans can be proud of, that on this day we have chosen by a majority vote, a President of African decent. (I do not say he is an African-American because that is not his history he is half African and half white, raised internationally and in Hawaii).

Every 4 years we come to this crossroads. Every year we prove again the strength of our democracy. Though, some 46 million Americans did not vote for President Obama there is no rioting in the streets. There are no hateful demonstrations. There is over joyous applause by his supporters, and calm respect by his opponents. This country of ours is a great democracy, where the shift of power is peaceful and organized. It is a testament to the greatness of this country, that though the conservatives and the Republicans have been defeated for at least 4 years, there is still hope for the future. There is hope now, and there is hope in another 4 years.

What a great country we live in. Though I do not agree with Obama on many issues, his tax policy the chief among his flawed policies, I do hope and pray that he may make the correct decisions for this country and put the right people around him who can make our country great. I hope that he may be a centrist, and reach across the isle as he has promised, and get things done to benefit this country. I hope he may be true to his words and his promises of bringing this country together, not as Democrats and Republicans, but as Americans. His words bring tears to many, but may his actions bring joy and prosperity for all Americans, regardless of race, religions, social stature, or any other of our many differences.

Good Luck President Obama!

The Cost of the Iraq War

2008-10-02T20:15:00.000-07:00

You hear all the time that the war in Iraq is costing us upwards of $10 to $12 billion a month. When people against the war talk about the cost of the war in monetary terms, they make it seem like this money disappears into thin air.

I want the war to end, and I want a stable Iraq. I want the government to stop spending so much, but I want us to win the war the right way. To many people the cost of this war is troubling. It is now the second most expensive war, though the cost of World War 2 easily trumps the cost of the Iraq war. But, have you considered where this money goes?

A large percentage of the cost of the war is the pay and care of our troops. This money is spent by our troops when they come home and by their families at home. This money is used to pay mortgages, buy groceries, eat at restaurants, buy retail products, etc. In other words, it is pumped back into our economy.

Another large percentage of the cost of the war is for government contracts. We pay American companies (this is why the Boeing v. EADS Tanker deal is so controversial) to build tanks, Humvees, and military weaponry. We pay companies to supply uniforms and protective gear. In other words it is pumped back into our economy.

Thus, a lot of the money we spend does not just disappear into the economy but being pumped back into our economy by providing jobs and American goods. So, it is a bit misleading when people say we are wasting $10 billion a month in Iraq.

I am a bit confused as to why we have not learned from WW2 and the Allied Occupations of Germany and Japan. We spent $5 trillion in WW2 (inflation adjusted $) and we spent another $45 billion or so in economic reconstruction. Our full out occupation of both countries was 6 years for Germany and 7 years for Japan. It took continued assistance and time before Germany and Japan were fully ready. It has been 5 years in Iraq and we are far from finished. Why?

For all the time and money we have spent in Iraq we have lacked direction, leadership, and a good plan. We need a Marshall Plan type plan. The situations of the wars and the situations of the countries are different between WW2 and Iraq, however, it does not mean something similar can't work.

Let's do a little studying of history and try to come up with a plan that will have such success as we had in WW2; success that lead to the creation of the #2 and #3 economies in the world. In the long run, the Japanese economy and German economy have contributed trillions of dollars to the world. If that can happen in Iraq then all the billions we spend will be worth it.

The Economic Bailout

2008-09-28T20:22:00.000-07:00

There is so much ignorance and misinformation out there as you watch the news and as you listen to politicians. There is a huge controversy concerning this Economic Bailout by Congress.

Let's get one thing straight here. This is not a bailout of Wall Street.

This is a bailout of the U.S. Economy. The Treasury Department will be utilizing the allotted money to buy mortgages and the securities tied to them. They are not bailing out Wall Street firms.

Yes, along with the American People as a whole, Wall Street firms will stand to benefit from this plan. In fact, they may be the largest beneficiaries of this plan, or at least the largest immediate beneficiaries.

This money is going to be used to take bad assets off the balance sheets of struggling financial firms. Don't categorize them as 'Wall Street.' That is misleading. We are talking about your banks. The banks you bank at, the firms you invest with, and the stocks and bonds you tie your financial future on through personal portfolios, pensions, and 401k plans.

This is not a Wall Street Bailout but an Every Street Bailout. This is the best idea people could come up with to save a crumbling global financial market. Even Warren Buffett agrees with this. He's the greatest investor of our generation. I would trust him with my money, wouldn't you?

People are angry, and they should be. It has been decades of mismanagement by Democratic Administrations, Republican Administrations, Wall Street executives, Institutional Investors, and yes, even regular citizens. We are all to blame.

1) Government turned a blind eye as illicit or risky actions were being taken. Regulation was lightened, and new laws permitted and even required riskier loans (ex. Community Reinvestment Act)

2) Wall Street's greed took advantage of lenient government oversight and regulation to participate in risky lending, creation of risky and unregulated products (Credit Default Swaps and Mortgage Backed Securities), as well as practice predatory lending especially among lower-income individuals. In order to increase profits and reduce risk they created the risky products that we are talking about, but what happened instead is the castle of cards came tumbling down faster than it took to build it all up.

3) Institutional Investors, those who run the big mutual funds, pension funds, and hedge funds hold great power. These big investors are trying to increase their returns to their mutual account holders (aka: all of us who invest via 401k and pension plans as well as mutual funds). They demand more and more from the companies, better and better quarterly profits. Wall Street caved into their demands and found alternative ways to shore up their balance sheets and announce better and better returns. One of the ways was these risky products with high profitability.

4) Even as regular ordinary citizens we are to blame. For some of us it is our investment accounts. We want them to go up, 10% or 20% a year. We demand it of our brokers and of the companies whose stock we own. Also, it is the American Dream to own your own home. Instead of the prudent and traditional way of hard work and savings to accomplish this, Americans in the millions wanted to buy their home quicker, taking risks with Adjustable Rate Mortgages and no down payments. America has an infatuation with debt. It was no longer okay to rent for a few years so save up for a down payment. Now any American regardless of employment status (yes even the unemployed), salary, or credit history could buy into the Dream. The belief that real estate prices would go up and up and up, so that they could sell their homes in a couple of years for a profit became prevalent. People did not think that buying a home with no job or income was a dumb move. Instead of being prudent, cautious, and intelligent, American got greedy. Just as greedy as Wall Street.

So, we are all to blame for this mess. It is easy to target Politicians or Wall Street executives, but it was the new culture of America that is to blame, and it is this culture that we must mend.

Let us look at this Bailout as a positive action and a corrective action. It will hopefully result in a return of Government oversight to protect our country (that is their main responsibility after all). It will hopefully give a fresh start to these financial institutions, allowing the lending process to begin again so all people and all businesses can resume their everyday lives.

Remember, without this plan financial institutions would continue to fail. Eventually the FDIC may not be enough. Credit markets will continue to dry up, reducing the opportunities for us to get loans for homes, cars, credit cards, etc. It will make it difficult for small business to borrow capital to meet payroll or growth. It will create panic in the financial markets, and it may well result in another Great Depression. We all know that it started on "Wall Street' but affected 'Main Street."

May we learn from history and understand that this bailout must be done, and we must all pray that it will do the trick. Otherwise....

Financial Bailout

2008-09-21T16:59:00.000-07:00

So, there seems to be a lot of backlash concerning this proposed $700 Billion bailout the government is planning. They say 'let the companies fail' or 'why should we pay for it.' People are saying it is more big government and unnecessary intervention.

People are justified in their anger towards the financial institutions. After all, have we not learned from 1929 and 1989? Have we not learned anything in the last 80 years? It may be that we have learned, but there is one thing that remains constant; greed. It was greed once again that brought Wall Street to its knees.

Are we just going to let these companies fail? Is that was is best? I think the response of the ignorant politicians and citizens is quite ridiculous so far, and believe it or not I think Paulson, Bush, and those trying to solve this problem have it right.

What would happen if we just let the companies fail? Let Wamu and Morgan Stanley disappear. Severely hamper Citigroup and JP Morgan. Destroy the small struggling banks all across the county. Keep fear in the financial markets. Annihilate the faith people have in the financial institutions and financial markets all across the world. If you are worried about a recession, try dealing with a depression. That is what you will get.

What will happen if we just let the companies fail? The FDIC won't have enough funds to cover all the insured deposits. Thousand of people will lose everything they have saved for. Even if they get their money back it may not be for months. What about their mortgage payments? They won't have money to pay the bills, feed their families, drive to work, etc. It isn't just the rich and middle class that will suffer. The poor will lose what jobs they have. Prices will go up and incomes will go down. The government might not have the means to support millions more on welfare. Everyone will suffer, and the poor and middle class often suffer the most.

What will happen if we just let these companies fail? The stock markets around the world will crash. The good companies and the bad will all be tossed aside. Companies will suffer and companies will die. Companies will lay as many people off as they can, or just plain close their doors. People's pensions will be lost, health coverage gone, 401k's destroyed. Social Security will surely fail and all of our retirement plans will be shattered.

Is this what people want when they say 'let these companies fail?' I surely hope they don't. I hope it is just that they don't get it. I hope it is just they are plain ignorant. I hope our leaders are not part of this crowd.

This bailout will cost us all, but far less than the alternative. We must choose bad over worse. Will this mean our taxes will go up? Probably. Is that better than losing everything? Most definitely. We have learned something in the last 80 years. That is, we cannot let our financial markets collapse. Yes, sometimes the majority of people, who's lives are not directly impacted by Wall Street, call for the destruction of greedy companies and crooked executives. Punishment is warranted, but we must look past the vengeance and look to the consequences. We must look to the consequences that their actions will cause if we stand by and do nothing.

Let's think about this. Maybe Paulson and Bush are making the best decision and most important choice government has made in our lifetimes.

A tax increase on the rich? Are you crazy Obama?

2008-09-19T17:09:00.000-07:00

Obama said in his nomination acceptance speech that McCain did not get it, that McCain was out of touch and that was a reason not to vote for McCain. Wait a second here Barry! I think you missed something here. Despite your eloquence, intellect, and charisma it is you who does not get it. Obama made a big deal a few months ago about the great financial advisers he has and will utilize as President. Yeah, you have a great army of financial genius', not the least of whom is my favorite investor Warren Buffett.

Let's review a simple explanation of Obama's tax policy.

Increase taxes on the 'rich' who spend a majority of the money in this country, invest the majority of the money, and pay the majority of the taxes already.

Here is my take on things. If Obama says the rich are those who make $250,000 or more, you have to ask yourself, Is Obama really from Chicago? If he is from Chicago he must have been in a coma.

He is from Chicago, which means it may not be McCain that is out of touch, but he must be out of touch. He is so young that I think he has spent his whole political career campaigning and his whole pre-political life organizing things that he must have missed what's happening around him. I don't think it is rocket science that cost of living is a major factor when you talk about tax policy.

Last I checked someone who makes $250,000 in Chicago makes less money then someone in, say, Omaha. Does he really think someone who makes that in NYC should get the same tax treatment as someone in Indianapolis? Or is he going to throw in a cost of living calculator on the tax forms and make doing your taxes an even bigger pain? Is he stupid despite graduating from Harvard? What is he thinking? Only a moron will propose something like that, and only a moron will pick a crazy running mate who's call to the rich is 'pay more taxes or you are not a patriot.'

Clearly he is out of touch. If he is elected I feel sorry for anyone who lives in Chicago or NYC or the whole State of California. They will suffer much more than others. When you factor in cost of living and try to categorize rich, isn't it much more logical to think maybe $1 million may be a better gauge of 'rich?' I would consider someone who is rich to be someone who does not have to work to maintain their lifestyle indefinitely. Buffett does not mind if he is taxed more, so let's tax his money. Not the average NYC dual income family making $250,000 and barely scraping by.

Obama, get in touch with the real world and maybe rethink you tax policy.

So what about Palin?

2008-09-19T16:50:00.000-07:00

At first I was sceptical of Sarah Palin. However, the last few weeks have been eye opening. The liberal and radical nature of Obama is coming more to the public domain. The Biden choice is being proven a big mistake. More and more people are realizing Obama just does not get it. Raise taxes? Stupid. More spending? Irresponsible. Spending time with radicals and terrorists? Detrimental. All Obama is, is a great orator. There is nothing in his background or in his political platform or in his supporters that there is to admire, let alone make him acceptable or qualified to be President of the United States of America.

I have not been a fan of McCain either. I think he will be better for the country and compared to Obama, the biggest factor that sets McCain apart is that he will pick good people to support him; like Sarah Palin.

Palin has taken the country by storm. From a mostly unknown Governor from a state that has more Caribou than people, to potentially the most powerful woman in the world. As I previously said, I was a bit skeptical of Sarah Palin. I thought the pick of her over the likes of economic powerhouse Mitt Romney, was a mistake. However, I have amended my thinking. It was a great pick. A maverick move that shook the political arena, putting the ball back in McCain's court, and shooting fear into the Obama camp and his liberal supporters.

What do I like about Palin? She does not seem the politician type. She seems like a Mom. Someone I can trust to do what she says she will do. Listening to her is almost calming. You can believe what she says. She seems honest and sincere. They say she is a maverick, but I would not necessarily categorize her has that. She is one of the masses. Someone who sees the ridiculousness of our current politicians and is not afraid to go against the establishment and bring politics back to where it was when our nation was founded. I salute her and salute McCain for picking her. She gives me a little bit of hope for this election cycle.

2008-09-04T20:21:00.000-07:00

So, why the name? As I was contemplating politics with both the Democratic Convention and the Republican Conventions having taken place in the last week or so, I was trying to establish my thoughts on the candidates and the issues. I will have more to say about my views, but here it is in a nutshell.

Strong economy through reduced spending, lower individual taxes, and lower corporate taxes. Strong defense. Small government with less spending, responsible and limited welfare, and strong emphasis on education programs. Socially conservative. Leans Republican, but not strict to the Party line.

You get the point. I am leaning towards McCain/Palin only because I agree with more of their policies than Obama/Biden's policies, especially on economics, taxes, and spending.

The name "The Robin Hood Dilemma" came to me as I was contemplating Obama's tax strategy, and his 'community organizer' background. To me welfare is a broken system. It has created a goup of lazy people who expect the government to take care of them, without any personal responsibility. They want everything for free just because they are poor. But, they are not 'poor.' They are lazy. There are plenty of real poor people. I have met a number of them through my Church service and Community service. There are people who struggle every day to support themselves and their families. There are millions of them all across this great nation. They do not look for a hand out or a free meal. They work for what they eat. They work hard, harder than many CEOs or Celebrities. They make minimum wage but work harder than anyone for it. They work hard while there are millions of others just as capable, who sit on their butts watching free cable, eating free food, and living in a free house. There is something wrong with this. Yes, this is slightly oversimplified, but the point is nevertheless valid. Why does the welfare system not fight for those who work hard yet find they have barely enough to survive on, let alone save for retirement or a child's college education. Welfare should be there for them, not for those who refuse to work. Obama is a welfare supporter, and I cannot support him in that. I cannot support a government focused on handing out freebies to lazy bums. Welfare must change. Obama wants to continue this welfare culture so prevalent in our inner-cities by taking from the rich through increased taxes and giving to the poor. It is essentially a redistribution of wealth. A 'rob from the rich, give to the poor' mentality. Here in lies the dilemma.
We all know the story of Robin Hood. The heroic Prince of Thieves takes from the rich and evil King and gives back to the poor, all the while winning the heart of the Maiden Miriam. It is a timeless story that makes for an entertaining Disney or Kevin Costner movie, but what if we look at it from an economic view. Maybe we should not let our children watch such a movie. The movie is more relevant in this political environment than we might have expected.
From a political/economical view, this feel good story masks the true morale of the story. To me, if the King of England were not so evil in this story it would be a horrible story. This so-called Prince would be nothing more than a common thief.
So, where is the dilemma? Maybe it is just in my mind, but as a Christian there is a motivation to do as Jesus did and have charity for the poor. There is a part of me that is giving, wanting to give of my time and resources to help those less fortunate. Shouldn't we all have that desire? For the most part I think we as Americans are a generous and giving people, as is evident with huge amounts of charitable contributions in this country for every telethon, every fundraiser, and every disaster relief effort. We feel a need to help the poor and afflicted. The down trodden and suffering. It is human nature. It is American nature. This is where the Democrats, or at least many of them, come from. Their desire for a big government with big spending projects is generally to assist these people who feel they cannot help themselves. There is something sincere and charitable about this political view. The Democrats may be considered more charitable than the Republicans, at least politically speaking.
This political mentality, however, can be dangerous. As I have worked with inner-city families in Rochester, NY I learned quickly that our generous welfare system is broken, and needs serious fixing. Not only is there too much inefficiency in the bureaucracy but it has taught and bred generations of families who are not self-sufficient. We learned this through disasters like Katrina. If the government does not save them they cannot save themselves. Sure the government has certain responsibilities and sure the government dropped the ball and needed to do a better job, however, we as individuals have responsibilities of our own. The government was not created by our Founding Fathers to do everything for us. They did not envision 'Big Brother' taking control. Our welfare system has created millions of people who cannot save themselves. As compassionate as we are there is danger in being too compassionate that we do harm. As the old adage goes, "you give a man a fish you feed him for a day, you teach a man to fish you feed him for a lifetime." We need this instilled in our welfare system.
Without changes to our welfare system, our education system, and large parts of our societal thinking we cannot truly change. If Obama wants change he's got to understand this. There is a dilemma of Robin Hood proportions. If we risk 'robbing' from the rich by taxing them more we will only go on strengthening the dependence people have on the government. The thinking that government will cover all your medical costs, your retirement costs, your education costs is just silly. If Obama wins and he gets his tax changes approved he will cause a huge redistribution of wealth, only to find out a few years later than it is still the case that the rich are getting richer, and the poor are getting poorer.
Some of this thinking of mine has been influenced by Robert Kiyosaki, and his book "Rich Dad, Poor Dad." It is a great book, and a must read for anyone. He argues that a redistribution of wealth does not work because the rich understand money while the poor do not. If you increase the taxes on the wealthy, the wealthy will find a legal way to not pay those taxes (or pay less of it). If you give the money back to the poor they will squander it as they continue the mentality of make more money, then spend more money. Mr. Obama, as good as your intentions may be there is a better way. We need to keep taxes low for everyone, and reign in spending. We need to reduce the welfare arm of the government and spend it on education reform. Pay teachers more to attract the best people to be our teachers. Give more money to the schools to create better learning environments. We need to strengthen families, and teach the ethic of hard work. We need to bring financial literacy to the forefront so people can learn how to better support themselves today and in the future.

I could go on, but you get the point. There is a dilemma facing us today. The name came to me as I thought of how the story of Robin Hood related to Obama's tax strategy. This, I think is a dilemma many face. We want to be giving and charitable, but to what extent? The democrats have a point in wanting to spend money to help the poor and middle class, but is there way the right way, the best way? What if our giving is doing harm? Is it right to take more from the rich and give it to the poor? Does the government do a better job in giving then the private sector or faith-based groups?

This blog is just for me to rant and rave about economics, finances, politics, and anything else that comes to mind. I just wanted to give a explanation for this catchy name.