Whaddaya Think?

When George Bush declared the economy "pretty good", democrat Chuck Schumer made sure he came out with the retort that the president is out of touch with real people. If the sitting president were a democrat and made the same statement about the economy, would Chuckles have made the same comment?

How long will it be before every college and high school student has an iPhone or similar device?

Is there any doubt that our republic would be better off with term limits - for everyone, congress, state legislatures, local councils? Two terms for the House, one term for the Senate.

As we stand today, does anyone have any doubt that all members of congress have this priority list 1) Get re-elected 2) Support the party line, if it does not get in the way of getting re-elected 3) Get federal money for the district/state so they can get re-elected?

Since Iran has supposedly shut down its nuclear enrichment program, how long will it take before George Bush gets the media "high-five" for stopping this dangerous activity?

Two years ago the press was aghast about the lack of affordable housing. Now the housing market is correcting and home prices in many places have fallen. Guess what the press is? Aghast.

Okay, I admit it...I watch"The Hills"

So let's get the cat out of the bag early...MTV was pretty new when I was in college. I know there are many walking the planet today who cannot imagine life before MTV, but such was the reality once upon a time, and shockingly we muddled through. I started watching MTV in college, and like a lot of things in college, like drinking too much once in a while, it just sort of stuck. I am not sure there are too many people my age that still watch MTV, but I do on occasion. I realize from the advertisements on MTV that I am far removed from the target audience. I don't need acne medicine, I don't use TAG body spray, and thankfully it has been many years since I have had to wear a condom.

As I learned many years ago, nothing is ever totally worthless, because it can always serve as a bad example. Watching "The Hills" the past couple of years, like the slow motion train wreck that grabs your attention and won't let go, I have learned several things and recognized that bad examples abound on popular culture. I know that just because you are good looking doesn't mean you have anything of substance to offer anyone or to society at large. This applies to both males and females. I have learned that males on "The Hills", and possibly many males in LA, have a limited command of the English language. They rarely speak in complete sentences with subjects and predicates and they rarely convey thoughts beyond single word answers to posed questions. They also wear wool stocking caps in Southern California during the day time. Isn't part of the allure of Southern California the fact that you can leave your woolly caps in the closet year round? Maybe sweating heads is a fashion statement, maybe they simply forgot that they are wearing wool caps in 85 degree weather, or they forgot to take them off their heads 5 years ago when they arrived in LA from Northern New England. I have concluded that the male characters on "The Hills" must be dumber than the average dolphin...not intending to slight the intelligence of dolphins.

Therefore it is a complete mystery to me, why the girls on "The Hills" spend time with these guys. Okay some of the relationships I can figure out. For those who saw Forrest Gump...Stupid is and Stupid does. If there is any doubt that I can haul the mail with respect to my acumen of "The Hills" I am getting ready to blow that out of the water. I can understand why Audrina dates guys like Justin Bobby...any questions there? Justin, the fake hard-ass who probably couldn't throw a football past his shadow and likely has no clue what hand his baseball glove goes on as a righthander. Let's just make this clear, the only person I have seen on television dumber than Audrina is Justin. At first I liked Audrina, I thought she was good to Lauren after the Heidi debacle. However the way she let herself be completely manipulated by someone as obtuse as Justin is beyond comprehension. The most creative deflection he could think of when he got busted making out with the redhead in front of his pseudo girlfriend was "you just see what you want to see". What is he talking about? Uhhh, okay Justin, what is your plan-B to get out of this jam. Thankfully Audrina sent him packing back to the hair salon where he works. Next up? Jason. Why would someone cute, seemingly bright, and as genuine as one can be on "The Hills" waste their time chasing Jason? Lauren seems to have a lot going for her. She is an intern who drives a $ 60K car, so something must be going right for her. She wasted how many years chasing Jason, who mastered his lines of "Huh?" and "I don't know" better than anyone in television history. Does this make any sense? I thought Heidi was going to be a good character and seemed to be a good friend to Lauren, until she met Spencer, whereupon she dumped her entire life for a guy who wants to fill his dining room with arcade games. I am not sure Spencer is smart enough to play the arcade games however, since they sat unused in the dining room the entire season. He could have had his friends over to play them, or show them how they worked, but he has no friends....but he does have a beach house...or mommy and daddy have a beach house. Remember when Heidi stabbed her friend in the back to get promoted and then asked her to transfer all the contacts from her old cell phone to her new one? That was great. Oh, and didn't she quit on the next episode? The train wreck really was in slow motion then because most people would have quit on the spot. I do like Whitney, I think she is the best of the bunch. She seems very well grounded has never been played by the morons parading around as the male characters on the show. I think she is bright and is lone admirable character on the show.

So I am totally embarrassed that I watch this show. I thought the season finale was a dud. Couldn't Heidi have started balling for us instead of standing there with a quivering lip when Spencer walked out? I have also learned that I do not want my daughters to emulate anyone on the show (okay maybe Whitney) and if they bring home a doofuss like Justin, Jason, or Spencer expect him to sit outside by himself in the cold when we have dinner together. He will finally get to make use of his woolly stocking cap that way.

I Think it Comes Down to Trust, or Lack of it

I am not sure why the Dems are so enamored with raising taxes. They hope to get new taxes enacted ASAP by hoisting the populist message that their new taxes are only on "the rich".

There are several problems with this however for all of us. First, what is the hard definition of the mushy term "the rich"? Is this based on net worth? Is this based on W-2 earnings? What level is determined to be "rich" and who gets to decide? There have been proposed tax schemes in the past where rich has been defined as a household earning more than $ 200,000 per year, or $ 100,000 per year, or $ 78,000/ per year. Get the picture? Rich is a term that bends to meet the need of the argument for the specific tax increase. I can tell you that when raising a family of 3 kids, $ 100,000 and even $ 200,000 is not rich. It is a good foundation to support your family and gives you some options in education and lifestyle, but rich? Hardly.

The next problem is this; when has there been a tax, once enacted that went away, or shrank without tremendous angst and taxes hikes elsewhere so any reduction is revenue neutral? Answer, somewhere between never and rarely. The problems with increased taxes are obvious, the question I have is why, when the economic risks are so great, are the Dems willing to take these risks to increase the federal coffers?

I think it is because the Dems do not trust people and markets. They cannot fathom that the market, the aggregate of millions of people making independent decisions on a daily basis that will determine their daily state if not the long term outcome of their lives, can arrive at a state through the invisible hand that can be better than the heavy hand of government intervention. The Dems want a minimum of guaranteed success for everyone, no matter the individuals role in their own outcome. They do not trust democratic process nor capitalist free markets. Therefore, like a nosey mother who cannot cut the apron strings with her children, the Dems have to micro manage decisions for everyone, no matter how little people may want government meddling.

The Democrats have been called arrogant and elitist in their notion that they know better than the citizenry how to spend their assets produced through a lifetime of work. I think there may be an element of truth to this, but I think the larger driver is that they just do not trust the free market to allocate resources in the most efficient and just manner. This is where the democrats have left the building that our founding fathers created for all of us. They just don't trust markets and by extension they do not trust you and me and the decisions we make. The truth is that markets are "smarter" and more effective than any individual or group of leaders. If they could just learn to trust markets and trust those who exist in those markets, they might fare better at the ballot box and also leave a little more cash in the private sector...where it belongs.

Try this on for size....

Senator Clinton, it has become apparent that there are multiple instances when your campaign has planted questions in town hall forums. Based on the facts surrounding this situation including statements from those approached to ask the planted questions, there is not alot of doubt that this occurred over the past two months. We would like to know your thoughts on this matter.

"This is my campaign and I am ultimately responsible for the actions and the practices of those in my campaign. Planting questions in a public question & answer forum is not an acceptable practice under any circumstance. As I stated, this is my campaign and I accept the responsibility for this campaign miscue. I have taken actions necessary to ensure that this practice will not be repeated. I have made it abundantly clear to everyone in my campaign from my senior leadership to the local volunteers in the electoral districts that I will not tolerate this practice moving forward and that this is not the way we want to win this nomination. I have full and unwavering confidence in my leadership team and I look forward to putting these incidents behind us. I am eager to asnwer all the questions voters have about my candidacy, my qualificaitons to lead this country, and my positions on the issues that are important to our future. You have my personal commitment that my campaign will be the most ethical and above board organizatoin in this election. Thank you for your time and thank you for your support."

What would have been so hard about that? If this was that response that Senator Clinton put out in the political arena two things likely would have happened. First, the electorate would have thought "how refreshing to see a leader stand up and take responsibility for the actions of their organization....like the rest us do every day." Second, the political fallout from this gaffe would likely be nearing its nadir instead of its zenith. Clinton's chosen response to this revelation of "It is news to me" coming on the heels of her obfuscation of driver's licenses for illegals issue was probably the worst possible response. Even if it was news to her (hard not to chuckle writing that) the better response would have been to step up and take the heat as the leader of her organization - the buck stops here. Opportunity missed by Mrs. Clinton....big time. Maybe just once, be up front and honest with us...try that on for size, you will be surprized how the truth plays with the ordinary people of America. Here is a great peice of advice I give to my team when any fuzzy issues arise. If you tell the truth, you only have to keep up with one story...it makes life a lot easier.

Two Posers

If someone bought an expensive house with little to no money as a down payment, took out an interest only loan with a teser rate that is now coming due, if that person now has to move, aren't we really talking about someone who just rented a house they probably couldn't afford in the first place? The banks who made this loan knew what they were getting in the first place with this type of investment risk, they are not entitled to any kind of bailout. The more unpopular position however is that the "home owner" or really the renter also knew the rules going into the game as well. As a person who really didn't own a home because they had no equity in the property, but was just renting it over the term of the teaser rate, they are no more entitled than the bank to a government bailout. They were a renter. Renters move all the time. This is not the government's business for crying out loud. Let the market sort this out. The only thing government intervention will do is screw up the process and cost us all a lot of money. Anyone want to take that deal?

A unit if energy is a commodity, just like a sack of potatoes. It really does not matter to the consumer the souce a calorie of energy. The market has determined that the most cost effective source of energy is fossil fuel. We can choose to like this reality or not, but at this point in our technoogical development, fossil fuel is still the cheapest, most efficient, and most abundant energy supply for the world's economic and societal needs. When the cost of fossil fuel begins to rise...as the supply starts to dwindle many years into the future or if hyper demand far out paces supply, then an alternative will appear in the market. Until that time, it would be foolish to spend some factor greater than the market cost of energy for our needs. As stated before, energy is a commodity. Paying more for non-fossil fuel would be like paying Five bucks for a Two dollar sack of potatoes. Why would anyone do that?

Only in America

You know what is both ubiqutous throughout the world and at the same time uniquely American? I think the asnwer to this riddle is human stupidity. Don't buy it? Just look at some of the videos on You Tube. In fact human stupidity has become so pervasive that people make idoits of themsleves, inflict injury on themselves, or take crazy risks just to have something to post on the Internet. One could argue that at least a few years ago people got paid to be morons and it made a little more sense. At least making a movie like "Jackass" provided the....well...jackasses with a little income. Now there are hours of jackass-like video clips posted everday on You Tube just for giggles. These posts come to you from every corner of the Earth, so this idea of human stupidity is truly pervasive.

What is truly American about human stupidity, is that we have legions of people who get to make a living off the stupidity of others, they are called trial lawyers, or more specifically personal injury attorneys. Let's just say that the power mower has yet to be invented. We are going to be economists for a while here and make a series of assumptions, so the power lawn mower does not exist. Let's assume that one day by a stroke of sheer brilliance or complete dumb luck my buddies and I stumble across the idea of a 2-cycle engine driving a whirling blade encased in a container with 4 wheels, a throttle, and a starter. Voila - we now have a power mower. Let's also say that my friends and I are smart enough to know that while very useful and meeting a significant need in the market, we understand that our product can be dangerous if used inappropriately. Therefore, we sell this product with every reasonable warning and direction we can imagine. Do not operate on steep hills, do not operate while intoxicated, do not fill with gas while the engine is hot, keep all body parts away from the blade while running, etc. etc. We have given the world a very useful product that will save untold hours and created a better life for millions.

Let's go back to point number One, human stupidity is everywhere. Even though every human on the planet knows that this is a dumb idea, I bet you anything that there will be some loony-tune out there who will try something stupid with our newly invented lawn mower. Some powered-by-beer fraternity genius will try to do something like cut his hair with the power mower. The result will be predictable...srerious injury to the "user" of our product. Here is where the unique American twist to ubiquitous human stupidity comes in...someone (personal injury attorney) will get to make a living off of druken frat-boy's stupidity. Under strict prodcut's liability, we, as the inventors of the lawn mower, should have had the clarevoyance to see that somewhere, someday, a frat-boy would think that cutting his hair with a power mower was a good idea and we are liable for the serious injury resulted. We will be sued for some one else' moronic behavior. That is where the Americanization of human stupidity kicks in. We allow others to make a wonderful living off the pure unadulterated stupidity of irrational consumers. The personal injury attorney will take us to the cleaners, or will try to take us to the cleaners, because his client is an idiot, we have money based on the value of our invention in the market, and there is no downside risk for him to sue us.

So while there is no corner in the market in human stupidity, there is an American corner on the market letting trial lawyers get rich bacuase of it. Guess what many of our politicians did before they became politicians? Guess what presidential hopeful John Edwards did for a living before entering the world of national politics? Hint: He didn't invent lawn mowers or anything else of value. See the problem now?

Stupid is as Stupid Does - Politics in 2007

I know that most politicians understand the inverse relationship bewteen tax rates and tax revenues. It has been the case multiple times throughout the past 50 years that when tax rates are cut, the economy surges, and tax revenue swell to record levels. This was the case in the Kennedy administration, the Reagan administration, and in the "W" administration.

While this is a semi-counter intuitive reality, it is not outside the grasp of all the "smarties" currently in or running for political office. I know that democrats understand this as well as the reverse to this reality which is that higher taxes tank the economy and therefore reduce tax reveues. So if everyone understands this, why are the dems hell-bent on increasing taxes? Why do they want to soak the tax payers who are paying the vast majority of US taxes? Is it punative? Is it that the leading dems truly are socialists?

There are a few other realities that the tax-happy dems should understand before they reach further into the pockets of the "producers" in this country:

1) Most of "the rich" that they laoth (though the dems in congress ironically are all very rich) are all smart emough to find ways around any tax increase plan. The smartest politician cannot outsmart the high end tax payer...who is a likely a high-ender becuase they are smart, motivated problem solvers who understandably want to keep the money they earn. That is how the system works. I have talent/skill, I work hard, I do a very good job, and get the prize. There is no better system in the world. Most high-enders pay a ton of taxes. I think most high-enders know that they earn a lot and will pay a lot. But they are currently taxed to the brink, and if they are saddled with more unfair, redistributionist taxes, they will find ways to avoid them. I am so happy for them in this endeavor.

2) No matter how hard the government wants everyone to be "okay" and to have a middle class standard of living, there are those who will spit the bit. Congress cannot force every American to show up to work on time, to work hard, to save for a rainy day, to go the extra mile on the job. Congress cannot force people to not have children out of wedlock, to stay married when they decide to get married, and to finish high school. This is the simple recepie for a modicum of success in the US. It is not a hard plan to follow, but there are many who will not.

The best intended programs will not lead to "no hardship for anyone". The tax burden imposed by unecessary and overreaching government programs will throttle the economy and kill the golden goose of United States free-market capitalism. The irony in the democratic tax and spend plan is that the folks who the dems allegedly want to help are the first ones to get kicked in the shins during a tax hike induced economic recession. The rich that the dems want to take down several pegs can weather a pretty rough economic ride. How does the paycheck-to-paycheck clerk make it when the recession forces their employers to cut their job.

3) the best thing any politician can do in managing the economy is stay out of the way. The US system is the best in the world. It creates millionaires who started from humble beginnings. It rewards innovation and hard work. It is the only system in the world that is self-limiting. My success in this system is limited by my ability, my work ethic, and the value I bring to the market. I limit my earnings and my worth in the market by the decisions I make. I do not want my economic success limited by decisions of power-addicted weanies in Washington who have never held a real job, never run a business, or had to make a payroll. Our system is the envy of the world, why do the dems want to kill it for government mandated mediocrity? Medicrity for everyone...courtesy of Uncle Freakin' Sam.

The United States tax problem is not a problem of too few revenues, the tax problem is too much spending. The tax problem in the US is a function of careerist politicians from both parties who want nothing more than to be re-elected and use tax-based handouts to buy votes. There is nothing wrong with the free market system in the United States. It works best when left alone. The free market has given us the standard of living we enjoy, the products we use, and the opportunities we leverage. It is our biggest asset. What is seriously broken in our country is the devolution of our republic into system of government handouts where political support is bought and paid for by politicians dreaming up new government guaranteed benefits for things that the free market and free consumers should provide for themselves.

If the government would stay out of the free market, there would be more and better of everything for those who chose to participate in what this country has to offer. I wish there were a politician with the courage to deliver this message to the nation. I guess it is easier to hand out "free" prescription drugs, retirement plans, and health care.

Gas Prices too High? Not Yet.

The price for gasoline, while a big headache for all of us, is not high enough yet, or stated differently, the price of gas is not high enough for those in the United States to do anything more than complain about it. If the price of gas were actually "too high" we would demand that we draw the oil reserves out of ANWR. If the price of gasoline were really too high it would be political suicide for the governors of coastal states to stake their incumbancy on stopping off-shore drilling. If gasoline prices were really too high, we would be willing to leverage the ridculous amount of coal resources the United States has for our fuel needs. In the true measure of whether or not gas prices are too high, if gas prices were too high the free market would deliver a new innovative substitute fuel or technologically driven renewable source of energy, and competition for consumer's energy needs would drive market equilibrium to a lower price per unit of energy. However, none of this is happening. We have the luxury of sub-optimal fuel sourcing. We can revel in our smugness, knowing that somewhere a caribou is feeding on grasslands that might otherwise fuel our nation. We can feel good about our ferderal government spending billions on inefficeint, market failures like ethanol. We can enjoy cocktail party banter about the vast energy resources of the United States that go untapped, while we send billions of dollars to buy our energy from those who despise us. A barrell of oil will hit $ 100 some day. It may not be tomorrow, but absent some impactful change in the attitudes and actions of the US consumers, the price of oil will hit $ 100 a barrell. It has to, market demand is increasing faster than market supply. I am certain when that day comes, we will gripe about how gasoline is simply too expensive. However, until we are ready and willing to do somthing about it, it really isn't. While pondering about "somedays", someday this problem will be solved, someday the price of gaoline will be so high that we will do somthing about it or the free market will do somethng about it. That day just isn't today.

Random Thoughts

When did “I don’t like it” evolve into “It’s not fair”. I don’t like that fact that Tiger Woods can hit a gold ball into the next county and makes a ga-jillion dollars a year and I can’t and don’t. I may not like it, but it is certainly fair.

What do people mean by the term “economic justice”? And who determines what defines economic justice. Hypothetically of course, if I am smart, work hard, sacrifice personal time, and am effective in a very competitive industry, is it “just” that I make more money than someone who may not have the skills I do, does not work as hard, and never misses the 5 o’clock happy hour? Is it “just” that the last dollar I earn is taxed at a much higher rate than the guy who does not work as hard or make the sacrifices I make?

Do the fans of government “solutions” (aka handouts) give any thought to how much money it takes to generate every dollar of government benefit? How many dollars in FICA taxes does it take to generate a dollar in social security benefits? I have no idea but I know it is a lot more than the dollar of generated “benefits”. The Social Security Administration has buildings, employees, computer systems, networks, calculators, endless forms, desks, chairs, paper clips…so how much does each dollar of benefit cost us…$ 1.25, $ 2.00, $ 5.00? I have no idea, but I know that any dollar sent to Washington comes back to the people as less than a handful of pocket change. Who are these people who want to send more money to Washington? Is there are worse investment in the world? I can’t think of one.

Remember that no matter what happens in life...the lawyer always gets paid.

The Insurance Thing

When did health insurance equal health care? It seems that the pols, at least on the democratic side of the aisle, interchange health care and health insurance, implying that one cannot get health care if they are not insured. Anyone with half a brain knows that is not the case, but the emergency room as the primary care facility clearly is not the best option for Americans in any scenario.

I guess folks understand the insurance business, but then again maybe not. I am no insurance guru, but I do know that insurance is just that…something that insures me in case of a large unforeseen event. The insurance game is one of pooled risk.

Let’s look at the auto insurance business. I pay my insurance company quarterly around $ 400/month (now that my eldest daughter is driving). Everyone else who is a customer of my insurance company pays an amount based on their coverage needs as well. For the vast majority of auto insurance customers, year after year we lose money on our auto insurance bets. Knock on wood, I have never filed an auto insurance claim, so every year, I have paid into the shared risk pool and every year I have thankfully lost. The only ones who come out ahead are those who have an accident. Hence the “insurance” ensures that those who have an accident do not have to pay catastrophic out of pocket the collision costs, medicals, etc associated with a major wreck.

So why is health insurance perceived to be any differently? Uncle Sam, that’s why. If 10 people pay a thousand dollars a month into health insurance pool, if all of us become sick and need more than $ 120,000 of care the insurance company goes bust. There is no magic in healthcare insurance. There is no money multiplier that creates an infinite sum of funds available for consumers. However, most folks with health insurance are fairly cavalier about spending healthcare dollars as the majority of the funds come from the anonymous third party payer…the insurance company. However, the insurance company and the insurance industry is subject to the same financial and actuarial realities of any risk-based business. If the same 10 people pay a thousand dollars a month for health insurance and only one of us get seriously ill requiring $ 250,000 of medical treatment, then 9 out of 10 of us lost money in the fiscal period, but we were covered just in case by pooling our risk and the insurance company playing to odds that most of us will remain relatively well during the period. So far so good, however, once Uncle Sam sticks his nose into the healthcare business or any business, the efficiencies of markets go away, costs escalate, and we have problems with people being able to afford coverage as costs for care and usage are driven higher by artificial, non-market conditions.

I am a fan of pay as you go for wellness care and insurance for catastrophic or major illness. Just like a high auto insurance deductable, I would be able to reduce the cost of major event health plan by stepping up to the plate for routine care. This would also force me to shop around and look for the best value for my healthcare dollars.

The healthcare “crisis” is really not that hard to solve, as long as people understand the basics of the insurance business and have the incentive to spend their healthcare dollars wisely. There are a lot of difficult problems in this country, healthcare and health insurance really is not one of them, if people would just use their heads….and if uncle Sam would get out of the way.