About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Monday, September 29, 2014

Finding Candidates Worth Voting For

It's been so long that I can't remember when, after a major event like the Benghazi murders on 9/11/12, that it wasn't reported that BO immediately went off to a campaign fundraiser.  I think we heard this so often, & still do, that we just didn't think about what this meant – it was like water running off a ducks back or just noise we heard with no meaning.  The graphic below explains that BO is determined to not let the midterm elections in his sixth year in office be the agenda breaker that it traditionally has been for his predecessors – & having money to tell a misleading story is @ the heart of his plan.  We have learned what it means to be a community organizer.
click on graphic to enlarge
With regard to the midterm elections pundits like Karl Rove have opined that Republicans are in a very strong position to win control of the Senate while taking for granted that they will hold, if not increase, their House majority – both of these potential accomplishments are important because they will help rein in the last two years of BO's intentionally destructive agenda & give the country a small chance to avoid becoming a politically ruined nation after the 2016 presidential election.
But to counter the theoretical Republican strong position the above graphic shows that Democrats have received far more campaign donations & it has come to light that many of the Senate races are much closer than thought – possibly because of the money spent.  Couple this with the natural Democrat advantage of promoting welfare dependent programs that in reality perpetuate the deterioration of the American standard of living – like the spreading national trend of raising the minimum wage laws – & you can see a Republican victory is far from assured.  Comprehensive immigration reform is always on the Democrat front burner (although sometimes on simmer like now) & this promise of amnesty will ensure the Hispanic vote for Democrats while the claims of the Republicans' "war on women" will attract the usual women voters to Democrat candidates.  MO, with an approval rating of well over 60%, has recently pushed women's issues & this should continue.
The money advantage allows Democrats to present negative ads that trash Republicans & this might just work in enough races for Democrats to hold control of the Senate what with Republicans already excruciatingly low approval ratings.  The Democrat Senatorial Committee plans to spend $23 million in TV advertising in Iowa, North Carolina, & Colorado which is $4 million more than Republicans plan to spend in the entire country.  Source WSJ.
Republicans are being outspent in nine of the ten competitive races shown in the above graphic – all except Alaska.  Who can blame Republican donors after the last two miserable candidates the GOP put up for president.  For those who still do not think there is more than a dime's worth of difference between such Republicans & their statist opponents please consider the example that Gina McCarthy, BO's recently appointed & confirmed head of the EPA, was an environmental adviser to Mitt Romney in Massachusetts before BO picked her for her current spot.  Oh please.
Long gone is the Republican single minded strategy of running only against ObamaCare which is starting to become more accepted & popular with an unsuspecting populace.  Of course a major part of this is because BO unilaterally delayed the most onerous parts of his law – for instance the next open enrollment on the healthcare exchanges starts on November 15, eleven days after the midterm elections.  How convenient since premiums are expected to go up an average of 10% for coverage in 2015.  In addition, the changes to ObamaCare continue to phase in.  The first set of penalties for not having healthcare insurance start this year - but are not payable until April 15, 2015.  This leaves Republicans telling disinterested people how bad their healthcare future will be but with no concrete proof until after the election – not a political winner on November 4. 
Just like Medicare, a tremendous loser for taxpayers, ObamaCare's burden on the country will increase in 2015.  According to an HHS summary through mid-August the number of insurance companies offering ObamaCare healthcare insurance plans will expand in 2015 from 252 to 316 – 77 new insurers with only 13 dropping out of the healthcare insurance exchanges.  The summary does not include seven states & the new plans are still subject to approval but you can get the idea that insurance companies want in.
In summary insurance companies want in, people will not know the detrimental effects of ObamaCare until after the midterms, & Republicans are left either dropping the issue or telling people how bad it is when hardly anyone has experienced the coming negatives themselves. 
We have an idea what Republicans are against but don't know what they are definitely for other than picking up control of the Senate.
We also know House Republicans have a modest goal of picking up 12 seats – a very small target in such an anemic economy where the latest Pew Research poll found only 21% think the recession that officially ended in June 2009 is over.  With a median annual household income of about $50,000 & the Federal Reserve's target inflation rate of 2% people @ the median will lose $1,000 per year in purchasing power in accordance with the policy of the government agency that was established to maintain the purchasing power of the dollar.
But the meager 12 House seat pick-up goal is the reality for a country in the apathy to dependence stage – another sign of Death Of Democracy of the American Republic.  A significant percentage of the country is just not interested in anything but electing statists who support & provide government dependent programs – this is what must be turned around in order for the country to prosper so that everyone not only knows the recession has ended but can participate in the prosperity to the best of their ability.
So what happens if Republicans win the Senate & hold the House.  To paraphrase Pelosi "you'll have to elect the Republicans to find out what their plans & programs are."
We all can list the libertarian & Tea Party points of limited government, personnel responsibility, & free enterprise that candidates worth voting for follow as a matter of routine.  But if this was the norm members of Congress would not need to be off for six weeks prior to an election campaigning day & night telling us with carefully orchestrated positions based on political calculations to win over one group or another how they have our interest @ heart – when we know that the overwhelming majority have only their own interest @ heart. 
Many in this readership have already stopped voting for the Republican lesser of two evils (Republican or Democrat) because it is this two-party philosophy that brought us to this stage in our descent toward dependency & less self-sufficiency.  The stakes are high in this election & the 2016 presidential election but even higher is stopping the drift away from our founding principles – this drift cannot end well & the sooner we start to turn it around the better. 
With the awareness of the millennial generation (ages 18 to 34) coupled with negative electoral experiences of the baby boomers more & more people realize they are not voting for choices because there is just one Big Government Party (think – you wind up with both government run healthcare & Gina McCarthy as head of the EPA with either BO or Romney as president) where the elites in the Democrat & Republican wings of this party take turns being in power.  How ironic that a people who have become so dependent on government would now think they have the power, let alone ability, to properly elect their representatives in government.
I have advocated for years that we need more than two major parties (currently two wings of one Big Government Party).  To me you can't have enough parties & if you have more than two viable parties many presidential elections will be decided in the House of Representatives (who vote for the three candidates who received the most electoral votes) per the Constitution when no one candidate receives a majority of electoral votes (currently 270).  A much better system than two parties taking turns being in power.
You can't start sooner than this election to break the two party cycle that produces congresses with under 20% approval ratings but 90% incumbent reelection rates.
Do you want to waste your vote?  Gary Johnson answered the wasted vote question in a Third Party presidential debate two years ago - "Wasted Vote? The only wasted vote is when you vote for someone you don't truly believe in."
Let left-wing statists vote for Democrats who support forcing taxpayers to pay for big government social programs & right-wing conservatives vote for Republicans who support laws that restrict personal behavior that violates their ideas of traditional values.  If the rest of the people vote for candidates who are financially responsible & socially tolerant we will have established a viable third choice which is the last thing the two major parties want.
Since the last election RTE has posted the voting records of both House & Senate members on many important issues as well as highlighting some excellent candidates.  These people are far superior to McCain, Romney, Boehner, McConnell, Leonard Lance, Rodney Frelinghuysen, or any Democrat – all on this list except the Democrats pander for votes in a way that is not believable to Hispanics, Asians, blacks, homosexuals, single women, young people, & the poor.
It is this type of information & knowledge that is essential for us to remain free – I do this for my personal benefit in formulating my own opinions & the blog is a way of sharing my work.  You have five weeks to find candidates worth voting for – make the most of it.

Tuesday, September 23, 2014

Why Income Inequality Has Not Increased In America

This post is based on two reports of income inequality studies entitled - The Myth of Increasing Income Inequality & Income Inequality In America – Fact & Fiction - that were sent to me by Diana Furchtgott-Roth of the Manhattan Institute.  Diana wrote the first report in its entirety & contributed to the monograph in the second report.  You can use this information in conjunction with the September 8 post regarding income mobility.  I know many subscribers to RTE, like our Wall Street Finance VP, will pour over these reports.
The studies conclude that there has been no increased inequality in America from 1987 to 2012 when measured by real spending per person by income quintile – the best measure of a person's financial well being.
How can that be true since we all have heard that the average CEO used to make 20 to 30 times the income of the average worker & lately that ratio has been reported to be more like hundreds of times more.  The conclusion seems even more improbable when you consider the dreadful economy of the past six years with its high degrees of unemployment & underemployment, the number of previously unemployed people who found work but only @ a fraction of what they used to make, the labor force participation rate of prime-age workers (ages 25 to 54) is still 2 points below its pre-recession level, the median inflation adjusted household income dropped 5% between 2010 & 2013, the poor education provided by government schools that leaves graduates (& drop outs) ill prepared to find work in the global economy, employers are still concerned about the shortage of qualified workers in engineering, construction, & information technology which they say is both intensifying & broadening across skills & occupations, the Fed's manipulated zero-level interest rates that leave CD interest income virtually non-existent, & statistics abound that the top ten percent now takes in 45% of the nation's income instead of one third.
We know all of the above maladies are facts that would @ least imply growth in income inequality over time.  But why then don't we see people dying of starvation in the streets?  Could it be that inequality is not growing? – i.e., the rich are not getting richer especially @ the expense of the poor.  In fact it is pretty close to just the other way around.
For perspective it is important to understand that the average poor American in the bottom income quintile has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe.  These comparisons are to the average citizens in foreign countries, not to those classified as poor. Source – Robert Rector of the Heritage Foundation. 
The problem with the emotional excitable claims made by BO that the income gap between America's rich and poor is the "defining challenge of our time" is that the claimed increasing income inequality in most studies is based on pretax income, does not include any of the 126 anti-poverty federal government programs whose benefits & existence has been documented by the Cato Institute such as food stamps, housing allowances, unemployment benefits, & Medicaid, does not include demographic changes to households that have occurred over time, & does not include the effect of the Tax Reform Act of 1986 which resulted in some small businesses filing their income taxes in the late 1980s & 1990s under the 28 percent individual rate rather than the 34 percent corporate rate, later increased in 1993 to its current level of 35 percent – as long as the top individual rate is less than the corporate rate small business owners will follow this practice.
The Manhattan Institute studies address faulty methodology used in other studies by concentrating
directly on the amount of money people have available for spending using the government's own published consumer expenditure data.  It is from this analysis that you see that there has been no widening inequality for the last 25 years.  The impact of the Tax Reform Act of 1986 makes comparisons of incomes or spending prior to 1987 pointless as explained above.
Below is a table from the Manhattan Institute studies that show the remarkable consistency from 1987 to 2012 in the ratio of real expenditures per person of the top income quintile to the bottom income quintile based on the BLS Consumer Expenditure Survey. 
click on table to enlarge
The information in the table is not based on the spending of CEOs of the Fortune 500 companies (i.e., 500 people), the handful of professional athletes who have tremendous incomes for a few years, or the even smaller handful of successful Hollywood stars who may never have another hit movie or TV show again.  It is based on an analysis of the 120 million households in America broken down into quintiles & then each quintile is analyzed to show real inflation adjusted spending per person per quintile for the selected years between 1987 & 2012.
Increasing inequality was shown to be a myth by the Manhattan Institute when they analyzed the government's own published consumer spending data from the government's Consumer Expenditure Survey. 
In essence the spending data can be derived by adding disposable income (adjusted for a small savings rate – i.e., people spend most of their disposable income) plus government transfers like those listed in the table below.  It is this balance that tells the tale of why income inequality has not increased over the years.
Income taxes (federal, & if any state & local) coupled with Medicare & Social Security payroll taxes reduce the pre-tax income of people in the higher quintiles while none of these taxes are paid to any significant degree by people in the lower quintiles.  Over the years Congress & our state elected representatives have done a masterful job of distributing a portion of the aforementioned tax revenues to people in the lower quintiles so that the ratio of the top to the bottom quintiles remained constant as shown in the above graphic.  This consistency of income redistribution shows the precision with which the politicians controlled tax revenues even before
BO told Joe the Plumber he wanted to spread the wealth around.
Our elected representatives have found the monetary redistribution formula to keep the domestic peace so that the half of the population with poor education & limited job skills is not @ the throats of the productive half – everyone has some money jingling in their pockets.  Of course this makes the U.S. a mixed economy – somewhere between a totally free market (pure capitalism) & a government directed one (socialism).  In 1996, just ten years into the 25 years covered by the Manhattan Institute's studies, Professor Friedman said "We're more than 50 percent socialist.  And I don't think we're getting our money's worth." 
   click on graphics to enlarge
The above table shows where some of the money goes & the above right graph indicates that government dependence spending is now higher than disposable income.  Both of these graphics are from IBD.  The first graph on left is from the Cato Institute & is for 2011.
The above table does not include 3 million people who have signed up for Medicaid under ObamaCare.  The Cato Institute has determined that a family can get government benefits equivalent to a $35,000 a year job in 11 states & in Hawaii such benefits are equivalent to a $60,000 a year job.  The programs do not require work; in fact people lose benefits if they become employed.  There is no one working in half of the bottom quintile households.
But we have to be careful of his intentions because BO does not always distinguish in his remarks between income inequality & growing income inequality - in fact he rarely if ever does.  In BO's defining challenge of our time quotation above he was referring to just the gap between the rich & poor (not the growing gap) meaning he favors socialism - for starters.  BO prefers the methods that show there is growing income inequality (disproved by the Manhattan Institute studies presented herein) & he also tries to convey the idea that the people in the bottom quintile are always the same people (disproved in the September 8 post regarding income mobility).
Scott Hodge, President of the Tax Foundation, calculated that the top two quintiles currently pay $1.5 trillion in taxes that go to the bottom three quintiles (yes, this means even an average middle quintile family – i.e., middle class - receives over $7,000 more in benefits than they pay in federal taxes each year) – this represents 21% of the top quintile's income.  Mr. Hodge calculates that in order to bring every family in America to average would require the people in the top two quintiles to pay higher taxes than they currently do with people in the top quintile paying the vast majority of an additional $2.4 trillion per year in federal taxes or 74% of their income. 
So now we know BO's target.
In mid-August a report came out that statewide 64.2 percent of New York students are not proficient in math and 68.6 percent are not proficient in English.  These appalling results, typical throughout the U.S., take the subject of income inequality to another level by revealing a problem much greater than the false and misleading claims of income inequality.  They clearly show how someone becomes so ill-prepared to support themselves that they will be competing for jobs with third world people who make pennies a day.

Wednesday, September 17, 2014

From Discouraged Worker To Suicide Victim

Full disclosure - I know people whose future is poverty, homelessness, & suicide.  I have known people who have committed suicide.
click on graph to enlarge
Robin Williams suicide by hanging has brought to the fore the fact that suicides of people aged 45 to 64 has increased sharply since 1999 so that this cohort now makes up the largest group of people committing suicide (see above graph). 
Thanks to economic illiteracy of the masses & just plain poor (or no) financial planning whatsoever people who have little savings, small pensions, or no family to rely on are very susceptible to this tragic ending so much so that deaths caused by suicide exceeded those caused by auto accidents in 2011 – source the CDC & the National Highway Traffic Safety Administration. 
Today people known as discouraged workers know the hopelessness of trying to find employment & when another prominent suicidal trait is added such as depression, loneliness, or chronic pain from a physical condition they become a candidate for suicide.  A discouraged worker is someone who drops out of the labor force because they cannot find work.  They move in with family & live a life of part time under the table jobs if they are lucky, receive a government benefit check or two, & are the cause of spending down their families' wealth.
This problem only increases as the baby boomer generation ages & its members become more alone with no savings, pension, or family of any means to help support them. 
The oldest of the baby boomers is now 68 – so this generation is well into the age group that is normally considered retirement age which accentuates this problem. 
The financial downturn of the past 6 years increases the possibility that workers over 45 with limited skills who have been laid off see the impossibility of finding gainful employment again in their lifetimes.  This does not immediately lead to someone committing suicide but make no mistake – this type of situation is only the fault of the person himself who did not continue to take the responsibility to get the training & experience necessary to make a living for himself & his family.
Some of the real long time subscribers to RTE will remember this contribution from 2007 from one of several doctors who subscribe to RTE:
"I thought about what we talked the other day. I would like to add the following to what you wrote about depression.  It looks like your friend was an example of burnout in which body and mind are strained, developing emotional and physical fatigue due to high stress. The involved person becomes overwhelmed and depleted of energy. Sadness, anger or indifference can set in.  Since burnout is a physical and psychological response that is connected to feelings about a work situation, it is important to attend to the mind as well as the body.  Burnout, if not treated leads to or reactivates depression.  Some of the other symptoms are: Powerlessness, hopelessness, drained, frustrated, detached from people and things, insecure about one's competence and abilities. The person's relationships fall apart, productivity drops, work deteriorates and the end result is suicide if the condition is not detected and treated."
The purpose of this post is to help all of us detect the symptoms of friends or family that can be treated in time.
1.  A person dies by suicide every 16 minutes in the U.S.
2.  A suicide attempt is made every minute of every day.
3.  Depression is the leading cause of suicide.
4.  One in twelve teenagers will attempt suicide.
Warning Signs:  If you know someone with one of these signs look for another.  If you find a second sign look for help.
1.  Depressed mood.
2.  Loss of interest in usual activities.
3.  Change in appetite or weight.
4.  Change in sleeping patterns.
5.  Speaking &/or moving with unusual speed or slowness.
6.  Decreased sex drive.
7.  Fatigue or loss of energy.
8.  Feelings of worthlessness, self-reproach or guilt.
9.  Diminished ability to think or concentrate.
10.  Reckless behavior.
11.  Withdrawal from family, friends, & society.
12.  Thoughts of death.
Prevent Suicide:
1.  Be willing to listen.
2.  Be non-judgmental.
3.  Become available.
4.  Don't be sworn to secrecy.
5.  Get help from local crisis intervention agencies, or call the National Suicide Prevention Lifeline @ 800-273-TALK.
Hope that this post can help save someone's life through your awareness & action.  My dear friend who committed suicide had far too many of the above warning signs that none of us recognized as potentially suicidal.