Tim Worstall : Master of Delusive Prattle tries to Redefine Wealth

I may be mistaken with this first assumption:  I assume Tim Worstall is, at least moderately, intelligent.  Whether he is or not, Tim Worstall epitomizes the practice of using one's intelligence as a tool for developing and deploying subterfuge, to justify any and all nonsense one can come up with.

His latest article on Forbes, from 2016-Aug-19, is entitled: "CBO's Very Bad Report - It's Complete Nonsense That The Top 10% Hold 76% Of All US Wealth", and the title itself characteristically reflects Mr. Worstall's desire to employ his intelligence for the purpose of misleading readers.  His aim is quite clear: create uncertainty about any statistics that lend validity to positions that run contrary to his own personal socio-economic and political ideals.

I typically try to ignore Worstall's garbage, but I found myself so annoyed by the ridiculous assertions in his current article that I had to respond — though unlike Worstall, I don't have the advantage of the asymmetric media exposure which confers columnists like him an incredible advantage when it comes to readership / reach.  But, I have to try...

Worstall's Insane Assertion: Wealth is Not Counted Properly

Worstall states:

"It is true that they [the top 10% of people] have 76% of the wealth as it is being counted. But that’s the very problem, the manner in which the wealth is being counted." 

Why does Worstall assert that wealth is measured wrong? In summary, he contends that this 76% of wealth held by the few is not defined accurately because it is financial wealth and it does not include a couple things: the value of human capital and, to a lesser degree, the (assumed future) value of pensions and retiree benefit plans.

When most people are asked to define wealth, they typically arrive at a definition that sure sounds like financial wealth, and this will almost invariably include the assets an individual currently holds and, when enumerated, this wealth will include things like: cash, cash equivalents (instantly accessible holdings at a bank, etc), physical property (the unencumbered portion of cars, homes, etc), stocks and bonds, and most anything they feel can be reasonably quickly converted into cash.  These are core components of material prosperity, or, that is, being "rich" by way of having accumulated assets that can readily be converted to cash, traded for other items of value, or pledged as collateral against loans.

Redefining Wealth

Now, according to Worstall's view of reality, financial wealth doesn't properly reflect true wealth and its distribution throughout society.  In order to market his absurd concepts and realize his agenda, he needs to convince people that "wealth" is not what most people consider it to be (i.e., financial wealth), but rather that it should additionally include unrealized-potential, of which, per his conjecture, there is a meaningful and measurable net-present-value (NPV) that will somehow dramatically alter the data and thus the statistical view of wealth distribution — and of course, he wants his proposed definition of wealth to somehow show that the "top" doesn't hold such a large proportion of all wealth.

There are so many holes in his proposed redefinition of wealth that I hardly know where to begin my analysis. Mr. Worstall apparently has an incredible ability to suddenly forget basic accounting and now confuse income-statement items with balance-sheet items. That is, within the foundation of his ideal new wealth-accounting mathematics there will be a ridiculous new condition where income is intentionally contorted into an asset.  Income and wealth (assets) are two completely different things, Tim.  I learned this very, very early on in life, as I am sure you did.

Even if you have a very high income, you may not be at all wealthy, depending on your spending habits.  Wealth is what remains of your accumulate income, as assets, after you have made your expenditures and offset your liabilities.  Assuming that you have started life with a zero balance, wealth is accumulated by retaining, repeatedly, a portion of your disposable income, and having overcome a propensity to consume, instead opting to fortify your personal balance sheet (i.e., your assets / wealth).

Unemployment Insurance = A Component of Wealth? Yeah, sure!

In making his pitch for a new definition of wealth, Tim even hurls this incredibly weak profession:

"Unemployment insurance has a value – all insurance policies have a value. That if I get fired I have an income is a source of wealth to me. But that’s not counted."

Well, duh, Tim... unemployment insurance is not counted as wealth because it is income, when actually collected, and this income is realized only upon becoming unemployed. This is further from being any part of wealth than the number of discarded aluminum cans laying beside a street when you walk or drive by: at least those cans can be collected and recycled for cash, without the need to be unemployed as a precondition to realizing that gain. Seriously, who falls for your baloney, Tim? If you are unemployed, and even if you are collecting unemployment insurance, it is not very likely that you are accumulating wealth; just ask all the long-term unemployed during the recent great recession that were lucky just to be able to keep their house!

Going further, Tim even mentions food stamps as a source of wealth, stating that if he had no other income, perhaps he'd collect some $300 a month in food stamps or such, and that looked at over a long time (he seems to ponder 20-years or so) the accumulated capital-value would be some $60-70K, of which some portion of this potential future income should be somehow considered "wealth" now.  But, if that's the case Tim, per this imbecilic logic, we would all accrue the exact same potential amount if we each have the same 20 years in which to potentially collect it!  

This logic is so transparently flawed and clearly designed to evoke a response from those who are against the concept of food stamps, welfare, etc.  That emotional response aside, just think his nonsense through a bit.  In Tim's world, even a newborn has a considerable chunk of "wealth" to be counted in the wealth-distribution curve statistics, as that baby is potentially entitled to an entire long life of future benefits — be it Social Security in the USA, food stamps, or whatever — and, there is certainly human capital lying there in a newborn's crib, which we need to also assign a NPV to according to Tim. This is simply a fantasy view of reality and certainly not remotely coupled to any financial reality.

Let's look at Tim's next major alleged uncounted "wealth" item as while further deconstructing his absurdity...

Human Capital = Wealth?

At a corporate or business level, human capital definitely contributes something to intangible assets, though most often it is the resultant IP (Intellectual Property) and proprietary methods and processes derived or implemented by the employees that is the true asset.  This is out of scope here anyways, since Tim is talking about personal wealth. So, what is the true value of human capital when calculating personal wealth? 

Mr. Worstall cites a British Office for National Statistics (ONS) report that dared to mention the term "human capital" along with some proposed value of that capital, in such a way that it could apparently be bent to his liking:

"The ONS also produced figures for “human capital”, putting a monetary value on a person’s qualifications, age, health, personality and skills.
The value of the UK’s human capital increased by £890billion to £19.2 trillion last year"

Seeing that giant number (£19.2 trillion) must have immediately worked Tim into a frenzy... as he then deduces that "human capital is vastly more important as an economic number [compared to household financial wealth]", but the CBO (Congressional Budget Office) study —  which shows 76% of family wealth being held by the top 10% — didn't somehow allocate this giant human capital figure within their analysis of wealth distribution.  

Temporarily ignoring the fact that you cannot simply quickly exchange your lifetime human capital potential for financial wealth, let's contemplate its place in Tim's new definition of wealth.  Presumably, you are to arrive at an affirmative response to this question: if this human capital figure were somehow apportioned to every citizen correctly, would it change the financial wealth distribution curve? 

Valuing Human Capital

Make no mistake, there are noteworthy correlations between various aspects of individual humans and their human capital and their likely income production and their eventual wealth accumulation.  As mentioned in his article, via citation, differences in education lead to a differing degrees of financial wealth, not that it should be any real news that families headed by college educated individuals end up with nearly four times the wealth of families headed by individuals with only a high-school education.  We should have all heard the well known statistics by now, that, e.g., acquiring a college degree leads to better pay. And, with a higher income, you have a much better chance of accumulating and retaining some of that income, beyond your propensity to spend, in assets, in your wealth.

But, having a college degree does not make you wealthy. I know plenty of people with college degrees that have near-zero wealth for the simple fact they do not earn a high wage and/or they may spend whatever income they receive, no matter how much they receive.  Income and wealth are two completely different things, and trying to somehow state that human capital, assessed by way of applying some net present value calculation based on attributes like your education (which imply potential earnings) to capture your true "wealth" is again just an incredible misconception.

If you believe that your wealth is higher just because you have a college degree, due to the statistics of income potential associated with that degree, you might as well consider other less-equitable income correlation statistics, and the implications.  It has been shown that your physical appearance will affect your earnings potential (just search google for various studies / results).  Furthermore, your gender will dictate to some degree your potential earnings (the stats are clear: women earn less for the same role), and your race will predict your earnings potential too here's a link to a 2016 Washington Post article that should help you get started with the underlying data behind these varied statements.  These types of study results are typical, and such data can be found everywhere. 

Apparently, human capital "wealth", calculated as some proposed net-present-value amount, is going to depend on all sorts of truly sad statistics. Never mind this whole human-capital current "wealth" misconstruction is absurd.  But, if the idea were to be taken seriously, we'd all have to really get into the gutters and extract all the relevant actuarial filth... we'd even have to look at each persons genetics to see who has the longest or shortest life expectancy, contemplate all social behavior and pay attention to personal health. Why?  Because when calculating an NPV, we need to know over what period our income assumptions apply, and how much risk there is in those assumptions changing, etc.  This is all just nuts!  And, the end result will be a statistical caste system of sorts. 

Then again,... while computing earnings potential, perhaps we should consider that America has become a country with very low economic mobility (CNN report) whereby if you are born poor you are likely to stay poor, and if born into wealth you are much more likely to remain in wealth. I.e., in the United States the economic class you are born into is likely the one in which you will stay... worse than many other developed countries. The stats are unreal (NYTimes, 2012 article), so much so that they even bear quoting here:

"... 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) — a country famous for its class constraints.
Meanwhile, just 8 percent of American men at the bottom rose to the top fifth. That compares with 12 percent of the British and 14 percent of the Danes.

Despite frequent references to the United States as a classless society, about 62 percent of Americans (male and female) raised in the top fifth of incomes stay in the top two-fifths, according to research by the Economic Mobility Project of the Pew Charitable Trusts. Similarly, 65 percent born in the bottom fifth stay in the bottom two-fifths."

No matter how any sane person looks at it, income and wealth are two completely different things, and any argument for how < future-earnings-potential = wealth(today) > is simply asinine, aside from perhaps assuming that real financial-wealth-disparity will only increase over time, as borne out by existing statistics and socio-economic trends.  As such, I posit that if we assigned a "wealth" value to human capital, when constructing wealth-distribution-statistics, that the end breakdown of this "wealth" would still be essentially identical as financial-wealth, or perhaps even more concentrated (to the top few). The data to justify this hypothesis is clear, as demonstrated above.

Proof of Human-Capital Value in the Present (or lack of it)

Sure, human capital is considered when applying for a loan, but make no mistake, it is not being accepted, at a personal level, as any type of "wealth" against which a loan is being granted. The fact you have a college degree may make a bit of a difference as to whether you get a loan, but what is really going to matter most to any banker/lender is your current financial wealth, current cash-flow, your income, and the demonstrated stability or trends in that income and your financial wealth.  The bankers may accept as collateral some of your other financial assets, but they are not going to simply let you get by on the fact you have future potential for income, outside of specialized discrete products like student loans.  

Perhaps the unsecured credit market, Credit card companies and similar firms, care about your human capital?  This is highly unlikely, and I'd argue that they actually demonstrate the fallacy of any current "wealth" attributable to human capital.  These firms grant credit based on current income, and they will instantly raise your rates if you lose your job and that income... you are now a credit risk.  This is not for some giant shift in your "human capital" wealth, it is because they are not in the least bit concerned with that... they only care about your instantaneous cash-flow, and whether you have any real financial wealth (i.e., assets that can provide you the cash you need to right now pay your bills).  

And, nowadays, even insurance companies (like car insurance) will raise your rates if you lose your income: your human capital didn't change, just your instantaneous income-production abilities, and thus your credit rating, and somehow your perceived "risk" as a driver.  To argue that your human capital "wealth" truly changed upon unemployment, would one first have to admit that there exists a true stigma, or bias, against the unemployed, in such a way as to have a huge affect on your future income production prospects, and thus your supposed "wealth" when bringing forward a net-present-value of that income? 

And, I can almost guarantee that your landlord, if you rent, couldn't care less about any supposed future-production-potential-valued-in-present-"wealth", but only about whether you can pay your rent right now in that universally accepted bit of wealth that truly matters: cash on hand.

Human Capital and Taxes

Next, if human capital is so important, why does the USA federal tax-code punish income resulting from the application of your human capital (i.e., you working) so much more than it punishes income resulting from putting existing financial wealth into play (i.e., investments)?  Regular income  —  wages earned from working at a typical job  —  is taxed at a much higher rate than income, within the same total earnings bracket, produced from dividends or capital gains. Well, aside from the most egregious example of a tax that exempts a select few, via the "carried interest" tax treatment, that is.

If Worstall can somehow distort income and the possibility of future income into a form of current wealth, then shouldn't that wage income also be treated just like the financial wealth income when it is employed in investments? Wealth is wealth, according to Tim.  So, why not lower the ordinary income tax rates for a married couple filing jointly, and making under $75K/year, from their current 15% down to where they match the zero percent tax that would accompany the same income if it were all produced from long-term capital gains [see table here]?

The simple fact is that there is a huge tax-code preference (favor; i.e., lower tax rate) for financial wealth derived from existing financial wealth as compared to income produced from human capital. Clearly the US tax code considers income from human capital to be something totally different from income produced from existing financial wealth.  The tax code is clearly telling us all that it is better, more advantageous by far, to have financial wealth upon which income can be derived than to produce income from wages.  That entire mess is a topic for another day, because it is almost certainly to blame for a large part of the real financial wealth-distribution issue, whereby most wealth is incredibly concentrated among the top few percent.

Pensions

Tim did mention one interesting bit regarding the measurement of wealth: how the funds held in a 401K are counted towards wealth, but how a defined pension future annual payout is not counted... again, my initial reaction is to simply say "duh, Tim"... as a 401K, in theory, can be reasonably quickly converted into cash in the present (less a huge tax-penalty) whereas the defined pension cannot (generally, to my knowledge).  Again, Tim confuses (intentionally) future income with what can be attributed to current wealth.

I would argue that, when counting 401K values in financial wealth, that to be counted fairly in the present towards financial wealth, one would have to reduce the value of the 401K balance by the amount of any applicable taxes and penalties. Aside from that, the 401K can be a current cash-equivalent asset whereas the defined pension plan cannot, unless some corporation wants to buy the rights to your pension (if even assignable) and cut you a check right now.  I am not sure about the logistics or legality of that... I will look into it more.

Conclusion

Perhaps in an upcoming blog or two I will dive deeper into thoughts on some of these topics. Worstall has clearly manipulated and distorted reality by way of his latest absurd assertions, surely in hopes of countering the widespread discussion surrounding the unfairness of the current tax and financial system, a system that has led to this massive redistribution of wealth from the masses to the top few.  Things will only get worse if people allow such nonsense to gain credibility.

Leaked: Donald Trump’s 2016 Cleveland RNC Nomination Acceptance Speech

Donald Trump is about to deliver his Republican National Convention acceptance speech to the world. How about a preview by way of a sneak-peak leak of that speech?

As a long-time computer programmer and software developer here in Cleveland, Ohio, I am not going to say how I came by this information, but I will simply post it here for your reading pleasure… at least the better parts...

The introductory stuff, chopped off for brevity, begins rather predictably... 

Thank you [to family, supporters,.... etc. etc…]. 

Thank you for making me your Republican nominee and I enthusiastically accept this nomination so I can now begin to Make America Great Again and Make America Safe Again, with your help. 

[...some more basic predictable intro stuff..., blah blah...]

Then the speech starts to get good!

My behavior throughout this election cycle has been truly appalling. Truly awful. Do I care? No. Not really.  Why should I?  I have intentionally said and done everything possible to demonstrate how completely broken American politics is. I needed to get America to wake up and vote for change. Melania even went as far as to appear to plagiarize portions of a speech originally written by Michelle Obama, just to gauge voter reaction and stir things up a bit. It was all planned. I am a brilliant businessman and an even more incredible politician because I know how this game works, and now I am going to use my natural gifts and business acumen to fix everything that is wrong with Washington politics.

Is he serious?!
Seems so...

I ran the calculations and have done exactly what was necessary for an “outsider” to be heard and to have a chance to lead this great country. This is how you win at business and at politics these days. Learn how the system works and use it to your advantage. This is what American politics has been reduced to. And this is because Washington insiders have taken over your democracy. American politics has been hijacked by the wealthy elite and corporate interests for decades now, and the only way to take on that establishment is to use their own tactics against them, without them knowing it. I have done it! Now you know! Time to tell all these insiders that their time is over and your time is here instead. Vote for me this fall and use this opportunity to take back your government and your political system. And, if you have even the slight doubts in voting for me, at least consider the fact that I am man enough admit that I have lied and distorted facts in order to be seen and heard and have a chance to represent you. Crooked Hillary will never admit her lies and misrepresentation and the fact that she is deeply entrenched in the Washington establishment political machine, will she?

OK, I see where this is going, I think.

So, how are we going to Make America Great Again and Make America Safe Again? Just like how I made my businesses and family successful. We are going to look at the numbers and the facts and do what it takes to get this country back on track. We do not have time to mess around with politics as usual any longer. It is time to get serious about fixing what is wrong in this country.

Trump, getting serious?  Could this be for real?

Let’s start with the government budget mess. I am a businessman. This country is essentially an enormous business. It is a giant business that we partake in, and a portion of our paychecks go to pay for protecting our freedom and our position of being the most powerful country in the world. But, a business must manage its revenue and its expenses. America spends more than it takes in, in a HUGE way… huge… it would be considered essentially bankrupt were it not for its ability to print money. We need to get our financial house in order. And no, we are not filing for bankruptcy, but rather we are going to address both our spending and our taxation. 

Guys like me are so wealthy due in large part to the favorable tax system here in the USA. And yet you constantly hear this political rhetoric about the need to cut taxes, when taxes are the revenue side of our government’s accounting system. We have an enormous federal deficit and debt, but yet for some reason we are supposed to ignore the revenue side of the equation and not charge taxes. Then again, we ignore the expense side of the equation too and spend crazy amounts on all sorts of insane stuff, but I will get back to that topic in a bit.

Could Donald Trump really treat America's budget like that of a business and be serious about both increasing revenue and cutting expenses?  I'll believe that when I see it. But, maybe. If I were to believe him.

For now, let me talk taxes, revenue. I hardly pay any taxes relative to my earnings. And, I’m not alone. Warren Buffett has pointed out repeatedly how he pays a lower tax-rate than his secretary. That’s great for us guys at the top, but not so good for the country’s coffers. Voters need to understand the math here. I have billions. Not just one billion, a few billion dollars. Warren Buffett makes me look rather poor though — that guy has like 20 times as much as me, something like 60 or 65 billion dollars. Do american voters even realize how much money a billion dollars is? 

Each billion I have is one thousand million. From what I read recently, 25% of american citizens do not even have a net worth of ten dollars to their name. So, if one of those 25-percent of people walks down the street and loses a dollar out through a hole in their pocket, they have just lost one tenth of their net worth. Ouch! A ten percent loss in one day makes for a bad day, but it can happen. For me to lose one tenth of my net worth, if I was ONLY worth one billion (which I am not, I have a few billion, I am quite wealthy,... very wealthy… but not quite like Buffett or Gates, those guys are crazy wealthy)... I would have to be walking down the street and lose a briefcase containing 100 million of my dollars! One hundred million dollars is mathematically no more significant to me than a dollar is to a quarter of the american population. 

Voters in this country need to grasp this disparity before they can understand why the only winners in this trickle-down ultra low tax-rate system, that is full of loopholes for the wealthy to exploit and tax-breaks which only benefits the top, are the top guys like me. If we want to make america great, we need to help everyone have a fighting chance to become great. So, stop voting against yourselves and start listening to me, a very successful businessman who understands numbers very well. Very well. 

Increasing taxes on the top, not to mention forcing US corporations to repatriate the TRILLIONS of dollars they are holding overseas and pay taxes, and pay taxes now or else be hit with fines, is how we are going to begin making america great again for the average american worker and small business owner. Forget this misdirection and smokescreen talk of job-killing-regulation,... the only thing killing jobs is the lack of tax incentive to keep people employed rather than simply piling up corporate profits in overseas bank accounts. Give tax breaks for employing people, not for hoarding cash and not putting it to work building up america.

Wow!  Trump, I'm with you on this stuff... I may just vote for you. And it continues to improve:

We have a system that is further rigged to deliver pay packages to CEOs of the big companies that are on average 300 times what a typical worker makes every year. So, right now, you can work your entire 30 year career with a company, and after all that time, you will be lucky to have made one tenth of what the top guy at your company makes in a single year. This needs to change. 

For america to be great, it must recognize that every american contributes to the success of guys like me and CEOs and everyone else at the top, and give them a better share of things. With our current tax system and income inequality, this is impossible. Or, if not impossible, there surely is no incentive to do so. 

The current tax system is telling me: take as much as possible for myself because there is no reason not to. So, ask yourself, if I can lose a suitcase containing $100 million dollars and lose the same one-tenth of my wealth as the person who only has 10 dollars to their name, why can’t I be expected to pay that into the tax system? Heck, I will still have $900 million dollars out of each billion left over to enjoy, and I tell you, I am still in a lot better shape that the average american with their nine dollars left in their pocket! I can buy whatever I want, whenever I want. Shouldn’t you, the american people, have a bit more in your pocket too?

And on and on... but, now to infrastructure and the spending-side of things...

And, we spend so much money, it is just insane. Where do I start… we spend it on things that do not deliver any return on investment. It’s like we are trying to be stupid with our cash. If you build a business, you invest where the money will generate more money… that’s why they call it investing. You build your infrastructure so that you can expand and move more products and services. You modernize to improve efficiency. 

But our government cannot even consistently invest in its roads and bridges, and wow, don’t even think about investing in anything like high-speed rail or any serious modernization. And what little we do spend on our infrastructure, especially relative to military spending, isn’t even spent in a way that ensures that the infrastructure lasts. I have seen old cast-iron or brick railroad bridges from the 1800s still standing, with little maintenance, throughout the world, but yet I have seen bridges here in the USA that are falling apart and having their concrete replaced after a mere few years. Can we really not build better bridges now that over one hundred years ago, so that we don’t keep wasting money on the re-building same thing over and over?

And, how about investing in education in a serious way? I’ll come back to this too in a bit.

A bit rambling, but sounds reasonable.
Ah, let's skip forward to immigration:

But first, I want to talk about Immigrants and immigration. My wife is an immigrant. Many great people I know are immigrants. And America’s growth and prosperity has outpaced the bulk of the rest of the world for the past eight years thanks in large part to its ability to attract foreign workers to join its fantastic pool of American talent when we need them. Why? Because everyone knows America is awesome, truly awesome, and they all want to come here to enjoy our American Dream. Who can blame them? And, we all benefit. The numbers don’t lie. 

We want the best educated and skilled people from around the world; who wouldn’t? You always want the best talent on your team. And, if we educated our own people better, our talent pool would be that much deeper. Let's do that to: let's invest in educating our young people.  But, even when we educate our own people well, and recruit the brightest from everywhere, we may find that we still need some additional workers or laborers to fill in the gaps in our employment pool that exist from time to time in our system, like when we build all our better bridges and roads and high-speed train systems and other times of increased labor needs. There will be plenty of work for everyone once I start things moving after I am in office. You watch.

Sounds like a lot to deliver.  But, OK.  Bring it on.  How about those controversial topics of gun control and such?

And, if you are worried about terrorism with any immigration, I have one question: why are you worried? How can anyone say we are not safe? We are the strongest country in the world, and will continue to be so. We spend more on our military than the next 7 highest spending countries combined. We have a million people spying on our own citizens to watch out for bad guys. 

How many people have died from terrorism on US soil in the past year? Any number is terrible. Truly awful. It is under 100 people even over this last year by my count, which includes the horrible Orlando night club attack of complete cowardice. And, my condolences go out to everyone and their families that were touched by terrorism. 

But, being a businessman and a numbers-guy, I really think the average american should be more concerned with how many people die from gun violence in America, prescription medicine deaths, and even automobile accidents. 100 people every single day, on average, are dying from gun violence in america, and that is not due to terrorism. We have nearly 40 people per day dying from prescription opioid overdoses in america (and that is just opioids… double that figure if you want to count ALL prescription-drug overdoses), and that number is rising. Last year 105 people also died in road traffic fatalities every single day of the year on average. The numbers do not lie: this campaign-of-fear being waged on america, the fear of terrorism in america, just seems crazy when we consider the fact that there are 100,000+ Americans dying every year from gun violence, prescription drug overdoses, and traffic deaths. But, we don’t spend 100’s of billions per year trying to prevent THOSE deaths.

Indeed.  Terrorism is seriously bad news, but when you look at the numbers inside the USA, how can you ignore that fact that for every death-by-terrorist there are one thousand other highly-preventable deaths by these other means?  Don't those lives matter too?

I surely agree with the next statement quite a bit:

The fact is, Washington and US politics are broken.

And, finally, after some rambling for a bit, comes the best part:

And, as for Mike Pence as my VP pick: sorry dude, you have to go. You were just a placeholder and another typical mainstream politician that represents more of the status quo… the only other true outsider in this race right now beside me is Bernie Sanders, so, guess what Mike Pence? You’re gone… outta here… from here on, it is Donald Trump and Bernie Sanders who together are going to usher in a wave of real change in America as we share the 2016 Republican ticket for President and Vice-President of the USA!

Hmmm....  that last part sounds a bit suspicious. I'm beginning to question the authenticity of this alleged Trump speech data leak. lol.

I want to thank my source of inspiration for this… the comic genius Lee Camp of RT America’s Redacted Tonight, and how Lee uses his extremely witty and intelligent comedy to point out the insanity in our political, financial, and social systems — topics including the 2016 election fraud incidents, civil rights violations, corporate control of our government, and so forth.  This was a long-form attempt at something like his "Headlines from the Future" segment.  I cannot compete with Lee Camp's brilliant comedy, but hopefully a few people find this "news" entertaining.

Brexit : Remain vs. Leave? Consider Iceland Volcanos

BREXIT: Remain or Leave in the EU? Consider the Icelandic Volcano Threat when Voting!

If you do not know what the "Brexit" (British Exit, from the EU / European Union) vote is by now, you probably do not live in the UK — the United Kingdon; i.e., in whole or part also known as: Great Britain, England, Wales, Northern Ireland, Scotland — or anywhere in Europe. Furthermore, you probably do not do business (import or export or purely financial transactions) within this region, because if you did and you do not know what the Brexit is, you would be utterly out of touch. The implied consequences (of a Brexit) upon trade and free movement of goods, services and people, are quite extraordinary.

Iceland Volcanoes : What does this have to do with Brexit?

Simply put: if the English, Scottish, Welsh, and Northern Irish citizens are no longer an integral part of the EU and its free-movement benefits, when the volcanoes of Iceland cover the UK in ash to the point their country is no longer inhabitable, or otherwise not able to effectively operate or accommodate their 65 million people for lack of breathable air, arable land, passable streets, and sufficient water supply (to name a few), they will quite likely encounter some heavy resistance to their desires to move, en masse or in majority, into mainland Europe as a place of refuge for what could be years.

It is not "if", it is "when"!

Unless people in the United Kingdom want to bear an increasing behavioral resemblance to Americans — you know, those "belief" driven types that choose to deny the scientific fact of Global Warming since it does not suit them, personally — you cannot choose to ignore the scientifically-backed threat that some or all of Great Britain will become buried under a substantial layer of volcanic ash from Iceland.  It will happen. And, quite probably, even without our current lifetimes.

And, when it does, the economic fallout will be incalculably large, and the human suffering may make the economic damages look like a silliness by comparison.  I am talking about an event that will make the 2010 eruptions of Eyjafjallajökull look like nothing.  And, that "little" 2010 eruption caused tremendous disruption to air travel across large swaths of northwestern Europe for about a week, back in April 2010, as well as other side effects.

Where are you quickly going to move 65 million people, let alone quickly, if things get really bad in the UK? Mainland Europe is your only hope.  And, if you Brexit — i.e., if the "leave campaign" is successful in leaving the EU — you quite probably have rescinded your current inherent beneficial rights to free migration and movement throughout the EU.  Therefore, when the volcanic mess arrives, and persists for any length of time, all the "Brexiters" will find it not so simple to migrate elsewhere until the problem remits.

I have watched various science shows over the years about this topic of Icelandic volcano eruptions and the potential damage, especially to the UK, of a prolonged and sustained high-output ash-producing event.  All forecasts, based on standard climactic and prevailing wind pattern behaviours, foretell a truly awful catastrophe for Britain, more so than most anywhere else.

The bottom line: this is one crystal-clear reason that the UK should remain in the EU!  There is no argument to the contrary (i.e., a pro "leave" argument) on this matter, aside from a fool's potential propaganda. Clearly, all UK citizens would be better served by remaining in the EU so that in the event of this, or any other equally serious catastrophe within the UK, they could still have the legally-binding right to migrate, for as long as necessary, into unaffected EU countries and regions.

And, sadly, it is not like volcanoes are the only potential threat — in this day and age, one must consider the menace of terror and how certain attack vectors, however unlikely, could leave portions of a country severely damaged (potentially uninhabitable) for sustained periods of time.  And, if such horrendous things were ever to occur, it might be nice knowing, as UK citizens and EU members, that you maintain the freedom of mobility (physical, work location, etc) to at least contemplate options that may otherwise not exist for you.  Would it not be better to know, with certainty, that your options will exist rather than counting on some anticipated mass "good will" of the continental Europe or other foreign countries to accept you into their lands if you absolutely needed somewhere to flee to in an emergency? ... rather than later face the foreign cynics that may fear the repercussions of millions of people fleeing the UK into the EU?

Then again, isn't it that same fear that in reverse that has many British contemplating voting for a "Brexit"?  Reciprocity could truly suck!

** note: I have no idea what becomes of British overseas territories and such like Gibraltar, which without free movement between itself and mainland Spain is pretty much screwed by a "Brexit" regardless of volcanos, etc.  This discussion contemplates the primary UK regions only. And, I am not diving into discussion about various players in all this like: David Cameron, Nigel Farage, Jeremy Corbyn, Nicola Sturgeon, and the long list of others.


Continue to read this Software Development and Technology Blog for computer programming, software development, and technology Techniques, How-To's, Fixes, Reviews, and News — focused on Dart Language, SQL Server, TypeScript, VMware, JavaScript, SVG, and more. And, occasionally, I simply post my opinion on current world events.

Guaranteed 3.6% Savings Yield - Simple, Safe, Long-Term with EE Bonds

Guaranteed 3.6% Compounded Interest? Where!?
Look to EE Bonds

[Note that as of January 1, 2012 banks and other financial institutions terminated their sales of bonds, in case you were only familiar with the old way of buying them at a Bank.  Go to Treasury Direct instead.]

Seriously, consider EE Savings Bonds!

Yes, savings bonds... those "old fashioned" instruments for putting money away for the future. Why is it you never hear "investment advisers" or "financial advisers" talking about how USA Government Savings Bonds are still a damn-good option for long-term saving, especially for people that are not otherwise financially savvy or blessed with "extra" time to manage their investments? Simply put: there is no money in it for the advisers!

I argue that savings bonds should make up a portion of almost every investor's financial portfolio.  You should never have to worry about them... just put your money in and wait.  For anyone that wants to argue about hypothetical situations like "what if the US Government goes under",... well, if it does, do you really think ANY investment is going to be worth squat? (and that includes gold; chaos will make that useless too... you would be better off having stockpiles of food and oil)

So, read on, and give EEs some consideration...

3.6% Annual Interest Rate? That sure beats the bank!

Not only does the 3.6% EE yield potential beat anything (of recent) you could get in the bank — and that includes long-term products like 5-year CDs — it nearly matches the current 30-year US Treasury Bills rate (3.86% as quoted currently on Bloomberg US Government Bonds rates).  So, what is the catch?

Patience is required to obtain this yield!

If you visit the Treasury Direct website page on EE Bond Rates, you may first be scared by the currently posted quoted rate of 0.2% (as stated in the paragraph titled "What interest will I get if I buy an EE Bond now?").  But, have no fear and keep reading... you can get the 3.6% rate I am referring to if you are patient and buy these EE-bonds with a 20-year investment horizon in mind.

Now, look further down the page for the section / paragraphs with a heading of "When will my paper bond be worth its full value?".  This is where the IMPORTANT INFORMATION is contained that leads to the 3.6% minimum guaranteed annual compounded interest rate if you hold the bonds for 20 years.  Quoted from that section:

"Electronic bonds are sold at face value (not half of face value). They start to earn interest right away on the full face value. Treasury guarantees that for an electronic EE Bond with a June 2003 or later issue date, after 20 years, the redemption (cash-in) value will be at least twice the purchase price of the bond. If the redemption (cash-in) value is not at least twice the purchase price of the electronic bond as a result of applying the fixed rate of interest for those 20 years, Treasury will make a one-time adjustment at the 20 year anniversary of the bond's issue date to make up the difference."

So, if you HOLD the EE Bonds for full 20yrs, you can forget that "0.2%" stated current rate, as you are guaranteed a minimum of 3.6%-annual-compounded-interest (using rule of 72), since your money has been guaranteed to double in that 20yrs.

Briefly, the "rule of 72" helps us compute the approximate annual interest-rate over a period of time by dividing the interest-rate into 72 in order to obtain the term (length in years) in which that interest rate will cause an investment to double.  So, in this case: 72 / 3.6 (rate) = 20 (year term).  I.e., basically 3.6% annual interest has been guaranteed in one of the most historically safe investment options ever, so long as you can think long-term!

You think you can do better elsewhere?

Sure, you may obtain higher (historical) yields elsewhere — perhaps in the stock markets, commodities, or corporate bonds.  But, you had best know what you are doing and have 1) the time to actively manage such investments, and/or 2) the nerve to ride out massive downturns like what we saw occur during the Financial Crisis that really shredded most investments in 2008 (to the point it took years to get back to pre-crash levels).

And, if you consider putting money in "the bank" as a savings strategy, consider the fact that for over 5 years now, interest rates in the bank have been terrible!  And, think about it,... 5 years is a full quarter of the duration you would have have to leave your money in the EE Bonds (toward that 20-year term to get the doubling of EE funds).  In the current preceding 5 years, banks have paid essentially ZERO interest while you could have been getting 3.6% in your EEs.

Bank rates may ultimately rise, but I would not count on it changing quickly or holding higher rates for any length of time.  And, keep in mind: interest on savings accounts and CDs is taxed every year whereas savings-bond interest compounds pre-tax (i.e., you are only taxed on the interest when you redeem the bonds).  This can make a substantial difference in compounded returns.

The bottom line is this: If you think you can maintain a higher-average-annual-return elsewhere, go for it. I simply look at EE's as just a very simple "no brainer" hands-off way to save some money for retirement in about as safe of way as possible.  And, you do not need to hold paper bonds anymore: use the TreasuryDirect electronic bond-buying system (in fact, paper bonds have nearly gone extinct and I have no idea why anyone would want paper to have to place in a safe deposit box or whatever).  Signing up at TreasuryDirect is super-simple and can be done in just a few minutes.

There is perhaps the issue of what happens if you die within the 20-year term (I'd rather not think about that), but even that is covered by way of beneficiary-designations and survivorship terms.  A survivor beneficiary does not have to cash in the bond right away, so they can continue to hold the bond until that 20-year term is met if they choose (and, income taxes on the interest remain deferred until redemption just like they would have been for the original holder).

Give those EE bonds a look.  You never know, it may turn out to be a very wise long-term investment to hold.  FYI: also note that the government currently limits annual savings bonds purchases to $10,000 per individual, so it is not like you are going to be able to take the proceeds from selling a house and put them into savings bonds all at once. Feel free to consult with your "adviser" or accountant on any of this, as I am NOT acting in either capacity here... I am just putting forth an opinion for you to consider.

Continue to read this Software Development and Technology Blog for computer programming articles (including useful free / OSS source-code and algorithms), software development insights, and technology Techniques, How-To's, Fixes, Reviews, and News — focused on Dart Language, SQL Server, Delphi, Nvidia CUDA, VMware, TypeScript, SVG, other technology tips and how-to's, plus my varied political and economic opinions.

Politics of Green Energy : Propagating Ignorance via Ideology

Humans are hopelessly spiraling toward their own demise — thank politics for speeding the process!  For being the supposed smartest animals on the planet, we sure do everything in our power to prove our ability to ignore fact in favor of ideological beliefs and opinion.  Science and technological advancement is wonderful: as long is it does not surface data that challenges the merits of our individual pursuits — especially the pursuit of "profit".

I am so completely disgusted with the politics of green-energy (or should I say the politicization of green-energy, and the outright disregard for fact — a nice way of saying "lies") as propagated by proponents of existing, carbon-intensive, and ecologically destructive sources of energy.  As is with most ideologically-driven hyperbole, hypocrisy runs rampant throughout the "logic" employed to "defend" what should be nearly indefensible positions for the continued push to use fossil fuels while global CO2 levels soar in direct relation to the combustion of those fuels.

Let me begin by recognizing the fact that not ALL "right leaning" (Republican / conservative / etc) backers agree with the illegitimate position that humans are not responsible for climate change.  In fact, some very noteworthy Republicans, conservative business-leaders, and wealthy individuals are very adamant in their promotion of green energy and ending the human self-destruction that is occurring as a result of fossil-fuels consumption.  But,...

I just read this article about how Americans are split on what is causing global climate change; and, you perhaps you already guessed how they are split: right down political-party lines!  If you consider yourself a Republican (i.e., conservative) you are statistically almost certain to believe the rhetoric spewed by party leaders that push concepts proven utterly false... things like blaming "natural causes" for climate change.  Again, this is PROVEN false, PROVEN!  But, politics make proof become "proof"; science that does not reinforce a politically-motivated position is suddenly just "science"; and so on.

Never mind the fact (and transcripts that back it up from the Bush/Cheney era) that the Republican party's entire strategy for exploiting their political base (to keep carbon-intensive energy running full-steam ahead) was to simply create DOUBT.  It worked.  Many of their followers only needed the slightest suggestion of "doubt" that climate change was due to human activities; they now had what the party leadership desired most: a "position" to cling to regardless of all the true evidence and science to the contrary.  This self-engineered doubt is all they continue to need to reject the fact that human activity is plunging this world into a state of unprecedented CO2 buildup and associated climate change.

Never mind the fact we can use the carbon isotope-typing to analyze atmospheric CO2 concentrations and determine that the CO2 came directly and unequivocally from human activity and the burning of plant-sourced matter (i.e., coal, oil, natural gas) and NOT from things like volcanoes and other ridiculous explanations (whose CO2 emissions produce a different isotope signature).  All the proof just becomes "proof" when ignorance is reinforced via ideology.  It truly is a shame, as we will all pay the price for this ignorance regardless of our political affiliations.

Perhaps we should get to the root-cause of this politicization of climate-change and the creation of any alternative "theory" of climate-change: MONEY!  That's right... like every human activity that goes contrary to common-sense and proof that an activity is bad for us as a whole, money lies at the root of this discussion.  The foot soldiers (i.e., the political masses) that quickly render their backing (by way of votes) to those pushing a particular agenda that is contrary to scientific evidence will likely realize little, if any, economic gain by lending their support to those at the top.  But, there are certainly many individuals and corporations that stand to profit handsomely if we continue to ignore human-induced climate change and continue to embrace CO2-intensive energy sources.

There is a lobbying force (i.e., money) that is intent on keeping their carbon-based cash-cow pumping out not just more money but also more CO2, and they will do anything to continue to ensure they have the votes to protect them and their climate-altering activities; all courtesy of ideological splits among the populace.  Their hope is that you turn off your brain and embrace the ideological ignorance that continues to reign supreme — never mind the fact that we are creating what is likely to be irreversible damage to this planet we all live on.  Never mind that no amount of money will ever make up for the fact that we will have doomed the planet in the process.
 
Now, let us discuss some of that hypocrisy that always accompanies such ideology.  One of the first things we hear is that going green is "too expensive".   Sure, wind and solar and geothermal may appear relatively expensive compared to other energy sources when the cost of environmental-destruction is left out of the equation, but when included, green alternatives are VERY competitive, and they are increasingly becoming more efficient and more competitive at the same time CO2-producing energy is, and will continue to be, increasingly expensive if the true costs of CO2 emissions are considered in the equation.  Solar technology is rapidly evolving and becoming cheaper and more efficient; wind turbines are becoming larger, more efficient, and thus more competitive also.

And, when considering the true cost of burning fossil fuels and the cost (via environmental damage and alteration from CO2 and other toxic emissions), the worst CO2 offender is COAL burning power plants.  The coal industry knows this and knows they have to create yet another lie to sell the public and get the votes to keep their profits rolling in, so they have coined this "clean coal" concept as their solution.  Sounds great does it not?  "Clean" coal.  Sure.  Wonderful.  But, then there is the fact that there is NO SUCH THING and not a single coal-burning power plant is in existence that is not emitting CO2.  And, to capture CO2 from coal-burning is EXPENSIVE and it takes MORE energy (as much as 1/3 of the total fuel burnt generating power will go to power sequestration if we are to capture all the CO2 produced from the plants) and an insanely complex infrastructure to implement.  This WILL end up on your electric bill!  And, of all the insane and desperate acts that humans could undertake, "clean coal" (and similar carbon-capture schemes) ranks number one.  Investing in such a dead-end is not "investing"... it is flushing money; but, for as long as you are willing to flush it into the coffers of the coal-industry, they will willingly take it.

Next there is the "clean" natural gas crowd.  Sure, it produces 1/2 the CO2 emissions as coal burning, but where is that gas coming from and what emissions are involved in the acquisition of that "clean" natural gas?  Watch the movie Gasland for starters and you will soon understand that this is anything but a "clean" fuel... hydraulic fracturing technology is what is enabling this (lie known as) "clean" natural gas, and it is causing widespread release of hydrocarbons and chemicals into the air and groundwater.  But, money rules the world and the natural gas boom throughout the USA is producing enough cash to retain the number of votes they need to continue this toxic energy pursuit.

We do not have the resources to waste on existing dead (and deadly) technologies while the remainder of the world passes us by with renewables.  As we flush our money (or, should I say other people's money - since so much of our money is *debt*) down the drain on carbon-intensive energy production, we are flushing our future simultaneously.  The politics of energy production are making us waste valuable time and money on unsustainable carbon-based technologies when we could be truly investing (where spending our money will produce a return in the longer term and not just go, quite literally, up in smoke as we burn carbon-fuel sources instead).

Please consider the true cost of carbon-based energy sources in any comparison to green-energy that you make.  Take time to understand the science behind energy production (and associated emissions).  And, get the facts about how much power is hitting this planet every day just in the form of sunshine, which we CAN easily harness for our power needs.   There is an amazing abundance of alternative energy available to us; what is not available in abundance is the propagation of this fact and the associated facts about human activity causing global climate change and CO2 rise.   I sure hope humans can overcome political ideology before it is too late.

Education vs. Income : China proves Bernanke wrong

If you find the current economic situation in America disheartening, and you want to understand "why" things are the way the are with regards to high unemployment and the massive disparity in wealth between the upper few and the rest, do not listen to Federal Reserve chairman Ben Bernanke: he is out of touch with reality! He may be a very smart guy, but he seems to be missing some blatant truths about what is going on at a macro-level in the USA and worldwide.

One of Bernanke's favorite "reasons" for the ills of this economy is: education. I watched him on a TV interview last week where he cited educational differences as one of the core determining factors between the have and have-not groups. I personally beg to differ Mr. Bernanke, and a morning story on CCTV (China Central Television) backed my position completely...

When it comes to Education vs. Income, it is just what I keep saying: a standard supply/demand curve sets salaries and earnings; that is all, nothing more. Education used to place you in a supply-constrained-group; not anymore.

China proves Bernanke wrong...China just proved it. The college-educated Chinese citizens were, just a couple years ago, on average making 4 times what the blue-collar factory workers were making in China. But, China is now experiencing an abundance of persons with degrees in accounting, engineering, technology, etc... and, those same college-educated persons are now making on average only 2 times the blue collar wages. The CCTV news show discussed how it is purely a matter of supply/demand for both sectors (white/blue-collar) that is forcing this narrowing in wages. 

China currently has an increased need for "low skill" labor, which has pushed the wages for the low end up while the college-educated job rates slow, stagnate, and decrease relative to the other group.


OK, Bernanke... how is the USA any different?There is a global glut of educated workers. As such, global wage-equalization is underway.

Makes you want to run out and get an MBA, doesn't it? NOT.

This premise that Chairman Bernanke makes, that lack of education is limiting incomes, is simply absurd in today's global economy. Sure, education *helps*, but it will not help beyond the point where supply exceeds demand for any one group of skilled labor - including college-educated labor.

SUPER-MACRO-EXAMPLE

The fact is, if EVERYONE on the planet had a college degree, and everyone had similar intelligence to back that degree, there would still be a need for "unskilled" labor in factories and in less desirable positions. And, who is going to serve up the Starbucks coffee in the morning... you got it: a college-educated person. And, pay differences are going to emerge like always, with stratification that does not reward education, but rather rewards being lucky enough to get one of the better jobs. 

There will still be the group on Wall Street that rewards themselves handsomely for doing nothing more than moving money around (electronically) and taking a "cut" and calling themselves brilliant investment bankers, private equity managers, and hedge-fund barons. It will have nothing to do with their education... just their position in society that allows them to siphon off huge amounts of cash from the productivity of everyone else in society.

Oh, wait... I just described the current economy in America!

What is REALLY wrong with the economy?

Bottom line: Bernanke needs to wake up and see the real issues of what is going on with the world economy and why this recession is now a supposed "jobless recovery". It has little to do with education. I, and many other people, know people with exemplary employment records and fantastic education credentials (including advanced degrees) that are unable to get work. 60-Minutes did a story where they featured a large roomful (100s) of the unemployed persons in Silicon Valley that were, predominantly over 40 and when asked what education-levels they had obtained, the majority of hands in the room were raised at "Masters" level and a large percentage were still raised at "doctorate/PhD" level.

Bernanke: how can we expect you to HELP this economy when you clearly do not understand the macroeconomic forces at play? Or, are you fully aware and just want simple excuses for the underlying mess that will never be addressed?

That underlying mess I refer to is an economy where:

• large numbers of college-educated persons can not find employment commensurate with their training or skills; 
• a *few* at the top of the economic food-chain, or the "top" as they have defined it to be, sit back funneling all the productivity out of this country via their instantaneous intraday flash-trading on Wall Street, whether for the banks they work at or the hedge funds and private equity firms and so forth; 
• there is "no inflation", but yet the volatile food-and-energy group, and any other thing that one truly *needs*, only goes up in price, and goes up faster than "inflation"; commodity prices are surging worldwide, yet there is "no inflation"... sure!; 
• there is no way for people to get any return on savings, though we always here how the USA got into this if from "lack of savings". Great, so now anyone who saves can look forward to .1% (yes, a tenth of a percent) or thereabouts on a "savings account" while large banks hit the same people up for 15+% on their credit-card interest rates. That is a 15,000% difference between what "savings" earn and what revolving-debt costs; need I say more? 
• it is nearly impossible to find ANY USA-MADE ITEMS AT STORES anymore. Period. I search to no avail. How am I to "stimulate the economy" (in the USA) if I can not find a way to spend my money on an item that would employ US workers? It gets worse every day. 
• Corporate America is moving jobs out of here as fast as they can... whether to dodge environmental code in the USA or to avoid the cost of benefits here or any other potential liability of having workers in the USA, they are rushing to China and other low-cost suppliers because our laws make it easy for them to do so. 
• IP (Intellectual Property) rights are only enforced when violations affect the largest of the large companies; aside from that, anyone starting a business these days will likely see their work stolen, cloned, or otherwise reproduced within a few months of product-launch, and there will be no repercussions. You will create a new product only to see a cheap Chinese knock-off on the market in no time. So, starting a product/business in the USA becomes even more foolish, and thus jobs do not stay here. 
• Tax-code that favors the highest-wealth people and our government that is "owned" by those people: I am sick of hearing things like "the uncertainty over taxes is preventing corporations from hiring"... GIVE ME A BREAK. There is no uncertainty! It is certain that, at worst case, taxes will revert to pre-Bush-tax-cut-levels... and, anything else is just a better case. How is a 2yr extension of a tax-cut going to lead to anything beyond another supposed "uncertainty" at the end of THAT 2yr period? Ludicrous argument! 
• And, we borrow money by the Trillions to pay for the implementation and materialization of the list I just enumerated!

Conclusion

I could continue enumerating all the (real) issues with the economy, but it will make no difference unless some people with influence start standing up to fix this mess.  And, fixing it is not just extending a tax-cut that favors the top one or two percent of the population.  Fixing it requires some serious change.

If we do not start creating jobs to provide educated workers with opportunity in-line with their skills, things are only going to get worse.  And, when China is already showing signs of a glut of educated workers, get ready for further wage-pressures here in the USA and even more unemployment among those educated persons that Bernanke seems to think do not exist in large enough quantities already.

SSN Theft : OK if "not knowingly"; RIAA theft: "not knowing" not valid excuse.

I began today reading the various news headlines, and I soon encountered an article in particular that made me think: YOU MUST BE JOKING!

Essentially, courts are ruling that, in some cases, STEALING SOCIAL-SECURITY NUMBERS is "OK".  What the @#??!

Here is an excerpt from the article that you may find very enlightening:

"Is using a forged Social Security Number -- but your own name -- to obtain employment or buy a car an identity theft crime? Lately, U.S. courts are saying it's not.

The most recent judicial body to take on the issue, the Colorado Supreme Court, ruled last month that a man who used his real name but someone else's Social Security number to obtain a car loan was not guilty of "criminal impersonation," overturning convictions by lower courts.

That follows a ruling last year by the U.S. Supreme Court that a Mexican man who gave a false SSN to get a job at an Illinois steel plant could not be convicted under federal identity theft laws because he did not knowingly use another person's identifying number. The ruling overturned an opinion by a federal appeals court in St. Louis -- and contradicted earlier findings by circuit courts in the Southeast, upper Midwest and the Gulf states."

So, if you are planning to steal (or, "borrow") another person's SSN#, just make sure you do not "knowingly" do it, and it is suddenly not such a bad crime; or, so says our various courts.

But, is there any consistency to what our courts are saying with regard to theft these days?
Read on, and prepare to be sick...

HYPOCRISY EXEMPLIFIED:The SSN-stealing story made me recall another story from just a day earlier about how The U.S. Supreme Court declined to hear the first Recording Industry Association of America (RIAA) file sharing case to cross its desk: a case that tested the so-called “innocent infringer” defense to copyright infringement.


Definition Note: an "innocent infringer", with regard to Copyright law, is someone who does not know they are committing copyright infringement.

Why do I bring this up?  Well, as I see it, this RIAA case (against someone who has supposedly NOT KNOWINGLY broken the law), has an outcome that stands in stark contrast to the outcome for someone stealing (or, supposedly "not knowingly" using) another person's Social Security Number for their benefit.  And, what is the penalty in each case: steal an SSN unknowingly, avoid prosecution.... unknowingly violate laws as you download some songs from the Internet and invoke the wrath of the RIAA, and pay $750 per song as your penalty.

Am I the only one that sees the sick hypocrisy in all this?
Here is another excerpt from the article discussing the RIAA court battle I refer to:

"The case, which one [Supreme Court] justice voted to hear, leaves undisturbed a federal appeals court’s decision in February ordering a university student to pay the Recording Industry Association of America $27,750 for file-sharing 37 songs when she was a high school cheerleader.

The appeals court decision reversed a Texas federal judge who, after concluding the youngster was an innocent infringer, ordered defendant Whitney Harper to pay just $7,400, or $200 per song. That’s an amount well below the standard $750 fine required under the Copyright Act for each violation.

[...]

A Texas federal judge had granted Harper the innocent-infringer exemption to the Copyright Act’s minimum fine, because the teen claimed she did not know she was violating copyrights. She said she thought file sharing was akin to internet radio streaming.

The 5th U.S. Circuit Court of Appeals, however, said she was not eligible for such a defense, even though she was between 14 and 16 years old when the infringing activity occurred on LimeWire. The reason, the appeals court concluded, is that the Copyright Act precludes such a defense if the legitimate CDs of the music in question carry copyright notices."

Wow,... what a pile of #$^*!  This RIAA case and legal conclusion is especially a pile of dung when reviewed in the context of how the "not knowing" defense has been applied to SSN-theft SUCCESSFULLY - proving that SSN numbers are less important than downloaded music, because that is what certain businesses and lobbyists have had decided for us.

I guess that all I need to do is write a copyright notice on my SSN card that states: "If someone other than I uses this SSN#, they are violating identity-theft laws and in addition they are violating my copyright and owe me $750 in addition to actually damages incurred".  The fact that they never SEE this notice (just as someone without the Music CDs in question in this RIAA case will never SEE the notice), is irrelevant: they have violated my notice, and I can collect, right? (doubtful: I have no recording industry behind me)

This makes me think: the government should re-print SSN cards now, and include a copyright notice on them, and charge everyone who steals Social Security Numbers a fine for copyright violation (as a form of revenue-raising, since they obviously will not enforce identity-theft laws).

LEGAL LESSONS LEARNEDSo, what have we learned from this? In summary, we can conclude that: it is OK for ignorance of the law to be a valid legal defense, so long as the ignorance led to a CORPORATION BENEFITING from the ignorance; whereas, if a corporation or organization representing a conglomeration of businesses or otherwise excessively wealthy people (like the RIAA does for the recording and motion-picture industry and its artists), then you can suddenly NOT plead ignorance of the law, even if you truly did not knowingly break the law.

Industries that need cheap labor [and get it by exploiting the illegal-alien labor pool] can benefit from the rulings that SSN-theft is not identity theft if done "without knowing" and for the purpose of employment or such.  The recording industry can benefit from the ruling that someone downloading copyrighted works "without knowing" is still guilty of theft because the downloader should have first read the copyright notice on the original CD or movie label (the label never in their possession) prior to downloading -- i.e., there is NEVER a case where someone can "not knowingly" violate copyright law.

Am I the only one that sees the insanity in this?

Guaranteed High Mileage Car Sales Boosting Plan

Forget Tax Incentives...
It should be rather clear by now that the average United States consumer has little concern for vehicle mileage when purchasing a car; at least, that is, until the price of gasoline is absolutely oppressive. And, tax incentives for hybrid vehicles and the like make little difference too. Doing what is "right" for the environment just does not seem to matter either.

So, how do we encourage people to save gasoline and purchase high-MPG cars over larger, more powerful models? Simple...

Mileage Incentives that Consumers
can Understand and Appreciate
I was just thinking about this the other day, and the answer became quite clear to me. The average person needs something TANGIBLE and right "there and now" to remind them why they chose to save gasoline with a high-miles-per-gallon vehicle, and the answer is this:

THE GOVERNMENT CAN MASSIVELY INCREASE THE PACE OF ADOPTION OF EFFICIENT VEHICLES BY GRANTING THE OWNERS THE "PRIVILEGE" TO LEGALLY DRIVE 15-20MPH OVER THE POSTED SPEED LIMITS ON HIGHWAYS (only highways) IF THE CAR THEY ARE DRIVING IS RATED AT OVER 50MPG HIGHWAY. PERIOD. HIGH-MPG CARS WILL SPEED (literally) OUT OF DEALER PARKING LOTS!

Sure, going faster will burn a (bit) more gasoline, but not much. I do not believe the hogwash that every 5MPH increase in speed decreases mileage 10 percent, because I have tested this with every car I have owned and have seen negligible impact from even a 10MPH difference in average speed over the same driving course of enough length to test completely. Not to mention, that bit of false information implies that if you doubled your speed, you would essentially get zero gas mileage. Ridiculous! And, regardless, people would be STILL be saving gasoline in a large way on the highway (compared to their current cars), and also consider how the "free pass to speed" is only valid on larger highways... the cars would save a LOT of gasoline everywhere else they are driven too.

So, come on government, incentive smaller, more efficient cars, in a way that the average consumer can quickly understand and embrace. When that consumer walks into the showroom and looks at the tiny little car that can get 50 or 60MPG, and then, with great surprise, again asks the salesperson: "So, you are telling me that if I buy THIS car, I can drive 15MPH (or 20?) over the posted speed limit on all Interstates and 4-lane highways, without getting a ticket for it?...(yes)... you are sure?... (yes)... I WILL TAKE ONE NOW!". Can you imagine how many people with long commutes, or traveling salespersons, etc., would want to suddenly save on gasoline by getting a high-MPG car?

Food for thought people... just thinking out of the box a bit. Though, dreaming is more like it :)

Mortgage / Refinance Rates - Home Equity, Conventional, etc

With mortgage interest rates being at super-low, rock-bottom, and certainly historically low levels, I have recently been thinking about how these rates really filter down to the consumer. I see home equity loan interest rates advertised as low as under 4 percent, though I am having a hard time determining if those are fixed-rate home equity loans (since they are quoted as Prime plus 3.25% or so), or whether, after taking out the loan, those rates are variable rate loans or somehow "float" over time.

I have seen 30-year fixed rate mortgage interest rates advertised at under 5% recently, though most often only if points and the like are paid (no-point loan rates seem to be just above 5% still regardless of all this talk I hear on TV of sub-5-percent loans).

Well, fact of the matter is that anything down in this range is quite reasonable considering the history of mortgage rates in the United States over the past decades. I remember the rates being quite high in the late 1970's and even through the late 1980's and early 1990's (my first home loan rate was something like 10.5% back then!!!), and it really is just amazing how people complain about "high interest rates" being anything over 5% (yes, I have heard people complain about this) even as I had to pay on a loan at twice that rate.

I calculated the other day how, if I purchased the same house now as compared to 20 years ago, I could have a payment that is literally just over HALF the amount of payment I had to make back then, and this is not even inflation-adjusted. If you throw inflation adjustment into the mix, the current-day mortgage payment would be essentially 1/4 to 1/3 of the payment. As such, I am just amazed that the housing market is still completely terrible. Sure, jobs are a major consideration, but wow... how much lower can rates go?!

I can not help thinking that it only makes sense to perhaps "step up" to a larger home or bigger yard or whatever while these lowest mortgage rates, lowest refinance rates, and lowest home equity rates in *forever* are available. I like my current house and yard, but I sure am feeling the "itch" to make a step-up now if I can.

The job market is bound to remain shaky, unemployment is sure to stay elevated for a while, but there is also one HUGE amount of fiscal stimulus in play (think: the Federal Reserve printing tons of money - TRILLIONS), that should get things flowing eventually. The only question is how long it will take for the Fed's, and Treasury's, massive injection of stimulus to start causing inflation. IF one would know that inflation is inevitable (especially re-inflation of some intensely-depressed home prices), then it would only make financial sense to purchase a property now, while interest rates are low, and hope for perhaps just a modest rise in interest rates coupled with a more substantial rise in home prices... that way, in theory, you can pay off the mortgage with post-inflated dollars.

But, who knows. Theory just does not seem to be panning out, since if it was, all this dollar-printing would drive interest rates higher (instead of lower) and also cause the US Dollar to devalue (versus getting "stronger" as everyone does the whole "flight to safety" thing). Macroeconomics, per what we were taught in College, is simply out the window lately, and this makes it tough to know whether these lowest mortgage rates, refinance rates, home equity rates, etc are all worth pursuing. arhghghgh. I need a crystal ball!

Credit Cards : Small Business = Personal Guarantee

Since I own a few small businesses, I receive a boat load of small business credit card applications. The mailers always say the same thing in GIANT BOLD PRINT: get your "BUSINESS CREDIT CARD".

Yeah, sure... "business" credit card, so long as you sign with a personal guarantee.

As I sit here watching the unraveling of the American debt-laden financial system in this current economic crisis, I can not help getting a bit upset about the sick irony that these bank credit card offers present. That is, if you are a large company, a public company, and/or have reached some magical "size" threshold where, as an incorporated entity alone, credit is issued and secured ONLY by the assets of the company (as opposed to requiring any sort of personal guarantee by corporate officers and the like).

So, as all these massive corporations default on their debt, file for bankruptcy, and so in... I can not help but find these "business credit card offers" (that require my personal guarantee of payment) all ironic, sickening, and disturbing. A small business entity with small amounts of credit must secure their credit personally, but yet a "large enough" business can borrow hoards of cash and default on payment (repeatedly in many cases -- where companies have been given many a chance, gone bankrupt repeatedly, etc - like airlines e.g.) and still not be required to offer any personal guarantees from corporate officers.

I really believe this is, in large part, why corporate management in this country is so terrible. There is little vested stake in the DOWN-SIDE of the business should anything go wrong. Contrast that to the fact that if I take out "business credit" in the name of one of my small businesses, that I am really taking out money that I PERSONALLY guarantee to repay. Who do you think has more incentive to PAY BACK THE LOANS?

So, while the biggest of the big companies can borrow with nearly no limit (especially in the day of government-backstopped borrowing), and repeatedly default - sticking banks and investors with huge losses and write-downs - the small borrower does not have such a luxury of non-repayment. Instead, we have to personally guarantee every last dollar borrowed with these "business credit cards" and "business loans" that are nothing more than personal credit cards and personal loans that happen to also include someone typing the name of our business on the application in addition to our personal information.

I am not saying that there should not be personal guarantees for credit on small business loans, especially if the small business has not been around for a long time or shown significant credit worthiness. Instead, I am saying that there needs to be more "risk" for large business borrowing - risk to these insanely over-compensated executive managers that can take millions or billions in compensation and stock options during the good times (heck, even during the bad!), but yet not be on the hook for a dime in personal losses when the company defaults on loans a mere year or two later... when, obviously some of that insane compensation should have went to paying down debt or avoiding debt in the first place.

There are rampant cases of this personal-profit, company-loss scenario among large companies, but yet they continue to obtain credit without personal guarantees. And, here I am getting my nearly daily mail about how to get my "business credit card" which I have to guarantee personally. So, a note to all you banks that send me these offers for "business credit": get lost!

I will take such an offer (perhaps) when the playing field is level and those "large companies" that continually stick banks with Billions of dollars in losses will have their own management personally guarantee some of those loans. I guarantee I am a better credit risk than GM, Ford, or Chyrsler, and I still do not see banks (or the US government) demanding PERSONAL GUARANTEES from those corporate executives!

Stock Analysis: Nvidia (NASDAQ:NVDA) and Ford (NYSE:F) Company Performance

I just have to compare and contrast the operating results reported by two companies today (Nvidia and Ford Motors), and especially discuss a fundamental difference between these two companies' management philosophies and ability to adapt to changing markets. That difference is a large one, and an obvious one: market agility and anticipating the future - Nvidia does this well, Ford does not.

Both have faced similar challenges with regards to their products and markets lately: their markets have been challenged by competitors (for Nvidia, that mean AMD / ATI; for Ford, just think Toyota, Honda, etc.), consumers have been demanding different products (for Ford, that means higher mileage cars; for Nvidia, that means higher performing graphics processors and more and improved Notebook graphics chip functionality), and each company has seen their products caught in a period of transition.

But, where they differ dramatically is in how they reacted to these challenges, and how quickly they reacted to known changes as well as anticipating uncertainty.

Let me start by quickly presenting an excerpt from earnings reports for each company - first Ford, then Nvidia:

NEW YORK (CNNMoney.com) -- Ford Motor reported a $3 billion operating loss in the latest quarter, and said Friday it would reduce staff and capital spending in order to preserve its dwindling cash.

Ford said it would cut salaried employment costs by 10% - reducing compensation of its white collar workers by eliminating merit pay, bonuses and the company's matching contributions to their retirement accounts.

Now, Nvidiia's quarterly results release:

SAN FRANCISCO, Nov 6 (Reuters) - Graphics chipmaker Nvidia Corp reported quarterly results on Thursday that topped Wall Street's estimate, as the company held the line on expenses while sales fell, and shares surged 12 percent.

Nvidia (nasdaq: NVDA) said its fiscal third-quarter net earnings for the quarter ended Oct. 26 came in at $61.7 million, or 11 cents a share, down 74 percent from $235.7 million, or 38 cents a share, in the year-ago period.

But after excluding items related to the company's recently announced layoffs and other charges, Nvidia earned 20 cents a share, beating the average analyst estimate of 12 cents a share, according to Reuters Estimates.

Notice the key differences.

Nvidia

Nvidia has been profitable in the past, and REMAINED profitable by acting quickly to reduce costs in light of the fact that demand was slowing and product-mix changes were taking place. In September, the company announced plans to cut 6.5 percent of its workforce when it was obvious their market was changing, and this quick reaction has helped them avoid losses.

You can argue that a graphics chip maker is inherently more agile than a car company because of the product lead-time and engineering/manufacturing cycle brevity compared to building cars, but on the other hand, that same logic must be applied to *competitors* that can also move just as fast to change their lineup of graphics cards and GPU offerings. So, Nvidia deserves credit for having management that is willing to act quickly, and decisively, in order to keep products inline with consumer expectations while keeping costs down as sales volume deteriorates a bit during a macroeconomic slowdown.

In addition, Nvidia shows foresight for future demand and growth in the parallel computing field with their CUDA offerings (this CUDA parallel processing cores feature is in nearly all their current GeForce and Quadro product lineup). I have been watching more and more commercial applications target this particular Nvidia platform advantage (which, I consider to be VERY large), and have seen applications like the upcoming Adobe Creative Suite CS4 even marketed as being best-with-Nvidia cards (and, Nvidia has a nice new high-end Quadro video card marketed specifically to Adobe CS4 users). This is great product planning, and will give them sales for many quarters to come.

And, if this were not enough reason to consider Nvidia a company with great foresight and momentum, consider how Apple Computer has just started offering the Nvidia mobile GeForce chipsets / GPUs in their new notebook lineup. As soon as I heard that news, it was even more obvious that Nvidia is making moves to future-proof their sales and grow their markets.

Ford

Ford has been losing money for a long time, and even while losing money, their management consistently acts slowly to reduce costs in light of the fact that demand was slowing and competitors were eating them alive. Ford Motors seems destined to live up to the image of the American Auto in general: outdated and behind the competition. Their entrenched management (just like General Motors) is a bunch of overpaid executives whose only tangible "plan" to fix things of late is to borrow (or be handed) more money from the United States Government and taxpayers.

I won't get into how lame this whole "rewarding failure" concept is with giving incentives to companies that fail is (instead of rewarding those that succeed and produce profits and jobs!), but it is highly indicative of the underlying problem with Ford and GM. They still, even after massive multi-Billion dollar repetitive quarterly losses, fail to act BEFORE the crisis gets worse, and are never able (or willing) to get ahead of the curve and show that they have any sort of visionary management abilities.

It is not like they have no knowledge of where the consumer is headed, where the economy is heading, and how their products stack up against the competition in regards to quality, features, mileage, and the like (start by reading Consumer Reports guys!). Nvidia has the same knowledge of what their competitors are doing (AMD's ATI division especially), and they must act to counter such competition quickly - and they do!

Ford looks like a slug by comparison to Nvidia, and repeatedly fails to deliver REAL change, and by the time (if ever it occurs) their management makes the DEEP CUTS and GROUNDBREAKING CHANGES required, they will have burned all their cash and find themselves once again knocking on Uncle Sam's door in hopes of more easy money. This door-knocking must be ignored, as it only encourages a repeat of their lame decisions, and will reinforce poor management "vision" while essentially penalizing those auto companies that DO have good vision for their companies' futures (by essentially subsidizing inferior products from Ford or any other competitor that is using government funds to prop-up their business).

Summary
Well, I think it is time to let some of the Silicon Valley management have their shot at Ford Motors management - or at least some of their foresight needs to go into play in Detroit. Funny thing is, the one Silicon Valley motor company I really find interesting (Tesla Motors) has breakthrough forward-looking products (like fully Electric sports cars), is creating new Auto-industry jobs, but yet has to compete with Detroit's entrenched industry without the massive handouts and support packages from the US government.

Instead, Tesla must secure private funding at market rates, and actually produce a product people want and set a price-point for its products where it can stay in business and perhaps even post a product. Gee, what an idea! All the more reason Detroit's antiquated auto industry needs to be allowed to simply DIE if they can not do the same -- it is time to reward success, and not failure. And, with regards to today's stock analysis, I plan to reward Nvidia's success with further purchase of their products (I have a Quadro in mind for before EOY 2008 yet) and their stock; but, by contrast, there is ZERO chance I will be buying a Ford product or company stock!