Go see ’The Big Short’ now

There is a good argument against democracy- that people aren’t smart enough to select their leaders.

The fact that Bernie Sanders has an editorial in the N.Y. Times today talking about how to reel in the Fed- while other candidates are talking about the terrorist threat, should be a clear message to the voting public that one of the candidates knows what your greatest danger is- and it’s not a jihadist.

The reason most of us make less, work harder, and had our net worth knocked to the ground was because government failed to stop a threat to the global financial markets- and let a bunch of jerks manufacture play money- and put a lot of it in their pockets. Our answer- to make more play money- and pay off their mess- all the while stealing it from you. I know- you don’t believe me. I’m just a perennial candidate who loses elections and writes a blog.

So- let me make it easy for you. Go see “The Big Short” in the movie houses right now. The book of the same name was written by Michael Lewis who also wrote “Moneyball” and “The Blind Side” -so he must know just a little bit about telling a story. In the movie- they’ll explain the house of cards the Wizards of Wall Street built- and blew up- in a way anyone can understand.

This movie should be required watching for every person in America- so you can start to understand who the real threat to National Security and Global Stability is- and it ain’t an Arab with an assault rifle or even a dirty bomb.

But- after posting the Bernie story on Facebook- one of those overly bright U.S. Voters said the following (I’m leaving his name out to protect the stupid):

It was a horrible idea to start bailing out private industry. Just leave them alone. Don’t regulate them and don’t bail them out. Someone else will take over the market.

“Not regulating them is what caused the problem, genius,” was my response- to which he said-

People choose to get into the stock market and to invest in business and the like. No one forces them into it and no regulations are needed. Buyer beware. The only thing that needs regulated by government is unwanted force upon those who don’t want it. And that mess you talk about made many people rich so it wasn’t a mess to them. Now the folks who had their money forcibly taken from them and given to others as a bailout were horribly screwed. And in addition I don’t trust the government with the ability to regulate very much. They are generally fools just looking for a paycheck.
This is the ignorance of how Wall Street is tied to Main Street. And while the movie doesn’t make the ties clear- it does explain pretty clearly how much of a fantasy the market is- with its imaginary valuations and total disregard for the mechanics of a functional economy.
Here is the part that most don’t get.
Most people do not invest in the stock market- they don’t have the money to spare. They don’t think the market is connected to their well being- but, in fact, this small subset of our economy is tied to everything. You buy insurance- that money is “invested” in the market by the insurance companies- who then “manage risk” and “protect” you from financial ruin in a catastrophe. The movie talks about how buying insurance against the market misbehaving was monetized- and a few people made a boatload of money betting against the people of the United States.
Those very same people, who paid to fix the mess.
But, insurance is only one part of it. The markets also control your credit scores, your interest rates, your credit worthiness- and also those of your employer. Your pension, if you are lucky enough to have one, is also “in the market.” And while the media and discussion focus on the big businesses, who get access to the best rates- no matter what- the majority of us, work for small business- which has the deck stacked against it a million different ways.
As to the government- we used to protect the people from being preyed upon by the FIRE (finance, insurance and real estate companies), in fact, the guaranteeing of home mortgages was a response to the last financial debacle when banking was allowed to self-regulate.
Go watch the movie. You’ll better understand what happened- even as you watch more people get insanely rich off the most rigged casino on the planet.
And here I’m going to defer to a friend, Daniel Greene- who added the following to the conversation- because some people actually do learn from history.
“If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.”

– James Madison, Federalist Paper #51

Those who advocate getting rid of government regulation are asking to return to an economic Darwinian state of nature where only the strong, super-rich survive, and everyone else gets thrown out on the street.

And, if you need evidence of what getting thrown out on the street looks like- go take a drive through some of Dayton’s neighborhoods- and look at all the vacant homes.
What’s worse- Madison wrote that statement in 1778, and men still aren’t angels.
But, we still believe that our government has been protecting us- despite it being bought and sold like a commodity. Go watch the movie and report back here in comments.


How to stimulate the right part of the economy by saving the government money

With all the fuss about the Fed raising interest rates- which is going to go straight to the banks’ bottom line, it’s time to take a look at a commonsense approach to handing some money back to the people at the bottom of the economic ladder- and save the government money at the same time:

A new report shows the cost to produce a penny was 1.7 cents in the 2014 fiscal year. That’s down from 2.4 cents in 2011 but still more than face value.

And that won’t change.

“There are no alternative metal compositions that reduce the manufacturing unit cost of the penny below its face value,” the biennial report to Congress said.

The nickel, too, is dead weight for taxpayers. Production costs stood at 8 cents last year, down from 11 cents. The lower cost per coin is largely a result of rising production and reduced metal costs.

Other coins turn a profit. A dime costs 3.9 cents to make, and a quarter 9 cents. All together, the Mint made $289.1 million on seigniorage–the difference between the value of the coin and the cost to make it–despite a $90.5 million drag from the penny and nickel.

Congress in 2010 told the Mint to examine ways to save money on coin production, a mandate that so far has led to detailed testing of alternative metals and production methods, including the use of a laser to produce coin blanks.

The Mint estimates that switching up the metallic content of coins could save taxpayers $5 million to $57 million a year, though vending, amusement, laundry and other groups with coin-operated machines warn that it could cost them billions to reconfigure machinery and make other adjustments needed to accept altered specie, the Mint said.

Source: Just How Much Does It Cost to Make a Penny?

So, how do we do this? You know that pile of pennies you have, sitting around the house? In kids piggy banks, and on top of the washing machine? Buy them back at more than a penny.

Have a day set where you can bring in 100 pennies and get a dollar bill and a dime back. Making the effective cost of putting a penny back into the Fed’s coffers .0011 cent. You could even spiff people who brought in 1,000 pennies and give them back $11.25 etc.

If the cost to make the nickel is that high and the Mint needs more- simple, buy them back too.

Since the super rich probably won’t waste the time running their spare change to the banks for the buyback- this will put a bunch of extra dollars into the hands of those who’ve been penny pinchers for a good reason. Pay the banks a small premium for handling the cash, but stop the stupidity of minting new coins that cost so much. Economic stimulus made easy.

Dr. Yellen are you listening?



Stop subsidizing the super rich: alternatives to the Fed rate hike

Today is the day when the mystical magic of economics is played with by people in an echo chamber.

And while the actions of Dr. Janet Yellen and the Fed are being anxiously awaited by the Wall Street Wizards, the pawns of the economy are hoping that the price of gas doesn’t jump up 20 cents.

No matter what economists and financial wizards think- Wall Street is so disconnected from Main Street (and reality for that matter) that the amount of attention paid to their fortunes is as disproportionate as the media coverage between Donald Trump and Bernie Sanders in the presidential race- despite one having substantially more donors, followers and potential votes.

Part of today’s action is boosting the interest paid on deposits big banks hold with the fed. This is supposed to “tighten” money up a wee bit- making lending slow down. This is giving more money to the people who crashed our entire economy- does that sound like rewarding bad behavior to me? Sure does.

So here are some alternatives – some of which could be enacted by Congress- which would do the same thing, and actually impact Main Street more positively than Wall Street:

  • Cap credit card interest rates at 20%. Any interest rates approaching 25% have been proven to be loans that are inescapable. In Ohio we saw toothless laws against payday lenders try to reel in these sharks, while the big banks are back to their old tricks- with bundling and reselling this high yield debt.
  • The 2009 bailout is still sending shock waves through the real estate market. We allowed millions of people to lose their homes, and even when we stepped in to “help” homeowners- the only people who benefited were the banks who all were made whole- even if the valuations were all wonky to begin with. There are still many people who asked for assistance- or even received it- that are still paying interest rates on home loans several points over what a loan is now. Offering 100% tax credits on any interest paid  last year over 5% on homes owned before 2009- would put money back in the hands of the people who have managed to struggle through the storm- while making sure not to hurt the precious bankers bottom line.
  • Enact caps on pay for companies that subsist on the public dollar. There is no reason to keep feeding campaign coffers with federal money. Here’s what I mean: hospital revenues can be divided by federal funded and insurance company funded. With the new mandate that everyone has health insurance- this basically comes down to health care is funded 100% with money from tax dollars. Yet, while the President of the United States makes a mere $400,000 a year- the average hospital CEO makes at least 3 times that. Defense contractors- make even more. Either cap salaries- or have special tax rates approaching 90% on all revenue above $400,000 a year for federally funded work- and, btw, ban them from donating to political campaigns and hiring lobbyists. No need for that circular flow of money to be subsidized.
  • And last but not least- companies that have more than 100 employees that have people on the payroll who are getting public assistance- be it section 8 housing, medicare, food stamps- etc- that money needs to be charged back to the employer. Call this the WalMart rule, call it being fair to families, but there is no reason to continue this subsidy of the rich at the expense of the poor.

Changing the federal funds rate is easy. Making real substantive changes to the real economy outside the Wall Street bubble is hard.

And one last thing- if we really were talking about stabilizing the economy, there should be a 24 hour moratorium on Wall Street trading starting an hour before the announcement. Of course, if we really wanted to start making economic policy that made sense, we’d eliminate flash trading, require stock purchases to be held a reasonable amount of time to be considered a true investment other than a day at a casino… but, that’s really wishful thinking.

Banking inequity

I have a contract sitting around somewhere for a home equity loan with Gem Savings from around 1990. It was one page, letter sized, in large type- and was all I needed to sign to get an equity loan on my house.

Now that document would run 8 pages of micro-type and include things like an arbitration clause, denying me the right to use the justice system to settle any grievances.

Later I signed one of those really long contracts to refinance my house with a bank. They changed the terms at the last minute, after jerking me around for weeks. Then, promptly sold the loan off to some mortgage servicing company, and then it’s been transferred time and time again- all without proper recording of title and lien transfer at the County Building.

If you or I sold a property and didn’t record the transaction, it wouldn’t be considered valid.

My small business, a sole proprietorship, recently teamed with another small business to do a large deal- $130,000, with a very small margin. When I went to deposit $90K, they wanted to hold my money for a week- despite being told well in advance this deal was coming. The banker even tried to warn me that this could be fraud. I had promised the vendor I’d pay by wire transfer- and was told by the bank it’d be $25 to wire money out. They didn’t tell me there was a $13 fee to have it wired into my account.

I’ve even had them putting holds on rent checks that are certified. Apparently, “Certified checks are easy to forge” which is why the hold according to my bank. WTF good is a certified check then? I do work for a credit union- which pays with certified checks- even those get a hold.

It’s getting harder and harder to run a small business, and banks behaving badly is just one more obstacle for small business to overcome. When I was a youngster in business school, you were advised to have counsel of a lawyer, accountant and a banker. Since the deregulation/consolidation of banking in this country, I’d say you’d be hard pressed to find any banker with actual lending authority anymore.

The last one I encountered was at Eaton National Bank- which once it got absorbed by LCNB ceased to be what it was. I’m experimenting with Wright Patt Credit Union now- which is one of the few credit unions that can do business lending. It’s becoming apparent that small business really is better off with a credit union instead of a bank, but I’m not sure if this applies to start-ups (I’ve been in business for 25 years).

One of the problems is that small business can’t buy the politicians’ ears the way big business can. When was the last time you heard of a tax break for small businesses? A program to help small businesses grow- that wasn’t driven by big business financial tricks (like quick write-offs of capital expenses)?

What could change if small businesses were given tax credits rewarding them for each full-time employee, length of employment, and growth in payroll that were redeemable for low-interest loans and access to working capital? What incentives could we offer to encourage the big banks to take small business seriously?

Small business powers most of our job growth, but, there are no small banks left to work with them. It’s time to solve this problem.

Grandstanding congressmen and CEO pay

Chafetz vs Planned Parenthood

Obviously, bombs are a cost no object endeavor- while birth control. needs tight oversight.

Reading an editorial about the Planned Parenthood inquisition, I saw a mention that a member of Congress had questioned the pay of Planned Parenthood president Cecile Richards- a whopping $520,000.

I thought to myself of the companies that have federal contracts, GSA schedules- who promise to do work for the people of the United States at the lowest cost possible. Companies like General Dynamics- who are so far over budget on the F35 program– and yet, keep getting funded. The CEO of General Dynamics, Phebe N. Novakovic, who also happens to be a woman- made $19 million last year. No inquisition there.

From the only news source that carried this in depth- Al Jazeera, read the exchange:

“Your compensation in 2009 was $353,000. Is that correct?” House Oversight Committee Chairman Jason Chaffetz, R-Utah, began. “Congratulations, it was,” Chaffetz continued when Richards said she didn’t have the exact figures. He went on to note that Richards’ salary had risen to $520,000 since then…

“I would like to register my opposition and objection to the chairman beating up on a woman, on our witness today for making a good salary,” said Carolyn Maloney, D-N.Y. “In the entire time I’ve been in Congress, I’ve never seen a witness beaten up and questioned about their salary… I find it discriminatory and inappropriate.”…

Rep. Elijah Cummings, D-Md., ranking member of the committee, said in a fiery rebuttal that it was particularly hypocritical for Republicans to place Planned Parenthood under a microscope and take Richards to task over her salary when they had never taken an interest in the hefty compensations of executives at big banks, drug companies and defense contractors, who had all engaged in law-breaking.

“Last month, Lockheed Martin was fined millions of dollars for using taxpayer funds to lobby Congress to maintain its hold on a multi-billion dollar Pentagon contract. Lockheed’s CEO received a stunning $33 million last year,” Cummings railed.  “Ms. Richards, do you know if there has been any investigation or any effort  — any — to eliminate Lockheed’s federal funding?”

“It sounds like there hasn’t been,” Richards answered.

“You got it, of course there wasn’t!” Cummings said. “These are huge companies that are actually guilty of breaking the law and their CEOs make millions of dollars — Republicans never criticize the salaries of their CEOs or they never try to strip their federal funding, their government subsidies or their tax breaks.”

Source: House GOP ‘beats up’ on Planned Parenthood president — and her salary

The Wall Street bankers made millions, while being bailed out. The program to save the homes of Americans from foreclosure- actually put more money in the hands of bankers than in the hands of the people being bailed out.

If Congress really cared about reeling in government spending- why not put a simple cap on executive salary for any company that receives significant income from the government. Any medical organization accepting funding for medicare/medicaid, a cap. Any defense contractor- a cap. Any bank that is guaranteed by the federal reserve- and has the ability to create money- a cap. Any company where employees depend on federal programs to make ends meet- a cap.

What the cap should be isn’t something random- set by the boards of directors- but based on a ratio of the total payroll of U.S. employees. You want to make more- don’t do business with the people of the United States- or accept our assistance.

Obviously, if the pay of the CEO of Planned Parenthood is relevant to the cost to our country of a government shutdown- this is important stuff.

A prepper’s holiday season

The patches and crest of the US Army Special Forces- the "Green Berets"

The patches and crest of the US Army Special Forces- the “Green Berets”

The United States Army spends at least a million dollars on every guy (and yes- it’s still a guys-only club) they train to wear a green beret. Don’t get caught up in the Rambo fantasy- the Special Forces isn’t the same as SEAL Team 6, Delta, the Ranger Battalions or Marine Force Recon.  Sure- they can go in and do amazing damage relative to their size- since they are highly trained, well equipped and typically well supported, but direct action isn’t their main mission.

Their main mission is to train and organize others to go overturn their government, or to keep their government in power- depending on which way the political wind blows.

Send in an A Team of 12 guys (no, it’s not anything like the “A-Team” TV show either) and out should pop a well trained, organized and equipped group that’s anywhere from Company to Battalion size – depending on where and what the team is given to work with. Translation- give them a literate group of French young men behind German lines in WWII (pre-Special Forces example) and you could have a team easily run a battalion- give them a bunch of semi-literate dope farmers in Afghanistan- and they’ll be lucky to have a few effective squads. Garbage in- Garbage out.

We have no problem at all sending these men all over the globe to “take care of problems” in third world nations where elections are non-existent or questionable, or where “civil rights” are being violated, or where plague and famine are winning a war caused by poverty and disconnected economies. We’ll even send them on humanitarian aid missions- where SF medics do dentistry and demolition guys blow up things to make damns, or set up water purification systems.

My question to you- is at what point is some other country going to look at our country- at Ferguson MO, or the latest shooting of a black kid with a pellet gun, and decide to send their Special Forces here to organize the disowned underclass to rise up and fight? Sounds crazy right? What makes it any different when we do it in places from as far and wide as Nicaragua to Somalia? Liberia to Libya?

And, why do we think that one day, one former Green Beret isn’t going to decide to do it in his hometown?

I look at the insane peaks of the U.S. stock market- and know that the company’s values aren’t rising because of higher real wages, higher real employment, higher standards of living, a better or stronger economy- and think, didn’t we learn a damn thing since 2009- or even since 1928?

Is the real reason “Black Friday” sales were down because you could shop on Thanksgiving? Or is it that people sense something isn’t quite right- and it’s not just riots, gas prices swinging, or temp jobs pushing numbers in the right direction.

All those people who laugh at “preppers” stockpiling water, fuel, guns and ammo? Do you really want to bet on you an economy built on lies anymore than a democracy that’s elected by a minority well schooled in stupidity?

When the mountains of cash printed and shoved into the economy for the rich to use to fill their bank accounts, which then purchase the best politicians money can buy, all become semi-worthless (which is what typically has happened when money supplies grossly outstrip the actual needs by real users of it)- you end up with the only real value being in things needed to survive: clean water, fuel, food and bullets.

We are not facing a zombie apocalypse- which is made up of mindless dead people roaming the streets- we’re waiting for the mindless sleepwalking wage slaves to wake up and demand to take back the streets.

You are free to return to your holiday cheer. Don’t say you’ve not been warned.

note: For the record, I don’t think most preppers really have a clue on how to survive. I lay better odds on those who live in a tight-knit community, than any people thinking they will make it alone. Also, while I only served with Special Forces units while in the Army and the Army reserves, I never completed the Q-course. I have never served in a line unit- or with anyone who wasn’t at least a paratrooper. My official Army MOS was 05B-1A4P, which means I’m a radio operator, who knows morse code and is Airborne qualified.  I  served on an A-team for over a year in the reserves while in college. I have the utmost respect for the training, the mission and the Beret.



The unintended side effects of the anti-Obamacare dolts

You’ve heard about businesses, big and small, threatening to move workers to part-time so as to avoid having to pay for Obamacare. Big business claiming that they can’t afford to pay for having full-time healthy workers, ones who are more likely to show up for work on time because they weren’t up all night with a bad sinus infection that is going untreated because they couldn’t afford a doctor’s visit. Yeah. So, instead, we’ll just hire more people (or more problems as any small business owner will tell you) to try to do the same work- and of course, none of those part-timers will have cured their sinus infection either- so your remaining full-time workers will be getting exposed to these sick legions of part-time drones.

What is this ultimately doing? Thanks to these dolts, they are going to drive unemployment to an all-time low, making the president look like the greatest hero to the working class ever. Jobs for everyone. Granted, it may mean you are working two part-time jobs, instead of one, but, many are already doing that. Wages for the best part-time worker will slowly rise as companies realize that turn and churn is costing them even more (my biggest expenses in hiring new people is the training time it takes to make them effective, not taxes or health care).

The rising tide of full employment and the increased circulation of money (remember people with less money spend a much higher proportion of their income, as opposed to rich people who often let it languish in the stock market, real estate or other big-dollar investments) will push new opportunities for entrepreneurial growth, including lower cost options in health care clinics as some physicians realize that there is a market for health care run like an assembly line now that everyone is covered. Imagine mini-health clinics that have five doctors working with one person to file standardized claims instead of one doctor with four people to handle filing claims. The entire health care industry will boom, needing new facilities, new nurses, new therapists (occupational, geriatric, physio etc).

In two years of high job growth, the Dems will recapture the House of Representatives, Republican governors who’ve made their mark by shifting taxes to local n00bs who can’t manage it effectively will fall as well, and an entire new generation of leaders will step forward riding on the wave of real jobs for real voters.

Thank you, you greedy bastards, you’re going to make Obama into the most popular president ever, or go out of business trying to prove your point.

The problems with property taxes: taxing investment

Considering The Tax Shelter
Photo Credit: JD Hancock via CompfightThe reason Mitt Romney pays so little income tax is that he makes most of his money from investments. This is supposed to be a way to “incentivize” investment. So he invests in companies that supposedly create jobs and spread the wealth around.

Mitt is most definitely part of the 1%. For the rest of us, our biggest investment is our home. The government gives us a mortgage-interest deduction to help us out, but mortgage interest is a fixed known cost in the equation, our wild card is property taxes- something our government seems to play fast and loose with.

For most Americans- the only long-term investments they make are their home and their retirement accounts. Both are supposedly backed by our government. Mortgages were backed by Fanny Mae and Sallie Mae or FHA and our pensions (unless you worked for Delphi) are backed by the Federal Pension Guarantee fund. Government regulations are all over the place- with rules on 401Ks, IRAs and the mutual funds that much of our retirement planning is predicated on.

But your home is different- it’s the one that is tangible, a direct reflection on your choice of where to live and you are the manager. You decide if it’s time to paint, put new gutters on, how you landscape, if you want to invest in granite counter tops or just use Formica. And here is the rub, at any time, someone hired by the county comes around every few years and decides what the value is and raises or lowers your tax bill totally arbitrarily.

How do I know this? Quite simply- I own four pieces of property and have watched the bills get played with over the years and despite going in to dispute the values last year- end up with mixed-up bills again this year.

Case in point: I bought two virtually identical cottages across the street from my house in 1995 for $19,500 each to try to improve the quality of life on our block. They were owned by a slumlord, whom the city has made very wealthy by overpaying for rent for years on a priority board office in a building he owned on the West Side. He was renting them out as Section 8 homes, I wouldn’t let a junkyard dog sleep in either one when I bought them. When entering for the first time the one my parents now live in  (I bought them without inspection) a lump of dirt fell on my hat – when it started moving, I realized that it wasn’t dirt- but cockroaches. The house was so infested I even found them inside the toilet tank. The other house was involved in drug sales- but wasn’t much better. I totally gutted both, put all new everything inside them, and then went to the banks to refinance and get my money back. They’ve been solidly rented ever since.

The tax values on these two homes, despite me telling the county that they are identical- is different. It’s also based on a number pulled out of a hat. It is so confused that they don’t even tax you on “the value” but on a percentage of value. The value goes up and down over time, based on what others in the neighborhood do, based on what you do, based on whim and whimsy.

This is bullcrap. The value of the homes was established when I bought them. What I choose to do with them is none of government’s business. If I fix them up and rent them for more, how is this any different than what Mitt Romney does in buying stock and hoping it goes up? Why does my investment get “appraised” a market value by someone who has no real way of telling what the value is? Concrete numbers like rent received aren’t counted. Concrete numbers like sale price aren’t considered. If you wonder why our housing market started fluctuating like the stock market- it’s because we allowed the banks to change the way they made money from concrete numbers to a numbers game (like a casino would run- where the “house” always makes money- and the irony of that expression is noted).

Banks used to make a majority of their money by lending money to people to invest in their home or business- and they had to hold those notes to get paid. Now, they make their money by investing money that we let them “create” with dubious products that they started selling based on packages of loans that they handed off. Banks no longer had any responsibility to make sure their investments were protected- since they sold off the loan as fast as possible to someone else and moved on to the next loan. Churning mortgages by banks is the same as churning stocks for stockbrokers- who only make money on the transaction- not on the outcomes.

So here I sit in my house. Bought for $14,500 in 1986, across the street from my office, bought for $2,200 and $2,400 in back taxes in 1988 and my two cottages (which I paid too much for)- paying taxes on property that is now worth a lot- according to the tax man, despite being written off by everyone else, including the banks when I bought it. Every property I bought I had to pay cash for, since they were all worth “below” the loan threshold for banks. Yet, here I am being asked to pay $2,000 a year  on both my office and my house and $800 a year on each cottage. I am being penalized for investing. Mitt Romney isn’t.

To add insult to injury- the house nearby, which is bigger than mine (it’s 2 stories over the back of the house, while mine isn’t), but the same basic footprint, was sold in foreclosure 3 years ago for $14,000. Not only are their taxes only $600 a year, they haven’t paid them and have been the frequent entertainers of police, fire and truancy officers.

How much money could we save if we didn’t have to pay for “re-appraisals” every so many years- and based tax value only on the purchase price by the owner? How about treating the real estate investor the same way we treat the stock market investor? It’s time for real-market valuation system and taking the arbitrary valuation of property out of the equation. Never mind the effect this has on seniors on fixed incomes (where we have to put “homestead” protections in place).

Why shouldn’t those who buy low and don’t sell, be allowed to profit from their investment in the community? Why do we abate property taxes for businesses that are “going to invest” but not for those who actually did invest? Considering that my investment in the office building brought jobs to an empty storefront- saved the city from having to tear down another vacant building and turned a shithole into a preservation award winner- why am I getting penalized with a growing tax bill? Consider that the cottages have been rented to people who have jobs instead of being on welfare or either on the way in or our of prison, haven’t I added value to the community and deserve to be rewarded instead of taxed? My home had sat on the market for over 2 years, starting at $22,900 and sold for $14,500 because the banks wouldn’t lend (despite all the BS about Community Reinvestment Act – CRA lending protocols), and yet 25 years later, because of banks’ new found freedoms of not having to be held accountable for loans- the nearby home sold for $500 less- despite being worth much more?

How come on almost every other level, investment isn’t penalized, but on property, it is? If there was a reason for a tea party revolt over taxation without representation, shouldn’t this be the case? My home was valued at one time by a bank at $130,000, but now according to Zillow it’s only worth about $62,300 and interestingly enough, Zillow is what the government is turning to for valuations for the “Making Home Affordable” program- not our local tax man’s appraisal.

There is only one honest way to value real estate, by the purchase price. Do you agree?

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Aborted at three and a half, the $2.2 billion C-27J

Photo of USAF C-27J

The C-27J

If you wonder how our military budget is the largest in the world, it’s because politicians get involved protecting their babies. In the world of military programs all politicians are decidedly pro-life if they have a piece of it in their state.

The C-27 is an attempt at a smaller version of the venerable C-130 Hercules which has been one of the most reliable  aircraft in our arsenal. When comparing the two– it appears that there are marginal differences where the C-27 is more useful than a C-130. At this point, the $2.2 billion purchase contract is probably going away. You probably can guesstimate that to even get to the point of the contract- the U.S. spent at least $2 billion agonizing over the plan- which started in 1995 with the contract awarded in 2007 for 78 planes.

We won World War II in about the number of years that we actually had the plane before it was cancelled. During that time we not only from scratch came up with planes like the B-29 Superfortress, the P-61 Black Widow and the P-51 Mustang. We built thousands of planes and won the war. Now, we can barely deploy a plane in 20 years.

From the Dayton Daily News- remarking on how WPAFB has come through the  budget-cutting process “relatively unscathed” we even quote a taxpayer-supported illegal  lobbyist, referred to as “Michael Gessel, a Washington-based vice president of the Dayton Development Coalition” as a reliable source:

President Obama’s 2013 defense budget, released on Monday, appears to leave Wright-Patterson Air Force Base relatively unscathed as the administration gets started on $487 billion in defense spending cuts over the next 10 years….

“From what we’ve seen of the budget documents released so far, Wright-Patterson seems to be facing level funding in the next fiscal year, under the president’s budget,” said Michael Gessel, a Washington-based vice president of the Dayton Development Coalition. “Of course, Congress can and does change some of these numbers.”…

Republicans have said they think Obama’s defense-spending reductions will undermine the military and its current capability to fight more than one war at once. Obama has said his goal is to build a smaller, more agile and technologically capable military ready for future warfare.

Still, Congress required the $487 billion in defense spending cuts over a decade, as part of the Budget Control Act enacted in 2011….

House Speaker John Boehner, R-West Chester, said Monday that the overall budget — not just the defense portion — reflects Obama’s “failed policies.”

“Our nation needs Washington to demonstrate some courage with a budget that honestly addresses the near- and long-term challenges we face,” Boehner said. “Instead, the president offered a collection of rehashes, gimmicks and tax increases that will make our economy worse.”…

The administration also proposed to cancel the C-27J, a twin-engine turboprop cargo plane that the Defense Department had said in 2007 would provide a needed airlifter for both the Air Force and the Army. Because the Ohio Air National Guard’s Mansfield base is home to C-27Js, Ohio politicians are concerned about the future of that base.

via Wright-Patterson relatively unscathed in Obama defense budget.

A squadron, btw, is typically 4 planes. To make matters worse, the C-27J is yet another attempt to solve a general’s wet dream of having a cargo plane be a helicopter. The V-22 Osprey fits this category- and has cost U.S. taxpayers billions and too many Marines their lives. That program also started at $2.2 billion and now has run over $27 billion and estimates call for at least that amount again to complete the program.

We could have bought a lot of semi-disposable helicopters instead. The venerable Bell Huey which served as a work horse in Vietnam cost about $5 million each, the cost of the new version, the Sikorsky Blackhawk, $6.4 million each. Each C-27j is $53 million for comparison’s sake. We used to just drop combat engineers in places to build big enough airfields when we needed a plane to land, now apparently, we still seem to think a different plane is the answer.

War is no longer like chess. It’s not waged symmetrically. It took 20 people to hijack four civilian airliners to start the current wars, not billion-dollar bombers or multi-million-dollar cargo planes. The new world order isn’t going to be maintained by a bigger military hammer, but through smaller, unconventional forces trained in special operations. Diplomacy isn’t improved by bombs and bullets, but by smarter use of all of our resources to build peaceful relationships.

Al-Qaeda won’t go away because we have a C-27, or a V-22, it will go away when people across the planet hate someone else worse than America, or they become hated more than us by the people around them.

If we want to solve the budget problems, we need to stop trying to turn all our chess pieces into Queens at a cost-is-no-object price tag and learn to use what we have available more efficiently.

The C-27 program is doomed. Anyone talking about saving it, or putting more money into the short takeoff and landing cargo plane category should have their heads examined. The answer isn’t a different plane, it’s either a helicopter or a longer, better runway- live with it.

When you read the paper and see politicians and lobbyists defending our defense spending, it’s your duty to do your homework, because, our politicians are all dependent on donations from these defense contractors. That’s why I’m running for Congress and work so hard trying to deliver the facts you need to make a good decision.

The next question is why we need an air wing in Mansfield in the first place? It’s a transport squadron right? Shouldn’t they be able to fly planes from WPAFB to Mansfield to pick up the troops for drill weekend in their C-130’s and hold drill here?

[Note: go look at any other candidate’s website for the OH-10 including Congressman Turner for a position on this issue]


I wrote this article on Feb 14, 2012, on Feb 18, the Dayton Daily News started promoting a Sunday article by John Nolan about “Mission Aborted” featuring the C-27J debacle, story not available online, without giving me credit for either the headline, or the questioning of this military program that Congressman Turner voted for. Here is the ad they ran in the print edition yesterday

Dayton Daily News promo ad for upcoming article mirroing this post

"Missions Aborted" - the word "aborted" came from somewhere.


Let’s examine “job creation” – and a solution

The news about the economy is good (according to Nan Whaley and Matt Joseph and national statistics) with very modest job growth. But the real question is what kind of jobs are we creating?

I have a friend with a terminal degree in his field, working two jobs, one at Wright State, another at UD as a professor. Neither offers health-care benefits for him or his wife. She is working as a barista, a “career: she has held off and on for the last 8 years. They get their health care from another job he has- working 25 hours a week as an office manager for a small professional services firm.

Four jobs, 2 people, just to get health insurance. These aren’t “jobs”- they are rentals of personal services. We don’t need more jobs in this country- we need careers- with job security. We used to have them, right here in Dayton. We had people who built trucks for GM, car parts for Delphi, ran a  pet food business at Iams, created the systems for financial services management at NCR to name a few. You could go to work at any of these places and never have to write a resume or go on a job interview.

Some say those careers are forever gone- that our country has become a free-agent nation. I say horse hockey.

As a small business owner, I can tell you the most valuable assets you have are your people. It doesn’t matter what your business is – selling burgers in fast food is a job that is designed for low skills and high turnover is expected, but the best in the business will tell you that having good, reliable, committed, dedicated workers whom you may have to pay a little more is well worth it compared to having to train someone new every 90 days. Real businesses are best when real people are treated with respect.

Respect is what’s taken a leave of absence in our country. We’ve stopped caring about our workers and become slaves to the corporate line- the bottom one. There is no connection between our leadership and our rank and file. There is no accountability from the top to the bottom. Laying off people, ending careers is something that actually increases the benefits to those at the top. There is no reward for paying people more, unless you are at the top of the food chain.

It’s time, especially when our country has been at war for a decade, to require civic duty to trump the corporate quest for profit.

It’s a sad country where for many, the only option to support a family or to be able to afford college, is to have to volunteer to risk your life in the armed services to protect the people who won’t protect your family’s welfare one iota. While the CEO of Premier Health Partners has no problem making $4 million a year (that’s $77K a week) while running a “non-profit” health-care company, your job in “housekeeping” is something to be bid out to some subcontractor on an annual basis to see if they can save a few bucks.

Yet, Premier Health Partners can’t deliver 3 stitches to an uninsured contract laborer for less than $1,400? A procedure that should cost no more than $250 if done by a doctor in a private office. Instead, Premier claims that they provided “services to the indigent” and write off the exorbitant bill (while pursuing payment from the poor working stiff with the cut hand for years). Yet, the major source of income for these “non-profit” shysters is our tax dollars- through payment from Medicaid and Medicare.

Until we put America back to work, with real careers with real pay and real benefits, it’s time for some shared sacrifice. It’s time to bring accountability back to the spending of our tax dollars.

The United States government is the biggest purchaser of goods and services in this country. We’re horrible at controlling costs, if you need proof, just look to the F35 program for the military- a plane to fight other planes that don’t exist in a type of battle that disappeared with the propeller age. It’s doubled in cost in the last 10 years and it wasn’t cheap to begin with.

So instead of all our fancy Federal Acquisition Guidelines that make every bid proposal to the government look less like a contract and more like a bible, let’s just put a rule in place that we, the American people, won’t do business with any company that pays their top people more than 35x what they pay their average U.S. worker. And if you are a non-profit, the ratio is 20 to 1.

Un-American you say? Limiting the “American dream?” That’s fine. Don’t do business with the citizens of the United States. If the company’s average U.S. worker’s paycheck is $50K a year, the  CEO can make $1.75 million a year. That’s pretty good spending money.

We’d have to stop doing business with the Wall Street banks and do business with the remaining small banks in the country. We’d stop doing business with insurance companies, hospitals, defense contractors. We’d not be able to buy any cars from American car companies, or computers from American computer companies- but, that would only be a for a few days, because none of these companies can afford to survive without our money.

When employment is back to 95% and we’re not fighting wars that cost billions a day, we may relax this policy, but, I’m not sure we’ll find a need to. Because when all is said and done, you can’t spend $77K a week, even if you tried- that is unless you keep having to buy off all the politicians who’ve put us in the mess we’re in. These political campaigns are getting more expensive by the day- and it’s the only tax, the political campaign donation tax, that the richest people running this country aren’t complaining about- yet.

We’ll only see politicians accountable to us, when their price tag falls as fast as our earnings have. I’m David Esrati, and I approve this message.