Tuesday, October 29, 2013

Quote of the Day: George Orwell

"Political language is designed to make lies sound truthful and murder respectable, and to give the appearance of solidarity to pure wind."

~ George Orwell

Friday, October 25, 2013

Random Acts of Journalism: The Darkside of D.C. Politics

In the CNBC interview above author and Peter Schweizer discusses his new book “Extortion: How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets.” Schweizer's book is drawing some criticism from the political status quo, here’s an excerpt from a National Journal article:
A new book that argues politicians in Washington manufacture crises and manipulate vote scheduling and other legislative activity as part of a Mafia-like “protection racket” to extort campaign donations. But the new book “Extortion: How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets,” is predictably not drawing rave reviews from House Speaker John Boehner, whose office is lashing out at author Peter Schweizer, a fellow at the conservative Hoover Institution and an editor-at-large at Breitbart.

Schweizer advances a novel argument: Rather than special-interest money in Washington being funneled to politicians in order to gain access and favor, politicians run government in ways designed to extract special-interest money from various constituencies. He also says that the notion that Washington dysfunction is a product of partisanship and ideological entrenchment can be looked at in a different light: that gridlock, legislative threats, and fear of uncertainty help prime the donation pump.

“It’s one of the oldest and most effective forms of extortion: the protection racket,” he writes in one chapter. “Pay me money and I will promise not to make your life miserable. Fail to pay and bad things will happen to you.”

Schweizer writes that that has been the “bread and butter” of organized crime for centuries, but that “the Permanent Political Class in Washington plays the protection racket, too. Failure to pay will not get you killed—but it could kill your business.”

To make his case, Schweizer describes various maneuvers in which he argues politicians engage in a form of legal extortion to extract campaign contributions from business or other special interests. His book throws out colorful terms for these maneuvers, such as “toll-booth” requirements, “milker bills,” “double-milker bill,” and “juicer bills.” In one case, Schweizer points to what he calls the “tollbooth” maneuver. In the interview, he said he first head of that phrase from a member of the “business community,” who used it to describe contributions he had to pay before getting floor action on a tax-extender. Schweizer said that led him to explore further. Schweizer depicts Boehner as the master of the tollbooth, and focuses in part on the events surrounding a 2011 vote on the Wireless Tax Fairness Act, a bill with widespread support that sailed through committee in July of that year on a voice vote. Yet, Schweizer notes that the scheduling of a floor vote on the bill lingered until the fall.

Boehner eventually announced a vote would be held on Nov. 1. Schweizer notes that the day before the vote, 37 checks from wireless-industry executives totaling nearly $40,000 rolled in to his campaign, including 28 from executives at AT&T. The day of the vote, he writes, employees at Verizon, another company with a lot at stake in the bill, sent 28 checks to members of Congress.

“Checks don’t just magically appear, and they don’t arrive by chance,” he writes, adding, “When corporate executives make donations on the same day at the same time, especially when a large group of them do... it is likely there has been an organized solicitation.”

The book also identifies other bills for which Schweizer says votes appear to be delayed, only to see eventual floor action accompanied in by a flurry of contributions by individuals or businesses with interests in the legislation.

This segment from 60 Minutes barely skims the surface of the corruption that is Washington, D.C. But it is a start, and we need more of this.

Few politicians leave office poorer than when they enter, and most leave as multi-millionaires. The only way to clean-up the corruption in Washington is take taxpayer dollars out of the hands of politicians and leave it in the hands of the people who earned it in the first place.

Wednesday, October 23, 2013

Quote of the Day: The Grouch

Politicians never accuse themselves of 'greed' for wanting other people's money to give to their constituents and cronies, but they have no problem accusing you of 'greed' for wanting to keep what you've earned through the fruits of your labor.

~ The Grouch

Sunday, October 20, 2013

Quotes of the Day: Eugene Fama

My attitude is this: if you are getting attacked by Krugman, you must be doing something right.

~ Eugene Fama, from Interview with Eugene Fama

Cartoon of the Day: The New Jim Crow

Obamacare: It's the Math, Stupid

As much as politicians like to demagogue and deny it, the math for Obamacare will never work and can never work, and is a major threat to the continued economic prosperity of the country. The failures of the websites are immaterial compared to the failures of the premise behind Obamacare.

The Great Global Warming Swindle

Global warming is almost exclusively about politics and increases taxes and control over people, rather than science. We have advanced beyond the military industrial complex to the welfare industrial complex and environmental industrial complex.

Wednesday, October 16, 2013

Investment Facts: Nobel Prize Edition

  1. The fees charged last year for actively managed mutual funds averaged 0.92%, which was seven times higher than the average fees of 0.13% for passively managed index mutual funds in 2012. 
  2. Empirical evidence shows that passively managed index funds outperform almost all actively managed funds over long holding periods, adjusted for risk, taxes and expenses.
  3. And yet there was almost nine times more money invested in actively managed mutual funds at the end of 2012 ($11.74 trillion) than in passively managed index funds ($1.31 trillion).
Source: The Investment Company Institute’s 2013 Investment Company Fact Book (53rd edition).

Cartoon of the Day: The Great Debt Debate

Final Score: Washington Establishment 1, Hardworking Taxpayers 0

Revisiting King George III

Sunday, October 13, 2013

Who Owns the $16.8 Trillion in US Debt?

Contrary to popular opinion, the US is not bought and paid for by China. In fact, most of US debt is owned by entities and people inside the the US. We owe about $5 trillion to other countries. The largest single owner of US debt is the US government itself through the QE program of the Federal Reserve, the investment restrictions of the Social Security Administration, and military and federal retirement programs. It is a boatload of debt, to be sure, and slightly exceeds the 2012 estimate of $16.62 trillion in US GDP. One thing the government shutdown has demonstrated (even though approximately 80% of the government is still working) is that there is plenty of bloat and waste in the bureaucracy to be cut, but few politicians with the fortitude to do what is best for the country in either party. Entitlement programs are a time bomb waiting to make the debt problem much worse without significant reform.

Saturday, October 12, 2013

30 Popular Life Hacks Put to the Test

Using Doritos as kindling to start a fire is my favorite.

Friday, October 11, 2013

Thursday, October 10, 2013

How Not to Advertise a Product

Why I No Longer Buy Personal Finance Books

At one time I was buying personal finance books at quite a brisk pace looking for the best advice to secure my future and look out for my family. It became clear after a close reading of these books that most of them were saying the same things over and over again, just with a slightly different spin. The common principals from these books could be easily distilled and written on a single sheet of paper, and why spend money helping to make the authors and publishers rich when I could be investing it for myself instead. So here are my principals:
  1. Save 20% of your income.
  2. Max out your 401K plan and take full advantage of your employer match.
  3. Only borrow money for houses and cars.
  4. Pay off your credit card bills in full each month and limit the number of credit cards that you carry.
  5. Unless you are Warren Buffett, Peter Lynch or Michael Price, don’t buy individual securities and stick with well diversified mutual funds or ETFs.
  6. Investment costs are the single most reliable indicator of future investment performance. What you don’t pay to the broker or fund manager is what you get to keep. Investment costs compound negatively. Index funds are a low-cost choice that guarantee diversify and market-performance minus their low fees without the need for star managers.
  7. Use your asset mix between bonds and stocks to manage your overall portfolio risk. There is always risk in every choice and black swan events will occur periodically.
  8. Rebalance your portfolio periodically between stocks and bonds. This is a mechanical way to ensure you are selling high and buying low.
  9. The greatest investment opportunities arise when the markets are in full panic mode (think 2008, 2009). If you can control your emotions, do the opposite of what the herd is doing, though it may be very painful for a while because no one know where the bottom is in the market.
  10. Maximize investments in tax-saving vehicles like Roth-IRAs.
  11. Insurance is necessary and is meant to protect you from catastrophes. It is not an investment vehicle.
  12. If you need a financial adviser (you can do this yourself), pick only fee-based advisers. For many, setting up an account online can take less than an hour.
  13. For most investors who will earn their lifetime income from a stream of payroll checks over the next 30 - 40 years, dollar cost averaging into index funds or well-diversified mutual funds is the most effective strategy for wealth accumulation.

That’s about it. If you can think of anything I left out, please feel free to add a comment.

Wednesday, October 9, 2013

Rick Warren on the Purpose Driven Life

A Blast from the Past

My how times have changed. The hypocrisy of politicians from both sides never ceases to amaze, nor does the silence of the lap-dog press.

Quote of the Day: Jim Treacher

Washington DC is a tiny island in a vast sea of other people's money. The natives enjoy its bounty and think it'll last forever.

~ Jim Treacher

Wednesday, October 2, 2013

Flying 3-D Printers

Not quite the replicator on the Starship Enterprise, but a step in that direction.

Quote of the Day: Don Boudreaux

The first error occurs when Mr. Krugman writes that “thanks to surging inequality, these petty people [the "plutocrats"] have a lot of money.” Contrary to Mr. Krugman’s implication, however, crony capitalists “have a lot of money” not because of rising inequality but, rather, because government gives them special privileges. At root, inequality here is the result of actions by the agency so trusted by Mr. Krugman – the state – rather than the source of itself.

Mr. Krugman’s second, related error is his claim that “money brings power.” In fact, only government brings power. While it’s true that people with lots of money are disproportionately able to use whatever government power exists, a government of few and strictly limited powers would be unable to grant special privileges even to the wealthiest of people. The core problem, therefore, isn’t “money” or “the rich”; it is, instead, the existence of the expansive and vigorous government power that Mr. Krugman famously, if illogically, believes is key to freedom, prosperity, and greater equality.

~ Don Boudreaux

Grouch: Boudreaux pretty much nails the fallacy underlying all of Krugman's op-ed pieces.