Wednesday, December 23, 2009

The National Organization of Women (NOW) thinks of the military as nothing more than a jobs program

Get pregnant while on active duty in Northern Iraq under Major General Tony Cucolo's command, and you get in trouble. Penalties for getting pregnant, or for a male soldier who impregnates a female soldier would be administered under Article 15 of the Uniform Code of Military Justice, likely in the form of a letter of reprimand and perhaps a reduction in grade and a small monetary fine.
When asked about this policy put in place last month, Gen. Cucolo said 'I realize it might be hard for those who have never served in a military unit. I knew there would be public interest and I am fine with that, that's Americans. I've got to take every measure to preserve my combat power.'
To date, the order is considered valid and has not been challenged by anyone other than by National Organization for Women (NOW) president Terry O'Neill. She has reportedly requested via correspondence to the military commander in chief, President Obama, that he intervene and countermand this standing order. Ms. O'Neill was quoted as saying 'well it may be his prerogative to be dumb but that's really not a very good idea.' .
The two sides of this issue are of keen interest to me.
The army, as represented by Gen. Cucolo, has finally taken a baby step towards turning back decades of political correctness as it pertains to women in combat or combat support roles. Prior to this, great pains were taken to insure that women were given equal standing in the ranks with their male counterparts, but were given great latitude regarding issues that relate only to female soldiers, and pregnancy is the primary issue here. Male members of combat and combat support units for decades have been expected to pick up the slack for missing females in their ranks when the females became pregnant while on active duty.
Each unit (be it a platoon, battalion, regiment, division, etc.) has specific man power allotments prescribed by equipment and staffing regulations (technically called TO&E, or Table of Organization and Equipment) that specify how many soldiers are required to carry out any unit's assigned mission. For example, an army supply company may specify 100 soldiers, but the ratio of male to female soldiers within that company has never been specified. If at any one time, 10 female soldiers are pregnant and have been relieved of more strenuous duties via a medical document of pregnancy (called a 'medical profile'), the remaining 90 soldiers must still perform 100% of the duties of this supply company to meet it's mission requirements. Many times this involves additional guard duty, for example, or other unpleasant duties that are shouldered by fewer soldiers, and morale suffers accordingly. Resentment towards these pregnant females builds over time, when they have been given light admin duties involving pencil pushing and drinking coffee, rather than sitting out in the cold numbing snow or perhaps searing, sweltering heat at a guard post. General effectiveness of these affected units is diminished as a result.
Terry O'Neill sees things in a totally different light: she does not understand that the purpose of an army is to kill people and break things. She looks at these positions as purely social in nature, and does not agree that armies should be going around killing people and breaking things. Ms. O'Neill is highly perturbed that the army does not continue in its old manner of coddling pregnant women, using the ranks of the military as a protector of a budding family, and paying these unproductive pregnant women full pay while they simultaneously adversely affect the cohesiveness and overall morale, and ultimately the fighting effectiveness of the unit.
Contrary to believing in the force of the military being used to protect and defend our country, Ms. O'Neill and her entire organization (NOW) are showing their true colors: they are pacifists who think (incorrectly) that people of different nations can always negotiate their differences away, and that evil does not exist in the world, only bad negotiators. She sincerely believes that we employ a standing army as a way to create jobs, and sending them into battle is not what they are there for. Or at least that is my guess as to what she thinks military people are supposed to do: sit around and cash a pay check but Heaven Forbid they actually kill people and break things.
. Terry O'Neill calls Gen. Cucolo 'dumb' for demanding that all soldiers under his command be accountable to their unit and fellow soldiers, I call Major General Tony Cucolo a patriot. We need more of this kind of policy in our military today, not less of it.
I know who the 'dumb' one is on this issue.

Sunday, December 20, 2009

All Hail King Barack I?

Well, it's done. The foot is in the door, the tooth paste is out of the tube, and the Genie is out of the bottle. On December 19th, 2009 (mark this day on your calendars, fellow soon-to-be Proletariat's), was the day that Ben Nelson (D-Neb) reportedly accepted whatever back room agreement offered by Sen. Majority Leader Harry Reid (D-Nv) to secure his vote on the disastrous senate version of Barack Hussein Obama's coveted health care reform initiative. If all 58 Democrats and 2 Independent senators keep their words and actually vote in favor of shutting down debate on the Senate floor, this one is a done deal. It will pass, regardless of it's wildly unpopular standing with the American public.
Even though the hated 'public option' was taken out of the wording of the bill, and the God awful 'Medicare buy in' provision has been scuttled as well, they will be back. Those provisions will be added by hook or crook going forward, in addition to public funding of abortions, rationing, death panels, and all the rest of those unsavory ingredients: in a few years, it'll be like the old ad for Praego spaghetti sauce: 'it's in there.'
This wildly unpopular legislation will be touted by the Obama administration as the beginning of a new era, the first significant social program to find footing since Social Security was passed in 1935. And we all know how well Social Security is doing these days.
With the upcoming signature of Obama's into law of this health care reform debacle, we will have the foundation arguably of a primarily socialist republic. And now for the scary part: Barack Hussein Obama will want to be around to make sure that those stricken provisions (you know, the death panels, the abortion funding, and outlawing private insurance eventually, etc.) are put back into the wording so that the government will in time be able to tell us what to drive, what to eat, what to smoke/not smoke, what to drink/not drink, what to play/not play, where to live/not live, what to listen to/not listen to, what to (fill in the blank), what not to (fill in the blank). All in the name of keeping health care costs under wraps. Like they care about the cost of anything in the first place, they don't. Barack Hussein Obama and his ilk just want to be able to control our lives down to the tiniest detail.
With the current system in place, the 112th Congress will likely see the huge majority of Democrats shrink if not even disappear, and Barack's administration will come to an end in 2012 as all Republicans, a majority of Independents and even some Democrats will sack him, maybe even in the Democratic primary.
Not so fast. Since we just got rid with a single signature on a piece of paper of our current capitalistic based representative republic for a socialist base for the most part, what's to stop Barack Hussein Obama from seeking to get rid of other components of our country's heritage? Like removing the 22nd amendment regarding presidential terms of office limits via executive order, increase ACORN's funding by ten fold, and thus have the framework in place for securing fraudulent election victories from now until he tires of being president for life. Heck, why stop there, he may as well just dissolve the Supreme Court, the House of Representatives and the Senate while he's at it. Sound unconstitutional? The Constitution of the United States of America has not stopped this guy from doing what he wants to do, not even one time.
Once these inconvenient (and in Barack's mind, trivial) constitutional matters have been eliminiated and we are completely under his boot, he can anoint his daughter, Sasha The First, as Queen of America in 2045. Then King Barack Hussein Obama The First, or likely in the history books, King Barack I, will have realized his vision for our country.
Remember, Adolph Hitler accomplished much the same thing: he was duly and legally elected by the German voters to the Reichtag in the 1920's, solidified power of the National Socialists over the next 4 years, and was then elected Chancellor (the last Chancellor of the Wiemar Republic), dissolved the Reichtag and took over as Der Fuhrer of the Third Reich. And we all know how things turn out for him thereafter.
Yes, all of this doom and gloom speculation sounds pretty far out there. I wonder how Hitler's rhetoric sounded to the citizens of the Wiemar Republic back in the 20's. I understand that the old paper hanger was quite the gifted orator.
Sound familiar?

Thursday, December 17, 2009

Obama intends on being a one term president.

Does Obama intend on becoming a one term president? You would think given his enormous ego that he would not want to think about getting the boot after only 4 years, but it sure does look like he is not overly concerned with his receding chances at getting re-elected in 2012. Many of us, concerned about Obama’s record of extreme liberalism during his short stint in the U.S. Senate, and several terms in the Illinois state senate, were told not to worry: he would, like all other liberal presidents have in the past, govern from the center. We were told he was not a crazy fool who would try and foist on the American public all of that demonstrably failed Marxist garbage that he wrote about in his books, and espoused during his days as a law professor. We were told that doing so would limit him to one term, and that the American people would not stand for such a vicious lurch to the left. Accordingly, we felt a bit more at ease during his ‘president-elect’ period prior to the inauguration. What’s the first thing President Obama did after his swearing into office on January 20th, 2009? He didn’t even let the ink dry on the paperwork before he started implementing his wildly irresponsible spending initiatives, starting with an enormous stimulus bill (which only stimulated Democratic bank accounts), the TARP bailout of banks (which again seems to have only effected Democrat interests), and on and on. This guy spends so wildly that he makes drunken sailors look like misers in comparison. And that is not even the tip of the iceberg as to the concerns that many independents and all Republicans, and frankly even some Democrats now have: his plans to cram massive tax increases down our throats in the name of health care reform and environmental protection (cap and tax) are particularly galling, and there are now murmurs on the horizon that he plans on granting legal status to all 20 or 30 million illegal immigrants currently here by fiat. His approval numbers for any president at this time in their terms is the lowest ever recorded. Does Obama seem to care about this? Seemingly not, as he is doubling down on his march towards achieving a socialist America. Which now begs the question: doesn’t he notice that the widespread opposition to his policies by most Independents, some Democrats and all Republicans are not only likely to profoundly and adversely affect the fates of Democrats who face elections in 10 months or so, but his re-election as well? If he notices, he doesn’t seem to care. And why would he not care? Maybe, just maybe, he’s acting much like a ‘rabbit’ in a long distance foot race: there’s one guy who’s sole predetermined job is to sprint out to the front of the pack, and set a pace that he himself cannot sustain, but that the strongest runners in the race will keep up with, and in the end they will cross the finish line, while the rabbit burned himself up after only three or four laps before dropping out. Obama, the rabbit, will have set in motion the necessary steps that his handlers (George Soros and other deep pocketed socialist ideologues) want him to initiate. Then, during the elections of the 112th Congress in 2010, the first of the Democratic rabbit causalities will bite the dust. In 2012, Obama himself will fall to whatever Republican candidate who will run on claims of being able to return America to its capitalistic former self. But by then the handlers will figure that it will be too late to substantially return American entrepreneurship and self reliance to the overall structure of the American economic system, and socialism will have crept into every fabric of our lives. Even though the Democrats will have been summarily booted from majorities in congress, and the White House will fall into Republican hands in the short term, this newly implemented structure will in the long run favor Democrats who fully understand and embrace imposing rules, taxes, restrictions on the masses, and bestow favors upon the anointed ones, and they will in the fullness of time claim their rightful places in the U.S. government: Masters and Rulers of The Great Unwashed. All thanks to the heroic pioneering efforts of ‘Rabbit’ Hussein Obama, who in kamikaze fashion fully intended on being a one term president.

Saturday, December 12, 2009

How dumb does Congress think we are?

This is a serious question:
How stupid does the current liberal congress and administration think we are, anyway? Or put in the form of a multiple choice question: Which of the answers below most accurately describes how the Obama Administration and the 111th Congress, all controlled by Democrats feel about the intellectual capacity of the American public:
a) Americans are dumber than a bag of hammers b) Americans are dumber than a manhole cover
c) Americans are dumber than a box of rocks d) Americans don’t have the brains God gave a crowbar e) All of the above Frankly, they all think we are dumber than a thousand bags of hammers. And that’s pretty darn dumb. They think that the Great Unwashed (that’s us) all just fell off of some turnip truck, and that we don’t have enough sense to come in out of the rain, much like mad dogs and Englishmen. The current frenzy of nutty bills pending in congress right now will jack up our taxes like never before, such as the Cap and Trade bill, or more technically the American Clean Energy and Security Act of 2009 (H.R. 2454). Passage of this awful bill will reinforce the false premise of man made global warming and allow this hoax to act as a platform whereby congress can fleece Americans of vast gobs of cash and restrict our freedoms perhaps to the point that we cannot even control our own home thermostats (because we are too dang stupid to know what to set it at, you see). And don’t get me started on this idiotic health care reform bill that the Democrats are going to shove down our throats because they think they know better how to manage one sixth of the private sector economy than we morons comprising the Great Unwashed do. Never mind that they can’t even manage the House of Representatives cafeteria and make a profit, or run the Cash for Clunkers program with any degree of efficiency, but this time things will be different. My favorite provision, since I am so dang stupid, is the privilege of paying taxes to fund this monstrosity of a program for four years BEFORE any disbursements are made, as this bill is written to start disbursal of benefits in the 5th year. That’s like leasing a car on a 120 month contract, starting the lease payments immediately, but not taking delivery of the car until the 49th month of the contract. Boy, howdy, we sure are going to like this program, Congressmen and Senators. Of course, we are just too dang stupid to understand how screwed up this bill is, and of course, being dumber than bags full of hammers, we all believe the CBO estimates of its cost over a 10 year period. They say the price tag will be about $900 Billion, but my dumb guess would be that its going to cost perhaps $12 TRILLION (which would double our current national debt). When has the government ever come in on budget with any of their pie in the sky programs, I ask you. When has it come anywhere close to the original estimates? How about never.
'Oh, boy, I cain't hardly stand to wait until ah gits me some o' that thar health care, Brandine! And ah hears that it's all free, yaaahooooo!' (Cletus Spuckler, the slack jawed yokel Simpsons character of limited intellectual and cultural capacity seen above has a wife named Brandine).
And of course, they are hell bent in getting this done prior to the start of the 2010 campaign season, as they are convinced that us dummies will forget that they shoved this garbage down our throats by the time the elections come around next time. We always have before, what’s changed? Thank you, Sir. May I have another?

Saturday, December 5, 2009

Afghanistan: US trying to train an army of Gomer Pyles and a police force of Barney Fifes

With our 18 month time table now in play, President Obama has laid out the framework of our mission in Afghanistan. We send 30,000 more troops, secure the Afghani population from terrorism within their borders inflicted by the Taliban, and train the Afghani army and police forces so that they can assume responsibility for their own security. Sounds good. Sounds achievable. Right? No way in hell is this going to happen, and I would be more than happy to elaborate on why I think this administration has absolutely no chance in achieving these pie in the sky goals. We have been trying to do this since the inception of hostilities in 2001. According to my math, that is eight years and counting. Eight years. You would think by now that some serious training would have transpired, and that a stable standing Afghan army would now be in place. In addition to the standing Afghan army, we have been training (and training, and training, and training…..) an Afghan civilian police force to assume some of the civil security now under tenuous control by the U.S. Army for eight years now. Eight years. Well, we all have to consider what kind of raw materials we all have to work with as it pertains to available personnel within this endeavor. Most Americans think that the citizens of the world are all made up of the same DNA (which is true, but irrelevant) and accordingly, other than some minor differences in politics, that we all behave the same; we all have similar hopes, desires, fears, and dreams for a just and righteous society. Right? Wrong. Profoundly and demonstrably wrong. The template that most Americans and nearly all the U.S. politicians have in place is horribly wrong. We assume that the Afghan population has the same desire, the same potential and the same tenacity to take control of their national security as that of the typical American. This is where a disconnect the size of the Grand Canyon throws the monkey wrench into our strategy: the Afghani population are not by any standard in the civilized world what we would call ‘civilized.’ And that is the key here. This country, if you can even call it a country, is one of the most primitive societies on earth. Illiteracy is well above 90% of the population. More than 9 out of 10 Afghanis can neither read nor write. This society consists solely of local brutal and savage tribes with no contact to what the rest of us would call civilization at all. Karl Rove in his interview with Fox News last week said that illiteracy is an issue with regards to our goals in Afghanistan. This is the understatement of the century. Saying illiteracy is an issue with regards to our goals in Afghanistan is akin to saying that having a 5 foot 9 inch center on your NBA team is an issue in winning the NBA Championship. It is like saying that having a 167 pound average on your NFL team’s offensive line is an issue to achieving a Super Bowl win. It is similar to saying that having an IQ of 77 is an issue to securing a Rhodes scholarship. This issue of illiteracy is not only huge, it is an impediment, a virtual road block to our ultimate goal of training Afghanis to defend themselves from overthrow by the Taliban. In order to maintain an effective fighting force or civilian police, it's imperative that the soldiers and policemen have the ability to reason, to make split second decisions regarding whether to use deadly force or not, and to make these decisions on the side of justice consistently. An uneducated, uncivilized goat herder with no formal education has no business being placed in any position of power over others, such as are civilized soldiers and police personnel. The U. S. Army, Navy, Air Force and Marines require anyone entering military service in an enlisted capacity to have at least a high school education, or have completed a G.E.D (General Equivalency Diploma). Ditto for nearly all U.S. civilian police force entry requirements. Additionally, these branches of our armed forces also require an officer to have completed a college degree prior to receiving the commission. Our armed forces have by far the highest standards of any significant military force on the planet. You cannot possibly get into the U.S. armed forces if you can’t read, since all of the training you are expected to complete to master your specific job entails a significant amount of reasoning, logic and comprehension. And yet we as a nation seem to expect that we can train these savages to achieve our civilized standards of behavior in a matter of a year or two. Good luck with that. The average Afghani picking up a rifle and trying to keep in step in a platoon formation is much like the old TV show ‘Gomer Pyle, USMC.’ Gomer couldn’t do anything right, but had the typical heart of gold that Hollywood script writers always gives these fish out of water characters. And it took every bit of energy on Gomer’s marine platoon sergeant, SFC Vincent Carter, to keep Gomer in line. Imagine an entire army of Gomers. And of course who could forget deputy sheriff Barney Fife of the 60's sitcom 'The Andy Griffith Show.' Stumbling, bumbling Barney (with his standard issue heart of gold) was issued only a single bullet, and for good reason: give him an entire cylinder of ammo in his service revolver and the idiot became a bona fide menace. Now consider trying to train an entire standing army and police force of Gomer Pyles and Barney Fifes. And once you have that image in your mind, then imagine hitting all of those Gomers and Barneys in their heads with a brick 20 or 30 times, until dementia and brain damage was well established. Then you would have a better feel as to what kind of standing Afghan army and Afghan police force you will have at the ready. It will take much more than 18 months to train these ignorant and brutally savage goat and yak herders. It will require them all to attain high school diplomas. And how long will that take? Well, it took me 12 years, if you don’t count Kindergarten. But before you start with that process, you have to build schools. And before that construction starts, you have to have the will of the population to initiate this process. Good luck with that. And Obama is confident that 18 months will do it. The reality is that the Afghanis will never, ever be up to the task of their own security as a nation. The only force on earth strong enough to get rid of the Taliban in Afghanistan is the United States military. And we have yet to unleash our awful and terrible deadly forces within our awesome arsenal to do that. We, contrary to any and all common sense regarding this situation, continue with this pie in the sky hope that we can make a silk purse out of a sow's ear. Good luck with that.

Sunday, November 29, 2009

Are the Taliban our toughest foes ever?

If you consider the entire duration of the American participation in World War II starting Dec 7th, 1941, it took the U.S. and its allies a mere 3 ½ years to secure unconditional surrender from the sole remaining Axis power, the Empire of Japan, which occurred on the deck of the U.S.S. Missouri on August 15th, 1945. The war in Afghanistan against a rag tag bunch of Muslim fanatics who call themselves The Taliban is now solidly into its 9th year of fighting. How do we compare the war making abilities of the Axis in World War II with those of these fanatics in Afghanistan? The Axis: 100,000 battle tanks, give or take 10,000, a few hundred thousand artillery pieces, thousands of naval vessels and millions upon millions of boots on the ground. The Taliban: a few thousand guys in togas and sandals (or as Mullah Omar would say, ‘sandals on the ground’), each with an AK-47. Throw in a few crew served weapons and a shoulder fired rocket propelled grenade launcher (RPG) or two, that’s about it. So begs the question of the day: how is it possible that these guys in togas and sandals fighting with small arms have fought the U.S. to a standstill (and arguably are gaining strength) over a period of nine years, when we dispatched an enormous Axis force in 3 and ½ years? The answer is simple: the introduction into modern warfare of what is now popularly called the ‘surgical strike,’ in which a relatively small team of weapons experts or highly technical combat weapon such as a smart bomb or ground attack aircraft can attack and destroy known enemy positions and combatants with precision and simultaneously minimize civilian (or what we now call ‘collateral’) casualties. The use of surgical strikes on our enemies in addition to the ability of the media using modern communications technology to instantly broadcast world wide all of the horrors of war now have most U.S. citizens erroneously believing that we can win wars just by killing the bad guys without the loss of civilians in the process. Once the liberal press picked up on these tactics, they selectively picked and chose which battles they broadcast: as many as possible when Republicans are in power, and as few as possible when Democrats hold the White House. And it is not just the press that recognizes the combination here: the bad guys also know that they can hide behind women, children, grandmothers, grandfathers and in mosques, churches and synagogues without fear of U.S. fire. They completely understand that should U.S. forces blow up a mosque and take out some innocents in the process, the news coverage world wide would be of tremendous value in their propaganda and recruiting efforts. By the length of time we have been fighting these guys, you would think they are the toughest adversaries we have ever faced. In reality, they are the biggest cowards. Accordingly, the Taliban is growing stronger and we allow them to mingle with the populations that support them in their war against the West. In days gone by, prior to the advent of the surgical strike, we would bomb, attack, and otherwise remove known areas of enemy strongholds, and simply accept the fact that there will be collateral casualties. In WWII, I don’t remember wringing our hands at the number of German civilians who died during the massive Allied bombings of German industrial areas. I don’t think there was an inordinate amount of grief paid to the 100,000 Japanese casualties after the A-bombs were dropped. Remember, these populations were not entirely innocent: they supported their country’s war effort, and many worked at the factories, turning out munitions and armaments that were the primary bombing targets. And the Taliban hide among the tribal populations, who harbor them and are accordingly aiding the Taliban effort against our troops. We need to go back to the days when winning meant killing lots of people, and worrying about innocent deaths was not paramount to the point that losing the war became a reality.

Saturday, November 21, 2009

What's Sec. of State Hillary Clinton up to these days?

Possible captions include:
1. This was #1 on my job description.
2. The Under Secretary of the Interior of the Republic of Lesotho likes chocolate chip cookies, and I thought I would make a good impression during our urgent upcoming summit meeting.
3. What? I got nothing else going on.
4. ( fill in the blank)
President Obama did us all a favor by assigning Hillary Clinton a virtual 'do nothing' job. She's now out of the Senate, and can't do any further damage there, while jetting to Latvia, Lesotho and Timbuktu on official 'do nothing' business, while the functions attended to by Secretary of State incumbents of the past (such as foreign policy) are now handled by John Kerry, Joe 'Plugs' Biden and other Obama-ites.
Works for me. This move is the only thing that I can come up with that President Obama has done so far that is good for America.

Tuesday, November 17, 2009

Top 10 Biggest Obama Mistakes

Although he has only been in office for a little under a year, President Barack Hussein Obama (hmmm hmmm HMMMMM) has made some doosies, and here they are in descending order of stupidity: 10. Picking Joe Biden as veep. Joe 'Plugs' Biden is arguably one of the dumbest politicians to serve in this office in American history. His infamous propensity for gaffs is not just simply foot in mouth disease, it stems from his lack of intelligence. Anyone who spouts whatever is on the tip of his tongue at any time does not have what it takes to conduct foreign or domestic policy, and has no business being just a heart beat away from the presidency. 9. Sitting in the Rev. Jeremiah Wright's church for 20 years. Jeremiah Wright has been preaching Black Separatism for decades, and this is the church where Obama and his family sat for 20 years, were married in this maelstrom of hatred of whites and America in general, and had their children baptised here. Obama has picked up a great deal of this garbage over those two decades, if through nothing else other than osmosis, since he denies ever hearing the Pastor's hate filled message. 8. Selecting Eric Holder as U.S. Attorney General. AG Holder is a radical Marxist, just like Obama, and his latest decision in selecting a New York federal court venue for trying Khalid Sheik Mohammed, Ramzi Ben-al Shib and several other high profile terrorists makes absolutely no sense to anybody. The likelihood of them being acquitted, despite confessions of guilt from them all, is high. 7. Bowing to foreign heads of state. His pathetic obsequious bows to King Abdulluh of Saudi Arabia, and lately to the Emperor of Japan diminish the stature of the presidency. These stupid acts show just how inexperienced and clueless this young man is and how utterly unqualified he is to sit in the Oval Office. 6. Dithering on sending reinforcements to Afghanistan. This is truly incredible: his own hand picked general Stanley McCrystal has requested 40,000 troops lest we risk defeat, and this Ditherer-In-Chief is sitting on his hands, worrying whether supporting our troops who are in peril currently will upset his lunatic left wing base. Utterly irresponsible. 5. Packing the executive branch with 'czars.' These unelected, unaccountable dictators have enormous power to do tremendous policy damage, and yet have never been scrutinized by Congress (such as it exists today, sadly). He now has 40 of these guys (and gals), and counting, and they have been granted more power than his cabinet secretaries. And who would have dreamed a few years ago that we would have a 'Pay Czar?' Someone who arbitrarily determines what anybody should earn? This is not the America I remember. 4. Allowing the Bush tax cuts to expire. True, this has not yet happened, and accordingly is not yet a 'mistake,' but I am putting it on the list anyway. Obama has never learned any economic theory that anyone can detect, and truly thinks that the government should be the source of all economic activity. Letting the tax rates return to the Clinton-era rates is just another anchor on the already ailing economy. 3. Thinking he has a mandate to do anything he wants. Obama won the 2008 presidential election with 54% of the popular vote, and by any means this is not a mandate to change our country into a socialist state. By ignoring the public outcry against his policies, and labeling dissenters as 'extremists,' he truly tips his hand at what he thinks of the American public at large. That is to say, not much. 2. Trying terrorists in civilian court. Although he says this was not his decision but rather that of the Attorney General Holder, he is simply trying to remove himself from the blame should this backfire (which it will). He is the decider, not the AG whom serves at his pleasure. Nobody is buying this baloney. These terrorists will likely choose to defend themselves, and accordingly gain access to our intelligence, methods, secrets, and will have a world wide podium to spew their Jihadi garbage. This one comes close to being the worst mistake of all, and in my opinion rises to the level of an impeachable offense. ......AND THE DRUM ROLL PLEASE......The #1 Biggest Obama Mistake, based on the potential damage to our economy is: 1. Shoving the 2,074 page Senate Health Care Reform proposal down America's throat. He surely knows that most all Americans do not want this costly, wasteful and power grabbing bill passed, and yet he is determined to see it through even though it may cost him majorities in Congress after the 2010 elections. It will change the basic relationship between the U.S. government and its citizenry, from one mostly of government of the people, by the people and for the people to one of government over the people. And don't think that when Obama fails to win re-election in 2012 a Republican administration will roll all of this back: do we all really think that the new kids in town will just relinquish all of that newly gained power over the Great Unwashed (that's us, folks) handed over to them by the previous Democrat administration? If you sincerely believe that will happen, then I've got some undeveloped real estate near Kissimmee, FL that I'd like to show you. Sure, it's a little spongy here and there, but.....

Monday, November 16, 2009

Waterfront property is nice, BUT....

Waterfront property is a wonderful thing. I feel compelled, however, to bring up the politically incorrect and yet cold, hard and irrefutable truth about this situation that will never get brought up in the news media: Yes, waterfront property is indeed a wonderful thing, except when the ocean or river or wind driven lake waters rises above normal levels. And here is the irrevocable, inexorable, immutable truth about waterfront property: As sure as the sun rises in the East and sets in the West; As sure as the Pope is Catholic and the bear does what a bear does in the woods; As sure as a bottle of Scotch will be guzzled on the Kennedy compound within the hour; SOONER OR LATER, THE WATER WILL RISE ABOVE NORMAL LEVELS ON ANY WATERFRONT PROPERTY, AND THE MASS OF WATER WILL EITHER DESTROY OR GREATLY DAMAGE ANY MAN MADE STRUCTURES PRESENT, AND IT WILL KILL, GREATLY MAIM OR OTHERWISE DISTRESS ANY LAND LIVING CREATURE THAT CHOOSES TO BE ON THIS PARTICULAR WATERFRONT PROPERTY WHEN THAT EVENT INEXORABLY HAPPENS. This fact is not even arguable. The only issue that people will debate is WHEN something like this WILL happen, but not IF it will happen. True, it may be decades, centuries or even millenia between such events, but they will still happen given the passage of time. Columnist Steven Chapman brought up a salient point in his column in the Chicago Tribune a few years ago when he opined that the more affluent and civilized we become, the more clamoring there is among the anointed elite that we need to “live in harmony with Mother Nature.” Mr. Chapman’s point is that we have a paradox here: “Mother Nature has NEVER lived in harmony with US.” Mother Nature has killed more folks than all of the despots and tyrants, wars and other manmade calamities combined over the span of human history. Since we have emerged from the ooze, mankind has had to fight Mother Nature tooth and nail to survive. Over the many millennia, humans have largely figured out where to put down the tent stakes in our best effort in beating Mother Nature’s wrath, but there are still those who have yet to figure out that if you choose to live in the path that Mother Nature stomps on from time to time, then those souls have opted to dramatically increase their chances of removing themselves from the gene pool at worst, or greatly distressing their lives at best. I would lump everyone in this category who builds their permanent residence on flood plains, on muddy hillsides, and on waterfront property WITHOUT INSURANCE. Most of those wretches you see on TV hurricane or tsunami coverage wandering the streets with only the shirts on their backs in all likelihood had their entire life’s assets assembled in a shotgun shack near the beach, and had no backup plan or insurance. We call folks such as these either stupid idiots, or far more likely, they are the nation’s poorest of poor who cannot afford to live elsewhere, and like others of the world who find themselves in this situation, are constantly exposed to the ravages of Mother Nature and are sooner or later naturally selected to be excluded from the gene pool. Sadly, and I wish it were not so, but this is the way it always has been, and it is the way it always will be, much to the dismay and disbelief of the utopian imbeciles that populate the news desks across the US and elsewhere. I still enjoy sipping a girly-looking drink with an umbrella in it on the various beaches in the Caribbean from time to time. And yes, I do expose myself to the hazards of this environment. Hurricane season in the Caribbean is to be avoided, and I avoid it. I still swim in the cobalt-blue water, and enjoy it immensely, even though I run the risk of being gobbled up by a man-eating shark. These are risks I willing take, and the actuarial odds of me taking a hit during these times are minimal. But should I choose to live permanently on these beaches, and even take it one step farther by sitting in the water with a pound of raw hamburger in my hand for 12 hours a day, then my odds of getting hammered by Mother Nature or her menacing creatures goes up considerably. Sometimes Mother Nature is just plain meaner than a junkyard dog, and not everyone can live in the mansion on the hill; there simply is not enough room for everybody up there. What can I do about it? Nothing, and neither can anyone else.

Friday, October 30, 2009

Trivia, anyone?

In the following quiz, depends on how old you are, generally speaking. Take this quiz, and don't cheat by Googling the answers, or looking at cell phones for clues. Here goes: What was the full name of ‘the Skipper’, the character in the 1960’s sitcom ‘Gilligan’s Island’ portrayed by Alan Hale? In a similar question, what was the name of the character portrayed by Bob Denver in the even older sitcom ‘The Many Loves of Dobie Gillis?’ What year and model was ‘My Mother The Car,’ a short lived sitcom in which Jerry Van Dyke starred in the early 1960’s? Name the children of Herman and Lilly Munster, portrayed by Fred Gwynn and Yvonne DeCarlo in ‘The ‘Munsters’ sitcom, also of the same era as all of these questions. In text, what does ‘IMO’ mean? When texting, which key must be selected and how many times must it be depressed to obtain the letter ‘R’? What does ‘OMG’ mean in text? When a younger person describes an object as ‘sick’, is this good or bad? When an oldster describes something as ‘the cat’s pajamas,’ is this good or bad? What is a ‘mollycoddler.’ 1 - 2 correct: you probably live under a rock, or in a cave with Osama Bin Laden. 3 - 4 correct: you're still under that rock, or in that cave. 5 - 7 correct: you are probably middle aged, between 45 and 60. 8 - 9 correct: you probably cheated 10 correct: you don't get out much, do you?

Tuesday, October 27, 2009

A critical view of "Greed"

Did you know that people are going hungry in America while the greedy ultra rich lounge on the decks of their opulent yachts and drive expensive foreign sports cars enroute to their lavish parties in Belair and Brentwood? I suggest that the two concepts are not related, but Dr. Julian Edney suggests that hunger and poverty are a result of the greedy rich bastards in America denying the down trodden their fair share of the pie. Dr. Julian Edney opines that this is how things are in America today in his essay “Greed” (his 25-page document plus footnotes available for review at the following link: ( A Los Angeles survey which Dr. Edney cites “found more than a quarter of low income residents, many working, are not getting enough food to meet basic nutritional needs. And 10% are experiencing hunger,” citing a source article about food stamps in California. This assertion doesn’t come close to describing the totality of the picture concerning “hunger” in America, much less the State of California. If anything, poor Americans eat entirely too much, and many times we all see that even the poorest of Americans are often obese as compared to the poorest citizens of Third World countries whose sociopolitical environments deprives their citizens needed food. This point is not even arguable. Dr. Edney also notes that “(poor) people in decaying buildings daily watch glittering television scenes of shining cars, ocean yachts, and overflowing parties of the rich and famous.” I for the moment will disregard his attempt to prey on class envy in making his point (unlike greed, envy is another of the 7 Deadly Sins that Dr. Edney does not take issue with in his essay, but rather seems to promote) . The fact that our poorest residents in America sit around watching their 25” color TV’s should alert even the most unobservant among us (to include the erudite Dr. Julian Edney) that compared to the rest of the world’s truly “poor,” the U.S. citizens classified as below the poverty line live in relatively secure dwellings and have amenities such as electricity, running water and color TV. These “decaying buildings” Dr. Edney describes would be considered palaces by most of the truly starving wretches outside of the United States and other Western free-market countries, whose living conditions consist perhaps of a mud wall with a 4x8 sheet of plywood above to keep some of the rain out. Most notably, however, is that these truly wretched to whom I refer are victims of sociopolitical systems that are not based on free market capitalism. Where there is free-market capitalism, even the poorest of the poor often have cars, live in buildings with electricity and hot and cold running water, flush toilets and color TV. Dr. Edney can’t really point specifically at any such nation (to include the US, Great Britain, Australia, Canada, most of Western Europe, etc.) in which the “poor” are in danger of dying from exposure. To the contrary, most of the poor in these countries have more to fear from dying of obesity related disorders. America’s “poor” (in addition to nearly all other nations included in the Western culture’s “poor”) are incredibly well off, compared to the poor of almost every other non-Western nation on earth.Another Dr. Edney statistic: “around 20% of American children are living in poverty. An estimated two million are homeless some time during the year, including whole families and people who have full- or part-time jobs.” Yet another survey from California is used to support this assertion, and I have to doubt its validity. Remember that the homeless advocate, the late Mitch Snyder, used to claim that there were 2,000,000 homeless people on the streets of the U.S. and yet no evidence has ever been cited other than the 2000 U.S. National Survey that supports the existence of perhaps a few hundred thousand homeless Americans at any one point in time out of a total population that just passed the 300,000,000 milestone. Nowhere in this article is there a mention that some of these homeless (more than just a handful) actually prefer their current housing status. In this great country of ours, there is the freedom to live anywhere one wants, including the street. One of the freedoms we enjoy, if I can apply that word here, is the never mentioned “freedom to fail.” If someone wants to live in a cardboard box, as long as they are mindful of any vagrancy laws in effect in their chosen neighborhood, they are completely free to do so. I personally knew of a homeless person who would have fought the authorities tooth and nail had they insisted he move off the streets into an approved “home” situation. That guy was my late older brother, and he was perfectly happy at the time living in his broken down 1968 Volkswagen bus. Dr. Edney implies that the proximate cause of the poverty and homelessness cited in the California survey he referenced is unbridled greed within our system. Contrary to this erroneous conclusion as far as homelessness is concerned, the true reasons for homelessness are many and varied, to include drug addiction, mental illness, alcoholism, poor life decisions, just plain bad luck, and at times even willful and calculated preference to life on the streets. To suggest that greed in America has any statistical correlation whatsoever with poverty or homelessness is simply ridiculous. I think that Dr. Edney’s point is that the American poor do not drink Sauvignon Blanc each evening as they munch their brie and wafers, and are deprived of enjoying the ocean front scenery overlooked from a back deck in Laguna Beach; perhaps the living conditions at which Dr. Edney believes that the “least advantaged person in society” should have his starting point established (by him and his elite contemporaries, of course). Critically important in discrediting his argument is that Dr. Edney failed to suggest any reasonable, pragmatic approach whatsoever as to how to realistically achieve positioning our poorest members of the American public to this ludicrous and arbitrary consumption level that he and his ilk would mandate as the lowest acceptable standard at or above which all of us comprising the great unwashed must live. Dr. Edney attempts to persuade us in his argument that greed is destroying our civilized society by invoking class envy as he opened his article citing the very rich wearing ultra expensive watches and drive around in Farraris and Porches. To take his point to the logical extreme, he suggests that because these ultra-rich have spent huge amounts of resources on lavish items, the poor are going without basic needs because excess resources that could have been used to feed, clothe and house the poor have been diverted by the rich to satiate their greedy and “piggish” (if I may borrow this adjective from Jack London as he applied it in his novel, “Sea Wolf”) excesses; essentially a “zero sum” scenario. In other words, if an ultra-rich American buys a $2,000,000 Picasso to hang on the wall of his Malibu beach house, many poor Americans elsewhere will simultaneously go hungry as a result. In Dr. Edney’s way of thinking, these rich, selfish ultra-rich Americans he details at the beginning of his treatise spent huge sums of money on luxury goods that should have been spent on basic necessities for the poor. Implicit (and insidious) in this logic is that there should be a mechanism put in place whereby a “cap” of some sort would be imposed on these conspicuous consumers, and the excess resources that would inhumanely have been directed towards luxuries by the ultra-rich in America would be fairly distributed to the needy. In other words, “from those according to their ability, to those according to their need.” Where have we heard these haunting words before? This vague, undefined equalization mechanism, of course, would be approved as acceptable and humane by Dr. Edney and other like minded Socialists. In addition, the “cap” or upper level of consumption by any given individual would be determined and implemented by Dr. Edney and his associates as well. The basic tenet of Dr. Edney’s argument is that unfettered greed is the direct cause of poverty in the U.S. and that eliminating greed by government decree would solve our basic poverty concerns. This logic sounds very similar to that (as detailed in his “Little Red Book”) of the People’s Republic of China’s Chairman Mao Tse-tung, whose Cultural Revolution has been attributed to perhaps as many as 50 million Chinese citizens put to death by the government when it was determined by the State that they did not fit into Mao’s extreme vision for a proletarian paradise during his ruthless quest for a communist utopia. Dr. Julian Edney’s tenet just will not hold water in the real world; he compares the capitalistic free market environment in America and her flawed human population with totally unrealistic utopian ideals and standards. He exaggerates the miseries of the unfortunate few whom have fallen into the unavoidable cracks within our imperfect system, and then based on the misery he points to within the isolated surveys he references, Dr. Edney then asserts that the system is inherently evil. No existing sociopolitical/economic system in the world today or that existed ever in the annals of mankind could possibly measure up to Dr. Edney’s utopian ideals. Oh, to live in the perfect world Dr. Edney and his ilk would envision; no greed, no sloth, no gluttony, no envy, etc., just paradise on Earth. But how exactly would we enact the mechanisms required to reign in unbridled greed within our system in order that we might achieve this “Garden of Eden” Dr. Edney envisions? He suggests teaching our young ones in school that greed is bad. And espousing throughout the population that greed is one of the Seven Deadly Sins and accordingly should be eschewed as evil behavior. Just one tiny problem: greed is an inherent human trait, and has been forever and it will never go away. Greed will be part of the human condition forever, despite Dr. Edney’s urging that we do something about it. Our current capitalistic market system allows for humans, as imperfect as they are, to rise to whatever level they are capable of, whether they are greedy or not, slothful or not, envious or not, etc. Dr. Edney is putting forth his argument that in essence is based on a similar (but in fairness, not exact) philosophy as that of Osama bin Laden – excesses within the Western cultures are morally destructive, to be fought against. A major and important difference between Dr. Julian Edney and OBL in this case is that bin Laden has taken up arms and embraces terrorism to impose his extreme view of morality on the world, as opposed to Dr. Edney’s argument that is held within the arena of ideas (much to his credit). If you ask Fredd, both of their views are similar and just plain wrong. The United States, it’s system of government and it’s primarily Judeo-Christian population, while not perfect, represent the best and brightest economic and social systems in the world, and as such puts forward an example to humanity as a “Shining City on a Hill,” a beacon of hope towards which the rest of the world flock. Most of the world's sentient population sees the promise of a better life for even the poorest of souls and seek entry to our great yet flawed country as the starting point on their path to prosperity. Fredd

Monday, October 26, 2009

Financial advice or snake oil, sometimes it's hard to tell

What is the value provided by a financial advisor? Indeed, what kind of bang does the consumer of financial advice get for their buck? Some question the value consumers gain in doing business with financial professionals, while others ponder the nature of the commissions and fees withheld by these professionals for their services provided and how these commissions and fees are connected to the underlying motivation financial advisors have in offering the sales of various securities and insurance products to trusting consumers. Exactly what does the consumer gain in the long run from using the services of a financial advisor? Overall, a financial advisor functions within an industry that is regulated by the federal government via the Securities and Exchange Commission (SEC), and by the individual states regarding insurance products and services. Anyone offering advice, sales of securities or financial or insurance related products needs to possess a valid license from each authority to legally transact business within the industry. The purpose of these licensure requirements rises from the many and varied past abuses of the public trust by charlatans and rapscallions posing as ‘advisors,’ offering nebulous products that on the surface sounded good as described by these slick hucksters, but in reality provided little if any actual value in exchange for the hapless consumer’s hard earned cash. Have things changed all that much from those days to what we see within the financial services industry now, given that the industry is reigned in to some extent by extensive regulation? Not really. Regarding the credibility of each advisor, what exactly do they know about the future and how this will affect your financial position? The answer: absolutely nothing. Nobody has a crystal ball, and the fact that they predict likely performance based on what happened in the past with each instrument they hawk is always disclosed by their catch all (and mandatory) phrase: ‘past performance is not a guarantee of future results.’ In other words, they are guessing about how your portfolio will look going forward given the general history of the products and services they sell you, when in reality they have no more information about what will happen in the future to the value of the products they shill than anybody else. What exactly do financial advisors know that you don’t know when it comes to how a security will perform in the future? Again, nothing. One advisor (a Certified Financial Planner, or CFP) recently emailed me the following: ‘…you may want to increase your international exposure. Inflation is coming and the value of our dollar will fall, which is good for international. The government printed up so much money to stimulate our economy that inflation is bound to happen. Also, I know you don’t want bonds, but you may be able to get stock like returns from I bonds in the future. Do this in your IRA or annuity though. I bonds spin off phantom income which accountants don’t like.’ Sounds like this guy knows his economic theory, doesn’t it? Is this CFP a credentialed economist? No. Although there are a few FA’s that have formal educations in finance and economics, most FA’s are not financial experts or economists, and have no real education in economic theory. This guy likely just read some financial journal article in which the esteemed author opines that rampant and out of control inflation is inevitable. Accordingly, this FA positions this opinion as the bogeyman to be defeated by his international bond proposal. In truth, this ‘Certified Financial Planner’ has absolutely no clue whether our dollar will rise or fall or whether rampant inflation will occur in the future, because no one knows for sure. This particular CFP based his sales pitch on a singular economic opinion. Unfortunately, the field of economics is not called the ‘dismal science’ for nothing: much of the science of economics is dedicated to economic theory which is far more subjective than objective. Because the real world application of these economic theories by politicians currently in power rarely produce exact results on any nation’s actual economic activity, the old saying certainly rings true: ‘if you lay all of the economists in the world end to end, they would never reach a conclusion.’ Or this one: ‘economists have accurately predicted nine of the last five recessions.’ And certainly one of my favorite economist jokes goes something like this: Q: What's the difference between an economist and a befuddled old man with Alzheimer's Disease? A: The economist is the one with the calculator. If you ask me, I have an opinion of the future that is no less valid than any other economist’s out there: if one looks around, clearly we are seeing with our own eyes a deflationary period, which is completely contradictory to this CFP’s alarmist cries. Unemployment is nearly 10% (9.8% as reported on October 1, 2009), home values are down 25% or more over the last two years, and retailers are slashing prices to lure scarce customers (along with their scarcer dollars) into their stores. According to economic theory (for what it’s worth), for inflation to occur the money supply must increase. One only has to look around, and your own eyes will tell you that the money supply is shrinking, not increasing currently. True, the government has trillions of spending projects budgeted but in reality has printed only a fraction of that currency, contrary to the CFP’s alarming statement above. And even those dollars are not getting circulated, as the banks glom onto any cash that comes their way just like the rest of us, and accordingly credit markets are exceptionally tight, and banks are not loaning nearly as much as they were in the past to small businesses which are the core of the U.S. economy. As many as 15 million Americans that had jobs only two years ago now are unemployed and an additional 9 million are underemployed. It is possible that these figures may actually be understated. In fact, deflation is the situation now because there is just not enough money circulating in the economy as people hunker down and tighten their belts during this recessionary period. This CFP quoted above has arguably got it completely wrong, and yet he wants to encourage the purchase of international bonds to counter the evil effects of pending rampant inflation, which hasn’t yet occurred and may not occur to the extent of which he direly warns us all. Strangely, we as a nation still buy financial products and services from these ‘expert’ financial advisors who rarely know what they are talking about most of the time, but consumers continue to pump billions and billions of dollars annually into their brokerage house coffers. Why do Americans continue to funnel dough into the clutches of these guys? The answer to that question is simple; fear. The financial services and insurance industries are basically built on fear. Fear of the unknown, fear of uncertainty and essentially the fear of poverty and death that we might face should things go badly for us in the future. And FA’s and insurance salesmen know this. This is the basis for every sales pitch that you hear come out of their mouths. The insurance guy will always start with something that goes like this: ‘Have you taken steps to provide for your loved ones in the event that something happens to you?’ They may dwell on this for a time, drawing a mental picture of your loved ones getting kicked out of their warm, safe homes and into the cold, mean streets to starve, languish in misery and die in the gutter because you failed to adequately provide for them earlier. Then, the pitch for insurance against this eventuality will be served up, depicting your loved ones living on in a worry-free paradise after you are dead and gone as a result of you doing the right thing in happier times with your immediate purchase of their life insurance policy, variable or fixed annuity, etc. Let’s assume that you fall for their slick pitch and buy a whole life policy. Exactly how do you gain from this transaction? How do you profit from the deal? You have to die to get a positive outcome from this deal, but ironically that would be a negative outcome, if you ask me. If you don’t die, you have to pay your annual premiums to the insurance company. That is also basically a negative outcome for you. On the positive side (if you call dying a ‘positive outcome’), your family gains from the proceeds issued from your policy after your death, assuming that you meet all the criteria stated in the 2 inch thick policy you signed, and that will be determined by the insurance company. This verification will be done at the insurance company’s pace, and on their schedule, which I guarantee is nothing even close to the pace and schedule you would like. And what are the odds that everything will come out alright, after the insurance company looks into every nook and cranny of the policy? Flip a coin, because their job is to deny, deny, deny. And when in doubt, deny the claim. Likewise, the financial advisor might ask you ‘what have you done so far to provide for your retirement?’ Whatever your answer, they will seek to poke holes into your existing security plans in any way they can, disparaging your ‘cash is king’ plan by bringing up the specter of inflation, and how this will destroy your buying power. Or, if you have bonds they will bring up reasons why you should be more diversified into stocks, or if you have stocks why you should have more bonds, etc. etc. etc. Whatever your position, the FA will invariably find fault with it, and discuss possible future occurrences that will diminish your existing flawed portfolio, unless you buy into their suggestions as to how to insulate yourself from a sub par future and ‘diversify’ and ‘allocate’ your assets into this fund and that instrument (which generates them a commission, fee, etc.). Regardless of the future, in which your portfolio will gain or lose principal, the FA’s wallet will only gain the dollars that you give them for their expert ‘advice’, regardless of whether you win or lose going forward into an unknown future. Under the auspices of the SEC, the independent Financial Industry Regulatory Authority (FINRA) attempts to project an image of the industry to financial services consumers as that of a highly regulated and honest segment of the business community. Unfortunately, there are several less than flattering sides of the business that truly need to be addressed by the SEC, FINRA, and the professionals within the industry itself. There are obvious and blatant bad apples such as Bernard Madoff whose shameless fraudulent activities paint with a broad brush a negative side to the industry. These highly publicized but rare incidents of massive Ponzi schemes perpetrated by criminals such as Madoff , Allen Stanford and a few other high profile financial advisors/scoundrels that make the news these days do not in truth reflect the general nature of the business for the most part. What can accurately be pointed out, however, regarding the structure of this industry is that it closely resembles a pseudo pyramid scheme itself, not unlike the business model developed by Richard DeVos and Jay Van Andel in the late 1950’s when they established what would eventually become Amway, in which network marketing is the primary means of generating business. Network marketing basically entails selling products to those you know, or to those whom the FA has some manner of relationship, to include blood relatives, friends, associates and most importantly the referrals obtained from these relationships. In other words, for network marketing to work, the FA must ‘pimp’ their family and friends and foist their products and services on the people they are closest to, and then subsequently twist their family member’s and friend’s arms for referrals. Of course, it differs from a true pyramid scheme; while a genuine pyramid scam generates revenues from new investors into the structure to subsequently line previous entrants’ pockets, the nature of commissions and fees from the financial services industry are indeed generated by consumers who are more or less satisfied with the product they purchase, which is advice. This advice can be good, bad or mediocre, and after a period of time, perhaps nonexistent. Amway has been dogged over many decades by accusations of being a pyramid scheme, but the technical structure they have put in place does not cross that line, however close to the line that legal call may lay. From 1959 until the late 1990’s, Amway used network marketing to advance Amway’s reach into virtually every corner of America. Once nearly total saturation of their network marketing plan was obtained in North America by around 2000, Amway focused on new markets internationally, as nearly every family in North America had an Amway connection, and no new network marketing was possible going forward in a nearly total saturation of the North American market place. While the comparison between the business model of Amway and that of most if not all financial services companies is inexact, the basics of both models remain the same: to survive in either environment (Amway or the financial services industry), the sales professional must spread the word of the ‘value’ of their services throughout their own social network rather than more traditional approaches used by businesses in the past such as media advertising. The larger the circle of friends, family and associates (or what is referred to within the industry as a ‘warm market’), the more likely that individual will succeed in gathering assets. In time, a similar saturation as happened with Amway will ultimately occur within the U.S. financial services market, with nearly every American family having a social connection to one financial advisor or another, and expansion using network marketing will no longer be a viable business model within the financial services industry. As to the assets that FA’s seek from their family, friends and associates, these assets will then be transferred by the FA to his/her licensing sponsor (the brokerage firm) and held in stewardship on behalf of the client by the firm and the FA as ‘assets under management.’ Subsequently, under the FA’s ‘professional management,’ this arrangement supposedly justifies the accompanying fees, commissions, trails, transaction costs, etc. Parts of those fees, commissions, etc. are kicked back to the individual financial advisor. Give or take, the FA will receive 50% of the fees, commissions, etc., and often much less. One of the less obvious and yet disturbing facts mentioned previously about working with an FA to manage one’s assets is this: in any downturn in the market, equities, commodities and certain income funds lose value and decrease the amount of principal within a client’s portfolio. This unfortunate event, however, never goes into negative territory as far as the brokerage house’s income statement or the FA’s wallet is concerned. Commissions paid to the FA by the client may decline in a downturn, but they never, ever go into the red as do the portfolio returns of the client. In good times and bad, the brokerage house and the FA gets paid regardless of the performance (or lack thereof) that their ‘professional management’ yields within their client’s portfolios; much like the brokerage partners of ‘Duke and Duke’ in the 1983 film ‘Trading Places,’ starring Eddie Murphy and Dan Ackroyd. When Randolph and Mortimer Duke (played by Ralph Bellamy and Don Ameche respectively) were explaining how the commodities brokerage business worked to neophyte Billy Ray Valentine (portrayed by Eddie Murphy in this film), Billy Ray replied ‘sounds like you guys are a couple of bookies to me.” This observance by Billy Ray is not entirely inaccurate. By merely holding the FA’s license, the brokerage house in effect cashes in on the FA’s relationships which he or she has developed, nurtured and maintained during the course of their lives. Any relationship developed by the FA going forward is expected (mandated, to be more accurate) to be mined and exploited for investment assets by the brokerage firm management, and this arrangement continues on in perpetuity: the brokerage house mandates that the FA ‘pimp’ all of their family, friends and associations in exchange for a partial return on the fees and commissions generated as well as the privilege of remaining FINRA and insurance licensed to continue on in this ‘pimp-like’ arrangement. The basic tenet of marketing in the financial services industry is not advertising their products and services to the ultimate consumer, but rather recruiting financial advisors who will act as pimps to exploit all of their past, present and future relationships for investment assets. The brokerage house needs to do nothing else after signing up the financial advisor but sit back and watch the money flow in as they shamelessly milk their FA’s relationships. There are of course exceptions to this generalization, namely that some of the larger brokerage firms such as Edward Jones and Pacific Life among others advertise the services of their financial advisors on a national scale, but still expect the same network marketing from their FA’s. Many of the larger firms insist that their ethics are beyond question, and that their only goal is doing what is in the best interests of the client. This is in reality only so much lip service, stating that the clients’ interests are paramount, as this is clearly not the case since each financial services company seeks to maximize their own cash flow at times to the detriment of their clients. Edward Jones, for example, has what it calls ‘preferred vendor’ arrangements that allow for certain mutual fund companies to kick back rewards to the FA for promoting their funds over others. This practice encourages the FA to offer more of the preferred products over other products that are outside of the preferred vendor list, regardless of financial performance of any product. Clearly this is not in the best financial interest of the client, but rather benefits the preferred vendor and the FA. Edward Jones does indeed issue a disclaimer indicating this arrangement, and that seems to satisfy FINRA but it does not address the ethical problem of a clear conflict of interest on the part of the FA towards their clients. Another conflict of interest at Edward Jones is the issue of no-load mutual funds: they are strictly forbidden. Not only does Edward Jones refuse to sell or support individual no-load funds, they will not allow in-kind transfer of no-load funds into the company books under any circumstances. The Edward Jones advisor will tell you that this is because they cannot get the same level of vendor support from no-loads that they can from their loaded fund vendors. This excuse is patently untrue: the sole reason they do not sell or support no-load funds is that there is no commission associated with these funds, regardless of how the fund performs financially. Accordingly, refusing to support no-load funds is a conflict of interest; if managing a portfolio to include no-load funds is in the best interest of the client, then Edward Jones should allow this. The bottom line is that Edward Jones will have nothing to do with them UNLESS: they are included in an internally managed product such as the Edward Jones proprietary ‘Advisory Solutions’ product, which includes no-load funds within its portfolio. In including no-load funds within a bundled product such as this, they have no problems in using no-load funds since there are commissions built elsewhere into the product. This reality refutes their explanation that they can’t get support from no-load vendors – obviously the Advisory Solutions account manager has access to unlimited support at the wholesale level of these funds. John Hancock Financial Network works in a similar manner in preferring some products over others regardless of the suitability issues the client faces. If a John Hancock financial advisor pushes insurance products over securities regardless of the needs of a client, the client is ill-served. If, for example, a client feels they are overly invested in their portfolio of insurance products and wants to increase their risk and return ratio by buying equities, the FA at John Hancock is discouraged from adding stock or mutual funds to this particular portfolio in a solicited fashion. Only unsolicited equity transactions are authorized by John Hancock to the FA, thus discouraging clients from increasing their risk/return profile and gently nudging them towards John Hancock’s bread and butter products: insurance. This disregards the need to determine suitability of products for individual clients required by FINRA, and diminishes the FA’s inclinations for risk tolerance profiling. The incorrect assumption by John Hancock management is that most (if not all) people prefer ‘protection’ from the downside of the market via insurance products over exposure to increased risk (and subsequent higher return) that are offered by equity products during bear market periods such as stocks and mutual funds over the long run. This reflects a built in conflict of interest as it relates to the relationship between a John Hancock financial advisor and their clients. So just what is the value of the advice we get from these guys who claim to be experts in the financial industry worth? Are they credentialed experts in the fields of finance and economics? No, they certainly are not for the most part. Are they savvy investors themselves who have made millions in the market, and now want to show you how it’s done? Most assuredly this is not the case. No, these guys are just sales people, nothing more and nothing less, and are more often than not motivated to sell you a product that pays them a commission, which ultimately comes off the top of your portfolio returns. They are just like every other ‘consultant’ that infests every other business. They know just enough to create fear and uncertainty on your part, sound just savvy enough to make you think they know way more than you do about money, and most importantly they know every closing line in the book to persuade you to give them your money. The value you receive for this? It’s negative value, if the truth be known. These guys are like all ‘consultants’ as they old saying goes and ‘borrow your watch and then give you the time of day.’ The only thing you notice from the advice you pay for is the commissions and fees that they take from you. They do not create any additional wealth, but more accurately are parasites on your portfolio. To answer the question posed at the beginning is that there is no value in the long run to the advice that you get from a financial advisor. Your guesses as to the future are just as good as theirs and your guesses cost $9.99 per transaction at TD Ameritrade, while a full service broker will charge at times $100.00 or more per transaction based on the amount. Anyone can open a TDAmeritrade or Fidelity account and manage their own assets just as good if not better than a paid professional. A few simple rules and you know as much if not more than a financial ‘expert’: Get out of debt. Pay off the highest interest rate debts first, namely your outstanding credit card balances. Once you have retired these, you can continue to use them if you pay off the entire balance each and every month (no exceptions), or if you cannot do this, cut the credit card up into at least 17 pieces. In other words, live within your means. Pay cash for items you used to purchase with a credit card. If you don’t have the liquid cash for something you want, don’t buy it. Again, live within your means. Your mortgage is usually the lowest interest rate consumer debt, and the interest you pay here is tax deductible, so pay this one off last, in conjunction with putting away the cash you used to pay on your credit card debt into the bank. Once you have saved at least the equivalent of 3 to 6 months of monthly expenses (your ‘rainy day fund’), put any amounts above and beyond your mortgage payment into whatever investment with which you are most comfortable concerning the inherent risk versus return of that investment. Do this each and every month (some call this regular investment schedule ‘dollar cost averaging’). Equities (stock in the form of mutual funds), real estate and corporate bonds are available on the cheap now. As they say, buy low and sell high. Things are low right now. Very low. Just think long term on these investments, perhaps 10 years or more time horizon. Any time period less than that, you are engaging in speculation which is different than investing. Words to the wise: stay away from the following: Commodities. These are highly volatile, and the markets for these investments are subject to wild swings based on politics, weather, corruption and all manner of seemingly irrelevant world events. Popular commodities currently are gold and oil. Avoid these investments as you would your broke 2nd cousin who just got paroled from the Big House. Options. These are only for investors with nerves of steel and ice in their veins. Additionally, these investments are purely speculative as to which way the investor guesses the markets will move, up or down. Guess correctly you win, incorrectly you lose. You may as well go to Las Vegas and put your option investment money on either red or green at the roulette table. Payouts are equivalent. Individual Stock issues. The strength in equities is diversification, or owning many different and varied stocks across all industries in large, medium and small companies. Mutual funds do this quite well. Only invest in an individual stock if and only if you know a great deal about the company, its principals, balance sheet, and are prepared to lose everything if this individual company goes belly up. If a single company in a mutual fund goes south, the rest of the fund will likely remain in good shape because most mutual funds are composed of hundreds of individual company stocks, and it is rare that a mutual fund manager will hold over 3% of the total fund assets in any individual stock.