Posts Tagged ‘politics’

A Non-Political Look at Income Inequality and the Wealth Gap

3 ways you can end income inequality and narrow the wealth gap. Together we can change the world.Frequently we look for political solutions to income inequality and the wealth gap. While the issues can be improved slightly from political action, there are two additional ways to close the wealth gap and level income that are more effective.

Politics is the messiest way to fix these problems and history offers ample warning for those who seek answers from this source. One need not look further than Mao’s China or Stalin’s Russia to see how abysmal political leveling can be. North Korea is a modern example of how not to level the playing field. 

Let’s turn our attention to the second way income inequality can be reduced. Walter Scheidel in his book The Great Leveler explains what he calls the “Four Horsemen” of leveling: war, revolution, collapse and plague. Historically these four horsemen have been the leading cause of leveling of income and wealth throughout history. 

Once again this is not a comforting thought. You can read Scheidel’s work for an in-depth review of his research. The record is clear, however; it takes great dislocation, pain, suffering and death for income and wealth to level naturally.

The first two methods of leveling the playing field are not valid choices if you enjoy freedom and like living a comfortable life. These first two methods of leveling are accomplished by bringing the top down rather than the bottom up. Which leads to an interesting thought experiment on how much we really want income equality and a narrower wealth gap.

 

Defining What We Really Want

Before we continue to the third and most viable way to level income and wealth we need to define what it is we really want and what we are trying to accomplish.

Leveling the playing field is actually very easy if you are willing to destroy massive amounts of wealth. Scheidel’s work and the 20th Century are amply examples of fixing the problem the wrong way.

Political solutions eventually lean toward solutions that are relatively effective which means forcing the top down and violence. The four horsemen do the same thing with the crude hammer of god. 

When most people speak of equality they mean they want to bring the bottom up, otherwise they are no better off than before while the upper classes are rent destitute. Normal people are not so dark in their thinking.

Therefore, we really should not care what other people have as long as we are enjoying affluence. Complaining you have one less apple as you relax in paradise is way too diva for this writer; it also shows a remarkable lack of emotional maturity.

In the Western world affluence is high, but there are still people stuck in poverty. The 1% have taken a larger and larger piece of the pie which means the middle class is getting squeezed with smaller gains and the poor are outright losing ground. (See embedded video.)

 

 

From the middle class on up the Western world enjoys massive affluence the rest of the world aspires to. A nice home with two SUVs in the garage are common. Travel is an affordable luxury. Food and clothing ample.

But there is something that grinds on our conscious when one person is paid less than another for the same exact task at the same exact skill level. This requires effort to fix.

While it is easier to ask someone else to make the change, each of us have within ourselves the ability to force equality. 

As a business owner we can take great measures to ensure employees are treated fairly and equitably. But what about large employers? How can we force change across our society?

And before these actions take hold, what can we personally do to narrow the wealth gap in our own life? Can we narrow income inequality in our own life regardless what business or government does?

This brings us to the third way to level the playing field.

 

 

The Numbers Don’t Lie

In 1995 James M. Poterba of MIT and Andrew A. Samwick of Dartmouth College published a damning report on household wealth in America

The above chart shows the household savings rate in America for the last 60 years. In the 1970s the savings rate began a precipitous decline. At the same time income inequality began to grow. Could there be a correlation?

Poterba and Samwick discuss historical stock ownership in America in their report. Their most interesting comment is telling: All corporate stock is ultimately owned by individuals. They allow for foreign ownership of U.S. equities which was around 5% at the time they published.

Here is what you can do to end income inequality today! 3 ways to narrow the wealth gaps and level income.While stock ownership eventually is owned by individuals, the real question revolves around which individuals own these investments.

According to the report household ownership of stocks was nearly 90% in the 1950s and has declined to less than 50% by the 1990s. Since the report it is fair to say stock ownership has continued declining.

The third way to level income and smooth wealth can only be accomplished on the personal level. If most people refuse to engage the exercise they will suffer greater inequality and there is nothing the government or any politician can do about it!

Traditionally the arguments surrounding income inequality involves wages. There is truth behind the inequality in wages over the last 30 or so years. The richest are getting the largest share.

But this ignores every other source of income! In the 1950s virtually all households held some stock. These households had a fractional share of ownership in these corporations. Dividends went to the household, almost all of them.

Now fewer than half of households own stocks which means these households have zero income from this source. The wealthiest by default ended up owning nearly all America’s wealth. People complained, but refused the one solution nobody could stop them from exercising.

And capital gains and dividends are taxed at a lower rate than ordinary income, like wages. Even with this massive incentive for individuals to own stocks the average person took a pass. And so income inequality grew. 

All the gains in America’s growth hence went to the remaining owners of America’s engine of economic wealth. There was no other possible outcome. The people who held stocks (owned a piece of American businesses) ended up with all the gains and the gains were spread to a narrower and narrower group with each passing year.

 

Get Your Share

At first glance you might think something as simple as having more people own shares in American businesses would not solve the whole problem. That thinking is wrong.

Owning a piece of America’s value creating machine means you get a slice of the profits in the form of dividends. Many middle class taxpayers pay a very low or no taxes on these dividends. 

Something else happens when more people own a piece of corporate America. Your fractional ownership slightly levels the wealth gap because you now own something tangible like the wealthy do. Your share might be small, but there is power in numbers. 

When nearly 90% of households held U.S. stocks, dividends were more widely distributed. It also meant nearly every household had a small say in how companies operated! (Remember, you are a part owner when you hold stock.)

As fewer people held stock there was no one to slow down the enormous gains in CEO salaries. The CEOs rewarded the remaining few shareholders and employees were left out of the discussion because they didn’t own a piece of the enterprise.

Of course, owning a few shares in McDonald’s doesn’t give you the ability to dictate policy at the firm. But if many people owned stock in the company they could gather enough influence to change corporate behavior!

It might sound strange, but what would happen if every employee of McDonald’s owned 100 shares and worked together to change wage policy at the firm? I know, I know. People working at McDonald’s can’t afford to own stock in the firm. Yet I argue you can’t afford not to own a piece of the company if you ever want to change corporate policy!

Income inequality and the wealth gap are the same exact problem! As the wealth gap widens the lower end of the economic scale has less and less say. Of course the people on top want more and they get it because nobody that owns the company says different. 

 

The Gift That Keeps Giving

When my kids were growing up they received a share of stock as a gift for Christmas every year. One year they got a share of Wrigley, another year a share of Disney. 

Part of the gifting process was to examine each company they had stock in along with a few other possibilities.

The family came to the conclusion Wrigley was a winner for a variety of reasons. Wrigley gave every shareholder a case of gum each Christmas which my kids found incredible valuable. Stock ownership had real benefits! 

The financial reports also looked promising. Earning grew and so did dividends. Dividends were reinvested while excess cash was funneled into more shares. The growth was impressive.

Then Warren Buffett came along and funded Mars Corporation’s cash buyout of Wrigley. (Damn you, Warren!) Every member of the Accountant household got a big, fat juicy (Wriggly makes Juicy Fruit gum) check for their ownership in Wriggly. It was a bittersweet moment, however.

Yes, a big, fat juicy check is always welcome, but the regular income of dividends ended! And worse, no more gum in the mailbox in mid-December! It was as close to a crisis as I ever saw it!

While many people use index funds, there is something lost when we give authority to a mutual fund to vote our shares. That is why I still own individual shares in companies.

Your influence is minor when you own a few shares in a company. But even without a majority of ownership a large number of shareholders can make life very unpleasant for management tone deaf to owner/employees. 

Regardless your minor control of the companies you hold stock in, you have an unseverable right to your share of profits. This by default shrinks the wealth gap and income inequality for you.

 

Fixing the Wealth Gap and Income Inequality One Person at a Time

It is tempting to blame government and politicians for the wealth gap and income inequality problems. But as we saw above, the problem is not a political one and politics can’t solve it regardless what politicians promise!

You can change the world; you can make a difference in ending income inequality.Natural levelers are down-right brutal. We don’t need a catastrophe to level the field to an acceptable level. Complete equality is a terrible goal as the 20th Century has shown. However, the current environment is way too lopsided to be good for society in the long run either.

Businesses are the engine of value creation and growth; labor builds the goods and provides the services that make that value creation and growth possible. It is fair to say labor should have a reasonable slice of that pie.

Looking to the government for solutions is only a minor stopgap. Social services (the safety net) can be increased (and improved), but this is unproductive after a point. While more can be done in this area, it will not solve income inequality if individuals refuse to own a piece of the means of production! Nor make even a dent in the wealth gap!

Unexpected plague, war, revolution or collapse can temporarily level the field, it does so by bring the top down, leaving the middle and bottom no better off than before and probably worse. To fix income inequality issues and narrow the wealth gap, we want to focus on improving the most amount of lives as possible, not destroy everything until we are all level digging in the dirt for sustenance.

I know the world preaches index funds; so do I. Before Jack Bogle passed away recently he warned of the issues I brought up above. If mutual funds/index funds/ETFs control all the stocks they will vote the rules in corporate guidance. 

If you respect and value freedom you will demand a voice and your voice is purchased with ownership. It doesn’t take much. A few shares of three good companies can do wonders for your economic status. You can still hold index funds with the bulk of your money. (They pay dividends too, you know.)

Even without direct ownership (ownership through index funds) you still personally shrink the wealth gap. The increasing dividends added to your wage income narrows income inequality ever so slightly.

It took 40 years for the problem to grow this wide; it will take more than a few years to fix, even in your personal life. 

Or we could do what we’ve been doing all along and hope it changes magically all on its own.

Or demand a government bailout. (But then you’re just like corporate America.)

 

 

More Wealth Building Resources

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Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Amazon is a good way to control costs by comparison shopping. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you very much!

The History of Polarized Politics in the U.S. and Money

How much is polarized politics affecting your financial situation and wealth. Don’t let the politics of others destroy your dreams. Learn how you can take control and excel.

How much is polarized politics affecting your financial situation and wealth. Don’t let the politics of others destroy your dreams. Learn how you can take control and excel.

The polarized political environment in America is not unusual. What makes the current situation so incredible is the comparison to what came before.

After World War II the United States experienced a prolonged period of relative political calm. While disagreement was rife, there was a sense of compatibility between the opposing political parties. A few Republicans were more liberal than some Democrats and a few Democrats were more conservative than a few Republicans. It was a world where liberal Republicans and conservative Democrats existed.

That started to change in the 1970s and blew full force as the 1980s arrived. The reasons are varied, but not the topic of today’s discussion. We are interested in the history of polarized politics and how it affected wealth. The goal is to learn from the past so we can better position ourselves for success in the toxic environment we find ourselves.

Politics is always a dangerous topic to cover. And it might not have an immediate connection with money or wealth. But experience (with heavy doses of research) reveals politics indeed has plenty to do with wealth and wealth creation or destruction. Polarized politics has visited America before and in much worse circumstances.

We will address politics first, then personal finances.

History of Polarized Politics

 

Founding Fathers

There is no exact count as to how many Founding Fathers the U.S. had. Some say there were 7, others 10. The Constitutional Convention had 55 delegates.

Regardless the number of Founding Fathers, there are several points worth noting about their behavior. First, they were all men of the landed class. In other words, the Founding Fathers were men with at least a modest amount of wealth in real estate. This isn’t the most politically correct situation by today’s standards. But we can (or at least should) agree this group of men did a pretty good job at nation-building.

Many Founding Fathers owned slaves. Benjamin Franklin had to dance around the subject when he was the American agent in London for the colonies. The British found it ironic Americans wanted freedom while holding tight to slavery.

Storing crops was more difficult in those days so it was common to store the excess corn crop as whisky. Consumption of alcohol was high in the 18th century. Bad water also encourage more alcohol consumption. It is no exaggeration to say the men who brought America to life were inebriated much of the time. While not drunkards by the standard of the time, some might be surprised how much work these men accomplished with the blood alcohol level they regularly had.

Benjamin Franklin

We only have time to discuss one Founding Father at length; we will touch on several others for reference. Since Ben Franklin is a leading Founding Father he will make a prime example for our discussion.

Much of the polarization of modern politics revolves around the identity politics of the left and the conservative ideas of the alt-right. There isn’t a single Founding Father who wouldn’t be nauseous over the current national dialog. Or would there?

Conservative Franklin: To the chagrin of the left, most Founding Fathers were decidedly conservative. Before President Reagan, Benjamin Franklin had his own version of trickle-down economics. Franklin believed the more money the rich had the more it percolated down to the poor. Franklin stated the”rich do not work for one another…” The rich, according to Franklin, spent their money on the poor buying the goods and services they produced. (Benjamin Franklin: An American Life  by: Walter Isaacson; Simon & Schuster; 2003; pages 267-8.)

Welfare and Social Security: Franklin also warned against the welfare state. He wrote welfare had unintended consequences and promoted laziness. Modern ears may find this palatable, but Franklin went further. “I fear the giving mankind a dependence on anything for support in age or sickness, besides industry and frugality during his youth and health, tends to flatter our natural indolence, to encourage idleness and prodigality, and thereby to promote and increase poverty, the very evil it was intended to cure.” (Italics mine.)

What Franklin was saying is you either work or deserve to starve, even in old age or during illness. Social Security is something Franklin would probably not approve of. If you lacked the necessary frugality and industriousness during the vigor of youth, you serve as a living example to those who consider such sloth.

Minimum Wage: Franklin also disagreed with the minimum wage. By artificially raising wages Franklin felt it would overprice goods destined for foreign markets.

All these positions place Franklin decidedly to the right of center. But was he really cold-hearted? Did Franklin believe people should be allowed to suffer?

While conservative readers might be licking their lips by now, the liberal folks will have something to cheer shortly.

Liberal Franklin: Benjamin Franklin had a balanced political stance. In some ways he could be called a liberal Republican by today’s measures. Franklin had no problem with taxes as long as they were coupled with representation. His lack of debate against the Stamp Act of 1765 is indicative of his political position. Only when there was a serious backlash back home did Franklin give us our first political spin campaign to right his reputation.

Policies should encourage hard work, according to Franklin. He felt hard-working people lucky enough to achieve wealth (became rich) had an obligation to serve the community. These duties should improve the lot of the community, providing for a prosperous middle class. Those in genuine need (people suffering illness before they had time to work for their keep, children and widows, et cetera) were the responsibility of the wealthy. Today we might consider many welfare programs as serving this need in a much larger population than existed in 18th century America.

There are also a few things we might find appalling in Franklin’s behavior even in the Age of President Trump.

The Un-family Man: Franklin left his wife and children to serve as colonial agent in London for the Thirteen American Colonies. Even when opportunity arose, he chose to stay in London or travel to Scotland and Paris, even as his wife’s health failed. Ask John Edwards how that helped his political career. Even the King found this behavior strange when he inquired as to why Franklin remained in England in 1774 when Franklin had no more duties there.

Womanizer: We can forgive Franklin for many of his political positions due to the age he lived in. His position on slavery softened over the years, but as Isaacson reports, Franklin used the qualifier “in time” in letters he wrote. He knew slavery wasn’t a workable prospect, buy also kicked the can down the road.

Modern eyes are ears will be most disturbed by Franklin’s behavior towards women. The list of affairs and potential affairs is long. Need I remind you Franklin was married with children during many of these flirtations.

History records Benjamin Franklin enjoyed the company of women more than men when it came to social gatherings. The flirtations weren’t always innocent and the women not always unattached. There is a crude sketch by Charles Willson Peale of a scene he walked in on of Franklin kissing Polly Stevenson, the daughter of Margaret Stevenson (Franklin’s landlady). It is possible Franklin befriended Polly’s mother for the purpose of spending time with Polly. Mary “Polly” Stevenson was 18 years old at the time Peale accidentally walked in on the kissing scene. But there is also a story of Franklin in a flirtatious conversation with Polly when she was 11 years old discussing her desire to be with an older man Franklin’s age.

Final Notes on Franklin: I spent a fair bit of time on Benjamin Franklin for a few reasons. Franklin is a Founding Father and certainly one of the most important and influential of the Founding Fathers.

He was a man with all the failings and shortcomings of men. His humor was crude at times, as we see when he recommended to the Royal Academy of Brussels that they should study the causes and cures for farts. It is unlikely Franklin was faithful to his wife and was distant to his family often. He even missed his only daughters wedding.

Franklin had strong political beliefs that would have toppled normal men. He didn’t suffer such a fate because he never held a high office. He was more a grandfather and guiding hand in the creation process of the United States. His role was certainly instrumental, but he managed to avoid the polarization politics brings once high office is held. Even Washington faced real criticism for the first time as president.

Another benefit of reviewing Benjamin Franklin is he shows us the world and human nature when the United States was just a dream and there were only American colonies as part of the British Crown.

If we fault Franklin for his short-comings that many current political leaders share, then we espouse the notion that Franklin should not have been allowed to do his work of nation-building. Such opinions at minimum presuppose the right of the United States to exist or at least ever to come into existence.

It is a truism of the ages: The worst of human nature can lead us to greatness.

Maybe we should be more open to human failings if we aspire towards a better tomorrow.

Thomas Jefferson

We will cover the next actors with less detail as they all share similar traits we find so disqualifying.

Thomas Jefferson is also a Founding Father of the United States. He wasn’t the biggest fan of slavery and history assumes he treated with slaves with dignity and respect. (How else could we remember a man as great as Jefferson and his contribution to our morals, values and standards.)

Jefferson also served as the third president of the U.S. That said, Jefferson did own slaves regardless his dialog on the subject. Over 100 years after the abolition of slavery in this country we still feel the scar it has left. The black community more than any other.

To make matter worse, Jefferson had a child with at least one of his slaves. In a modern era where people in authority are criminally liable for sexual activity with someone under their authority, this seems like a serious offense. Yet it happened and we seem unmoved by the act. Maybe time does heal every wound. Or not!

For all Thomas Jefferson gave this nation, he was still a man with failings. Failings we would consider criminal in the current environment. If modern rules were applied Jefferson would never have been president and his work may never have been created. How a man with such concerning behavior gave us rules to live by is hard to understand. But once again, the greatest of us tend to have the greatest failings, too.

President Andrew Jackson

President Andrew Jackson did more to define and solidify federalism than any other president. But could a man of such accomplishment be endowed with faults?

Polarized politics were at their worst in Jackson’s day. Jackson won the popular vote three times and the presidency twice. He also gave Native Americans the Trail of Tears.

Instead of focusing on Jackson’s flaws, I want to refocus on our topic: political polarization.

People today think the things said and done are the worst ever. Wrong! People had no problem Jackson killed a man in a duel, he was also hated enough to be the first president to have an assignation attempt on his life.

He married his wife before she was legally divorced from her husband. As you can imagine, adversaries made hay of this knowledge. They hounded Jackson and his family to the point of murder.

The political campaign of 1828 was brutal. The fight contained numerous ad hominem attacks. This isn’t so different from modern times. The difference was how the attacks also dragged Jackson’s wife, Rachel, into the fight.

Rachel Jackson started to suffer from what we would call today anxiety and depression. The stress became so acute it lead to a heart attack that killed her. Jackson never forgave his enemies for murdering Rachel. We have no way of knowing if the stress caused her death, but Jackson didn’t care. He blamed his enemies and hated them to then end for what they had done.

If you think politics are polarized today, you might want to read up on President Jackson. Few political leaders in the U.S. experienced such an assault in attaining office.

President Abraham Lincoln

Most Americans hold President Lincoln in high regard. They hold views of Lincoln as a moral and honest man. He freed the slaves so he must be good, right? He also preserved a nation rent in two by political division. Never before or since has our nation been so politically divided. There is nothing in the current dialog we can compare to the division our nation faced and underwent in those days of the early 1860s.

These are not the worst of times. Our nation weathered far more serious problems than a misogynist Trump. Need I remind you the great Abraham Lincoln consorted with prostitutes while married. Yeah, great leaders are riddled with flaws. Perhaps the flaws are what make them great.

Yes, I digress. It is political division that most concerns us. Except, all the discourse on said divisions seem to revolve around moralistic behavior.

FDR

Before we finish with the Supreme Court and discussing the personal finance implications, we turn to FDR, the hero of the left.

FDR also had serious flaws when it came to women. He also had an affair. (It starts to sound like a nervous tick after a while.)

The Great Depression was the issue of the age when Roosevelt took office. You would think after the economic crisis the Republicans presided over, the Democrats would have unchallenged rule. You should think again.

Before World War II became an issue, FDR had a New Deal. There was only one problem. Republicans packed the Supreme Court for years and the Court kept knocking down his programs.

Roosevelt had an idea. If the Justices wouldn’t retire so he could nominate his own choices friendly to his programs, he would expand the Supreme Court so he would have vacancies to fill.

This struck Republicans a very wrong. And what do you know, even Democrats felt it was a power grab by FDR. FDR’s own party denied him the ability to expand the number of justices on the Supreme Court for political reasons. Talk about political polarization! Yes, it happens even within parties. Even worse than we see today.

Supreme Court

There is always the temptation to think this is the worst time EVER! Rarely are such thoughts true.

Brett Kavanaugh’s nomination to the Supreme Court by President Trump signals the worst ever injustice in the history of the U.S. But is it?

There is already talk of impeaching Justice Kavanaugh. Some have warned this would set a bad precedent and has never happened before. And that is a lie!

Here is a quick rundown of notable Supreme Court dramas.

Removed from Office: Supreme Court justice John Rutledge was removed from the court by the Senate in 1795. Yes, 1795! Rutledge’s wife died in 1792 and he didn’t take it well. His mind deteriorated to the point where there was no other choice.

The same year Justice John Blair suffered from such severe headaches he was unable to continue. Rather than have the Senate remove him, he resigned.

Assassination: Justice Stephen Johnson Field was nearly assassinated in 1889 by a California State Supreme Court justice in a confusing story of divorce, alimony and a lost case.

Antisemitism: The Supreme Court had a justice so hated not a single member of the court attended his funeral. Justice James Clark McReynolds was a very vocal anti-Semite. In 1916 the Jewish justice, Louis Brandeis, joined the Court. McReynolds left the room every time Brandeis started to speak.

Racism: Justice Hugo Black  belonged to the Ku Klux Klan prior to taking the bench.

There are stories of bribes and other nefarious behavior by Supreme Court justices. Justice Kavanaugh may still resign or face impeachment by the Senate at some point in the future. Regardless, we sometimes wrongly assume the Supreme Court, the final arbiter of law, rule and justice in our nation, is free from political polarization. Unfortunately, the Supreme Court is just as liable to the shortcomings of human nature as any group.

 

With the groundwork on political polarization in place, we now turn to the impact polarization has on personal finances, wealth and money.

Personal Finance in the World of Political Polarization

 

The lesson above clearly outlines a history of political polarization in the United States from before its inception until today. The luxury of self-pity falls on deaf ears when history is called into action. Things have been marching higher for a long time, as Steven Pinker notes in his landmark works: Enlightenment Now: The Case for Reason, Science, Humanism, and Progress and The Better Angels of Our Nature: Why Violence has Declined

Stop burning money! Learn the secrets the wealthy have used from the beginning of time to build their financial fortune.

Stop burning money! Learn the secrets the wealthy have used from the beginning of time to build their financial fortune.

The Long March of Growing Wealth: Humans have lived on the Earth for a few hundred thousand years. We lived short lives back then and progress was slow. Life was dangerous. Basic shelter might have been a cave, tree or outcropping.

Then man (it might have been a women for all we know) discovered how to create and control fire. Cooking soon followed which improved life immensely. Cooked food was easier to digest and it killed pathogens. Life was still hard, but lives were made a bit easier with the discovery of fire.

Shelter improved slowly over the eons. Fire made the home warmer in cold climates. Still, disease and subsistence meant most lives were brutal and short.

The pace of human progress was painfully slow for the first several hundred thousand years. Rape, murder, war, disease and starvation were constant threats. Men died from injury and women in childbirth. When God informed Adam and Eve of their curse as they were kicked out of the Garden of Eden, he meant it. But curses have a shelf life.

Civilization: Somewhere back there, over 10,000 years ago, humans became civilized; congregating in cities, that is. This was another improvement. War was a constant threat, but now a larger group was needed to harm the community.

Health issues were the age old problem.

Fast Forward: The pace of improvement in the human condition keeps accelerating. First rudimentary shelters, then fire, now cities. A few lucky souls avoided disease and injury, living to an old age, even by modern standards.

Cities grew and slowly man discovered ways to alleviate medical afflictions. Many remedies were more harmful than helpful. Such is the nature of progress.

Money was invented and the ancient Greeks debated what money really was and how it worked. (Sapiens: A Brief History of Humankind) Over half of Jesus’ parables dealt with money or wealth. Life was improving at the fastest pace ever in history and it was slowly picking up steam.

China flourished in isolation from the West; Europe enjoyed the Pax Romana. It would be nearly the thirteen hundred years before mankind experienced the Pax Americana.

From the scientific advancements of Greek and Roman culture, mankind dropped into a Dark Ages. The path of progress is steady and up, but there are plenty of detours along the way. The line is not straight, but it leans ever more so upward every day.

1870: Something happened around 1870. The Dark Ages had long passed, the Renaissance morphed into an Age of Reason and science and discovery flourished. And most important, enough humans finally existed to hit a critical mass, causing an explosion of economic growth the world has never seen before.

 

Gross World Product

 

As the graph above illustrates, economic growth was painfully slow until 1800 where we see a slight tilt north. In 1850 the Gross World Product turns decidedly higher and goes parabolic in the 20th Century.

The pace of wealth creation accelerated like never before. Things got better. A lot better! Really fast.

Pockets of suffering still exists. The 20th Century experienced two world wars, Stalin’s Russia and Mao’s famine. Many people suffered and died. But many more lived better and longer, too.

Inequality: The buzzword of the day is inequality. The rich seem to get richer while the poor get poorer. But is this really true?

Inequality still exists and surely always will as long as more than one human is alive. There has been an uptick in income and wealth inequality recently. Compared to historical norms we live is really good times.

The wealthiest people alive in 1930 rarely, if ever, had indoor plumbing. Today, with rare exception, we all enjoy indoor plumbing.

Medicine is even more widespread. Polio is a rare disease; small pox eradicated. While indoor plumbing eludes many in third-world (I hate that term) countries, modern medicine is brought in on a regular basis. Fewer women are dying in childbirth. Men have fewer dangerous jobs shortening their lives. Children live beyond infancy at a very high rate. These numbers have never been so generous ever in history. Things are as good as they’ve ever been, and believe it or not, it’s still getting better and better every day.

Walter Scheidel in his book, The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty -First Century outlines how inequality is on the decline and has been for a long time. Periodic catastrophes level the playing field immensely, but there seems to be a natural level of inequality. The good news is that everyone can have a significantly high standard of living even on the lower ends of the income distribution scale.

Optimism is the Best Financial Choice: If you have to make the call, always bet things will get better. For thousands of years things have been doing just that and at a rapid clip for over 100 years.

Warren Buffett has a reputation as a master stock investor. People spend a lot of time dicing his decisions looking for the secret sauce. I can save you the time. Buffett is the most optimistic guy you’ll ever meet. Even his good friend Bill Gates acknowledges surprise by how upbeat Warren always is.

Buffett came out in support of Hilary Clinton in her bid for the presidency. When Donald Trump won many called it the end of America and probably the world. A bit dramatic, I think. Buffett made it clear America has the “secret sauce” when it comes to economic growth and that America will do just fine even with Trump as president. I personally think the human race has a bottle of that patented sauce.

Yes, some people have it bad. Cancer might not feel like a time to be optimistic. But this isn’t about the individual level. We are talking humanity here. As a whole things are chugging higher all the time with only periodic setbacks.

The stock market reflects these facts. In the U.S. the stock market has powered higher decade after decade. Even the Great Depression is a minor speed bump when the charts are viewed over large time periods. It looked scary up close and personal. Then, a few decades later it looks like a minor dimple on the chart.

The 1987 stock market crash is the same story. The Dow dropped 22.6% in one day. The decline requires you squint your eyes to make it out now.

To the Future and Beyond: Life is good and getting better! Calls for the “end of the world” have been with us from the beginning of time. It’s a story that sells, but never delivers.

The future is bright. Today isn’t so bad either!

America and the world will have challenges ahead. That doesn’t mean optimism is wrong or dead! It is only an acknowledgement of reality. Every challenge will be confronted and re-challenged as we boldly go where no species has gone before.

Don't miss out on the progress happening all around you. Don't let polarized politics harm you financially. Use the "secret sauce" the wealth have used forever to build wealth.

Don’t miss out on the progress happening all around you. Don’t let polarized politics harm you financially. Use the “secret sauce” the wealth have used forever to build wealth.

Back to Politics: I know, I know. We never had a president like Trump. True.

We never had a Founding Father like Franklin either. How could such a womanizer, a masher, be allowed to engage in nation-building after the things he did.

And a president who fathered a child with his slave! How will the nation survive?

And don’t forget the evil of the Trail of Tears, a duel and murder and the death of a president’s wife.

A Civil War didn’t slow us down. A great president with massive flaws sewed the nation back together.

FDR tried to manipulate the Supreme Court to no avail. Talking of the Supreme Court, these are the people who gave us Dred Scott! These flawed men (most of them were men) did something wonderful as a whole. As bad as they were, their flaws made us stronger, more vibrant.

Politics is NOT more polarized than ever before. The First Lady is miffed, but not dead or even scuffed.

Things are not going to hell in a hand basket. The economy may falter from tariffs, but before long we’ll scale even higher heights. It’s almost unbelievable and then it happens again!

Never lose faith. Optimism is always the best choice. Things are good and getting better. We live longer and better lives. Economic and personal wealth is at sky high levels and rocketing higher! And any decline in the markets is a correction soon to be followed by greater heights!

It’s not a Dream; Success is Real: I’ve been around long enough to personally hear many of the doomsayers. They fall by the wayside every time. Yes, much of the Western world in more polarized than it has been for many decades. Let me remind you of the above chart. From 1850 to 1900 the U.S. exploded higher economically. During this time we experienced the Civil War and what many in the south thought was the end of the world, the freeing of the slaves.

Not only didn’t the world end when we took the moral high ground, we excelled. But we had to experience the debauchery and evil of slavery to propel us from the ignorance. We certainly don’t want to go back. It will require vigilance to retain our hard fought gains.

This is not the End: In recent times we were told the U.S. was caput because  a womanizer like Clinton was president. Did anyone take the time to research Franklin and Jefferson? Caput! I think not!

Then Bush was a sign of the End Days. Nope! President George W. Bush proved to have human failings, but we did fine.

President Obama was the worst. I had clients who came into my office saying their life’s mission was to prevent Obama from getting a second term. What a waste of time! The economy grew, the stock market was up and America and the world did great after a serious economic debacle.

And now we have the hated President Trump. Many tears have been shed. The Supreme Court is forever tainted (unless you read few history books where you’ll discover it was always tainted). I’m not a fan of Trump. I disagree with many of his policies. But not all! An honest person will find issues where agreement exists. Who doesn’t like lower taxes? We can debate who gets how much and the fairness of taxes, but com’on! I also agree with more infrastructure spending. I’m against tariffs which are nothing more than a tax on consumers. Call it a quasi value added tax, if you will.

The Beginning: In the darkest hours of World War II, Winston Churchill gave encouragement to the British people as Nazi bombs decimated London. His immortal words are as vital today as they were then as we worry ourselves sick over geopolitical events. His words are a reminder things always get better and setbacks are only temporary.

Now this is not the end.

It is not even the beginning of the end.

But it is, perhaps, the end of the beginning.

 

 

More Wealth Building Resources

Credit Cards can be a powerful money management tool when used correctly. Use this link to find a listing of the best credit card offers. You can expand your search to maximize cash and travel rewards.

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.

Amazon is a good way to control costs by comparison shopping. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you very much!

 

My Tax Plan If I Were President

Taxes laws are a mess. I have solutions to simplify taxes and lower rates. Using humor, I share tax tips for deductions for individuals and small businesses. I also address the politics behind such required changes. #wealthyaccountant #taxhumor #taxdeductions #taxtips #smallbusiness #funny #politics #presidentIf you’re reading this the day it’s published it means this is the due date for extensions for partnerships and corporations. If you work in a tax office and things are quiet you might want to consider another job. (This is an inside joke directed at a former employee who struck out on her own. If you need bookkeeping in Vegas I know a qualified person to handle that. Seriously.)

I thought today would be the perfect day for me to announce my candidacy for president with a few tax policies I’ll sign into law via executive order if elected. Some of you might be darn excited about this unwelcome event as you think I’m a Democrat. Other might be excited because they think I’m a Republican. The truth is I’m neither. I prefer to waffle between both side of the aisle or as the police call it: walking in a drunken stupor.

As much fun as I’m going to have writing this, I am also dead serious. What follows are tax policies I would like to see instituted. Some things will sound very liberal and some things will sound downright conservative. Basically, I should tick off just about everyone in the room with something.

Welcome to politics.

Ground Rules

Before we start I want to point out some things I plan as president are not completely tax related. For example, I will deal with the minimum wage, but connect it to tax policy. The same with welfare of every kind. Along the way I’ll fix the health care issues of the United States by default and solve trade issues and immigration policy in a way everyone will love until I’m elected. Then a third will love me and two-thirds will hate me until we approach the next election. Then the population polarizes and it ends up a dead heat until I’m assassinated re-elected.

Tax policy controls everything. Al Capone gets away with murder until they called in the Treasury Department. (It worked!) Welfare once required a trip to Social Services. Now it’s handled at the tax preparer’s office. Corporate welfare is even worse.

Trade disputes sometimes result in tariffs, an excellent way to tax your own people while convincing them it punishes the other country. (Don’t underestimate the ignorance of voters.) Once again important issues of national importance end up in a tax bill.

So, let’s get down to business. I’m confident I’ll win your vote.

Simple and Basic

With the exception of my own profession, everyone should love the basic framework of my tax plan. Republicans lowered tax rates to the lowest level since taxes were collected in this country. And I think they’re still too high!

For individuals and families: I propose to raise the standard deduction to $100,000 for joint returns; $75,000 for head of household returns; and $50,000 for single taxpayers. That means a married couple filing jointly can enjoy their first $100,000 of income tax free! (I know! It makes me giddy too.) Exemptions were eliminated with H.R. 1 and I don’t want to rock the boat so all you guys get is a huge standard deduction. In fact, itemizing is gone! If a hundred grand tax-free isn’t enough to stay solvent there isn’t a thing any politician can do to help you.

7 ways your taxes should be lowered. Tax humor might be funny, but also illustrates how taxes must be lowered. Find tax tips and deduction for individuals, the self-employed and small businesses. #wealthyaccountant #politics #president #taxplan #taxhumor #deductions #smallbusinessAs for tax brackets, people like the idea of a flat tax. I propose two brackets so my peers at least have an outside chance of staying in business: 20% and 50%. After the standard deduction, the next $400,000 is taxed at a flat 20%. All income above this level is nailed at a 50% rate with nary a deduction available to reduce the tax.

I hear the howls of protest, my tax obsessed readers. You think President Accountant will bankrupt the nation with such a plan. Au contraire. To pay for this simple tax plan all the welfare tax credits are nixed. The Earned Income Credit: gone. The Child Tax Credit: gone. Savers Credit: nope. Education credits: huh? No, no, and no. No more handouts on the tax return. Let’s turn the tax office back into a tax office and not an unpaid extension of the welfare department of the government.

Also, all income is taxed at the same rate. No more special rate for qualified dividends or long-term capital gains.

Poor people need not complain. The Earned Income Credit was designed to compensate low income workers with a kickback of their FICA taxes. In my tax plan every worker gets the first $20,000 FICA tax free. If you work you get an instant EIC on your paycheck.

HOWEVER. . .

Social Security taxes now are like the Medicare portion of FICA: paid all the way to the sky. And FICA applies to ALL income: dividends, interest, capital gains (long- and short-term) and more. A sports star gets a $20 million bonus. Good for everybody! A CEO of a public company enjoys a windfall of stock options? Good for everybody. The Social Security and Medicare financial problems are solved.

If you think about it (I have) the reduction in tax credits more than offsets the massive standard deduction increase. We may have to institute another round of tax cuts or risk paying off the national debt.

I see fear in the eyes of business owners. Don’t worry. I thought about you guys, too.

Business Taxes

This crazy new tax deduction for qualified business income is insane. All it does is increase complexity in the tax code, lining the pockets of tax professionals and attorneys practicing in tax law. In my plan the QBI is gone.

WAIT!

Don’t shoot! I propose a better solution. Businesses will enjoy their own standard deduction of $1 million. That’s right, my Republican friends, every small business owners will enjoy their first million tax-free on top of their generous standard deduction.

Big business is sweating right now, worried I’ll fill the Treasury at their expense. No way! As a gift for funding my political campaign you get the same $1 million standard deduction, plus a flat tax rate of 15%. You heard that right. The Republican plan of 21% is still waaaaay too high to compete internationally. We will start at 15% and reduce the rate 1% per year until it hits 12%.

Oh, don’t be sad, my liberal friends. To pay for this tax cut we will cut corporate welfare the way we did for individuals. If you think welfare to people is costing taxpayers, you haven’t added up how many handouts are lining the pockets of super-rich corporate executives. Those handouts will be eliminated completely.

To prevent small businesses and the big guys from gaming the system, all businesses controlled by a group only get one $1 million dollar business standard deduction only. In other words, you only get one million dollar deduction per investor. (And you guys thought I didn’t give this adequate thought.)

Tax System

The U.S. is one of only a few remaining nations taxing on a worldwide system. My plan brings us in line with the world by switching to a territorial tax system, where only profits from inside the U.S. are taxed. The tax rate for profits outside the U.S. is 0%, giving a major competitive advantage to American companies operating abroad, something they have to dance around now to compete with other nations. That alone could resolve half the trade deficit.

Americans working abroad would not be taxed unless they earned the money in the U.S. The Foreign Income Exclusion would be obsolete with President Accountant.

To prevent games, corporations could not shift profits outside the country. Strong measures will be in place to avoid such a practice with a 10,000% penalty for offenders. (You’re getting an awesome deal. Don’t get greedy!)

Foreign companies that want to sell in the U.S. would also pay U.S. taxes for their profits earned in the U.S. (Where ya gonna get a fairer deal than that?)

Trade Wars

This is just plain stupid. Tariffs are a tax on your own people! I would open the door to trade with all tariffs eliminated. If other countries don’t follow suit, fine. They can tax their own people more. All the better for our economy.

Looking for a fair tax plan? Then I know the perfect guy to vote for! Taxes are a mess is desperate need of organization. #wealthyaccountant #taxplan #tax #taxes #taxhumor #funny #deductions #creditsThe U.S. and its businesses whine endlessly about free markets. Well, trade wars and tariffs are the exact opposite. Compete or go broke. Under President Accountant we will allow markets to decide the winners and losers.

The one issue we have a right to complain about is the theft of intellectual property. (I’m pointing at you, China.) Our current president has a point on trade issues with China and a few other countries. Policies that strip intellectual property from U.S businesses will be dealt with harshly. If it is determined (China is the worst offender here) that theft has taken place, the government of the country where the offending company resides must compensate for losses and prevent such theft. If the government of said country can’t regulate their own people that country is barred from selling any goods or services in the U.S. until they govern responsibly. No more stealing our stuff and using it to sell against our own hard-working business owners.

The details are more than I can publish right now, but trust me. It’ll be great! The best trade plan this country has ever seen.

Health Care

It is repugnant that the wealthiest nation on the planet can’t provide basic medical care for all its people when other nations do just that. Therefore, I will sign an executive order my first day in office expanding Medicare to cover all U.S. citizens from Day 1 to Day End. No more Medical Premium mandate needed. If you want more than basic coverage; buy additional coverage. There is no additional deduction and businesses are not allowed to provide more health coverage to employees. Businesses are out of the health care business from now on (unless they are a medical business).

To pay for this basic benefit the Medicare portion of FICA will be increased 2%; half paid by the employee and half by the employer. All income, including dividends, capital gains and interest, will pay the additional FICA tax. And remember the FICA exemption above. Nobody gets hurt.

I hear my conservative friends complaining already. “We need to keep government out of our conversations with out doctor,” you say. I agree. Let’s keep your employer out of it, too. I for one am sick to death of telling my employees what kind of medical care they can get. Unless I’m a doctor or hospital, I’m out of the health care business and devoting all my time to my business, which is what I’m good at and the reason I started my business.

Minimum Wage

Is that grumbling I hear at the back of the room? No worries, my liberal friends. Under President Accountant the minimum wage will be abolished! You heard me right. Now holster your weapons.

The reason I’ll eliminate the minimum wage is because if we have a minimum wage to increase the number of jobs, then it stands to reason we must have a maximum wage to create more jobs. Don’t hear that argument too often, do you?

Eliminating the minimum wage will not put you at risk. Your favorite president will guarantee you see $15 per hour minimum on your paycheck each and every week. Rather than force companies to pay a minimum wage, there is a special tax for every hour any employee earn less than $15 an hour. That special tax is 20 times the amount your employee paid under $15 per hour.

I bet there will be no companies paying less the $15 an hour right quick.

Yes, businesses will be encouraged to automate with higher wages. But when has increased productivity been bad for a society? You get more for less. And with the new standard deduction and Medicare-for-all programs you will have a secure safety net.

There will be slightly fewer jobs, but they will pay better. Do I have your vote yet?

Under Cover

There is a lot to love by both sides of the aisle with my plans. Unless you are a tax professional you probably like my proposals.

It is unlikely I’ll actually be elected. Rumor has it a stark-raving mad crowd of accountants are approaching the Accountant farm as I write. With such a simple tax code with no loopholes, tax professionals are out of business. But then again, what did we produce? We manipulated a system created by man with no logical connection to reality. Very unproductive.

HUH!?

Was that gunfire?

 

More Wealth Building Resources

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Side Hustle Selling tradelines yields a high return compared to time invested, as much as $1,000 per hour. The tradeline company I use is Tradeline Supply Company. Let Darren know you are from The Wealthy Accountant. Call 888-844-8910, email Darren@TradelineSupply.com or read my review.

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.

Amazon is a good way to control costs by comparison shopping. The cost of a product includes travel to the store. When you start a shopping trip to Amazon here it also supports this blog. Thank you very much!

Why Banning Gays and Transgenders from the Military is Bad for Your Wallet

Hatred is in the air and it’s costing the nation plenty and a whole lot more to those who harbor the hate. The President has now banned transgender people from the military and the alt-right is cheering. And it’s a stupid idea.

It is easy to see how dumb this policy is if you think about it for even a moment. If we exclude gays and transgender people from the military because it might hurt morale, why not exclude these people from all areas of society. Think about it. We can complain when they work and complain when they don’t. We can really mess with these people.

But let’s not stop there, my Aryan Judeo-Christian friends. As long as we are excluding those we consider undesirable we need to name the groups we want out. The gays and transgender people are only the beginning. We had a little thing called the Civil War that started 156 years ago. The discussion was slavery if memory serves me right, but it might be fake news. Women gained suffrage in 1920 in the U.S. with ratification of the 19th Amendment to the Constitution. White men haven’t heard the end of it ever since.

Let’s take a tally. We want gays, queers, transgenders, blacks, Mexicans, women, and let’s not forget the Jews (of which a tincture probably runs through the author’s veins) from serving in the military. Basically, we only want white men in the military.

Here is why this is soooooo stupid. When the military is called to duty only white men will be on the line fighting for the nation. Inevitably some of these fine young “white” men will die. That will leave a disproportionate number of gays, transgender, black, Hispanic and other undesirables to spend time with, shall we say, white women.

It’s hard being a racist when you really start to think about it. Now we get to think about how it is killing your pocketbook.

Into the Foxhole

The argument for keeping gay and transgender people out of the military is still a powerful debate. Nothing drives more fear in a white man’s heart than being hunkered down in a foxhole with bullets whizzing overhead only to be interrupted by the sound of his buddy unzipping his fly. I get it. (Bad choice of words.)

You see, gay guys have to have sex with every guy they get within 10 feet of. Guys understand this. “Normal” guys have sex with any woman within arm’s reach. Right? No! Let me get this straight (another interesting word considering the conversation). A guy can be around a female and act like an adult, having an intelligent conversation with said woman without any possibility of coitus? Really? If this is true then it might be possible for a gay guy to not be in the mood while in the foxhole. And guys, you are not required to date the guy in the skirt. It’s optional!

To recap: Gay people don’t jump every human of the same gender!

Now listen close my tiki torch carrying friends. The problem isn’t with them; it’s with you! This is a personal finance blog and the United States prides itself as an economic leader. Therefore, we can state the facts and then correlate how it affects your wealth.

Some costs to your income and net worth are obvious. Getting your mug on the front page news spewing hate and engaging in violence can cost plenty in legal fees and losing your job doesn’t necessarily help the family budget. At least your hate for social programs like food stamps and welfare reduced to painfully low levels will be no safety net for you either. More important to keep taxes low. AND GET A JOB!

When did it become a battle cry to complain when people don’t work and to whine like a two year old when they do? If a guy wants to wear a mini skirt and high heels, who am I to argue. Klinger was in the military and things turned out okay. Of course with a doctor named BJ. . .  (What? M.A.S.H was a television show. Really? It’s wasn’t real? Get outta here!) It has come to my attention you should disregard this paragraph. —The Editor

My Favorite Color

The logic surrounding the recent increased violence in the United States is lost on this backwoods accountant. Business owners actually deny service to clients based on religious beliefs, the color of their skin or who they boink when the lights go out.

What really blows my mind is we want to keep certain groups out of the military while we need more hard working (I said hard working!) people to serve the nation in the military. Does this mean the tiki torch carrying crowd is marching to the recruiter’s office to sign up? Are they indicating their support for the draft? I’m confused.

Several years ago I had Lasik surgery on both my eyes. In my community there are several choices for this surgery. After careful research I concluded Dr. Alexander was the best doctor in the field locally. Eyes are important so I wanted the best. I paid above average to have my precious eyes see 20/20.

Dr. Alexander did an awesome job on my eyes. And he is black. I didn’t care; it didn’t bother me. And isn’t it like a white guy. As soon as the chips are down the black guy is good enough to bail my tail out. And if the good doctor happened to be transgender it would not have bothered me either. I wasn’t looking for a date; I wanted my eyes fixed!

I have gay clients, transgender clients, black clients, female clients, Hispanic clients and even Jewish clients. The one thing I can tell you about every one of them is this: They came to me for help and they showed me something green. Money green always grabs my attention.

In all my years of practice I never once asked a client (or employee) about their sexual orientation. They need tax work or business planning done and I’m the guy to do it. I don’t offer sexual services in my office.

My office manager is Puerto Rican. You should be glad she works for me! She keeps my tail moving in the right direction. My business would be less profitable if Karen were not there. Skin color never once entered the equation. It’s like my eyes; I hired the best and the best just happened to not be white. Who cares? I wasn’t there for a skin graft! I wanted my eyes fixed without incident. Dr. Alexander delivered.

When I see the rallies and violence over immigration I am appalled. We need immigration reform in the U.S. I agree with that. But the concept of ‘kick’em all out’ is butt stupid. They want to work! When has that become a problem?

We have real issues in our modern world. Income and wealth inequality are caustic problems begging for solutions. Nuclear weapons are aimed at our cities and territories and the best we can come up with is a wall? Our infrastructure is crumbling and the best our supreme leader can come up with is “ban transgender people from the military”. Our tax code is in desperate need of revision and instead of working on the problem we waste time pardoning an ex-sheriff who treated Hispanics reprehensibly.

Perhaps the reason we have anemic economic growth and a declining labor participation rate isn’t about some minority group we want to beat up on this week. Maybe the problem is white men. If white men have so much time on their hands maybe they should get a job or two so there are none left for the Mexicans. All I hear is “Kick them out”, but I see no white protestors lining up to fill the vacancies.

I am a white male and feel disgusted at the legacy my race is leaving. We seem to hate all who are not white and even hate anyone white who dares show kindness to anyone not white and male.

History is clear on this. It never ends well for the racists. It isn’t all that good for the rest of the crowd either. If you don’t believe me, research the late 1930’s to 1945. Hate only knows how to destroy. Hate is the acid which destroys the vessel which contains it. And it’s bad for business, jobs and personal wealth.

I do not care if my eye doctor is getting rich. I actually hope he is. He provided an incredible service to me and I fully expect he will enjoy the rewards of his talents.

I cheer on my clients. Many Hispanic business owners utilize my services. The biggest issue I have is communication. Sometimes I cannot understand what they are saying as their English is still spotty. Then Karen steps in and speaks Hispanic fluently. There is great respect between my non-white business owners and me. I want them to do well; I want them to win. When they thrive, so do I!

Over the years I have had a small number of transgender clients. There were probably more than I was aware of. In the 1970s and 80s the world’s leading sex change doctor worked at a hospital less than five miles from my office. A few of his clients wandered through my doors.

The hate has to stop. Yes, it can be uncomfortable when a transgender, gay, black, Hispanic, woman, et cetera is in the room under certain circumstances. You are an adult. You can deal with it. Uncomfortable usually means unfamiliar. Get familiar and the discomfort will go away.

A Final Story

Many years ago Mrs. Accountant and I were in Dallas attending a seminar. In our free time we enjoy visiting museums. We found ourselves at a museum with an IMAX theatre near the Cotton Bowl. Time got away from us and so did our ride. We were stranded late at night as the museum was closing. We had to leave.

This had all the hallmarks of a very bad outcome. This was before the days of cell phones and Uber. There was a pay phone inside the building, but no phonebook to find the number of a taxi service. I had money for the phone if only I had the number of a cab company.

I asked every person there if they could help. Each walked past annoyed at my interrupting their life until a black woman wandered near. She was tired and cranky after a long day of work. Still, she helped Mrs. Accountant and me find a taxi phone number. At that moment she was the most awesome woman on earth.

In the end it worked out. We got our cab ride back to the hotel without incident.

That is why I will never rally against any group of people. You never know when someone from a certain group will be your only salvation. A guy in a hot pink mini skirt helping Mrs. Accountant and me out of the bad situation would have been just as welcome.

Don’t hate, kind readers. Hate always ends in pain for all parties involved. My youngest daughter was born cisgender, a genetic defect where her gender was assigned at birth because her gender wasn’t apparent at birth. I love my daughter. God created her as she is. Who am I to argue with God? No one should hate her because of a gender issue.

If our nation faces a crisis I will not spend a second thinking if the people protecting my country, me , my family, friends and clients, are gay, straight, transgender, the color of their skin, ethnicity or religious faith.

When that day comes, and it always does, they will be the most awesome people to me no matter what their personal life is.

 

Note September 20, 2017: When I wrote this post I had been introduced to a new word about my daughter’s condition: cisgender. At first I thought this was the new “politically correct” way to speak about intersex children. It isn’t. I was using the term wrong as a comment below mentions. There are so many terms bandied around today to deal with gender and sexuality it is confusing even to a dad with a daughter born intersex. So, to clarify, the article above is correct as long as you replace cisgender with intersex. No matter what name society uses to identify my daughter’s condition, I still love her to death. She is my sweetheart along with her sister and mom.

 

The Mistake Obama and Trump Both Made

Eight years ago Barack Obama was hitting full stride in his first term as President. The economy was in tatters. The banking industry was only beginning to come to terms with the level of bad loans they had on their books. The largest insurance company (AIG) required a bailout to survive; the largest domestic automakers needed a bailout to preserve jobs; nearly every bank required assistance and every money center bank actually took assistance to weather the storm. This easily could have been another Great Depression.

So what did President Obama do in this desperate environment? Why, tackle health care reform, of course.

Every President has a short window of opportunity to build a coalition at the beginning of their Presidency to pass a key piece—or if lucky, several pieces—of legislation. These are the tough issues, things like major infrastructure investments and tax reform.

President Obama chose health care reform. The country needed, and still needs, major health care reform. The country also needed economic stimulus. Badly! Unemployment was high, income inequality was expanding at a rapid pace, while the nation’s bridges, roads, sewer lines and water works crumbled.

It was an honorable effort, but a tactical error that prevented any additional large, and necessary, legislation. (Yes, I am aware banking reform was passed along with other legislation. This will all become clear in a minute as I illustrate why the most pressing legislation never happened.)

And President Trump is making the exact same mistake.

A New Man

Presidents get two terms max in the United States. After eight years it is time to bring in some new blood. If you loved the old guy, wave goodbye nostalgically; if you hated him, bid him good riddance. President Obama served his two terms and it was time for the new guy. The American people choose (well, the electoral college chose) Donald Trump.

Break out the confetti. A new guy on the job means another opportunity to pass significant legislation early in his first term. And what did President Trump choose as his key legislation? Why, health care, of course.

You would think Trump would have learned from Obama how easily healthcare can bog down your agenda. A litany of problems to solve devolved into a serious fight extending longer than anticipated when Congress went to work on a health care replacement plan.

Obama was lucky. He was able to pass major health care legislation, the Affordable Care Act. It was an improvement, but far from perfect. Many more people now have insurance and pre-existing conditions no longer leave you uninsured regardless of ability to pay.

The ACA also has serious flaws which need addressing. Insurance premiums are exploding and many markets have few, and in some cases no, insurance choices.

Eight years ago I explained to anyone who would listen that President Obama was making a mistake when he addressed healthcare first while the economy is what really needed attention. Fix the economy and the money would be there for healthcare reform, even a single payer option so coveted by the Democrats.

Donald Trump ran on a platform promising four key things: immigration reform, repeal/replace the ACA, tax reform and infrastructure investment. All four areas need attention, no doubt.

President Trump addressed immigration with executive orders which ended up bogged down in the courts. And there was no wall erected. The wall was a stupid idea anyway. We don’t need a wall. Remember President Reagan? “Mister Gorbachev, tear down that wall.” The Republicans should have been listening to their leader.

Then came the real first attempt at legislation. Tax reform and infrastructure would have to wait (and wait and wait) regardless how necessary legislation was needed. Health care, and more to the point, repeal of President Obama’s key piece of legislation, was first on the list. Once again it was a stupid idea with expected results.

Obama was lucky. With the economy in dire straits he was able to muster the votes to pass the ACA. With a large part of his political capital spent and the midterm elections costing the Democrats the majority in the House, any additional major legislation was impossible. To hell with the American people, not to mention the world economy.

Time to Play Trump

Time to let President Obama enter the history books and play the Trump card. Obama is no longer President and has no hand in passing future legislation.

The issue here isn’t politics. Your opinion of Trump doesn’t matter. He is the President and if things are going to get done he has to take the lead.

Contractors install conduit lines at Kirkuk Regional Air Base, Iraq, as part of a foreign military sales effort being managed by the Electronic Systems Center’s 853rd Electronic Systems Group at Hanscom Air Force Base, Mass. (Courtesy photo)

By picking repeal and replace (or just repeal) of the Affordable care Act it was inevitable the President’s agenda would struggle in the deep quagmire of mud the runs down the halls of Congress. It was also the worst choice Trump could make.

Trump watched Obama spend every drop of political capital on health care while the Federal Reserve was the only game left in town to deal with the economic issues punishing the country. It was a bad choice then; it’s a bad choice now.

Since it is always easier to play armchair President, I will share what Trump should have done to save his Presidency. (Obama should have taken the exact same path and he would have kept the House and passed serious additional legislation of his liking.)

Trump has it all backwards. He is right about the issues needing attention. Health care and immigration are important. Tax reform is beyond desperate need. And infrastructure is embarrassing the nation as our roads and bridges crumble like those of a Third World nation. We can do better.

If Trump would have hired me I would have advised a different approach, one that would have given his entire agenda a fighting chance of being passed.

My advice to the new President would be this: Turn the whole process around. Attack infrastructure first. A trillion dollars of infrastructure spending would have caused an economic boom with plenty of good paying jobs here at home. The increased economic growth would not stop at the jobs dealing with the infrastructure. High-speed transportation (once again so we can join the 20th Century—you read that right), better roads and updated airports would increase productivity.

Business would boom for decades. Trump would be an easy two-term President with this single change of policy. The advantages to the economy would continue into the foreseeable future.

The tax revenue would pour into the government coffers! Now you have the money to fund health care initiatives and tax reform. Who would argue with a President who produces such success? He would have been a demagogue! (Opps! That part he covered himself already.)

Think about it. The only way to move forward in this country is to start doing things differently. President Clinton wanted to tackle health care out of the gate and went nowhere. Obama managed massive legislation on health care at the expense of the remainder of his agenda. Trump is nearly out (if he isn’t already) of political capital.

Trump’s only chance to save his Presidency is to do a 180 degree about face, dropping all issues save infrastructure.

The Republicans might actually go along with it; the Democrats would salivate over the prospect. The Republicans are so desperate for a win (or any legislation to pass Congress) this crazy idea might just work.

An Open Letter to President Trump

Mister President, it is time to stop screwing around. Stop hiring idiots with no training or idea on how to run the U.S. government, the largest organization on the planet. Stop draining the swamp! The swamp is there for a reason. Get rid of all the wetlands and the wildlife dies! Time to let the swamp do what it does best. Use that to your advantage.

Focus on infrastructure. Provide massive financial support to each state to fund projects of their choosing. Also demand certain projects get attention. The trillion dollars of spending is spread out over many years. The increased tax revenue will lessen the impact on the deficit, but make no mistake, the deficit will go up to pay for this.

We need high-speed rail and other advanced forms of transportation to compete with the world. It is time to pull out heads out of our arses in this matter. Time to act like a world leader instead of playing catch-up all the time. Use your unique way with words to get Congress to do the right thing this time.

Part of infrastructure is rolling out an overhaul of the electric grid and converting our society to renewable sources of energy. We can always sell our oil to countries less enlightened. We will lead the world once the transformation is complete with the lowest costs of production. Jobs will be outsourced around the world to the United States as we will be the best choice for business.

Solar and wind energy must be part of the mix. Considering the entire infrastructure program, solar and wind installations will be a small part of the expense. Battery storage and transmission lines must also be including in the process. This will bring down energy costs for the American people and businesses.

Tax incentives for businesses and homeowners to invest in battery storage technology and energy production will power the economy forward without the government footing the entire bill. Citizens and businesses will be partners with the government in transforming this great nation of ours.

The rapidly growing economy will be the envy of the world. The expanding tax base and increased government revenues will allow for tax reform, and (gulp!) dare I say it, tax cuts.

Health care will be easier to tackle once the real problem has been addressed. Hard to get emergency medical care when the road is so bad you can’t drive on it or the bridge is out.

Immigration is the least issue, but does require attention. We don’t need a wall; we need an effective partnership with our neighbors so they have opportunities at home. There is nothing wrong with allowing people from around the world (even Mexico!) to dream of coming to America. Isn’t that what it is all about?

Gives you that warm and fuzzy feeling, doesn’t it, Mister President? And it is all yours if you can find a way to put the swamp to work productively. You do know how to make deals, don’t you?

Or, if you prefer, we, the American people, can sit around all day and complain about your performance.

Here is How You Can Piss Off Donald Trump

Disclaimer: This is not a political rant! The time is ripe for this message and Trump happens to be President. It is meant as satire wrapped around a serious message you must follow or suffer the financial consequences.

Nothing is more fun than good times. The recent run in the stock market in nothing short of incredible. After years of slow growth economy and low inflation coupled with a rising stock market, the stock market has exploded. The chart has gone parabolic! But this is not a story about investing or the stock market, however. This story is about pissing off Donald Trump.

Promises of faster economic growth and more high paying jobs face reality after Election Day. President Trump has hitched his wagon to a promise of hyper economic growth, in the neighborhood of 4% or higher. Depending on the day, a lot higher. I’m guessing if things go well we can see wages double every three, maybe four, years. And the best part, no inflation while the government pays off the national debt and increases spending across the board. Such are the promises of politicians.

And in these “best of times” you think it will last forever. Think 1929 or 1987 or 1999. Oh, for the heady days on 1999 when broad stock indexes sported triple digit P/E ratios. How can you lose? The future is clear to the horizon. Life is good, just ask the government.

But you don’t like President Trump. Even those two words together turn your stomach. How can a misogynistic scoundrel, Russia loving, Mexican wall building, China hating, swindler like that be President? He said nasty things about your mother and you are not having it. You want to hurt the bastard (without going to jail). How dare he win an election without winning the popular vote! It isn’t fair! Do I have to write every sentence with an exclamation point? Guess not.

There has to be a way to rip the façade off the man who insults women and every known ethnic group. The only (somewhat) sacred demographic is white middle aged men and it is starting to look like a gay pride parade around here. Which, when you think of it, is another group the Trump camp hates! Your blood boils as you plot your revenge. You can hurt him. You can hurt the whole crowd of miscreants in the White House.

You begin to formulate a plan. A plan so devious they would give you the chair for it. (Actually, it might be a very nice, custom-made chair perfect for the sitting room, but I digress.) You can’t shoot the guy. They whoop up on ya pretty bad when you do stuff like that. Besides, the guy is too stupid to suffer as he goes so it is a nonstarter. You want something that hurts the bastard day after day with grinding and gnashing of teeth where he burns in hell forever and ever, suffering and screaming and . . .  ahhhhhhh!!!

I scared myself.

Revenge is a Dish Best Served Frugal

Then it occurs to you. You know exactly what you will do to punish the man who insulted the woman who brought you into this world. What you have planned is so devious even the devil himself will quake in your presence. You finally figured out how you can piss off Donald Trump daily till his dying breath.

President Trump prides himself a deal maker, an uber-successful business owner. Take away the one thing he prides himself in and you rip his identity from his skull and trample it in the gutter of flowing raw sewage. (Wow. Even I am impressed by my contorted words of bitterness. Look out Stephen King, you have competition.)

The plan is simple and costs less than nothing. All you do is stop spending. Only the most basic of needs are satiated. Debt is retired, bills are paid and then spending grinds to a halt. You start biking to work and preparing your own meals. The massive pile of cash you accumulate needs a home so you invest it in index funds. (You thought of buying gold, but your tax guy told you gold is not a good long-term investment so you took his advice and bought Vanguard index funds, you sly dog you.)

Your solo efforts are too small to dent the economy so you enlist an army to march to war against or the orange haired menace. You start a blog and preach early retirement, saving, investing, legal tax reduction and frugality. It starts slow at first, but before long the message spreads. Soon thousands, then tens of thousands, then hundreds of thousands, nay, millions of faithful followers heed your message of responsible spending and saving.

It becomes a cult for fucks sake! God help us all.

Only a few years into his Presidency, Donald Trump faces economic headwinds like never before. The economic effects were impossible to ignore. Household debt declines to levels not seen since the 19th Century. Yes, 19th Century. Interest rates and inflation remain low with the newfound frugal habits of respectable men and women the world over.

Jobs growth slows; GDP declines. You achieved your goal. You managed to piss off Donald Trump without breaking a single law. Not a one! (Well, okay. Except for the time you spray painted an orange mustache on a Trump election campaign poster. But, hey. It’s only illegal if ya get caught. Right? Oh, piss off, as our good friends in the UK would say.)

You grin with inner pride as you single handedly mount a worldwide army to destroy the menace from 5th Avenue. You secretly rejoice as the Republicans in Congress buzz like bees over the economic catastrophe.

Then the best part of all starts: 3 a.m. tweets! President Trump is so mad he can spit nails. The government is so pissed at you they forget about Snowden and put all their efforts against you. Trump demands you be brought before him.

People either love you or hate you. Half the world wants to protect you and crown you king while the other half want to mails little, itty-bitty pieces of you to the White House as a gift to the commander-in-chief.

Reaching your goal of pissing off Donald Trump sounded a lot more fun until he issued a fatwa against you via a Twitter storm. Why is he so pissed at me? you complain. All I did was tell people to pay their bills, retire debt and live the good life. I’m the good guy!!!

Run as hard as you may, the masses of faithful found you tucked away in your hole behind the farmhouse. They dragged your sorry ass into the sunlight to be exposed for the fraud you are. They stuff you into an SUV (a fucking gas-guzzling SUV!) and drive you to the capitol.

It is a long drive from Wisconsin to Washington D.C.  Crowds line the road all the way cheering their support. As you recount all your actions your heart sinks lower and lower. This is how it ends, you think to yourself. All you did was tell people to spend less than they earn, save, invest and act responsibly. Why do you have to suffer the consequences for your actions? Why?

The Big House

The brainwashed followers of President Trump grab you by either arm and direct you into the Oval Office. You are not getting away. When you see the great orange haired narcissistic demagogue you fall to your knees and start bawling, “I don’t wanna diiiiiiiie!” You inch forward on your knees until you are at the President’s feet.

You reach out and hug his left leg like a dog greeting his master coming home from a long day of work. You contemplate kissing his shoes, but decide a long painful death was more palatable than kissing Donald Trump’s loafers. It was a close decision, yet one you were still fully capable of making and adhering to.

Your world and life was at an end. A sort of calm came over you as you realized how quiet the room was. You stop sobbing, out of tears to shed. You accept your fate. It is then you realize you deserve everything you get. Telling people to save and pay off debt. Really! What the fuck were you thinking? It’s un-American!

New York Times

Special Edition

March 3, 2217

 

Today is the 200th anniversary of one of the most bizarre events in American history. A wealthy accountant from the backwoods of Wisconsin started a war against then President Donald Trump. He built an army of followers who cut their spending, saving and investing the difference.

President Trump knew his plan to build walls and raise tariffs would never work. When it looked like all his plans would fail, a savior rose from the backwaters of this great nation making America, yes, even the world, great again.

The message of this accountant resonated with the masses sick of living under the yoke of debt and poverty. He taught the people spending was the problem, not income. People started living better than ever before in history after his campaign of terror set the world free at last.

President Trump had no idea where the money would come from for his massive infrastructure rebuilding plans. More public debt or Federal Reserve money printing would only make matters worse. Then this crazy accountant came out of nowhere and saved the whole thing from collapse. All the saving people did provided the funding for the programs to make the human race great again.

Never before in history did people bike so much and eat healthier. People worked less and had more. The economy purred like a kitten. Before long debt collapsed around the world as people and nations discovered a new economic model that was sustainable. The world changed that day for the better.

Today we remember an American hero who showed us the way 200 years ago. Today in history, a wealthy accountant received the Presidential Medal of Freedom.

[Footnote: Conspiracy theorists claim the wealthy accountant was sobbing and groveling at the President’s feet prior to receiving the highest honor a President can bestow upon a civilian. This journalist finds that to be the crazy talk of radicals trying to sully the good name of a wealthy accountant who happened to live in Wisconsin 200 years ago. Never forget what he did for us.]

Serious endnote: I am writing this as the stock market roars higher and the promise of accelerating economic growth is in the air. This is a dangerous time. I’m not talking about the stock market; I am talking about your spending habits. Don’t drink the Kool-Aid. Going back to old spending and consumption habits will come home to roost later. If anything, now is the opportunity to double down on your wealth building program. Pay down debt if you have any. Max out tax advantaged accounts. Don’t worry about the current level of the market. There will be a times when it goes down a lot. As always, it will also rebound to new highs. Excess spending is a 100% loss you never come back from so keep a tight lid on consumption.

Finally, if you are in or near retirement, now is the time to fill the short-term fund to maximum. You should have at least two years of spending minimum in a safe short-term fund. Money markets, guaranteed bank deposits and short maturity Treasury bills will do the trick. Enjoy the ride.