New Radio Show - editorial, opinions - call me and voice your opinion

Tune in to Carrboro's radio station 103.5 FM every Friday at 11am for my show 'The Voice of Reason'

featuring editorials and opinions from our community and around the world. Some of my favorite topics include:

government, healthcare, taxes, climate change, gun control, the subprime mess, the war,

foreign policy, the economy, government spending, elections and the candidates, water... 


Today's topics 

1) Bill Clinton's charity and the implications on a third Clinton presidency.
2) The Israeli lesson on dealing with terrorists.
3) Letters to the editor

  • Global Warming - NOAA study says the oceans having been warming for over 100 years and may be the cause of the atmospheric warming
  • John Edwards unsuccessful presidential bid
  • Hit & Run Driver in Mini Cooper
  • Volunteers needed for Human Services panel call 732-8181
  • Please teach the super bowl players how to show proper respect during the playing of the national anthem
4) Waterboarding revealed - torture admitted 'but they were all bad'.
5) Complaint against lawyer dismissed for revealing confession of deceased. 



1) Presidential candidates past are never past - regardless of what they'd like to believe.

2) The gun lobby wins again and Virginia doesn't enact legislation to put an end to gun sales at gun shows.

3) Hugo Chavez shoots his mouth off and shoots his economy in the foot.

4) Save-A-Watt - the Duke Energy consumer rip off program.

5) County Taxes - need I say more. 

1)      Many subdivisions have deed restrictions that ban the use of clotheslines.  Saving energy shouldn’t be restricted by covenants.

2)      Letters to the editor

a)  Doomed to debt – budgeting isn’t cool, people spend too much and have access to too much credit

b)  Universal Healthcare in Massachusetts is waaaay over budget – this year’s budget was $472 million but they spent $619 million and next year’s cost is estimated at $869 million – an 85% increase over this year’s budget.  It is expected to exceed $1.35 billion by June 2011.  It is simply unaffordable.

c)  California is planning to send indigent patients to the private sector.  But wait, many doctors no longer accept Medi-Cal because the reimbursements don’t cover the costs.  But wait, the California legislature wants to reduce Medi-Cal budget by 10%.  These patients have no place to go but the emergency room.  If California can’t afford their current healthcare plan how are they ever going to be able to afford universal coverage.

d)  A lack of educational achievement and the implications in a global economy.
e)  If waterboarding is ok, let Bush be the first.

3)      Hillary’s ‘lowered expectations’.  Ten in a row leaves Hillary with an eroding coalition.  Apparently she’s not going to be ‘The Chosen One’.  What are her options?

4)      Progress in Pakistan – Musharraf and the Taliban lose in seemingly free elections.  The USA has an opportunity to show Pakistanis that we aren’t a fair-weather friend with the ouster of Musharraf.  The new government will need our help to gain a foothold against corruption and terrorism.

5)      NIU Student Shooting – readers speak out on the reasons why.
They want media attention, we need less guns, we need more guns, mental illness is the cause, we need to raise our expectations for our children, children of the 60’s are to blame because of excessive permissiveness, the 1980’s decade of selfishness, abortion is the root cause, the internet is responsible because it eliminates human contact, we need to get back to more moral living, the assassination of JFK took away our dreams, it’s men who are doing the killing – we need to ask what’s wrong with men, bullying is the problem, depersonalization and desensitization because of video games,  the devil is responsible, our living conditions are overcrowded causing society to break down, people can’t handle disappointment, people become unhinged, all the shooters were people using drugs prescribed by a doctor, boys aren’t raised to be sensitive.
1)          Defense Budget - The future of our country is being held hostage by the budget deficits, military spending and trade deficits.
2)          Disabled veterans deserve treatment for mental disabilities as a result of their time in the service.  Today the disability claim process doesn’t include treatment. We can do better.
3)          RalphNader.  With only a few anticipated votes what’s his agenda?
4)          Criminals- In 1988 there were approximately 700,000 people in US prisons.  Since then the prison population has exploded.  In 2009 we will release 700,000 prisoners – as many as the entire prison population in 1988.  Historically 2/3 of released prisoners will be rearrested.  That means there will be another nearly ½ million crimes in 2009 from release prisoners alone!
5)          The North Carolina Health Care System is broken.  The mental health reform enacted in 2001 appears to need reform.  The 2006 budget for community services was $5 million per month.  The actual cost was $90 million per month.  That’s 1800% OVER BUDGET.  We need community services but we also need to control costs.
  • NAFTA – the democratic candidates were vilifying NAFTA, but the facts don’t support vilification.  According to the Ohio Department of Development more than a quarter million Ohio workers earn their living from exports.  Since NAFTA was enacted the US has added 26 million additional jobs and real wages & benefits have increased 23%.  Economists believe the loss of manufacturing jobs is the result of increasing automation and productivity.  It would appear that our democratic candidates are pandering to organized labor who blame NAFTA for the declining numbers of union workers.  But the truth is that rolls of unions began declining in the 1960’s reflecting the beginning of the transition from a manufacturing to a service and technology economy.

  • Tony Rezko – Who is this guy?  What’s his connection to Obama?  What money has changed hands between Obama & Rezko?  Why would Obama pay Rezko above market for vacant land?  What favors was Obama trying to repay?  What favors did Rezko do for Obama?  It appears that Rezko helped Obama buy a $1.6 million home for $1.3 million.  There are many unanswered questions about this relationship just as Rezko’s trial kicks off in Chicago.

  • Big Oil kills tax credits for wind, solar and other renewable fuels.  The tax credits would’ve cost $17 billion over the next 10 years so Congress asked for the elimination of $17 billion in tax breaks for oil & gas companies.  Unfortunately that was a deal breaker.  Big Oil put pressure on Congress and they caved.  Big Oil made $145 billion in profits last year.  Surely they can afford a reduction of $1.7 billion in tax credits.

  • The mortgage mess – Treasury Secretary Henry Paulson Jr. said, “Most of the proposals I’ve seen would do more harm than good.”  Do we really need another Savings and Loan bailout?  How would we distinguish between the speculators and those who simply got in over their head.  How can we bail out homeowners without bailing out the banks.  Should we bail out the banks?  Should we bail out Wall Street?  A government intervention is a band-aid on an underlying cancer and the only cure for the cancer is the free market system.  Let’s not make the cure compound the problem.
  • On Jan 15th on New Hampshire Public Radio, Senator Clinton said “It’s clear, this election they’re having is not going to count for anything.”  She was referring to the Jan 15th Michigan presidential primary.  Now that the Democratic National Committee is enforcing its own rules people are crying disenfranchisement.  There was no crying when the flouted the rules and moved the primaries up, but now that they are suffering the consequences they cry.  It reminds me of another politician who is crying – he doesn’t seem sorry about what he did but rather sorry that he got caught.  If the DNC lets FLA & Michigan back in what does that tell everyone – it’s ok to break the rules?

  • Technology is pervasive in our schools but has it provided the much needed improvement in our educational process?  Apparently not if you compare our kids to those of other countries.  So what’s wrong?  How can we realize the potential of our technology?  We have vast resources available – internet, video, Powerpoint, interactive learning tools etc. - and yet we can’t seem to consistently harness the power of the tools.  

  • How much do you pay for your car insurance?  If you’re a safe North Carolina driver without tickets or accidents the answer is TOO MUCH.  That’s right.  The insurance industry has a pretty sweet deal on their hands.  They shove people into the ‘Reinsurnace Facility’ that aren’t risky drivers and collect a fat 50% commission on their liability premiums.  Insurance companies are not required to disclose why or when a driver is sent to the facility – that’s a secret!  Some insurance companies send over 90% of the policies they write to the Reinsurnace Facility.  Do we really need to pay 50% commissions?  We need better transparency in this process.

  • The Columbian democracy launched a counter-attack against the Revolutionary Armed Forces of Columbia (FARC) when they retreated into the Ecuadorean jungle.  The raid was successful and they captured the laptop of one of the leaders.  On the laptop were several pieces of highly disturbing evidence.
    1. Payments from Venezuelan President Chavez to the terrorists - $50 million already and another $200 million to come later.
    2. Suggestions that FARC was trying to acquire 50 kilos of uranium for a ‘dirty bomb’.  That’s a lot of uranium!
    3. A promise that FARC would fight the US if necessary.
    4. Planned weapons transfers from Venezuela to FARC.
    5. Chavez plans for destabilizing Columbia.
    6. A thank you note from Chavez to FARC for the $150,000 the terrorists sent Chavez while he was in prison after his failed coup d’etat.
  • State funding of terrorists is a violation of the UN rules and carries severe penalties and sanctions.  It seems that Chavez is outraged that Columbia would counter attack.  Once again, it seems that he isn’t so much outraged about the attack as he is about getting caught funding terrorists.

From one WCOM volunteer to another, thanks for your support and dedication!


“Until the great mass of the people shall be filled with the sense of responsibility for each other's welfare, social justice can never be attained.” Helen Keller

  1. David Walker resigned as Comptroller General, the head of the Government Accountability office.    David warns that if we don’t do something about the national debt, already $9 trillion, that the future role of government may be nothing more than sending out social security checks and paying the interest on the debt.
  2. With all the campaign rhetoric about healthcare has anyone looked at the way healthcare works – find it and fix it.  Rather than focus on staying healthy we focus on fixing the problem after it has arrived.  The financial incentives for doctors are backward – they don’t get anything for helping people stay healthy, they make big bucks performing operations and providing services for people who are ill.  We spend $2.2 trillion on healthcare!  It is predicted to double in 10 years – and that is without paying for the 47 million uninsured!!  How could we possibly afford that without a complete restructuring of our healthcare system.  Chronic diseases like heart disease, cancer and diabetes account for 2/3 of all health care expenses.  Diet and exercise would go a long way toward eliminating many of those chronic cases.
  3. Hillary Clinton has finally released her records from her white house days.  Or has she?  It turns out the archives have turned over 10,000 pages to the Clintons for their review before releasing the documents.  And what about those 140 last minute Clinton pardons?  Hundreds of pages have been withheld.  What about the documents pertaining to the Clinton Foundation?  Nope sorry.  What does she have to hide and what will it accomplish by waiting?
  4. Ethanol, it turns out, isn’t as green as many would have us believe.  It takes a lot of heat and water to produce ethanol.  In the end the net gain isn’t that great.  With the water shortage in the Southwest and Southeast can we really afford to use 3 gallons of water to produce 1 gallon of Ethanol?
  5. Eve Carson.  What a tragedy.  She was president of the student body.  A wonderful person.  Apparently murdered by two people who should’ve been behind bars for parole violations.  The criminal justice system failed to keep up with the accused.  More than 10,000 people showed up for her memorial at the UNC campus. 
Here are the topics for this week’s radio show.  I’ve changed the format somewhat to include some of my own perspectives.

  • Bill Gates testified before Congress that we need to allow more skilled foreign workers into the US.  In other words, we don’t have enough highly educated workers in the US.  My question is why?  Don’t we have enough smart people in the US?  Don’t we value education enough?  If you listen to our politicians they tell us we have a surplus of workers so it can’t be that we don’t have enough people.  What can we do to inform people about these opportunities so that these high paying jobs can be filled by US citizens.

  • The Obama speech.  It was a great speech.  His oratory skills are incredible.  But his actions speak louder than his words.  He sat by while his pastor damned America.  He sat by while his pastor accused the US government of giving drugs to black people to enslave and imprison them.  He sat by while his pastor accused the US government of inventing HIV “as a means of genocide against  people of color”.  These are just a few of Rev. White’s wild accusations.  You can view them yourself on YouTube.  Rev. White preached hate.  He preached hate against white people.  I can understand that someone of his age can’t get over the hurt, but why is he passing this hate onto the next generation.  Why is Obama not condemning the Rev. and attending another church?  Why is Obama subjecting his children to the Rev’s hate message?

  • Hillary’s response to Spitzergate, “best wishes”.  As First Lady she spent much of her career campaigning against prostitution and global sex trafficing.  She condemned “the heinous practice of buying and selling women like commodities”.  So why was her reaction to Spitzer to remove his endorsement from her website and give him best wishes?  Apparently it’s political.

  • The time has come to change the way we view crimes with guns.  Here’s a fresh idea for crimes with guns whose time has come.  If someone shoots a gun during a crime they need to go to jail, it shouldn’t matter if they miss.  If someone shoots a gun at your head but misses should they go free or get a reduced sentence because they’re a bad shot?  NO!  Instead of focusing on the outcome of the crime we need to look at the ACTION of the CRIME.  How does this sound for punishment?
    1. Carrying an illegal firearm – 5 years in prison
    2. Committing a crime with a firearm but not discharging it – 20 years in prison
    3. Shooting at another person, regardless of outcome – life in prison
       We can debate the merits of this plan and the sentences but one thing is certain.  The current plan isn’t working.

To listen via the internet - Google WCOM & click on the first link, or click here and then click on the ‘Streaming Webcast’ icon in the upper right hand corner.

Here are the topics for this week’s radio show.

  • Hillary Clinton is being asked to withdraw her bid for the Presidency by
many in the democratic party.  Both Howard Dean, Chairman of the DNC and
Nancy Pelosi, Speaker of the House have put pressure on Clinton.  Why?
Neither she nor Obama have enough delegate to win the nomination.  In fact,
even the delegates they have won don’t have to vote for them at the
convention – believe it.  Why not go to the convention for the final
decision.  Anything less would be undemocratic.  Besides there’s a lot of
time between now and the convention.  Know knows what exciting information
we’ll hear about Tony Rezko, Rev. Wright, Obama’s 100+ present votes etc.

  • Lenin said that when a lie is repeated often enough it becomes truth.
Unfortunately that is what is happening to McCain's comment about have a US
presence in Iraq for 100 years.  He also said that he would support that
position provided Americans are not being injured, harmed, wounded or
killed.  However, that part is unfortunately being left out.  He compared a
US presence in Iraq to the presence the US has in Japan, which is 75% funded
by the Japanese – and has been for the last 60 years.  The Demoncratic party
has turned this statement into a sound-bite lie and the media is dutifully
repeating it until it becomes truth.

  • What takes 3,000 lives per day that we have a great degree of control over?  
That’s right – 3,000 per day or 1.2 million casualties per year or 6 million
casualties over the last 5 years.  Let's put that number in perspective,  
----In the five years we've been in Iraq sadly we've lost 4,000 soldiers.
----Also during the last 5 years we’ve had 100,000 murders on the streets of
the US.  The US can be a very deadly, dangerous place.
----The death rate for this killer is equal to the number of people we lose to
heart disease 650,000 and cancer 550,000 every year.
What is this potentially preventable killer?  The automobile.  During the
last 5 years the US automobile has killed 200,000 people on our highways and
injured another 2 million people.  The vast majority of the 6 million killed
during the last 5 years have been in developing nations.  If you think it is
problem now, just wait until China and India develop their middle class with
billions of drivers.  We can dramatically reduce the number of people killed
by the automobile.  Just because it isn't a problem for you doesn't mean it
isn't happening.  Millions more will die needlessly unless we take action to
improve highway and automobile safety around the world.

  • No Child Left Behind (NCLB) has a bad rap.  People complain about the
testing but how can you improve if you don't test?  How do you know where to
focus your efforts, where to invest your time & resources?  People complain
about underfunding but we spend an average of $10,000 per child on primary
and secondary education.  People complain about the burdensome requirements
but NCLB isn't mandatory unless you want federal funding.  People thought
requiring certified teachers would improve education but there is no
evidence that certification results in better effectiveness.  There are lots
of certified teachers who do a bad job of teaching.  How will we know who
they are unless we test for it.  It seems to me that the ones who are
complaining the loudest are the ones who have something to hide.

To listen via the internet - Google WCOM & click on the first link, or click
here and then
click on the ‘Streaming Webcast’ icon in the upper right hand corner.

If you read an editorial or opinion that you think would be good to include
on the show please let me know.

As always I appreciate your feedback.
At a fundraiser on Sunday night the freshman Senator from Illinois told a crowd of supporters, “ foreign policy is the area where I am probably most confident that I know more and understand the world better than Sen. Clinton or Sen. McCain."  Sen. Obama did not clarify what experience he has that provides for this understanding.  Let’s review his job performance.  He has yet to hold a policy hearing for the European & NATO foreign relations subcommittee that he chairs.  Add to that the 100+ ‘present’ votes leaves me wondering why he doesn’t want to take a stand.  Then I think about the amount of time he’s spent running for President and it seems to me that all he’s been doing since he got into office is running for President.  How does that provide him with foreign policy credentials?  Sounds like sniper fire to me.  Nevertheless I’m sure there will be a smooth as silk speech to explain his comments and all will be well again with Obamamania.

Less than 8 weeks of school remain until another round of high school graduation ceremonies.  But wait.  In a report from the ‘America’s Promise Alliance’ only about half of students from America’s 50 largest cities graduate high school.  How can that be true in America?  What’s going on?  If we are going to compete in a global economy we need more college grads.  India has more PhD’s per capita than any place in the world and they’ve got a lot more people than we do – aren’t we smarter than Indians?  Bill Gates and other high-tech companies have lots of high paying jobs for educated people and he told Congress that if you can give us educated workers we’ll take our jobs to countries that will.  There’s nothing holding our corporations in the United States as we’ve seen from the exodus of manufacturing jobs and the movement of corporate headquarters (corporations are moving because we tax our them to death and they simply leave and set up shop in another country with more favorable tax laws not necessarily because of a lack of workers).  If we are to succeed into the next century we must have an educated workforce.  Why is our high school graduation rate so low?  What will these kids do for work without even a high school diploma?  What is it about our culture that is causing this problem.  A good education provides a solid foundation for future success in the workforce.  What’s not to understand?  If you think it is bad for the general population look at the African-American population.  According to the APA report.  Only 25% of African-American high school students enroll in college and most of those in two year programs.  Only 37% of African-American college students graduate.  Do the math and you’ll see that less than 10% of African-American high school students graduate from college.  We can do better than that.  We must do better than that.

Only 4 days left until your taxes are due.  Yuk!  I don’t know about you but I would love to be in the Clinton’s tax bracket.  They made over $100 million since leaving the White House eight years ago – that’s a big hunk of dough.  The part that I liked best was the $15 million consulting fee from Burkle’s Yucaipa firm.  I’m still trying to figure out how to make $15 million in consulting while touring the world giving speeches worth $50 million.  What did Bill do that is worth $15 million.  I’m sure Burkle didn’t give the money away, he must have gotten something in return.  I’m pretty sure we’ll never know.  The Clinton’s have been very generous with their charitable contributions, but wait.  It seems that most of the donations were to the various Clinton foundations.  Isn’t that interesting.  So what did they use the money for?  Seems they didn’t spend much at all until after Hillary announced her bid for President.  Then it seems they were able to find many worthy causes that just happen to coincide with primary elections.  Now that’s interesting.  If you want to know the true motives just follow the money.  I can’t wait to see the records of who donated what to the Clinton’s foundations.  I wonder how many of the almost 140 last minute Clinton pardons we’ll see on the donor list.  We know for certain that at least one of the last minute pardons are on the donor list to the foundations as well as Hillary’s campaign.

John McCain gave his big economic speech this week in Pittsburgh.  One of the highlights in my mind the was optional flat tax for individuals.  If you have a lot of deductions you could still use the existing system.  I think this is a great first step toward a more enlightened tax code like the FairTax.  McCain also talked about cutting corporate tax rates from 35% to 25%.  The US has the 2nd highest corporate tax rate in the developed world after Japan.  If you think jobs are going overseas now, if we don’t reduce corporate taxes they exodus of jobs will accelerate.  There is nothing holding corporations and all those high paying jobs in America.  McCain also talked about a one-year pause on INCREASES in discretionary spending.  About time!  He also talked about vetoing any bill that had earmarks.  Also, about time.  The one thing he didn’t talk about was inflation.  We are looking at $4/gallon gasoline prices because we have a weak dollar.  By keeping interest rates low we are devaluing the dollar and THAT is causing the price of oil to go up by devaluing the dollar.  The inflation we are experiencing today is a direct result of a weak dollar.

Some suggestions for Barack Obama.  First, Barack says he wants to increase the income tax rate to 39.5% and raise the cap on payroll taxes.  Taken together it means that the top rate on income would exceed 50%.  Barack also wants to raise the tax rate on dividends to 39.5% and the rate on capital gains to 28%.  Over the last 40 years when capital gains rates are low the treasury actually receives more tax revenue.  Something to consider when thinking of raising the capital gains rate.  Barack wants to create economic equality through income redistribution – taxes.  The track record for that type of socialist approach hasn’t been very good.  

Rather than raising income taxes I propose that we raise the gas tax to $1 per gallon.  So that we don't hurt the economically disadvantaged I suggest we give everyone making less than $100,000 per year a pre-rebate.  The pre-bate would be an amount equal 100% to the extra cost a family would incur because of the increase in the gas tax.  As income rises the 100% figure would decrease until it is fazed out at $100,000.  For a typical family that drives 12,000 miles per year and gets 20 miles per gallon they would get a check for $600, an amount equal to the additional gas tax they’d pay.  With the additional money we raise through the gas tax we could spend the money to rebuild our crumbling national infrastructure.

This plan would have many benefits:
  • Encourage energy conservation
  • Encourage use of public transportation
  • Reduce unnecessary trips in the car
  • Encourage use of car pooling
  • Provide high paying jobs to rebuild our infrastructure
  • Reduce the cost of a barrel of oil because demand would go down. 
The topic for this week's radio show is Free Trade - NAFTA and the Columbian Free Trade Agreement.

With our Presidential candidates talking about renegotiating our NAFTA agreement I thought it might be a good idea to look at the economics of NAFTA.

$58 billion of the $62 billion NAFTA trade deficit is from energy imports, not manufacturing.

Excluding oil & gas our foreign trade deficit with NAFTA has grown only $4 billion since 2000 while our non-NAFTA foreign trade non-energy deficit has grown by $150 billion.  If we had the same agreements with the rest of the world as we do with NAFTA our trade deficit our would have grown only $25 billion instead of $150 billion.

The addition of 30 million jobs in the US since NAFTA went into effect makes the 'giant sucking sound' an hollow argument.

So why are our politicians so intent on telling voters they want to renegotiate NAFTA.  They're trying to convince unions that they can get their manufacturing jobs back.  But the question is how?  How can our corporations afford to pay a US employee $90/hour ($50/hr wages and $40/hr benefits) to put lug nuts on a Chevy when they can get people in other nations to do it for $1/day.  The answer is they can't.  Perhaps that is why someone from Obama's staff told the Canadian Prime Minister that Barack wasn't serious about renegotiating NAFTA.  Perhaps that is also why Clinton's Chief Strategist met with Columbia to assure them that the trade agreement would go through.  The staffers could always be thrown under the bus if word got out, meanwhile the message has been delivered.

Speaking of Columbia the stakes there are even higher than they are with NAFTA.  Columbia is between a rock and a hard place.  Venezuela and Ecuador, Columbia's leading trading partners, have stopped trading with Columbia, trying to destabilize the democratic Columbian government.  Nancy Pelosi wants to change the procedural rules under which the US negotiated the agreement.  Her excuse is that it usurps her right to schedule legislation.  The result is that in all likelihood there will be no vote on the Columbian agreement this year.  The result leaves Columbia without the vital support it needs at a difficult time.  Columbia has worked hard to support the US in the war on drugs and fighting terrorism.  This would provide them with valuable political as well as financial support.  The agreement is good for the US as well.  It will remove the Columbia import duties on our products - some of which are as high as 80%.  Since our products will cost less to Columbians they in all likelihood will purchase more of them.

This week's topic is healthcare.

Let’s review the presidential candidates positions:

On Healthcare Coverage:  Obama & Clinton favor mandating insurance coverage, McCain proposes tax incentives.

On Insurance Companies:  Obama & Clinton favor new regulations, McCain wants to avoid direct regulation.

How You Will Get Coverage:  Obama & Clinton favors the current employer approach, McCain would shift to an individual approach.

Can we afford universal healthcare coverage?  Look at Massachusetts.  They mandated coverage.  They are at least $100 million over budget, some estimates go as high as $300 million.  Patients have long waiting times to see a doctor.  You may have to call 50 doctors before you find one that is taking new patients.    Massachusetts has 4 world class teaching hospitals and a solid healthcare infrastructure.  If a small state like Mass can’t make universal coverage work, what makes the candidates think they’ll be able to make it work on a national scale.

The candidates tell us that they’ll be able to pay for it with various strategies.  I say, implement the strategies, demonstrate that they save money and then spend it on healthcare.  Don’t spend the money before you’ve saved it.

What’s wrong with the Medicare model?  Perhaps we could use that.  The secret that none of the candidates is addressing is that the Medicare funding problem is even worse than the Social Security problem.  Nothing is wrong with the delivery of service, the problem with Medicare is that it has the potential to bankrupt the country.  

Why can’t we afford healthcare in this country?  Because costs are out of control and our model for providing healthcare is all wrong.

What’s wrong with our model?  

  • The more tests doctors perform the more they get paid.  They’re like sales people – do you want that colonoscopy?  If not you’ll die?  Who wouldn’t want it.  Yes, please doc, give it to me.  I don’t want to die.  Sales doctor.

  • If a doctor successfully treats a diabetic the doctor will receive their $200 a couple of times a year.  But if the diabetic doesn’t do well and needs to have a leg amputated the doctor will make thousands.

  • Our system of incentives and rewards is riddled with conflicts of interest.

How are our costs out of control?

  • What is the average cost of a 15 minute consultation with a Doctor in NY?  It’s $200.  That’s $800 per hour or $1.66 million per year for a 40 hour workweek.  That’s just for office visits.  It’s a lot higher than that for exams and surgery.

  • How much does the cancer drug Tarceva cost?  $4,000 per month and on average it offers patients only a few extra weeks.

I personally went in for a nuclear stress test earlier this year.  It took about an hour.  The bill was over $3,100.  I have insurance but my portion was still over $500.

Why was my portion so high?  Because the insurance company only pays what is ‘reasonable and customary’ and I’m responsible for the rest.  Who determines what’s reasonable and customary.  Why, the insurance company of course.  Sad but true.  The company Ingenix the primary provider of that ‘reasonable and customary’ data to health insurers.  And guess what, Ingenix is owned by United Health, one of the nation’s largest healthcare insurers.  Tell me that isn’t a problem.

Our pharmaceutical companies are the biggest sales people of all.  You can’t watch anything on TV without see an ad for a new medication.  I have heartburn.  Do I really need Zantac or will Alka-Seltzer do?  They tell me if I don’t take the Zantac the heartburn might be acid reflux and do permanent damage.  And how about those side effects of all these products.  Many times the side effects sound worse than whatever they’re trying to cure.

To listen via the internet - Google WCOM & click on the first link, or click here and then 
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The topic for this week's show is taxes.

Our presidential candidates have donned their thinking caps and come up with a solution to high prices on gasoline.  Elimination of the 18.4 cent federal gas tax.  Genius!  Let’s do the math.  Suppose you’re going to drive 2,000 miles this summer.  If your car gets 20 miles per gallon then you’ll burn 100 gallons of gas this summer.  The upside is that eliminating the 18.4 cent federal gasoline excise tax will save this driver $18.40.  The downside is that it may encourage people to drive more which would increase demand and may actually increase the price of gas.  It will encourage production of greenhouse gases and do nothing to reduce demand for gasoline.  Demand for gas is going up, because of our gas guzzling SUV’s and because of the rising middle class in China and India.  The only way to reduce the price of gas is to reduce demand.  The only way to reduce demand is to increase the price of gas.  I support the idea of increasing the gas tax 10 cents per year for the next 10 years.  So that we don’t hurt the economically disadvantaged we can offer them a prebate.  We can use the additional tax revenues to invest in ‘clean/green power’ and rebuild our infrastructure.

Speaking of investing in clean power.  We are losing clean/green jobs to other countries and we are also missing a huge opportunity to reduce our dependency on foreign energy.  While our politicians bicker about incentives for wind and solar power those incentives are scheduled to expire at the end of this year.  Rather than let them expire we need to expand them.  It costs about $5,000 for a residential solar hot water heater.  It takes 7 to 10 years to earn a payback on that installation.  The average household spends 35% of their energy bill on heating their hot water.  Imagine how much energy this country could save if every home in America had a solar hot water heater.  At $5,000 the solar water heater is unaffordable for most, but with tax incentives we could easily install one on every home in America.  Now that is something that would have a positive effect on our energy dependence.

Our North Carolina politicians are in high gear talking about increasing taxes to provide for a better ‘social safety net’.  Between 2000 and 2005 North Carolina spent over $50 billion on North Carolina social programs.  In FY 2006-7 the total was 14.2 billion on an estimated total of 2.4 million people.  If you do the math it means every family of 4 should have received approximately $22,000 worth of services every year.  If you ask the recipients of those services if they got their $22,000 worth I’m sure the answer would be a resounding no!  So what’s the solution?  I say instead of having the needy wade through the bureaucracy at the Department of Health & Human Services, let’s just send them a check.  When you think of government efficiency, think of the DMV.  No wonder the needy aren’t getting their $22,000 worth.  We don’t need more taxes.  We need smaller government.

Our politicians love their sin taxes and in New York city they just raised the cigarette tax again.  It will go into effect July 1, when the price for a pack of cigarettes will be $9.  Let’s do the math.  If you smoke 2 packs per day that’s $6,570 per year.  In order to spend $6,570 you’ll have to earn $10,000 per year so that you’ll have $6,570 left after you finish paying your federal taxes, state taxes, social security taxes, medicare taxes etc.  You’d think that NYC would be raking in the tax money.  But no.  City and state records of tax-paid cigarettes indicate sales are plummeting, even though smoking rates have remained the same.  What’s going on?  Smuggling.  Profit on a semi of smuggled cigarettes is $1 million.  Stealing a semi is more profitable than stealing an armored car – and less heavily guarded.  Are the taxes having the intended effect of raising revenues?  Doesn’t look like it.  Instead it is providing the mafia, organized crime, gangs and even terrorists with revenue to finance their illegal operations.  The profit potential is so great it has every form of criminal involved in cigarette smuggling.  Instead of raising revenue, it is raising the crime rate and making our streets more dangerous as criminal organizations increase their numbers and battle for turf.  It is moving more money into the underground economy avoiding taxation altogether.  It is also supporting criminal organizations by providing them with profits.

This week's topic is illegal immigration.


Big news this week.  North Carolina decided not to allow illegal immigrants to attend community college.  The legality of the decision aside, it raises the question, whatever happened to illegal immigration as a primary topic of the Presidential Candidates.  Remember when Hillary supported the idea of giving drivers licenses to illegal immigrants New York?  She spent weeks on damage repair.

So why aren’t we discussing illegal immigration?  All three candidates basically agree on the 3 key issues – 1) a path to legalization for illegal immigrants, 2) penalties for companies that hire illegal immigrants and 3) securing the border.  They all supported the Bush-backed immigration reform legislation that couldn’t make it through Congress.  So why can’t we move forward on this issue?  The answer - lack of political fortitude.

So now the states are working with Homeland Security to move forward on illegal immigration.  Homeland Security has authorized local authorities to enforce immigration laws via the 287(G) program.  Previously that was the exclusive purview of the INS.  You’ve probably seen Sheriff Joe Arpaio from Phoenix, AZ on TV rounding up illegal aliens and putting them in jail until they are deported.  Many have criticized his actions, but the feds have reviewed his performance and deemed his actions appropriate.

Arizona isn’t the only state moving forward with legislation to deal with illegal aliens.  Oklahoma has a new law that terminates taxpayer funded benefits for illegal aliens, empowers state and local law enforcement to detain illegal aliens for deportation and requires businesses to verify employment eligibility or face serious financial consequences.  80% of Oklahomans support the new law and it appears to be working.  Reports indicate that illegal aliens are leaving Oklahoma in droves.

It would appear that as US citizens we are of two minds regarding illegal immigration.  On the one hand we embrace the idea of immigration.  What we don’t embrace is the idea of illegal immigration.  Even so, we are willing to provide a path to citizenship provided the immigrants meet certain criteria.  What the majority of American’s apparently don’t like are the things that promote multiculturalism or not assimilating to the American culture.  So long as immigrants are willing to assimilate to the American culture, learn our language and obey our laws we welcome them with open arms.

The topic for this week’s show is entitlements.

The Farm Bill passed by Congress, while not an entitlement in the traditional sense of Social Security, Medicare and Medicaid, the bill in its current form is essentially welfare for the wealthy.

65 cents of every Farm Bill dollar goes to the wealthy.
6 Senators and a handful of Representatives have received $6 million in farm subsidies.
Scotty Pippen, David Letterman, David Rockefeller and Paul Allen (co-founder of Microsoft and uber-billionaire) all receive farm subsidies.

Farm income is up 56% over the last 2 years.  2008 estimated farm income is a whopping $92 billion.

Farmers who earn up to $2.5 million per year are still eligible for subsidies.  When President Bush requested a reduction in the income limit to $200,000 his proposal was rejected outright.

The NY Times called the bill disgraceful and the Wall Street Journal called it a scam.

Congress has once again proven they can’t be trusted with taxpayer money.  The states have scammed Medicaid reimbursements for $42 billion over the last 10 years.  The Government Accounting Office has documented these scams going back to the Clinton administration.  The proof of fraud has been given to Congress.  But instead of doing something about it, Congress forbade enforcement of the anti-fraud rules – they slipped that little goodie into the Iraq War funding bill.  No wonder the Congressional approval rating sits at 12%.

How do we solve the entitlement crisis.  Yes it is a crisis.  Entitlements will consume 40% of our ECONOMY in 20 years.  In 2007 we collected $2.4 trillion in taxes on a $14 trillion economy.  In today’s terms it means we would have to nearly TRIPLE our tax collections in order to pay for those existing entitlements.  That is just the existing entitlements, it doesn’t include promised entitlements like universal healthcare.  The Congressman from Wisconsin has proposed legislation called “A Roadmap for America’s Future” that will address the entitlement crisis.  Is it perfect?  No, but we need to address the difficult issue off entitlements and this bill is a good starting point.

If you listen to the democratic candidates they’ll have you believe that they can simply tax the rich to pay for the entitlements.  Unfortunately it won’t work.  A 50 year research project shows that wealthy people are highly tax averse and will simply invest elsewhere in the world that has a more friendly tax environment.

The Senator from Illinois has promised that he’ll increase the capital gains tax even though he knows it will produce less revenue for the federal government.  Who will pay the price for the increase in capital gains?  The 100 million middle-class American’s who own mutual funds.

So much for taxing the rich.

Rising food prices have caused riots around the world.  The president of the World Bank warned that 33 nations are at risk of social unrest because of rising food prices.

As Americans we take access to food for granted.  Even the lowest income Americans spend only 16% of their income on food while people in other countries spend a majority of their income on food – for example Nigerian families spend 73% of their income on food, Vietnamese spend 65% and Indonesians 50%.

Food prices have almost doubled in the last 3 years – sending many of the world’s poor to bed hungry.  There are an estimated 350 million children who suffer from malnutrition.

More than 3 billion people in the world depend upon rice as their primary food source.  Yet, many misdirected governmental policies are contributing to escalating food prices and food shortages worldwide.  The global food problem is not caused by falling food production as some people have suggested.

  • Japan’s government imports 8% of the rice it consumes in order to comply with global trade commitments but the imported rice isn’t distributed to Japanese citizens.  The rice sits in warehouses until it is unfit for human consumption and then it’s fed to livestock.  Why?  Because the Japanese want to continue the tradition of consuming only Japanese rice.  Trade agreements prevent them from distributing the rice to the hungry people of the world.

  • Europeans have a cultural distaste for genetically modified food.  So Africans, who could greatly benefit from crops that are engineered to withstand drought etc., don’t plant genetically modified crops for fear that Europeans won’t import their crops.

  • In 2005 the US government began to require use of ethanol.  The US government also provides ethanol subsidies of 51 cents per gallon and taxes ethanol imports 70 cents per gallon.  These policies resulted in a boom in ethanol production.  The evidence suggests that these policies account for at least 50% of the increase in the demand for and price of corn.

People in less developed countries work very hard.  The laborers picking the coffee you drank this morning make $1 per bushel.  This is very labor intensive, hard work.  The best pickers can only pick 10 bushels per day, an average picker will pick 6 bushels.  These people can’t afford to feed their families on $6 per day.  They need help and the world has the means to be able to help.  

  • Allowing the Japanese to distribute the rice they don’t want to eat would feed millions.  It is simply a matter of the various governments of the world with whom Japan has trading agreements giving the ok.

  • Encouraging the adoption of genetically modified crops would dramatically increase crop yields in Africa.

  • Eliminating the subsidies on ethanol production would help lower demand and in turn lower the price of corn.

  • The World Food Program needs $750 million immediately to help feed the world’s starving children and another $3 billion annually to keep up with the increasing price of food.  The world can afford $750 million to save our children.

While Americans are overweight, crying about the price of gas and their need for entitlements, millions of people in the rest of the world are starving.

The topic for this week's show is money.

American’s are hooked on debt.  Between ‘89 and 2001 our credit card debt went from $238 billion to $692 billion.  Last year it was up to $937 billion.  By now it is probably over $1 trillion.  This isn’t mortgage debt at 6%, this is credit card debt at rates up to 30%.  We must be nuts paying those kinds of rates for things we ‘want’.

Why don’t we talk about money?  Why don’t we teach our kids about money?  

Why do households with annual income under $13,000 spend $645 per year on lottery tickets?  Annual lottery ticket sales are about $60 billion per year.  Let’s just call it what it is, a tax on stupidity.

Why do college students have an average of 4 credit cards by the time they graduate?  They’re students!  They probably work part-time in a service related job if they have a job at all.  Why do they need credit cards?  So they can have the things they want.

Why do our politicians need to spend $750 million on presidential primary elections?  Why would Hillary Clinton’s campaign be $19 million in debt ($10 million of her own money) trying to get a job that pays $400,000 per year?  Why would Obama not follow through on his vow to accept the public subsidy for the general election and abide by its spending limits?  Because it’s all about money.

Why would doctors and other medical experts, who are being compensated by big pharma, risk their credibility by posing as an independent expert on NPR and say that the links between antidepressants and suicide have been overstated?  Because it’s all about money.

It doesn’t matter if your talking about the American consumer, politics, elections, healthcare, drug companies, climate change or environmental issues.  Money influences everything we do.  It’s hard to trust anything you read, see or hear.  And no one is immune from the influence of money.
Recently there’s been a lack of coverage and debate on Iraq and there’s been a lot of good news coming out of Iraq.
  • Iraqi army & police have finally gained control of Basra & Sadr City.  
  • The US Ambassador says that the terrorists have never been closer to defeat.  
  • There has been a dramatic drop in sectarian violence.  
  • Attacks in iraq hit a four-year low in May.  
  • May had the lowest number of American fatalities since the start of the war.
It looks like we’re very close to winning the war.  Why is it we only hear the bad news on the news.

Speaking of good news...
  • Unemployment is 5.5%, very low by historical standards.
  • Even with gas at $4/gallon our standard of living is the highest it has ever been, and that’s true for the middle class and poor as well.
  • We are living longer, heart disease and stroke are declining.
  • Crime is in a long-term decline.
  • Education levels are at an all time high.
  • Even with the subprime meltdown, houses are still worth 33% more than they were in 2000.
So why is that 81% of Americans say the nation is on the wrong track?  Could it be that impressions of ourselves and our communities come from personal experience, but impressions of the nation come from the media?

And more good news...
  • Finally, after 25 years of exponential increases the weight of our children has finally stabilized.
  • True, fully 1/3 of our kids are either overweight or obese.
  • True, the heaviest kids have gotten heavier.
  • True, youth incidence of cardiovascular disease and diabetes is on the rise.
  • True, these overweight kids will have more health problems as adults.
  • True, these overweight kids more often turn into obese adults.
Nevertheless, it looks like we have finally turned the corner.  Now we need to start the process of reversing the overweight trend.  Perhaps those 81% of Americans would think we’re on the right track if they could lose a few pounds.

Who are we as Americans?  
  • Hard working?
  • Industrious?
  • Educated?
  • World leaders?
  • Optimistic?
  • Competitive?
  • Self-reliant?
  • Patriotic?
  • Freedom loving (speech, religion, political choice, opportunity...)?
  • Law abiding?
What is America’s national identity?  Do we have an identity crisis?  The majority of American’s believe we are increasingly divided along cultural and ethnic identities.  The Bradley Project issued a report that says our identity is being weakened by the spread of multiculturalism.  Is it time to have a conversation about our national identity?
The topic for this week's radio show is the price of oil & gas.

So what is causing the rapid increase in the price of oil & gas?

According to Prof. Feldstein (former Chairman of the Council of Economic Advisers and currently a Professor at Harvard) the rising incomes of people in China, India and the Persian Gulf states have dramatically increased the demand for oil (and many other commodities) and therefore the price.

He goes on to say that speculators haven’t increased the price of oil.  The price of oil on the futures market is increasing because the market believes that future supplies will not increase as fast as demand – therefore we will have increasing worldwide demand with limited supplies and increased prices unless we either
  • increase supply or expected future supply
  • decrease demand or expected future demand

While it will be difficult to increase supply or decrease demand in the short term, it is fairly easy to increase the expected future supply (by authorizing exploration, extraction and refineries) and reduce the expected future demand (by improving incentives for alternative energy and/or legislating more fuel efficient vehicles).

By improving the future expectation of the relationship between supply and demand we will reduce the price of oil & gas today.

Why do our Congressional leaders keep pointing the finger at speculators?  Here are the facts, you be the judge.
  • The price of steel has risen 117% in the last 5 years.  Steel isn’t traded on the commodities futures exchange.  There are no speculators for steel.
  • World oil consumption has increased by 10 million barrels per day to 86 million barrels per day while oil production in the US has decreased in the last 20 years.  Government regulations prevent exploration and expanding refineries.
  • Copper has increased 360 percent while corn increased 70 percent with 1/3 of our corn production being diverted to ethanol.  Why wouldn’t corn go up as much as copper if speculators were involved?
  • The giant mining company Rio Tinto recently increased the price of iron ore for its Chinese customers by 85%.  Again, iron ore isn’t traded on the commodities markets.  There are no speculators for iron ore.  How does Congress explain the increase in the absence of speculation?

Why not tax the massive profits the oil companies are making?  The oil companies control only 6% of the world’s oil reserves.  They don’t control the supply and hence they don’t control the price of oil, they simply refine and distribute it.  By increasing taxes on the oil companies they’ll have less incentive to refine gas thereby driving the price up even further.
So what’s the real story with Iran’s pursuit of nuclear weapons?  The Iranian President, Mahmoud Ahmadinejad, recently said, “By the grace of Allah, we (will be) a nuclear power."  Somehow, I doubt he was talking about nuclear power for electrical generation.

A couple of weeks ago Iran demonstrated their ballistic missiles.  Seems like they should be demonstrating air conditioning in airports or light bulbs in libraries rather than missiles if they are truly pursuing nuclear technology solely for the production of electricity.

In Dec ‘07 the USAToday published an article about a recent National Intelligence Estimate (the NIE is a summary of the 16 US intelligence agencies) that said Iran had halted its pursuit of nuclear weapons in 2003.  You’ll recall the NIE was the source of weapons of mass destruction in Iraq.  Hmmm...  The NIE went on to say that Iran could restart their weapons program at any time and worst case they are about 18 months from a bomb.  Since the world hasn’t been able to inspect Iran’s nuclear labs whose to say that they didn’t restart their program 18 months ago?

Now you may think that because this is on the other side of the world it won’t impact you.  Of the world’s 1 trillion barrels of petroleum reserves, fully 66% are in the Middle East.

Iran isn’t exactly an innocent bystander in the Middle East.  They are an active supporter of anti-American and anti-Iraqi militias and suicide bombers in Iraq.

Here are some of the Iranian President’s comments about suicide bombers.

He praised his country's ability to recruit "hundreds of suicide bombers a day," saying "suicide is an invincible weapon. Suicide bombers in this land showed us the way, and they enlighten our future.

Amadinejad said the will to commit suicide was "one of the best ways of life."

"Is there a craft more beautiful, more sublime, more divine, than the craft of giving yourself to martyrdom and becoming holy? Do not doubt, Allah will prevail, and Islam will conquer mountain tops of the entire world."

"What is important is that they have shown the way to martyrdom which we must follow.'' 6 [President Ahmadinejad's comments on an aircraft crash in Tehran that killed 108 people in December 2005].

The Iranian President is also a big supporter of the terrorist organizations Hamas and Hezbollah.



Amadinejad continues to threaten Israel on a daily basis.  Here are some recent quotes from speeches.

"This regime (Israel) will one day disappear."

"The Zionist regime is a rotten, dried tree that will be eliminated by one storm.

Israel is "a disgraceful stain on the Islamic world"

Israel is doomed to be "wiped from the map" in "a war of destiny."

Ahmadinejad said that "the countdown for the destruction of Israel" has begun.

Zionists are "the personification of Satan."

"In the case of any unwise move by the fake regime of Israel, Iran's response will be so destructive and quick that this regime will regret its move for ever."

So we come to a point in time when there are basically 3 choices.

  1. Do nothing.  Allow Iran to acquire a nuclear bomb which they will surely give to terrorist organizations and try to wipe Israel off the face of the earth and perhaps the rest of the infidels on earth.
  2. Continue to negotiate and apply sanctions hoping that Iran doesn’t pursue nuclear weapons.
  3. A pre-emptive strike, whether by the U.S. or Israel.  No doubt Iran will retaliate with some combination of conventional, biological and chemical weapons.  No doubt, Iran will ask Hamas and Hezbollah to join the fight.  The fight may escalate out of control with Israel using a nuclear option of their own.

Ahmadinejad fired off a fresh barrage of warnings to the United Nations, saying Iran did "not give a damn about resolutions" about demands to freeze sensitive nuclear work.

"The Islamic republic of Iran has the capacity to quickly become a world superpower. If we believe in ourselves... no other power can be compared to us."

"Iran's enemies know your courage, faith and commitment to Islam and the land of Iran has created a powerful army that can powerfully defend the political borders and the integrity of the Iranian nation and cut off the hand of any aggressor and place the sign of disgrace on their forehead."

"Our enemies should know that they are unable to even slightly hurt our nation and they cannot create the tiniest obstacle on its glorious and progressive way."

"We don't shy away from declaring that Islam is ready to rule the world."

August 18, 2007
"The Zionist regime is the flag bearer of violation and occupation and this regime is the flag of Satan.”
(Address to an international religious conference in Tehran)
June 3, 2007
"With God's help, the countdown button for the destruction of the Zionist regime has been pushed by the hands of the children of Lebanon and Palestine . . . By God's will, we will witness the destruction of this regime in the near future."
(Speech, as quoted by the Fars News Agency)
November 13, 2006
"Israel is destined for destruction and will soon disappear"

August 4, 2006
"A new Middle East will prevail without the existence of Israel."
 (as quoted by Malaysian news agency Bernama website)
May 11, 2006
Israel is "a regime based on evil that cannot continue and one day will vanish."
(to a student rally in Jakarta, Indonesia)
April 14, 2006
"The Zionist regime is an injustice and by its very nature a permanent threat. Whether you like it or not, the Zionist regime is heading toward annihilation.  The Zionist regime is a rotten, dried tree that will be eliminated by one storm."
(In a speech at the opening of the "Support for the Palestinian Intifada" conference on April 14-16 hosted in Tehran)

October 26, 2005
"Israel must be wiped off the map ? The establishment of a Zionist regime was a move by the world oppressor against the Islamic world . . . The skirmishes in the occupied land are part of the war of destiny.  The outcome of hundreds of years of war will be defined in Palestinian land."
(In an address to 4,000 students at a program titled, 'The World Without Zionism')

So what's wrong with the U.S. Government bailing out Fannie Mae & Freddie Mac?  Everything.  The incentives are all wrong and have been for years.  The incentive is to take on excessive risk because there is no downside when the federal government provides the safety net.  Regardless of how many accounting scandals Fannie & Freddie continue to flourish because of our federal government.

When Fannie & Freddie make money their executives get huge bonuses, but when they lose money the government bails them out.  This is an abomination.  If you take the profit then you must also accept the losses.  But apparently not when Fannie & Freddie provide sweetheart deals for those in Congress.

Let’s go back to 2003.  Federal regulators determined CEO Franklin Raines and senior executives perpetrated financial fraud by cooking the books to receive large financial bonuses.  Franklin Raines received over $50 million in bonus during the years from 1988 to 2003.  Civil charges were filed against Raines and two other former executives by the The Office of Federal Housing Enterprise Oversight (OFHEO) in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused. On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie's former chief financial officer, and Leanne G. Spencer, Fannie's former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie's insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of "other benefits" said to be related to his pension and foregone bonuses.

Are they in jail?  Nope.  Did they have to pay back any of the money they stole?  Nope.

The company paid $400 million in fines and reported an $11 billion accounting scandal.  Yes, Fannie & Freddie have been out of control for a long time.

We were supposed to have fixed the problems but here we are 5 years later and the problems have only gotten worse with Fannie & Freddie.  Congress has done everything in their power to eliminate oversight for Fannie & Freddie.

Why not just get rid of Fannie & Freddie?  The critics say we can’t do without them.  I disagree.

OK, what contribution does Fannie Mae provide regarding home ownership?  Studies indicate they provide only 7 basis points – a basis point is 1 hundredth of 1 percent (see 7/23/08 Wall Street Journal page A17).

The critics say allowing Fannie & Freddie to fail would set off a worldwide financial crisis.  According to the NY Times July 27, 2008:
  • According to its own fair-value accounts for the end of March, Freddie Mac is technically insolvent and Fannie Mae has only a small net worth.  The markets already know they’re broke.  Who would lose?  The shareholders would lose, just like Bear Sterns.
  • There has already been a test case for how the mortgage market would function without Fannie & Freddie.  After the 2003-4 accounting scandal, regulators severely constrained their activities.  In 2005, the nation’s total residential mortgage debt outstanding rose by $1.176 trillion in that year, even though Fannie’s and Freddie’s stakes rose by on $169 billion, just 14.4 percent of the total.  In essence, the market barely noticed that the two agencies’ private competitors were providing 85 percent of the increase in mortgage debt in 2005.

The issue is not too big to fail, it’s that they’re too big to liquidate.  So liquidate slowly, over say 5 or 10 years.  No panic, no problem.

How could we let this happen?  The answer is Congress.  Chris Dodd, Senate Banking Chairman (Democrat from Connecticut), derided critics at a February hearing who he said were, “repeatedly raising alarm bells about the risks Fannie & Freddie pose to the financial system.”  Senator Dodd got a sweetheart mortgage from Countrywide CEO Mozilo who was thick as thieves with Fannie Mae. (7/24 Wall Street Journal page A14).

One of the few representatives who did want to reign in Fannie and Freddie, Cliff Stearns from Florida, had oversight for Fannie & Freddie stripped from his subcommittee responsibilities when he began his hearings in 2004.

Yes, if you want to place the blame for Fannie & Freddie being out of control.  Look no further than Congress.

How much will the housing bill cost us?  The experts can’t predict exactly.  They set aside $300 billion in new loan authority to provide troubled homeowners with new loans, $3.9 billion to fix up foreclosed properties, $15 billion in tax cuts and other misc. amounts for various projects but the telling number is the $800 billion increase in the limit on the national debt to $10.6 trillion.


Footnote:  So who is Franklin Raines?  The answer from wikipedia

Franklin Delano Raines (born January 14, 1949 in Seattle, Washington) is the former chairman and chief executive officer of Fannie Mae who served as White House budget director under President Bill Clinton.

He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979.

On December 21, 2004 Raines accepted what he called "early retirement" [3] from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses [4].

In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $50 million in payments made to Raines based on the overstated earnings [5] initially estimated to be $9 billion but have been announced as 6.3 billion.[2].

An editorial in The Wall Street Journal called it a "paltry settlement" which allowed Raines and the other two executives to "keep the bulk of their riches." [8] In 2003 alone, Raines's compensation was over $20 million.[3]

A statement issued by Raines said of the consent order, "is consistent with my acceptance of accountability as the leader of Fannie Mae and with my strong denial of the allegations made against me by OFHEO."[4]

In a settlement with OFHEO and the Securities and Exchange Commission, Fannie paid a record $400 million civil fine. Fannie, which is the largest American financier and guarantor of home mortgages, also agreed to make changes in its corporate culture and accounting procedures and ways of managing risk. [9]

In June 2008 Wall Street Journal reported that Franklin Raines was one of several politicians who received below market rates loans at Countrywide Financial because the corporation considered the officeholders "FOA's"--"Friends of Angelo" (Countrywide Chief Executive Angelo Mozilo). He received loans for over $3 million while CEO of Fannie Mae. [5]
The topic for this week’s radio show is war.  It would be wonderful if the world could live in peace, but as long as we have dictators and totalitarian regimes we will always have people struggling to be free.

From all appearances it looks like Mr. Putin is trying to reconstitute the old USSR.  He has correctly read the tea leaves regarding the world’s response to his attack on the democratic Republic of Georgia - “We urge restraint on all sides — that violence would be curtailed and that direct dialogue could ensue in order to help resolve their differences.”.  Russia has been hostile toward Georgia for some time now.  In 2005 Russia implemented economic sanctions against Georgia that didn’t worked and only infuriated Russia.  Russia has been violating Georgia airspace and shelling Georgian villages for years.  While meeting with President Bush earlier this year Mr. Putin referred to Ukraine as “not a real nation” (WSJ Page A21 8/12/08).  Today Georgia, tomorrow Ukraine.

I’m reading the book, “Moment of Truth in Iraq “.  It’s a first hand account from a journalist who traveled with the military.  The surge has worked.  For the most part the major hostilities are over.  Our primary mission at this point is to eliminate the remaining terrorists and maintain the peace.  The Iraqi army and police forces are doing an reasonably good job of providing security for the 25 million Iraqis but they still need America’s help.  The political promises for a complete withdrawal demanded by many politicians last year while the outcome of the war was in question may have made sense, but if American troops withdrawal too soon it would open the door for Iran and al Qaeda to once again establish a base for terrorists in Iraq.  Our military experts say we need to be there for another 18 months.  Instead of examining the past and discussing how we got into Iraq we should be looking forward to a stable and democratic Iraq and discussing how we can help maintain a democracy in the Middle East.

The war in the Darfur region of Sudan is a tragedy that fades in and out of the news.  More than 250,000 people have been killed and millions people have been forced into refugee camps and are slowly starving to death.  A year ago the UN approved a peacekeeping force of 26,000 police & soldiers.  Unfortunately they haven’t been deployed.  China is a villain in this conflict by obstructing efforts of the UN Security Council to impose tougher sanctions.  

Should the U.S. be the police force for the world?  We are great at short wars.  We can topple a government and their military faster than any country on earth.  The American people don’t have the patience to help build nations as we did in Iraq.  As much as the people in Georgia and Darfur need our help do we really want to get involved in another military conflict?
Congress has finally gotten religion and agreed to discuss allowing oil exploration off our coasts and in ANWR.  I’m guessing the polls and that 1 million signature petition caught their attention.

That’s good news since prior to their flip-flops Nancy Pelosi said drilling was “a hoax on the American people” and Barack Obama called it “another Washington gimmick.”  I wonder what their rationale was for making those statements.  Certainly the laws of supply and demand indicate that more domestic crude would reduce the price of gas and improve our balance of trade.

Not all politicians are flip-flopping.  Bill Richardson, Governor of New Mexico and former US Energy Secretary still opposes drilling.  He says it will take 30 years for new drilling to have a positive impact on gas prices.  What would make him say such an outrageous thing?  Experts agree if we start drilling today we’ll be pumping oil in 3 to 7 years.  Good thing he doesn’t have a seat in Congress.

Speaking of flip-flopping positions I was amazed at the political gymnastics of House Democrat Mark Udall who is now running for Colorado’s open Senate seat.  He helped kill the pilot program to extract oil from shale.  Our shale oil reserves are estimated at 7 times larger than Saudi Arabia’s crude oil reserves.  We need to do a pilot program so we can improve our ability to extract oil from shale and determine the environmental impact.  A pilot program is a good solution.  Unfortunately the enemy of the good is the great and there are no great solutions, so Rep Udall killed it.  Now that he’s behind in the polls he’s changed his position.  In his new TV spot he says, “We’ve got to produce our own oil and gas here in our country.”  It is an obvious political maneuver.  It makes me wonder if he truly believes it or if he’s just saying it to get elected.

Anyway the good news is they have reversed their positions and are now open to drilling for oil.  

The bad news is that Congress could be pulling the wool over eyes.  The proposal in the Senate is to allow offshore drilling, only where there isn’t very much oil – Virginia, Georgia, North Carolina and South Carolina.  Congress wants oil companies to explore the leases they already have.  Oil companies have something like 65 million acres under lease for oil exploration in the US.  Oil companies are in business to make money.  If there was oil in those 65 million acres, they’d be drilling.

Meanwhile, Vladimir Putin sent his deputy Prime Minister, Igor Sechin, to Cuba to discuss oil exploration in the Carribean.  Russia may provide a joint Cuban-Russian-Venezuelan development of the crude oil reserves and could include an overhaul of Cuba’s existing oil infrastructure.  While we debate the environmental impact Russia, Cuba & Venezuela are harvesting the crude oil wealth of the Carribean.  On August 4th Vladimir said, “We must restore our position in Cuba and other countries.”  

If oil is going to be extracted from the Carribean wouldn’t we rather have control of the project?  I’m sure that we’d do a better job of managing the environmental impact, not to mention the increased supply of domestic crude.

The behavior of our politicians makes me wonder about their true motives.
The topic for this week is economic expectations.

As I watched the Democratic National Convention I couldn’t help but notice how many politicians promised a return to prosperity under an Obama administration.

According to a recent Pew Research Center Report more than half of Americans believe they either have not moved ahead in the past five years (25 percent) or have fallen behind (31 percent).

But the facts don’t match the sentiments.  American’s are 40% wealthier than they were at the end of the last recession in 2001.  The total net worth of U.S. Households is now $56 trillion, up 40% from $40 trillion in 2001.  Even the horrible housing market isn’t as bad as many think.  Nationwide, only Detroit and Ann Arbor have seen home values drop below 2001 levels according to Zillow.

I think people’s expectations are out of whack.  When I was growing up we didn’t have HD TV’s, Cable TV, Tivo, DVD, Computers, DSL, ipod, Cell Phones, Playstation, Gameboy etc.  All this stuff costs big bucks.  And speaking of big bucks, how about the cost of Starbucks.  If you get 1 cup of coffee every work day you’ll spend over $1,000 on coffee in year.  Can most Starbucks patrons really afford to spend $1,000 per year on coffee?  How did hyper-consumerism become the norm?  Why do recent college graduates expect to wear designer fashions?

The National Association of Credit Unions did a financial literacy survey that showed 60% of teens don’t know the difference between cash, credit cards and checks.  The US Treasury Department tested 46,000 high school students with a 35-question financial literacy test.  The average score was 56%.  The JumpStart Coalition for Personal Financial Literacy did a survey of high school and college seniors.  High school seniors correctly answered only 48% of the basic questions about earning, spending, saving and investing.  College senior didn’t do much better at 65% correct.  That’s scary when you consider some of those college seniors were in the School of Business and will be future CPAs.  

We have done a miserable job educating our citizens on financial literacy and fiscal responsibility.
The topic for this week's show is our political process.

There’s no doubt in my mind that the political process in this country is broken.  So broken that even though most American’s agree on important issues our government simply can’t or won’t address them.

80% of Americans say Social Security is broken.
73% of Americans say they support offshore drilling for oil.
71% of Americans say they support a single tax rate of 17% with an exemption for each person in the family.
65% of Americans say they support building more nuclear power plants.

If the majority of Americans agree then...

Why hasn’t Congress fixed social security?  They’ve voted themselves a nice retirement program.
Why hasn’t Congress approved offshore drilling?  All it takes is a vote.
Why hasn’t Congress fixed our 54,000 pages of income tax rules?  There are several great proposals.  Fairtax anyone?
Let list goes on and on and on...

The answer is our Congress is stalemated.  They no longer represent their constituents, they represent their own interests and the interests of their party.

Our political process is also broken in the way we elect our leaders.

For example, how are we better prepared to cast our votes now that televangelist Pastor Rick has interviewed our candidates.  I thought we had a separation between church & state.  I wonder what our founding fathers would have thought of that spectacle.  Thomas Jefferson wrote in 1781, “It does me no injury for my neighbor to say there are twenty gods, or no God.  It neither picks my pocket or nor breaks my leg.”  Could he get elected today?  Unfortunately the answer is probably not.

Just because a candidate says they want to reform the political process doesn’t make it so.  Both parties’ political conventions are primarily financed by unions and corporations.  Why?  So their lobbyists can get easy access to the political parties.  This year more than $112 million is expected from private donors to support the conventions.  That is 14 times more than in 1992 according to a study by the Campaign Finance Institute and the Center for Responsive Politics.  According to the study the donors to the conventions have spent over $1.5 billion on lobbying and political contributions since the last election.  That’s billion with a B.

So what’s the solution?  

First, do away with the political parties.  We don’t need them.  In today’s information age they are an anachronism.  Without political parties all politicians would run as independents, representing their constituents.  How can you have post-partisanship when you still have political parties?

Second, initiate term limits.  When politicians get entrenched in Washington they owe their job to the lobbyists who have paid the $1.5 billion in bribes over the last 4 years.

Third, line item veto.  That will help take the earmarks out of spending.
I agree with number 2 and 3 but disagree with number 1. There would still be political parties maybe by another name but congress people will join together to elect a leader who has promised something to his/her supporters. Fact is political parties have much less impact on the elected officials today vs. years ago.
there are many political parties. In the U.S., of course, the two wings of the national party control the system to the point that nascent political parties face overwhelming obstacles to success.

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