Income Redistribition - A Free Ride at Others' Expense

Why should a group of hard-working, innovative, and lucky(?) people be asked to contribute to the less fortunate, some of whom are lazy, unimaginative and unlucky?

Income Redistribution is an economic concept supported by nearly every economist; rightfully so. People who earn more, pay geometrically more income taxes than those who earn much less. Automobile insurance premiums are based on risk, with low-risk people paying much of the premium that high-risk people could never afford to pay. In many states, homeowners support schools and other municipal functions that renters use but are not required to support. High taxes paid by the more fortunate are used for social programs like welfare, school subsidies, etc. Tax exemptions for people with large families are compensated by single people or people with no children. Very little taxation credit is allowed for the wealthy to offset taxation by their charitable works. Corporations are taxed at rates which inhibit the growth which could create more jobs and less expensive products.

Part of the tax forgiveness for large families was conceived to keep birth rates high enough to meet future labor demands. (Germany actually pays citizens "kindergeld," depending on the number of children in the household. It's a billion-dollar social program that has failed miserably. Germany has been importing labor, mostly immigrants, for many years with no end in sight.) The subtle American approach has been equally unsuccessful.

Tax loopholes and political "pork" have created a class of very rich taxpayers who pay no tax at all; some corporations fall into this category as well. Close to one-third of all American banks (Subchapter "S" status) don't pay federal income tax.These individuals and corporations are not pulling their fair share of the load. Virtually all government spending is totally void of entrepreneurial concepts which could save billions annually. Political "pork" attached to virtually every bill passed by Congress cost taxpayers billions every year.

Unemployment compensation actually encourages unemployment and only serves as a bridge to full welfare. A working person pays taxes and contributes to the economy in many ways. A person on welfare only takes. When a person returns to the workforce, unemployment compensation should continue until the worker's first wage increase. (If it stops when a person is reemployed, the person feels a sense of loss; like working for "half wage.") When the worker receives a pay increase (longevity or promotion), unemployment compensation would be reduced by one-half of the pay increase. In this manner, the person realizes financial advancement while unemployment compensation is also reduced.

It's time to rethink the American income tax framework and social benefits in terms of the above. Should social programs, like taxation, encourage people to have children that they can't afford? Most states have a sales tax which intends to compensate for property and income tax shortfalls. Perhaps state sales tax could be restructured to be higher for purely luxury items and lower for necessities. A "flat tax" (everyone pays the same percentage of income, like 9%) may not be economically feasible, but incorporating some elements of flat tax into our income tax code may offer some relief to all taxpayers. Certainly, closing tax loopholes, which sharply reduce taxable income, would go a long way to increase tax revenues.

Certainly, the "haves" are responsible to support and nurture the "have-nots." Unfortunately, the American taxpayer isn't getting good value for a dollar paid into the system.  "Have-nots" remain in that category far too long and become a serious liability to the overall system. The challenge is to help an individual move up the socio-economic scale and become a productive citizen who pays taxes and doesn't receive welfare (easier said than done, but nevertheless the goal). Essentially, if the word "social" precedes a program, it's broken and badly in need of repair. We owe it to ourselves and to the future of America.

Trump - The Grand Experiment

For as long as I can remember, I have wanted a President of the United States who was not politically beholden to party and financial benefactors. I grew up hearing that the Democrats were "for the people" and the Republicans were "for big business." Later, the "Liberal" and "Conservative" labels were born. I have struggled to avoid allowing myself to be labeled and have tried to vote for the individual whom I thought would be best for our country and our people. In the past couple of decades, I believe our leadership has focused on garnering the votes necessary to stay in office, continue their self-enrichment, and enhance their "legacy." No one was strong, willing or brave enough to do what was best for the country by resisting a congress full of people focused on the same egocentric values. Words like "principle" were overshadowed  by a fanatic need for "political correctness." All things "political" rapidly became negative. It was time for a non-political person to take the reins and see where it would lead.

Enter Donald Trump. He made outlandish promises and filled his vision of America with "facts" that were either exaggerated or concocted. But were they? Can it be that Trump saw behind "facts" that had been themselves manipulated (generally subconsciously) to prove a point or support a political self-serving agenda? Statistics are tricky and can easily be corrupted through bad or incomplete data, computational error or misinterpretation. (Although 90% of people who have lung cancer smoke, 90% of smokers may not contract lung cancer.) Can Trump's instincts be so good?

Trump seems to operate (and succeed?) by keeping opponents off balanced and not knowing where the next blow will land. He uses exaggeration to "prove" a point, then takes unexpected action. If you have something to hide, getting into a contest with Donald Trump is ill-advised. His attack on the American voting system is a great example:

For his going-in position, Trump says there were several million illegal votes cast (mostly for Hillary Clinton) during the recent Presidential election. Since he won the election, most say why bother to attack the results? He's created "concern" in those who might have benefited from illegally cast votes over the past 20 years or so and don't want the complete election process laid to bare. In a minor shift in his view of elections, Trump now talks of states' roles of registered voters containing many names of dead or otherwise ineligible voters. Although illegal only if they vote twice, "some" voters are registered in more than one state. Some states don't require a government-issued, picture ID for a voter to prove his or her identity and right to vote. There are other irregularities such as convicted felons voting, multiple votes cast by a single voter, registered voters who don't meet state registration requirements, etc. I believe Trump's goal is two-fold: (1) State voting administrations must clean up their data bases of validly registered voters and keep them current; (2) Every registered voter must be issued a governmental (state) ID so they can prove who they are at the time they vote. No ID, no vote. (Of course, the ID issuing process must be accurate and foolproof - no easy task.) The Democrats have complained about the ID requirement disenfranchising poor and minority voters (mostly Democrats). In these cases, simply issue the ID and bill the federal government.

Trump hasn't forgotten the days of "voters" being transported by train to multiple polling stations to cast their vote multiple times; the days of "a dollar a vote." It's certainly possible that voter cheating is far more sophisticated today. States need to step up and ensure voting integrity. After all, there's a lot at stake.

When Trump creates controversy or crises, the telling is often in those who scream the loudest and longest. In some ways, it's a form of intelligence gathering and a way of defining the parameters of a solution. The current row with Mexico is a case in point:

Trump has always proclaimed that Mexico will pay for the anti-immigration wall between Mexico and the U.S. Mexico has always denied it will pay for the wall. A 20% tariff on Mexican imports isn't feasible (and is passed through to the American taxpayer), but it is an eye-opening start. Controversial as it may be, the wall will probably be built and Mexico, however long it takes, will somehow pay for it. At nearly $25 billion a year, remittance income (Mexican income earned in the U.S. and sent home to Mexico) is Mexico's largest contribution to its gross national income, even outstripping oil income. Mexico can't afford to give up this important income and neither can U.S. companies who employ cheap Mexican labor. Therefore, there will be a negotiated settlement, probably resulting in much improved registration of Mexican workers who work in the U.S. A secondary aspect of better control is to stem drug smuggling which attaches itself to the flow of workers coming from Mexico.

Because of his non-political thought process, Trump often states his personal opinion, rather than that of the President. Since we have never experienced a non-political President, we can't parse Trump the person and Trump the President. The world is have difficulties as well and we'll all just have to struggle through the learning curve. As a person, he seems to think waterboarding is a valid form of interrogation. As a President, however, he's willing to defer to his staff. As a person, he thinks global warming is bunk, if not a Chinese-serving rumor, but as President, he's prepared to once again defer to his staff.

Trump the person may see NATO and the UN as ineffective organizations that sap U.S. taxpayers' money. As Trump the President, however, he will support these organizations, while trying to reorganize them to become more efficient, powerful and more directly serving U.S. interests. U.S. funding of the International Monetary Fund and our foreign aid packages will certainly come into deep review. Trump will not throw any world organization or U.S. ally under the bus but will focus on what good comes to the U.S. through association with them.

Although Trump may be motivated by power, egoism, patriotism and narcissism, he at least doesn't seem motivated by greed, re-election or legacy. He seems focused on fixing what he perceives as broken, but may not follow political protocol in the process. The consequences of his methods are new territory and remain to be seen. Whatever happens, I have enormous trust in our political system and structure (the Constitution, in short) to know that Trump or anyone else will never destroy the United States of America. He is one Grand Experiment that we must see to the end, because it could very well be the beginning of something huge! At least it won't be a boring journey.

Too Young to Say "No?"

Children having children may not be at epidemic proportions, but it happening at an ever increasing rate. Recently, a school class in Bosnia took a class trip and seven 13 to 14 year old girls came back pregnant. I don't know much else about this incident but it says a lot about society and morality.

Legally, a 13 year old girl cannot consent to sexual intercourse, creating a rape condition if her partner is a legal adult. However, if her partner is a legal minor as well, there is no rape and the state has another mouth to feed. Is there something wrong with this picture?

It is generally accepted that most girls will more quickly mature emotionally than boys of the same age. Statistically, seven pregnant girls in one class suggests that there were more participants who dodged the bullet. Given the adolescent ages is could also suggest that the girls were the organizers. Whatever happened is unknown, but certainly something went terribly wrong.

When I was a very young boy, my mother had a sex chat with me. She told me that one day my hormones would try to kidnap my brain and common sense and that I should resist hormonal surges. Perhaps the most important thing she told me was to always respect girls and their bodies, especially the one I found myself with when my hormones began to shout. She warned that some girls might pretend to want sexual contact to test my sincerity and level of respect. When I was 16, I finally confronted just such a situation and I navigated through it successfully, sending the girl on into life intact. It was a difficult decision, but I was able to stop and think.

My point is this: children develop hormonal urges that result in "feel good" sexual contact. If no one warns them or arms them with evasive maneuvers, a tragedy could occur. Many parents are derelict in this phase of child rearing and expect the school system to fill in for them. Many other parents just don't care and depend on "street" knowledge to protect their children. In cases of child pregnancy, there often isn't an adult to blame; so who is to blame? Society believes the girl isn't capable of knowing to say "no." I think she is, if she has been properly prepared for the crucial moment.

Some religions believe in a Natural Law, which helps decide right from wrong, and that children reach the age of reason (knowing right from wrong) at around age seven. If this were true, a 13 year old would have a strong premonition that engaging is sexual behavior is not acceptable behavior. Or not?

A pregnancy resulting from the union of two underaged children should indict the parents of both children. These parents should be held criminally liable for dereliction of their parental duties. My heart aches for the children of these missteps because they are probably doomed to the same fate.

Religion - What It Is and Isn't

I have deep religious beliefs, most of which I keep to myself and try to practice them. If there were ever anything good that has spun totally out of control, it's "religion." It didn't begin with jihadists and won't end with them. Religion has almost always been an excuse for all things evil. Religion is truly a huge paradox. In the name of religion:

We sent Crusaders to conquer Middle Eastern peoples of another faith.

We fled to a new country (America) to escape religious persecution in England and promptly forbade the practice of any other religion than our own.

Members of the Ku Klux Klan went piously to church every Sunday with their families.

Mohammed created a catch-all religion, hoping to combine the religions of the world into one - Islam (great idea!). His dream has been twisted by religious fanatics who slaughter children, oppress women and stifle education, all in the name of Allah. Did he write Sharia Law?

We tortured and killed thousands during the Spanish Inquisition.

Many religions profess to be "Christian," but live their lives according to the teachings of the Bible's Old Testament - exactly what Christ said to forget as a blueprint for life.

Jews have elevated their religion to the status of a nationality, completely forgetting that their roots are in Palestine, just like so many Arabs. In many ways, they live the Cain and Abel scenario every day - brother against brother.

We burned supposed witches in Salem in the name of God.

Croatians have killed Serbians in the name of religious fervor and they both have attempted to wipe out Muslims in their countries.

Why are Ireland's Orange and Green aligned along religious lines and not political ones?

Henry VIII didn't like the divorce rules of his religion, so he founded another one.

Martin Luther deplored the corruption in his religion but, rather than fix it, founded his own religion.

In their fervor, religious fanatics often infringe on the good nature of others, even to the point of forcing themselves into homes during intense, door-to-door evangelism.

Some religions believe that heavenly salvation is available only to its members.

That there are so many varieties of religion, is actually a good thing. I believe that people choose their religion largely because of the level of ritual. Religious ritual covers a huge continuum from the most plain (nearly devoid of ritual) to the ornate, ritual-rich Byzantine, to the horrific ritual of the Satanists.

I believe that a good religion consists of one that recognizes the Natural Law within all of us and helps us follow it. Religion must pass the practicality test so it can be internalized, resulting in peaceful, tolerant, charitable, respectful, and understanding behavior. Religion shouldn't consist of "What I believe," rather "How I treat others." Religion must never be fanaticism. Anything taken to extreme runs the risk of becoming negative and destructive.

Unfortunately, perception is reality. To an Islamic fanatic, slaughtering children is acceptable behavior. To almost anyone else, it's abhorrant.

Perhaps religion can be summed up in the words of what is now called the Platinum Rule (vice Golden Rule): "Do unto others as they would have you do unto them." Please ponder these powerful words!

Amateurs, and More Amateurs

No one is qualified to become President of the United States. It's a job that requires a clear slate with the flexibility and cunning to read the signs in the sand and react appropriately. Only one imperative is indelible: protect the national security of the United States of America.

Recent events tend to underscore once more the critical skills of leadership. The first rule is recognizing the need to build a team with complete and complementary skill sets to supplement deficiencies in the leader. All bases must be covered. John F. Kennedy owes his entire positive  reputation to his unique ability to gather highly skilled staff around him; a staff that supplemented his weaknesses; a staff that would offer sound advice. Others, like Richard Nixon and George W. Bush, weren't no lucky (or skillful?) and were lured into grievous errors by their staffs. Unfortunately, Barak Obama takes the lack of this skill to an entirely new level. An amateur himself, he has surrounded himself with amateurs who add nothing to fortify his weaknesses.

The second rule of leadership is to articulate clear definition of the mission and a firm dedication to it, no matter what. Everything a U.S. President does must be defined in terms of national security; not political survival, not party politics, not personal agenda, or not what history will write (the legacy). Again, Obama fails miserably.

Obama's campaign promise to close Guantanamo was based on emotion and lacked any consideration of national security. In fact, if Guantanomo ever does close, it could seriously endanger the entire  economic structure of the U.S. Nearly all of our export wealth sails through the Gulf of Mexico, right past Cuba. In a time of conflict, skilled missileers could shut down much of our export capability. We would be seriously wounded and many of our friends wounded mortally. I submit that Guantanamo is  very important, if not critical, to our national security. Its closing should not become a political trophy.

I won't expand on how the current "band of amateurs" leading our country has negatively affected our image throughout the world. We need someone like Ronald Reagan to return us to the prominence we once enjoyed. We may still be the major world hegemon, but it's in spite of the Obama administration, not because of it.

Very recently, a bungled rescue attempt caused the execution of both an American hostage and a South African hostage who was destined to be returned safe to his family. All of the critical players in this rescue attempt dropped the ball. No one even knew that successful negotiations had reportedly ensured the imminent release of the South African hostage. What's even worse is that we may have known but didn't care! Instead of going home alive and well, South African hostage Pierre Korkie was executed by his captors during the bungled attempt to free American hostage Luke Somers. Both of these men were innocent victims of a weak and amateurish American government; of fractured diplomatic and intelligence systems.

One last caveat: Barak Obama is not an African American President. He is the President of the United States of America, after stripping away all of the labels that tend to flavor how we view people and what we expect of them. He was elected to office not once, but twice, to represent the American people (all of them, also minus any defining labels) and to protect our national security. History will determine whether he lost his focus or never had it. History will decide whether he was a victim of bad advice or of world events. History will be initially cruel and unforgiving, but eventually will sort out and focus on the empirical truth. It worked for Truman and I hope it will work for Obama. He deserves his place in history, based on the merits, or lack of them, and nothing else.

Putin and the Ukraine

In many ways, Putin is acting in the strategic interests of Russia's national security. Russia is exceptionally vulnerable to land attack and must develop buffer states to delay any attacks from Europe.

I fully expect all of Eastern Ukraine to secede from Kiev and to form some sort of federation with a puppet government loyal to Russia. Putin is smart, however, and is not rebuilding the old Soviet Union which had to carry financial responsibility for member states. The new "republic" of East Ukraine will be a separate state, responsible for paying its own bills. Since it contains the major industrial complexes in Ukraine, has a huge trade relationship with Russia and will be protected by Russia, East Ukraine will probably be able to take care of itself quite well.

Not much can be done to reverse the inevitable. However, we must focus on limiting the Russian encroachment to East Ukraine. Some of our options are:

1. Station American troops in Kiev to "protect" the American embassy and other American interests in the Ukraine (read: Western Ukraine).
2. Station American troops in Poland to conduct an exercise with the Polish military.
3. Place U.S. sanction against Russian/East Ukraine individuals and banking interests and work hard to negotiate or coerce other European countries and the EU to do the same,
4. Long term: develop the infrastructure and sell American natural gas to Europe, especially Germany to help offset Russia's monopoly in Europe. Pressure other natural gas producers to do the same.

To President Obama: It is paramount to remember that the Russian military is not comparable to the U.S. military and could not win a head-to-head confrontation. Putin is bluffing when he acts as the "world" power Russia is not!

A CEO Can't Win Either Way

A CEO is entrusted with the growth and prosperity of the company he or she leads. One critical element of company growth and prosperity is taking very good care of employees. Among other things, compensation, training, promotion potential, health care and retirement programs are key to reward and motivate employees. In an environment of uncontrolled, spiraling costs and government mandates, health care has become a central issue in terms of properly protecting employees while controlling costs. To complicate matters, health care issues can be incredibly emotional, placing its business aspects far out of focus.

Health care premiums are exorbitantly high and volitile because costs in the health industry are essentially out of control. Typically, a company shares health care costs with its employees because of these high premiums. A 50-50 cost sharing is not uncommon. Additionally, to keep health care premiums down for employees, the company will agree to pay substantial health care claims before liability to the insurance company comes into play. For example, a company will typically pay 50% of employees' health care premiums and the first $1 million or so in claims each year. Needless to say, a company's stake in its employees' health care is substantial and often unpredictable.

Unfortunately, a few excessively high claims will consume the company's co-pay share and cause the insurance company to pay large claims. The result is to substantially raise premiums or the company's co-pay. Whatever happens, the company's health care costs will soar. The options are simple for the company: share the additional health care costs with all employees by raising their premiums or absorb the additional costs and offset them by other austerity measures.

Please note that I have deliberately avoided placing a face on the "excessively high claims" I mentioned above. The decisions a CEO must make are strictly business in nature, doing what is best for all employees and for the company. The ice gets thin, however, when a CEO chooses to pay unanticipated costs for one benefit (health care) by curtailing another (retirement plan). In this case, all employees are still liable to pay the full price. In retrospect, the CEO needs to find a way to pay the costs of providing expected and fair benefits to all employees and absorbing unanticipated costs as they occur. In health care issues, it's pretty certain, claim and premium costs will rise yearly. The trick is to stay ahead of the trend and meet it head-on. That's what CEOs are paid to do.