Monday, March 30, 2015

The Fed Has Failed the Nation, in One Chart

There is only one way to end the financial tyranny of the Federal Reserve--abolish it, and put an end to the predatory pathologies of its policies.


The Federal Reserve has failed not just the nation and the U.S. economy, but more importantly, the American people that it supposedly serves. It has also failed the world, by showing other central banks that they can reward private banks and the top .01% with absolute impunity.


The supposed goal of the Fed's zero-interest rate policy (ZIRP) and quantitative easing (QE) was to make borrowing easier for both corporations and consumers, the idea being companies would borrow to invest in new productive capacity and consumers would buy the new goods and services being produced with cheap credit.

The secondary publicly stated goal was to spark a rally in stocks, bonds and real estate that would spark a wealth effect: as households saw their net worth rise, they would feel wealthier and thus more likely to buy goods and services they didn't need on credit.

The real reason for ZIRP and QE was to rebuild the balance sheets and profits of banks on the backs of savers who have earned near-zero thanks to the Fed's manipulation of markets. But setting aside the obvious success of the Fed's real goals--enriching the banks and the super-wealthy who have access to near-zero interest credit--let's see what corporations did with the Fed's nearly-free money.

Did they invest in new productive capacity? No, they bought back their own stocks--trillions of dollars worth, to boost stock prices and managerial bonuses. Note what happened when the last stock buyback binge faded: stocks crashed.


The Fed's free money for financiers enriched the top layer of corporate management and the top 1% who own most of the nation's equities. You can read the details here: Factset Buyback Quarterly.


Chart source: Jim Bianco, Bianco Research, LLC, November 2014

The other group of financiers with access to the Fed's free money for financiers has been private equity. So did the private equity multi-millionaires borrow the Fed's largesse to build new plant and hire new employees? Did they invest the borrowed billions in productive startups?

No--they used the money to buy existing companies and bleed them dry. The Glory Days of Private Equity Are Over (Via Mark G.):

Private equity has been holding back the economy. When you buy out a drugstore chain or car-rental company and load it with debt, you aren’t investing in the productivity of the economy. More often, by cutting back on new products and services, you are removing productivity from the economy. While generating wealth for endowments and pension funds, private equity can destroy wealth in the economy—my guess is 0.5%-1% lower gross domestic product in an already subpar recovery.

There you have it: the Fed has lowered productivity and GDP and stripmined savers, widows and orphans to further enrich the obscenely wealthy. Recall this from my entry last week, Will Cash Always Be Trash, Or Will It One Day Be King?

Between 2009 and 2012, the first years of the economic recovery, the top 1% saw their incomes climb 31.4% — or, 95% of the total gain — while the bottom 99% saw growth of 0.4%.

There is only one way to end the financial tyranny of the Federal Reserve--abolish it, and put an end to the predatory pathologies of its policies. 



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle edition
Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.  

And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.


Thank you, Luther A. ($10/month), for your outrageously generous subscription to this site-- I am greatly honored by your support and readership.

Read more...

Sunday, March 29, 2015

How Many Slots Are Open in the Upper Middle Class? Not As Many As You Might Think

Not only are there not that many slots in the upper middle class, the number of open slots is considerably lower.


If America is the Land of Opportunity, why are so many parents worried that their princeling/princess might not get into the "right" pre-school, i.e. the first rung on the ladder to the Ivy League-issued "ticket to the upper middle class"? The obsessive focus on getting your kids into the "right" pre-school, kindergarten and prep school to grease the path to the Ivy League suggests there aren't as many slots open as we're led to believe.

Let's set aside the endless debate over what qualifies a household to be "middle class." Most people define themselves as middle class, with little regard for their income. Let's cut to the chase and ask: how many young people aspire to joining this ill-defined middle class? Does this mean a rising standard of living and security? Not any more.

If you want those things, you must aspire to join the upper middle class.

So the more fruitful question is: what qualifies as upper-middle class?Here's a handy line in the sand: Stanford University covers the tuition for all incoming undergraduates whose household income is less than $125,000.

According to the U.S. Census Bureau data (here displayed on Wikipedia), $125,000 is right about the 85% line--only the top 15% households make $125,000 and up annually:Household income in the United States.

For context, median household income in the U.S. is around $52,000 annually.

A few years ago, I calculated What Does It Take To Be Middle Class? (December 5, 2013) and came up with an absolute minimum of $111,000 for two self-employed wage earners, as this includes the cost of healthcare insurance and the employer's share of Social Security and Medicare taxes. This was bare-bones.

Since employees of the government or Corporate America receive healthcare and retirement benefits (matching contributions to employee 401K plans, etc.), these can be subtracted from the $111,000. But this didn't allow for vacations or any of the finer things in life, so if we are talking about a truly comfortable household income, around $105,000 for state/corporate employed people sounds right and $125,000 for self-employed people is more or less the minimum required.

(Obviously, money goes further in the Midwest and not very far on the Left and Right coasts.)

Stanford's cutoff of $125,000 isn't as outlandish as it might seem at first glance.See where your household income fits in the spectrum with this online tool: What Is Your U.S. Income Percentile Ranking? (This confirms that an income of $125,000 puts the household in the top 15%.)
Meanwhile, wages for every category of worker, from the highly educated to the high school graduate, have been declining:


How many slots are there in this upper middle class? A household income of $190,000 is in the top 5% nationally. According to the Social Security Administration data for 2013 (the latest data available), Wage Statistics for 2013, individuals who earn $125,000 or more are in the top 5% of all earners. Two such workers would earn $250,00 together. The 2.8 million households with incomes of $250,000 or more are in the top 2.5%. If we define the top few percent as upper middle class, then who qualifies as wealthy? Only the top 1%?

I think it is reasonable to define the 10% of households earning between $125,000 (top 15%) and $190,000 (top 5%) as upper middle class. This is around 12 million households, out of a total of 121 million households.

Most of those jobs are already held by people with years of experience and abundant social and human capital. Yes, there are plenty of wastrels living off trust funds and free-riders doing as little as possible in their guaranteed government jobs, but by and large the people earning these incomes are working hard and will do whatever it takes to maintain their current incomes for the sake of their kids and their own security.

This explains the frantic drive to be one of the 2,100 students accepted by Stanford out of 42,000 applicants. These low admission numbers reflect the admission realities in the upper crust of Ivy league universities, both public and private.

The assumption is the few open slots in the upper middle class (or dare we hope, the 1%) will disproportionately go to those who have the credentials that signal they have the social breeding and brains to fit the corporate culture and they're willing to work hard and make their bosses lots of money.

Meanwhile, the top 5% of households in San Francisco earn a whopping $423,000 annually. (brookings.edu)

This is enough to put those households in the top 1% of California residents, roughly $433,000 annually: 10 States Where You Need The Most Money to Be In the 1 Percent

If you're curious what jobs those living in top 1% households have, check out this chart: Explore the occupations and industries of the nation's wealthiest households (NY Times).

4,575 writers (out of 92,000 nationally) are in top 1% households. Where do I sign up? Another 10,134 writers in "other industries" (out of 465,000 people claiming this employment category) are also in top 1% households. 15,000 retail clerks also live in top 1% households.

Perhaps the trick is not to make a lot of money writing or selling accessories, but to marry a top-level attorney, doctor, business owner, dot-com millionaire, lobbyist or trust funder?

(You can look up what qualifies as a 1% household income in this link, which has a chart of all 50 states and Washington D.C.)

Not only are there not that many slots in the upper middle class, the number of open slots is considerably lower. No wonder so many parents are desperate for an insider's pathway for their offspring. 



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle editionAre you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.  And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Elston Exhaust ($100), for your outrageously contribution to this site-- I am greatly honored by your steadfast support and readership.

Read more...

Saturday, March 28, 2015

Complacency Reigns Supreme--Nothing Can Possibly Go Wrong, Right?

So by all means, buy the dip now that the VIX soared in full-blown panic from 12 to 17.


One of the more remarkable features of the Bull market in stocks is the ascendancy of complacency and the banishing of fear. Take a look at this chart of the "fear index," the VIX--more properly, a measure of volatility:


The VIX popping up to 17 from 12 now qualifies as an extreme of fear which gives the Bulls the go-ahead to buy the dip once again.

Even more striking is the daily chart of VXX, a short-term VIX-based etn: A tiny blip up from 24 to 26 now qualifies as an extreme of panic.


Equally remarkable is the steady decline in both VIX and VXX: complacency now reigns supreme.

The complacency is the result of stocks' steady rise for over two years--9 quarters of advances with only one spike down in october 2014--a spot of bother that was quickly reversed by a Federal Reserve flunky talking up QE4 (another round of quantitative easing to boost stocks).


No wonder complacency reigns supreme: any time the stock market tumbles by more than 3%, a Federal Reserve flack runs to a microphone and starts talking about how the Fed stands ready to launch QE4 or "whatever it takes" to push stocks back into rally mode.

For context, recall that both VIX and VXX tend to reach 40 in real moments of panic/fear. That the VXX "soaring" 2 points from 24 to 26 now qualifies as an extreme of fear is absurd.

Yet this is the logical result of central banks constantly "saving" equities every time they swoon the slightest bit: traders and punters know that the Fed making reassuring sounds is all that's needed to reverse any decline and restart the Bull advance.

But a couple of things have changed recently. The QE baton has been passed from the Fed to the European Central Bank (ECB), famously ready to do "whatever it takes," but the ECB's QE bond-buying hasn't triggered the global rally that many expected.

Secondly, China is rolling over the first time in six years. The engines that pulled the global economy out of the hole in 2009--the Federal Reserve and China--have stopped, and there are no equivalent engines warming up.

So by all means, buy the dip now that the VIX soared in full-blown panic from 12 to 17. Nothing can possibly go wrong as long as a Fed flack stands ready to spew the same old assurances of "whatever it takes" into a microphone. 



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle edition
Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.  And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Thomas H. ($50), for your super-generous contribution to this site-- I am greatly honored by your steadfast support and readership.

Read more...

Thursday, March 26, 2015

Will Cash Always Be Trash, Or Will It One Day Be King?

When the phantom wealth evaporates and risk assets go bidless, cash will once again be king, for the simple reason there will be so little of it.


Occasionally it's a good idea to step away from the daily grind to consider the larger issues we all face--for example, the future of the money we earn and the bits we invest in something we hope holds or increases its value.


At present, cash is trash: cash earns almost no yield, and in some countries it now earns a negative interest rate, meaning it costs you to park your cash in a bank.

Even cash equivalents such as one-year Treasury bonds pay almost nothing.

Those who avoided debt and risky assets since 2009 have seen their cash lose value when adjusted for inflation, while those who borrowed to the hilt and bought risk-on assets such as stocks, junk bonds and high-end housing have skimmed monumental gains for doing what the central banks incentivized: borrowing money and buying speculative risk-on assets.

Correspondent Kevin K. recently sent me a link to a home in the San Francisco Bay Area that was purchased around the crash era (2008-09) for $1.4 million, and sold last year for $2.1 million.

Assuming a conventional 20% down payment of $280,000, the savvy buyer borrowed $1.12 million at historically low rates and offloaded the house 6 years later for a cool $560,000 profit (assuming a 6% sales commission and closing costs).

That's a 200% return on the $280,000 cash down payment--a healthy reward for borrowing to the hilt for a mere 6 years.

Anyone who margined to the hilt in 2009 and rode the stock market higher with borrowed money easily earned returns in excess of 200%.

Yet how many people did so? Consider this chart of the wealth of U.S. households before and after the Global Financial Meltdown and Great Recession.

By the look of it, even the top 5%--individuals earning taxable incomes of $120,000 or more, according to the Social Security Administration, or households with total incomes around $350,000, according to the U.S. Census Bureau (Table F-3. Mean Income Received by Each Fifth and Top 5 Percent of Families, XLS file)--have yet to regain the value of assets owned in 2007, before the Global Financial Meltdown/Great Recession.


If the top 5% had borrowed/margined to the hilt and dumped all that dough into risk assets, their net wealth would have skyrocketed. Clearly, few did so.

This suggests those who did margin/borrow to the hilt were in the top 1% or .1%. 95% of 2009-2012 Income Gains Went to Wealthiest 1%Average inflation-adjusted income per family climbed 6% between 2009 and 2012, the first years of the economic recovery. During that period, the top 1% saw their incomes climb 31.4% — or, 95% of the total gain — while the bottom 99% saw growth of 0.4%.

What would have to happen for cash to be transformed from trash to "cash is king"? The basic answer is: all the risk-on credit/asset bubbles that have richly rewarded those who have speculated with borrowed money will have to implode and be impervious to central bank attempts to re-inflate the bubbles.

What conditions would have to be present for credit/assets to implode and not recover?

We are in uncharted territory in terms of the global bubble in credit and risk-on assets, so the answer isn't immediately clear. Here are some possibilities:

1. Credit growth falters.

2. Borrowing dries up (despite abundant credit).

3. A global scramble for cash to pay debt and the costs of lavish lifestyles triggers the liquidation of risk-on assets.

4. The risk-on assets go bidless, i.e. nobody wants luxury yachts, super-cars, estates, etc. at any price because the value is plummeting.

5. As phantom wealth evaporates, everyone realizes the collateral propping up the mountains of debt is either impaired or non-existent.

When the phantom wealth evaporates and risk assets go bidless, cash will once again be king, for the simple reason there will be so little of it. When the opposite of the present dynamic is "impossible," then the "impossible" becomes not just likely but inevitable. 





Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle edition
Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.  

And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Ray W. ($50), for your superlatively generous contribution to this site-- I am greatly honored by your steadfast support and readership.

Read more...

Wednesday, March 25, 2015

What Will End the 34-Year US Treasury Bond Bull Market?

I see #1 and #4 as the most likely triggers of a rise in Treasury yields.


U.S. Treasury bonds (10-year and 30-year) topped out above 15% in late 1981, and have traced a sawtooth pattern down ever since. The 10-year bond now yields 1.92% and the 30-year yields 2.51%.



Correspondent Mark G. recently asked a question that is on many minds: what might finally produce an end to the 34-year US Treasury Bond bull market? Here is Mark's commentary on the question:

10 Year T-Bond interest rates are falling again after a minor rally. This leaves me pondering a nearly 20-year old question: what might finally produce an end to the 34-year US Treasury Bond bull market? Neither the beginning or end of three different US QE programs, plus Japanese and ECB QE programs, have served to do this. Nor did oil price booms to $140/bbl, or price crashes to $42/bbl WTI with threats of further decline. Or any other commodity or possible index of commodities. Various FOREX levels so far have also been only correlated over the very shortest of terms. Stock market bull bubbles and bear crashes have also come and gone without lasting effect. War, peace, Cold War, Cold Peace ditto.

My background education and experience says that before this T-Bond bull market can end the US T-Bond sellers will have to routinely overwhelm the buyers.

As Mark observed, the price of bonds (along with all other securities) is established by supply and demand. For prices of any financial security to fall, sellers have to routinely overwhelm buyers.

Demand is one factor; supply is the other. If the security is scarce, then even modest demand can push the price up. If the security is in surplus, demand can be overwhelmed by supply.

So the only way that the yield on Treasuries (or any other security) can rise is if supply overwhelms demand. If there are no buyers of bonds at a low price, the yield must rise to entice buyers to part with their cash.

If demand soaks up the initial issuance but more issuance hits the market, the yield will rise as demand for more bonds simply isn't present at low yields.

The central banks have manipulated the market for sovereign bonds by creating new money out of thin air and buying bonds. The goal is to suppress interest rates. And since central banks can create as much money as they want, whenever they want, there is no limit to how many bonds they can buy.

Rising yields once acted as a limiting factor on governments' issuing more bonds to fund their fiscal deficits. But since central banks have created trillions of dollars out of thin air to buy as many bonds as the Treasury issues, rates can be suppressed for as long as central banks are free to create trillions out of thin air.

If we put these dynamics together, we can sketch out a few possible conditions that would have to be met for U.S. Treasury yield to rise:

1. The Federal Reserve (the central bank of the U.S.) would have to be restrained from printing money to buy Treasuries. This could be informal political constraints (i.e. widespread public distrust of the Fed based on its role in exacerbating wealth inequality) or it could be the Federal Reserve's charter and powers are limited by acts of a Congress that is hostile to its counter-productive money-printing and financial repression.

2. The supply (issuance) of new bonds rises to levels that overwhelm demand. Were the U.S. government to run enormous deficits, the supply might well overwhelm demand, especially if the Fed were no longer free to print up another $3 trillion to buy bonds.

3. Other sovereign-debt markets that are currently being sold in favor of U,S. Treasuries would have to become more attractive in yield, liquidity and safety than Treasuries. Right now, oligarchs around the world have already suffered losses of 15% to 25% on their wealth not held in U.S. dollars.

The rush to sell other currencies and assets to buy dollars and Treasuries has enabled the Fed to end its quantitative easing/bond buying programs; the demand from overseas buyers has been strong enough to push yields down to historic lows, even without any Fed purchases.

This trend would have to reverse for Treasuries to be sold in favor of some other sovereign bonds.

4. The phantom wealth in risk-on assets would have to dissolve on a global scale, forcing owners of unleveraged assets such as Treasuries to dump their Treasuries en masse to raise cash to pay down U.S.-denominated debt and to to fund their lavish lifestyles.

Once the markets for yachts, super-sports cars, etc., dry up, these assets go bidless: nobody wants a costly-to-maintain yacht or super-car at any price. Real estate may retain more of its value than oligarch toys, but real estate is famously illiquid; the margin call must be paid in days, and finding a buyer for luxe real estate takes longer than days.

That leaves precious metals and the amazingly liquid Treasury bonds as assets that can be sold in a hurry to cover debts being called due to the collapse of risk-on bubbles in equities, junk bonds, real estate, art, yachts, super-cars, etc.

I see #1 and #4 as the most likely triggers of a rise in Treasury yields. The collapse of phantom-wealth bubbles could occur in the next year or two, or be delayed for another 5 to 6 years. But the implosion of phantom-wealth bubbles is assured by the internal dynamics of bubbles. 



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle edition
Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.  And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.
Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Steve W. ($50), for your superbly generous contribution to this site-- I am greatly honored by your support and readership.


Read more...

Tuesday, March 24, 2015

The Tried-and-True Blueprint for Raising Taxes

As the global economy slides into recession and the U.S. economy catches a cold, the blueprint for raising taxes will be dusted off in every state.


The blueprint for raising taxes in the modern era was first established in 1913 when the federal government instituted permanent income taxes. Prior to 1913, income taxes were viewed as wartime emergency measures to raise money for the immensely costly prosecution of war.

Here's the blueprint for raising taxes:

1. Declare the tax is an emergency measure.

2. Start the tax out at a low rate to minimize resistance.

3. Levy the tax only on the wealthy to play the "it's only fair" card.

4. During some late-night session when the public isn't looking, make the tax permanent by burying the provision deep inside some popular and/or complicated legislation.

5. Raise the tax rate in response to deficits, i.e. "we need more money."

6. Gradually expand the base by reducing the qualification level from "wealthy" to "well-off" and eventually to everyone.

7. Gradually reduce deductions and exemptions to pittances.

8. Auction off exemptions for the super-wealthy via campaign contributions.

You can watch the blueprint in action in any number of locales--for example, Rhode Island, where the governor is proposing a first-ever statewide property tax on second-homes worth more than $1 million. The proposed levy has been dubbed the Taylor Swift Tax in honor of Swift's $17 million mansion on the Rhode Island coast.

According to the data presented in these links, Rhode Island property taxes are in the top 20% of the nation. Depending on how the tax is reckoned (as a percentage of median home value, for example), Rhode Island scores in the top 10 of the 50 states.





Here is a Tax Foundation chart of property taxes paid by county. The darker the blue, the higher the property taxes:


As the global economy slides into recession and the U.S. economy catches a cold, the blueprint for raising taxes will be dusted off in every state. 



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle editionAre you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible. 

 And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Shirley C. ($50), for your outstandingly generous contribution to this site-- I am greatly honored by your support and readership.

Read more...

Monday, March 23, 2015

Orwell and Kafka Do America: How the Government Steals Your Money--"Legally," Of Course

Due process and rule of law have been replaced with "legalized" looting by government in America.


Did you know that the government of Iran steals your cash if they find more than loose change in your car? They don't arrest you for any crime, for the simple reason you didn't commit any crime; but it isn't about crime and punishment--it's about"legalizing" theft by the state.

So the government toadies don't charge you with a crime or arrest you--they just steal your money.

Pity the poor Iranian people--clearly, there is no rule of law to protect them from their predatory, rapacious, fake-democracy, quasi-totalitarian government.

Did you also know that if you deposit too much money in modest sums, the government of Iran steals all your deposits? They will claim--oh, the twisted logic of Orwellian, repressive governments--that you are obviously a drug dealer who is avoiding laws that require banks to report large deposits to the government.

Once again, you won't be charged with a crime--in true Orwellian fashion the suspicion that you may have committed a crime is sufficient reason to steal your cash. Pity the poor Iranian people, living in such a banana-republic kleptocracy.

Did you also know that if you are caught with any drug paraphernalia in your vehicle, the government of Iran steals your vehicle? The crime isn't a drug crime--it's a property crime: what are you doing with the government of Iran's vehicle?

Pity the poor Iranian people, living in a Kafkaesque nightmare where suspicion alone justifies the government stealing from its citizens, and an unrelated crime (possessing drug paraphernalia) is used to justify state theft.

As in a Kafkaesque nightmare, the state is above the law when it needs an excuse to steal your car or cash. There is no crime, no arrest, no due process--just the state thugs threatening that you should shut up and be happy they don't take everything you own.

Your car and cash are guilty--and your house, too.

Alas, dear reader, I have misled you. It is not the Iranian government that uses these tricks to steal from its people--it is the  U.S. government that uses these above-the-law excuses to blatantly steal from its citizens. I presented these Orwellian, Kafkaesque travesties of the rule of law as being Iranian so you would see them for what they are--the actions of an above-the-law, predatory state which falsely claims to be a democracy with a functioning judiciary.

All these forms of civil forfeiture in America are well documented:


Stop and Seize (six parts)

I strongly recommend reading every word of these articles before you start spouting nonsense about what a great and glorious government and legal system we have here in America.

After six years of gorging on the ill-gotten civil forfeiture gains of kleptocratic local government mafias, the Attorney General of the U.S., Eric Holder, recently announced that the federal government would no longer be taking its 20% share of the pounds of flesh stripped from the bones of U.S. citizens.

As my old African-American foreman F.B. would say: that's awful white of you, Eric, after feasting on the billions of dollars stolen from Americans for six long years. The same can be said of President Obama, who has ignored the officially sanctioned thievery by government thugs and toadies for six long years.


This is how Orwell and Kafka do America: each absurd justification for stealing private property is more outrageous than the next.

But wait--there's More! That bastion of liberal politics, the state of California, a state completely dominated by Democrats claiming the cherished mantle of Progressiveis undoubtedly the most rapacious, thieving, Kafkaesque government in any nation claiming to be a democracy.

As I have documented in detail, the mere suspicion that you might owe the state of California some tax is enough for the state to steal all the money it finds in any of your bank accounts. And in a fashion that would have made the NKVD of the former Soviet Union proud, you also have to pay the bank a $100 (or more) fee for stealing your money for the state of California. (At least in some accounts, you had to pay for the bullet the NKVD would put in the back of your head.)

After they take all your money, you can call the state tax office and listen to a recording. If you have any money left, you can spend it trying to prove your own innocence, since the state of California already declared you guilty without any evidence or due process.




When the state steals our cash or car on mere suspicion, you have no recourse other than horrendously costly and time-consuming legal actions. So you no longer have enough money to prove your innocence now that we've declared your car and cash guilty?

Tough luck, bucko--be glad you live in a fake democracy with a fake rule of law, a fake judiciary, and a government of thugs with the officially sanctioned right to steal your money and possessions without any due process or court proceedings.

Be glad we don't have to torture a confession out of you, like the NKVD/KGB did in the former Soviet Union, because your cash and car are already guilty.

And that's how Orwell and Kafka work in America--a nation that once was a democracy and could once claim to live under rule of law. Wake up and smell the stench of a gilded gulag, America; we're living in one whether you care to admit it or not. 



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle edition
Are you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.

And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.


Thank you, Mike F. ($20), for your much-appreciated generous contribution to this site-- I am greatly honored by your support and readership.

Read more...

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