People want your money – be vigilant

Scams abound. At the dinner table when the kids were younger, we discussed with our teens that people want your money. So, you have to be vigilant and guard against them. Some want it by legitimate means – advertising to get your money for services rendered or products bought. Some want it through aggressive marketing to accelerate such purchases and some want to steal or trick it from you. The scams are the trickster part of the equation.

I had a new scam attempted on me this week which I will call the Electric Utility Scam. This scam was quite well organized with a sincere woman saying I owed money to the electric utility and they were on their way to cut off my power. I could stop them if I called Accounts/ Billing and gave me the number. I called and they asked for my last four digits on my phone and I asked what address they showed, which they correctly offered. He said I owed $500 and I said that was not possible, as my last bill showed a lesser amount due and it was not the due date. He then gave me to a supervisor who wanted me to go on my bank account and do a quick pay. I then said I do not believe you are the utility company and hung up. I called the number on my account statement and they confirmed it was a scam.

I don’t know why I went along for so long. I was skeptical from the outset, but the sincerity and the multiple people involved showed how organized it was. Yet, it was a fraud attempt. Other scams have been tried on me, my wife and my relatives. Here are a few to let others know they are indeed fraud attempts.

Grandparents Scam – This one bothers me the most as the scam preys upon the elderly by saying a grandchild has been in an automobile accident and cannot reach his parents. When the grandparent asks which one, the grandparent offers the name, which the caller seizes upon. The scam is to wire a sum such as $2,700 to an account. Usually the numbers are high, but not extreme.

Amazon Scam – This one is the most active as we have had about a half-dozen calls. An order on the account did not go through and they want us to provide credit card info to pay an odd sum like $739.45 to process the order. The first time we asked each other if we are expecting anything at all or for that amount. Since the answer was no, it must have been a scam. When other calls came in for similar odd amounts, we knew for sure.

IRS Scam – This one is scary sounding saying there is legal action being taken against you for taxes owed, but this is a scam. The IRS will send you a letter, not call you. And, they will try to resolve issues without legal action, before they ever move down that path.

Microsoft Scam – This one is a phone call saying your system has been compromised. The first time I got this one, it sounded legitimate, but when I was booting up my computer the guy asked me if this was the computer I do my banking with? I hung up. Then I realized Microsoft will not be calling me.

Insurance Scam – This one was not an effort to steal, but to sell. My mother was told her certain insurance company account had been compromised. My mother did not have such an account. This was an unscrupulous marketer trying to sell her a Medicare Advantage plan, which she already had with another provider. So, I called to cancel and told the representative how this happened. We also had to change my mother’s banking information as a result.

Bank Scam – This one often shows up on our mobile phones which is annoying. Someone representing our bank or someone else’s bank will send a text warning of a compromise on our account. It is not the bank especially when we don’t even bank with the entity being used. It is a fraud. Banks do send texts at your request, but they appear more legitimate and are for helpful reasons you checked off on – activity, overdrafts, etc.

Please share your experiences below with these and other scams. These do not even count the ID theft attempts, actual compromised credit information at various stores or services or ransomware attempts. People want your money. Be vigilant, even more so than I have been.

Class matters, socio-economic class that is – a revisit to an old post that remains pertinent

The following post was written in 2012, but it still remains pertinent. When I hear people chastise people in poverty for not working their way out, I think of this topic.

When you read this title, there are several interpretations that come to mind. While I am a firm believer in acting in a classy way, treating others like you want to be treated, the “class” I am referring to here is socio-economic class. There is a body of work spawned by research conducted by the New York Times, which led to the publishing of a book under this same title – “Class Matters.” It also led to a revolution of thought and I would encourage you to visit “www.classmatters.org for more information.

In essence, the term class matters refers to the tenet that your socio-economic class is a key factor in your ability to ask questions of those who are trying to serve you. The higher strata of socio-economic class is highly correlated with better education and more confidence. This translates into the greater ability and lesser reluctance to question things. On the converse, those in lower socio-economic classes tend to have lesser education and more self-esteem issues. They have a greater inability and lack of confidence to question those in power or who are trying to serve them.  As a result, those in the lower classes often make poorly informed decisions as they are:

  • too scared to ask questions,
  • feel threatened if they do so,
  • feel they will show their ignorance if they do,
  • do not know the right questions to ask, and/or
  • fall into a trusting mode, whether legitimate or not, that the person serving them knows what they are doing as they are wearing a doctor’s coat or suit and tie.

To illustrate this concept using a real life occurrence, the current housing crisis we are facing has many areas of cause from the lenders to rating agencies to investment managers to developers to buyers. At the heart of the problem, we had too many developers and realtors selling houses to people who could not afford that price of house and mortgage lenders providing mortgages to people who should not have that level of mortgage or who did not fully understand the terms of the loan. The buyers did not understand what a variable mortgage is or, using one of the lender’s terms, what a “pick-a-payment” or flexible payment mortgage entailed. The concept of negative amortization is term that was not well-explained or fully understood. In “House of Cards” a line that resonates with me is lenders were providing money to people who could “fog a mirror.” Then, they packaged up all of these poor risks in collateralized debt obligations (CDOs) and sold them to investors who thought they were buying a less risky product. The rating agencies did not help by stamping these CDOs with a AAA rating.

There are some who firmly believe in the concept of “let the buyer beware.” In their minds, the people who bought these houses and took out these loans should have been more aware “like I would have been.”  As a consequence, they believe the buyers should be held entirely responsible for the housing crisis. This school of thought has some merit, but misses two greater issues. First, if you have ever bought a house, you are asked to sign more papers than in any other transaction. I would wager that an exceedingly high percentage of buyers do not read every word of what they are signing. The legalese is too complex. More often than  not, they will ask the attorneys to explain simply what they are signing. I would also wager that in these transactions people actually sign papers they do not fully understand.

Second, with that context, people in a lower socio-economic class will be even more trusting of those in suits and ties. They would ask even fewer questions and understand even less of what they are signing. When the American Dream is to own a home and people in suits and ties paint a picture that you can afford this home, the buyers believed them more times than they should have. In some cases, the seller put “perfume on a pig” to dress up the sale as best as possible. Individuals were shown monthly payment numbers and did not realize those numbers could dramatically change every two years. In some cases, their income and wealth numbers were inflated to show they could afford a house and mortgage they otherwise would not. The buyers trusted people showing these numbers and signed on the many dotted lines.

Two true stories will embellish these points. The poster child for one extreme end of what happened was a builder based in Atlanta. The CEO and CFO were convicted of criminal and unethical actions they helped perpetuate with home buyers. In essence, the company-realtors representing  new developments did not represent they would make an extra bonus if you bought in this new neighborhood. They did not represent the inspector was being paid off to inflate the price of the house and show no problems existed. They did not represent that the mortgage lender they recommended was affiliated with the developer. So, along comes the buyer who does not know this, does not know to ask these questions and who sees a financial representation that they can afford this house. Even people above the lower socio-economic classes were taken in by this criminal behavior, yet the lower class people did not stand a chance.

The other anecdote took down a bank of which I was shareholder. This bank bought  a mortgage bank who had developed the concept of the “pick-a-payment” mortgage. This flexible payment mortgage concept was geared for a very astute buyer, not the masses of people who bought it. Mortgage people at this bank wondered why the CEO of the acquirer was pushing these mortgages even up to six months before the bank was destined to fail.  A mortgage person for that bank said we are having “pick-a-payment parties” to promote the sale of these mortgages. We are selling these mortgages to people who do not know what they are buying. They do not understand when they do not pay enough, their mortgage principal increases. Like with the above example, the lower socio-economic class buyers did not stand a chance. The people in higher classes suffered as well.

Yet, the class matters concept goes beyond these examples. It happens in everyday life, whether it is visiting the doctor, buying a car or something on credit or being served by the bank on other issues. We have people who will go into debt as they do not know the exposure they are adding with each purchase. In today’s world, there is a dearth of customer service. You have to be the navigator of your own customer service experience. Many people do not realize this as the case and tend to delegate the responsibility to the customer service person. We don’t ask enough questions of doctors seeking alternative treatments or payment plans. We accept the terms of a store credit card without knowing that if we fail to make one of the 30-60-90 day payments, we will pay back interest to the point of sale. We do not understand that we need to pay more than the minimum credit card payment as it will take 30 years to pay off a washer and dryer purchase. We do not ask the question, do I really need yet another credit card? We do not realize we have the power to say “no.”

I tell my children “people want your money, so you need to understand that.” Sometimes, they want it by legitimate means. Sometimes they have enticing commercials which are too good to be true. And, sometimes they will try to steal it from you online or by lying to you in person. You have to guard against this. With this backdrop, someone in a  lower socio-economic class will not ask enough questions to be served. They will take that extra credit card that arrives in the mail. They will sign up for the 30-60-90 day store plan to get a 10% discount not knowing the full ramifications of the transaction. I have also witnessed in helping homeless families, budgeting skills could be improved and asking questions about “must have” purchases are not done often enough. Sometimes these “needs” are actually “wants” and could be postponed. They do not know how to zealously navigate the use of coupons or the best times to buy products. They do not ask for the manager or supervisor when being ill-served.

This week I read a series on the inability of hospitals to uniformly offer reduction or the abatement in cost to those without health insurance and in an impoverished state. Someone wrote in that they successfully navigated payment options from one of the studied hospitals asking why couldn’t others have done that. When I read the letter critical of the people short-changed, the concept of class matters entered into my head. The people in need did not navigate the system as they did not know or have the confidence to ask the right questions. They did not relentlessly pursue options. This is exacerbated by the lack of transparency of the payment system, so it takes a concerted effort to understand what is happening even for people in higher classes. There are other examples in our society where you have to make a concerted effort to understand the details.

In closing, my hope is for more people to understand that class matters in getting proper help and service. We have to make it easier for people to ask questions, search for answers and be better served or, at least avoid being ill-served. It is OK to ask questions. As the teachers often say “the only dumb question is the one not asked.”  Please help others remember that. Offer to go with someone to the doctor to help ask the right questions. Or, encourage people to write their questions down beforehand. Encourage people to not get into credit exposure beyond their means.  Share your wisdom of purchasing or not purchasing items. Sources like Consumer Reports, BBB , Angie’s List,  http://www.cars.com are vital tools, e.g. Yet, I guess the big take away is to not assume people are like you. You may have avoided stepping  in the hole, but you would have asked more questions. Not everyone will. Offer them your help and understanding.

Is this what a president for the common man does?

Many of the Trump base have no idea they are voting against their economic interests. This advertised populist, common man president, fails to let folks know the following:

– in his first two hours of being president, he repealed a regulation that would have reduced homeowners insurance premiums for securing mortgages with the less than 20% down, that was scheduled to go in effect February 1, 2017. This would have helped about one million low income homeowners.

– he has hobbled the Consumer Financial Protection Bureau that was very successful, but banks and credit card companies did not like it. The CFPB penalized these companies for fraudulent and aggressive lending practices, with 95% of the fines going to cheated consumers. In short, the CFPB helps folks who are targeted.

– he eliminated a new requirement that said all investment advisors have to be fiduciaries, meaning they must put your interests ahead of their own. This was done to help investment advisors, paid by the transaction, to encourage sales that may not be in your best interests.

– he passed a tax bill that favored the elites and businesses, under the guise of helping everyone. To keep the bill down to costing only $1.5 trillion in debt, he had to have some pay higher taxes – a sneaky requirement noted that state and local tax deductions were capped at $10,000, so if you owned a house and lived in a state where income tax occurred, your tax bill may increase. Note, folks who do not itemize deductions, tended to come out ahead with the change.

– he failed to tell people (actually lying about the impact routinely) the tariffs would be paid for by consumers when importers passed along the cost. He has routinely lied saying China will pay the tariffs, but that simply is not true. Each time he said this, economists would rebut his lie.

– he also lied about an ACA change he made that increased premiums for people, saying it would only impact insurer profits. In essence, he ceased the subsidy to insurers to repay them for paying deductibles, copays, etc. for members making less than 2 1/2 times the poverty rate. Insurers honored their written commitment (Trump did not) and subsidies went up to pay for the resulting increase in premiums. BCBS of North Carolina said premiums the next year were going to increase by 0%, but with the Trump change, they went up by over 6%. The CBO said the increase in subsidies increased the deficit by $10 billion per annum and unsubsidized folk saw premium increases.

– he has advocated a COVID-19 relief bill which will prevent employees from suing employers for endangering them with COVID-19 exposure.

– finally, environmental deregulation hurts those in poverty more, as they have fewer choices as to where to live.

There is more. With his attacks on the ACA, with a pending lawsuit that would harm it, more of Trump’s base will be harmed. Plus, with his misinformation and mishandling of the COVID-19 pandemic, more people are being harmed and dying. Of all that I mentioned, his callousness and negligence in COVID-19 handling is the most prominent failure that impacts people.

So, in turn for getting protection over gun rights and attacks on abortion access, the president has largely screwed over his base and they have no idea he has.

The Fifth Risk – a must read by all legislators

Michael Lewis has authored several books that lay out a practical lens of major issues. They include “The Big Short,” “Moneyball,” “Liar’s Poker,” “The Blind Side,” and “The Undoing Project.” His latest book is called “The Fifth Risk,” and it is as much historical as it is alarming of missed risks.

The book is based on his review of largely unread briefing materials that were prepared for the incoming Trump administration by officials describing what the various departments do, their concerns, their successes, etc. Since the president was surprised he won the election and had fired his transition manager, Chris Christie, candidates to take over the various departments were not identified, much less in place. So, materials were not read and meetings went unattended. Lewis even interviewed people that prepared such reports after he read the non-confidential portions of the reports. They were more than happy to share their stories.

The above paragraph is not made to be political, it just presents a fact that the folks who eventually took over these departments missed a huge opportunity to learn how things worked from the people who oversaw the departments. As a result, our country is at risk of things that the leaders of many departments do not fully understand. And, what makes it more concerning, is many never took the time to understand or were even qualified to do so. The DOE was previously run by a nuclear physicist. After the election, until he recently resigned, it was run by a former governor without a science degree.

The book is actually a quick read, much shorter than it could have been. Yet, it is something every legislator should read, as they likely have a poor understanding of the risks at hand and what is not being done.

Lewis summarizes the general concerns of a key contributor from the Department of Energy, who greatly worries about things like exposure risk to radioactive waste product from nuclear energy that still exists and attacks on our energy production and distribution system, by saying:

The fifth risk is “the risk society runs when it falls into the habit of responding to long-term risk with short-term solutions. ‘Program management’ is not just program management. ‘Program management’ is the existential threat that you never really imagine as a risk.”

And, later he identifies the not knowing risk. “Here is where the Trump administration’s willful ignorance plays a role. If your ambition is to maximize short-term gain without the regard to the long-term cost, you are better off not knowing the cost. If you want to preserve your personal immunity to the hard problems, it’s better never to really understand those problems.”

To this point, the DOE contributor said when he saw the budget, “All the risks are science-based. You can’t gut science. If you do, you are hurting the country. If you gut the core competency of the DOE, you gut the country.”

There are so many things that these various departments do that benefit American people and industry that are misunderstood or simply not known. Could they be more efficient? Of course, and that should be the goal of any administration. Yet, these hard working people, scientists, engineers, Ph.Ds, etc. do yeomen’s work, and are ridiculed by some as the “deep state.” After speaking with many of these people, Lewis concludes the deep state are folks that actually know what they are talking about. They do not boast on themselves and get little notoriety.

One example is of a Coast Guard scientist who is the foremost authority on where people who fall over board might drift. He is actually acclaimed in other countries more than he is here, because he did not brag on his efforts. Previous to his efforts, falling over board usually meant the death of the person. Yet, he studied patterns, currents, sizes of people, what were they wearing, and other data points over years, even going on board as part of search and rescue missions. He developed an easier to use software tool that heightened the Coast Guard’s ability to pin point people. And, it is successful, but he is now retired with no obvious successor.

But, let me leave you with a final example, one of many. A business leader in rural America was bragging on getting a loan all on his own. The bank had a press conference where the leader was going to say this is how it should be done, with no government involvement. When someone from the Department of Agriculture introduced herself, he asked “what are you doing here?” She said, “we are the ones who lent you the money you are talking about.” He had no idea. Most Americans don’t, even legislators. After one complained about the Department of Agriculture sucking, she told the state official something he did not know, we invested more than $1 billion in your state last year.

I have written before about “The Invisibles.” These are the folks who show up at work each day and make things run well, without bringing attention to themselves. There are numerous examples in this book. And, when they are not allowed to do the things that are needed, we are the ones who suffer.

Help me define the best (or worst in this case) metaphor of the Trump presidency

After the most recent incredulous statement by the US president about ingesting disinfectant as a possible cure for COVID-19, I felt this Marie Antoinette moment might be a metaphor for his presidency. Yet, there are truly many contenders for such a distinction.

Below are twelve top of mind statements or actions that could be considered. Sadly, there are more to choose from. So, readers please let me know your top three, including others I may have overlooked.

1. Ingesting disinfectant – he has to tried to explain this away as sarcasm, but to see Dr. Birx trying to avoid eye contact when he asked her what she thought is telling.

2. Sharpie gate – this is when the president played meterologist and scared the state of Alabama by drawing on the map the hurricane may hit them. This was an unforced error thst aides spent a week trying to diffuse.

3. Firing Comey without telling him – for a person who liked to say “You’re fired” on TV, the president cannot bring himself to fire soneone in person. James Comey found out he was fired via TV news. But, Trump failed to tell his Communication team, so Sean Spicer was hiding in the White House bushes with staff to plan what to say.

4. First travel ban – Trump likes to use the word disaster to define anything he did not do. The first travel ban was so disastrous, it waa pulled after two days. The president failed to vet the change with various stakeholders including the people who would need to conduct the ban. So, people did not know what to do and the lines were long.

5. India/ Pakistan brokering peace deal – this faux pas did not get much air time, but the president announced in front of the Pakistani leader the India prime minister asked him to broker a peace deal between the two countries over the Kashmir conflict. Within the hour, India put out a press release saying no such request was made.

6. Tariffs paid by China – the president has said this at least a dozen times, so it may be a good candidate because of its staying power. Trump likes to say China is paying the tariffs. Economists correct him each time saying US importers pay the tariffs which are passed onto the consumers. So, we pay the tariffs.

7. Extorting Ukraine – after watching a parade of reputable public servants testify under oath at a great risk with such a vindictive president, Trump was impeached over extorting Ukraine for personal gain. He likes to focus on one phone call, but if that call was so “perfect,” why did his staff try to bury it?

8. Siding with Putin over CIA – in Helsinki, standing side by side with a man who is KGB trained on disinformation, Trump sided with Putin over the advice of his intelligence people. Senator John McCain wrote an op-ed piece to blast the president’s words as “traiterous.”

9. Pulling out of Paris Climate Change Accord – the president’s stance on climate change was my worst fear going in. So, he announced pulling out of the Paris accord on June 1, 2017, the day following Exxon shareholders voting for management to tell them what Exxon is doing to address climate change. When we exit, the US will stand alone in the world.

10. Transgender in military – the announcement to ban new transgender people in the military got the press, but the decision process is the metaphor. Per the book “Fear” by two-time Pulitzer Prize winner Bob Woodward, the president announced his decision by two tweets around 10:05 one morning saying the Joint Chiefs of Staff and he had decided to do this. Problem is they had not. The time is important as the Joint Chiefs waited downstairs to meet with the president to go over four options and the pros/ cons of each. The president was told of this and asked when would be a good time to meet. This is a key reason DOD James Mattis abruptly said that a tweet is not an order.

11. Wandering alone at G20 – this was a sad to watch as the president wandered the tables looking for someone to talk with after dinner at a G20 meeting. He finally wandered over to meet with Vladimir Putin alone, a very scary situation with a very informed leader and Trump, who does not study history or issues. Plus, it is a metaphor that he would gravitate to Putin’s table rather than an ally of our country.

12. Bragging on fixing the economy – this is the most relentless of topics and, until the virus hit, was his claim to fame. The problem is he did not fix the economy. Yes, economic growth continued under his watch, but when he was sworn in on January 20, 2017, the US GDP was in its 91st consecutive month of economic growth (that is seven plus years), the stock market had more than doubled under Obama, and unemployment was under 5%. Presidents get too much credit and blame for the economy, but for Trump to say he fixed the economy is untrue – it was not broken He has added both short term tailwinds and long term headwinds.

So, that is a dirty dozen, so to speak. I wanted to limit them twelve, so leaving off Charlottesville, his rallies, his ignoring the early warnings on COVID-19, or just his litany of routine, daily untruthfulness or beating up on the press, etc. proved difficult. Let me know your top three choices. Please feel free to add any others. It is funny, depending on how I want to focus my attention, I could pick a different three – is impact, continuity, or inanity the best measure?

The Fed needs to act independently

The Federal Reserve was set up to be a nonpartisan governing board over the money supply in the US, which impacts the economy. The president would only appoint members for Senate vetting when terms expired. The Fed is supposed to be independent from pressures from the White House.

Yet, the bull-in-the-china shop president wreaks havoc over what is supposed to be done. He acts regally in what is supposed to be a democracy with rules of governance. The Fed should not succumb to any president, but especially this one, who routinely places his self-interests above the country’s. And, that does not lead to good governance.

Presidents have little impact on the economy, only providing some headwinds and tailwinds. This president has done a little bit of both. But, he championed himself as a superior dealmaker and business person when campaigning and since elected. Yes, he has had success, but given his starting point, some financial people think he should be wealthier than he is.

He touts a $1 million loan from his father, but that is fable. An in-depth study was reported by The New York Times in the fall of 2018, that Trump’s father transferred tax free over $400 million to his son before he died. That is well north of a $1 million loan. Plus, there are Trump’s six corporate bankruptcies on failed projects. That caused US banks to stop lending to him, so he went to Deutsche Bank for money. But, there have been other failed investments – airlines, mortgage company, etc.

Trump has eagerly patted himself on the back about the economy. But, the economy was just over 7 years of economic growth and the stock market had more than doubled under his predecessor when he took office. But, as with Trump, Obama should not get too much credit for the economy either. He provided mostly tailwinds and a few headwinds. What is revealed by the stock market fall off due to global softening, falling oil prices and the coronavirus, is the president does not have much to do with the stock market. As Warren Buffett once said, if the president is going to take credit for the stock market increase, then he must take the blame for the fall.

So, the Fed would do well to ignore the president. Yes, the president is entitled to his opinion, but what has been shown over his history, is maybe his financial advice is not as sound as he (or his followers) think it is. My concerns are we are using tools that should be reserved for even tougher times. The stock and bond markets seem to be more jittery with moves like this. And, when people are staying home, traveling less and eating in, reducing interest rates may not be creating a needed salve, if less spending is occurring.

Yet, as noted earlier, what bothers me most is the president is interested in his own optics, not fixing a problem. He has and wants to trade short term gain for his benefit, at the expense of future problems. He did this with the debt and deficit and he has and will do it with the Fed. They need to tell the president, thanks but no thanks.

Here, there and everywhere

A lesser known Beatles’ song penned by Lennon/ McCartney was on the Revolver album – “Here, there and everywhere.” Using this song as a title to a potpourri post seemed appropriate. In no particular order:

A stark difference in the reactions to briefings that Russia is continuing to meddle in our elections was provided this week. Senator Bernie Sanders told Putin to back off, while the president of the United States fired the acting director of the Department of National Intelligence. Former Senator John McCain said in an editorial after Trump’s kowtowing to Trump in Helsinki, that he never thought he would witness a US president taking the word of a Russian leader over that of his own intelligence people. He still is. I have shared with multiple senators for many months that we have a national security risk in the White House. His name is Donald Trump.

Wells Fargo was fined $3 billion for their actions that led to the fraudulent creation of accounts and the failure to address these issues. They had been fined hundreds of millions earlier, but they still did not realize the severity of their screw up. Something this big is traceable to the top, whether it is explicit or implicit. Implicit means they created an environment that tolerated such bad behavior.

After yet another hate inspired mass shooting, this time in Germany, it troubles me that our leaders here are not condemning this in the harshest terms as German Chancellor Angela Merkel has done. Bigotry has to be carefully taught, so the only way to teach its counterpart is to condemn bigotry again and again as wrong. Our president fails to understand this point.

On the good side, the Taliban, Afghani and US negotiators are headed for an agreement which may end hostilities and allow for the exit of more US troops. Mistrust on all sides abounds, but let’s wish for a tangible and sustainable agreement.

Finally, from mythology, people who got too close to Medusa were either shot by arrow or turned into stone. US Attorney General is realizing now he has gotten to close to Medusa damaging his reputation. So, unless he leaves the building, he will end up being shot by the proverbial arrow or turned to proverbial stone. I guess the snakes are hiding in the combover.

Have a great rest of your weekend.

Don’t believe your eyes

Yesterday, Secretary of the Treasury Steve Mnuchin testified in front of Congress that the tax cut of December, 2017 would pay for itself before ten years. Really?

This is after the nonpartisan Congressional Budget Office said the tax cut would increase the national debt by $1.5 trillion before it was signed.

This is after we have witnessed the deficit increasing over previous projections the past two fiscal years.

This is after the president said the tax cut would increase GDP growth to 4%. It rose from 2.3% in 2017 to 2.9% in 2018, but softened to 2.1% in 2019.

This is after previous studies that said no tax cut has ever paid for itself. In fact, it is quite nervy to say it would – think of that statement. “It will pay for itself.”

It takes even more nerve to sit in front of Congress and say that it still will, now that the sugar rush has died off. Companies tended to buy back shares with the tax gain rather than invest the gain.

In short, the tax cut borrowed from our future to make a pretty good economy a little better for a little while. For Mnuchin to follow his boss’ lead and ignore facts is troubling. We have a debt and deficit problem that is being downplayed. To solve a problem, it requires admitting we have one.

Per Reuters – More foreign firms halted U.S. deals amid Trump administration scrutiny: report

Last week, Alexandra Alper of Reuters Financial News shared findings within a concerning report. The “report released by the Committee on Foreign Investment in the United States (CFIUS), shows that foreign companies abandoned roughly 14 percent of U.S. investments that were investigated by CFIUS in 2017 ‘in light of CFIUS-related national security concerns.’ The percentage in 2018 was 11 percent.

Those figures were sharply up from the period immediately before Trump took office. About 4 or 5 percent of such transactions probed by the committee were dropped annually from 2014 to 2016, the report showed. The Committee, led by the Treasury Department, reviews foreign investment in the United States for national security issues.”

I have raised this issue previously – when any entity makes it more burdensome to deal with, other entities will explore other options. The tariff wars are causing suppliers and customers to find other avenues. John Deere sales are down in the US, but up in South America as more agricultural products are being bought there.

On foreign investment, if we have companies jump through too many hoops, they will take their money elsewhere. These are headwinds to our economy and our growth has been softening.

Coupled with overall global softening, it should give us concern.

We should pay attention when people sound alarms at their own peril

It fascinates me when an old post starts getting some attention. Right now, one called “Who is Paul O’Neill and why should his opinions matter?” is getting a few looks (a link is below). In essence, O’Neill was fired as Secretary of the Treasury for voicing an opinion the President did not like.

What did he say, you ask? He said he was concerned about the debt and felt the Bush Tax Cuts were unneeded. This is after Bill Clinton handed a surplus budget to the younger Bush. It should be noted the debt is now 5 times larger.

Recently, the well respected Director of National Intelligence Dan Coats resigned under pressure as he told the inconvenient truth about Russian influence and its continuation. Like O’Neill, this clarion call should be heeded. Like with General James Mattis’ resignation last December, Coats departure is giving GOP Senators pause, yet they refuse to act.

Back in late 2007, a Texas financial analyst noticed that people who could “fog a mirror,” were getting huge mortgage loans on properties that seemed to be over-inflated in value. He did his homework and was able to get a meeting with the CFO of Bear Stearns. He told the CFO he thought Bear Stearns was over-extended with risk and was going to to go under.The CFO thanked him and the guy uttered these parting words – well, I am going to bet against you. Within the year, Bear Stearns was bought for a very discounted price before it went under.

Colin Kaepernick is a good NFL quarterback, but he has been blackballed from the league after calling attention to the unequal rights and treatment of Blacks in America. His civil protest was hyper-politicized by a hyper-political president, so he was blackballed, a term which seems apt. Yet, we have a difference in how Blacks are treated. Even further, our society is more economically unequal than it has ever been, with haves owning much greater shares. A society cannot withstand such differentiation for too long. Kaepernick’s protest should be heeded not condemned. His protest is far more emblematic of American values than a flag or anthem ever could be.

Those who are giving clarion calls should be given due consideration. There are financial analysts who have cautioned against Brexit from the outset. Those concerns have fallen on too many deaf ears. Their corollary message is even more dire – do not leave the EU without a deal. That is beyond poor stewardship. It matters not what the current PM says. Yet, if it does happen, it is only fitting that Mr. Johnson is the one trying to deal with the fallout.

Before I close, let me go back to someone who is similar to the Texas man who tried to forewarn Bear Stearns. The movie “The Big Short” highlighted one person of several who saw the housing recession coming. When his concerns fell on deaf ears, he had them create a product to pay off if he was right.  The industry laughed at him until a couple of years later they realized he was right. His clients made a fortune. The movie ends by telling us what this man is now investing in – water. While it does not get much play here, we have a global water crisis which rivals climate change as a concern. He saw it coming.

https://musingsofanoldfart.wordpress.com/2013/03/20/who-is-paul-oneill-and-why-should-his-opinions-matter/