Friday foibles and follies

On yet another Friday the 13th, be safe and be smart. And, watch out for black cats crossing in front of you. In the spirit of the day, let me offer a few foibles and follies for your contemplation.

Per our friend Scottie’s post, it always makes sense do your homework and be prepared for whatever comes your way. Please take about two minutes to watch the video of White House secretary’s Jen Psaki’s response to a reporter question on the claim of GOP support for Senator Rick Scott’s economic plan. Trust me, it is worth the watch. See below for the link to Scottie’s post.

I apologize for a little bit of morbid humor, but it is Friday the 13th. I once read the true story of man who is about my age now being diagnosed with prostate cancer. Being married for many years, he objected to the doctor’s insistent recommendation of a more invasive surgery that would leave him impotent. He said making love with his wife was the greatest joy in his life and he pursued other procedures. After being cured for twelve years and enjoying his love life, he read the doctor passed away. The man saw the obit and smiled that he had outlived his doctor, noting to his bride, the doctor makes whoopie no more.

There is another true story I read about an older New Jersey woman who refused to sell her coastal property to a famous developer who would later become a notorious former US president. The developer wanted her property as it was next the casino he wanted to build. To his chagrin, she denied every advance to buy her property, even the threat of lawsuit and he exhibited his famous temper. A few years later, as the casino went bankrupt, her property was still standing. And, she smiled that she had outlasted the investment.

In a news report following the housing crisis in 2007-08, one of the investment banks that went under was Bear Stearns. About a year before this occurred, a financial analyst got a meeting with the CFO of the organization as he wanted to forewarn them. The analyst saw the banks and finance companies selling mortgages to people who could “fog a mirror” as their only review. These mortgages were packaged together (called Collateralized Debt Obligations) and stamped as good risk and sold to investors by folks like Bear Stearns. The analyst told the CFO he had a model which showed Bear Stearns would go under as a result. The CFO thanked him and asked him to leave. The first fallacy was the CDOs being stamped as good risk as a lot of bad risk together does not make it good. The second fallacy is the Bear Stearns folks assumed the market would always go up, which is not a realistic assumption.

These stories may seem unrelated, but at the heart of them is to two underlying themes

– do your homework and be prepared

-if you know what you want and know the options, stand firm in your mission.

The Bear Stearns story is not an outlier as several entities either went under or had to merge during the Housing crisis. The movie called “The Big Short” based on Michael Lewis’ book and starring Christian Bale, Ryan Gosling, Brad Pitt, Steve Carell, et al, defines what happens when supposedly smart people don’t know what they are investing in. See link below to a summary of the movie.

https://en.wikipedia.org/wiki/The_Big_Short_(film)

Please focus on the news

Yesterday, in my browser feed was the headline Tucker Carlson said (whatever). That is not news. Carlson is an opinion host whose modus operandi does not always include the truth, which is actually a generous comment. What he, Rachel Maddow, Sean Hannity, Lawrence O’Brien, Laura Ingraham et al, espouse is not news. It is opinion. And, in Carlson’s case, includes purposeful disinformation as he covers for the untruthful and seditious bent of the former president.

I have been a broken record that the news too often covers things that are not news. I do not care who wins or loses by an action or inaction, I want to know what it is, who will benefit, what it costs and when will it be implemented. Congress largely does nothing but run for office. The fact we have to wait, every time, to fund the government at the last minute is a travesty, in my view. Stop the stop gap measures and do something with more forethought and action.

One thing I fault the media on is focusing on too many little things with the former president. Yes, he did all those things, but by focusing on little faux pas, the bigger transgressions get overlooked. Here is an example. In the middle of the 2020 election, the former president’s foundation was ordered by a judge to be disbanded and Trump repay money he used from people’s donations for personal use. The repaid monies would be distributed per the foundation’s bylaws by a group of new trustees with no one named Trump among them. Yet, this news got overshadowed and not many people knew it occurred.

I mention this example as it is a precursor to what is happening with the Trump business today. The former president and his children have been ordered to testify in court in the criminal proceedings against the company regarding misrepresentation of financials. It should be noted the Trump accounting firm resigned from the account and said do not rely on the last eleven financial statements, which is extraordinary. This is not a witch hunt, nor was the foundation story above. This is alleged malfeasance.

This must be focused on as this person is still considering running for president again. This is in spite of his Big Lie that the election was stolen from him that he has been unable to prove in spite of a lot of money, effort and now suspended attorneys’ time. This is in spite of the investigation that the former president committed seditious actions against a branch of government leading up to and on January 6. No, Mr. Carlson, this was not a false flag operation.

These are needed news stories. Yet, I would rather we talk about addressing climate change, water concerns, shoring up electrical grids to meet the growing renewable energy production, investing in the new jobs of the future, improving healthcare access, dealing better with our debt and deficit, etc. Yet, we still have to talk about the former president’s poor stewardship, untruthful nature and alleged malfeasance and sedition.

More thoughts on saving a little money

I was reminded of the story of a fellow blogger whose car passenger wanted her to stop by the store so she could buy a lottery ticket. When the driver asked her how much she wanted to buy, the rider said $5. The driver said hand it to me and as she did, the driver threw the $5 out the window. “Hey, why did you do that?” The response was simple, “I felt if you were going to throw your money away, I might as well do it for you and give you a better story.”

Yes, I am aware some folks win the lottery. But, I am also aware, hundreds of millions of folks do not. My strong advice is get a strong box and every time you feel the urge to play the lottery, throw the $5, $10 or $20 into the box and lock it up. At the end of the month, put it into a savings (or investment) account and do not touch it. Better yet, set up automatic deposits with each paycheck into a 401(k) plan or savings or investment plan. $10 a week will amount to $520 a year without investment earnings.

I touched on investments, but investing money need not be hard. One of the safer (but not 100% safe), higher dividend paying investments is in your electric or gas company. They usually have customer stock purchase plans that are easily accessible. Often, information can be found on the billing statement, but go online and check it out. These companies are quasi-governmental because of their community purpose, so they tend to be safer (but not totally safe) investments than other stocks. Yet, you can also google high dividend paying stocks online as these stronger companies tend to have stock purchase plans. One key suggestion is to automatically reinvest the dividends to buy more stock.

But, where you should start is your company savings 401(k) plans. This is especially true when the company matches your contributions. If they match 25%, that is an automatic 25% return if you immediately sold the stock. Plus, you are dollar averaging as you invest, so the vagaries of the stock market will be less impactful if you invest the same amount with each paycheck. When you leave that employer, you can leave a large balance in the plan, roll it into an IRA or just cash it out. Some plans will automatically cash out small balances.

Finally, the best way to save money is not to spend it. I have written several blogs on this subject, but avoid buying so many name brands and plastic water bottles. If you live in an apartment, the water is usually included in the rent. So, get a filtered pitcher and save money and the environment. And, don’t throw so much food away. Based on the product, those dates are “best by” dates not expiration dates. A key thing to remember is leftovers are our friends – three meals out of one dish can go a long way to saving money.

Too many folks are looking for panaceas to make a ton of money quickly. Yet, most people make money by not spending it and investing it. If you are young, you have a huge advantage over an older person – you have more years for your investment to grow.

Note: Please do not construe the above as investment advice. These are savings suggestions. I am not an investment professional, so check with people who are for advice. Stock values do go up and down based on company and market performance. And, the stock value is based on the solvency of the company, so do some research or invest in mutual funds that hold many stocks.

Good economic news per Jennifer Rubin and Wall Street Journal

In an editorial by Jennifer Rubin of The Washington Post called “Opinion: Biden gets an early Christmas gift: Good economic news,” she discusses the good economic news hearing into 2022. In excerpts below, she cites The Wall Street Journal and The Conference Board to support her claim.

“Presidents have some control over fiscal policy, but markets, the Federal Reserve and, yes, the state of the pandemic have a lot more say on how the economy is performing. Nevertheless, if President Biden can be bashed for bad economic news during his presidency (e.g., inflation), then he also should get some credit for successes. And right now, there is plenty for him to crow about.

Heading into the new year, the economy looks in better shape than Biden’s legislative agenda. The Wall Street Journal reports: ‘A booming U.S. economy is rippling around the world, leaving global supply chains struggling to keep up and pushing up prices. The force of the American expansion is also inducing overseas companies to invest in the U.S., betting that the growth is still accelerating and will outpace other major economies.

With a projected 7 percent annualized growth rate for the fourth quarter, the United States is running circles around Europe and China. That relative strength against the rest of the world, reflected in a strong dollar that lowers the cost of imports for U.S. consumers, matters greatly.

The economy grew 2.3 percent in the third quarter (higher than the expected 2.1 percent). Moreover, for all the talk of inflation and the pandemic, consumer confidence is through the roof. ABC News reports: ‘The Conference Board, a business research group, said Wednesday that its consumer confidence index — which takes into account consumers’ assessment of current conditions and their outlook for the future — rose to 115.8 in December, the highest reading since July.

…Furthermore supply chain woes are showing signs of abating. As Biden said at a meeting on Wednesday with his supply chain task force, “Packages are moving, gifts are being delivered and shelves are not empty.” He was also able to point to concrete steps his administration has taken to address the issue, such as obtaining the ports’ agreement to operate 24/7.

The full editorial can be linked to below. Rubin’s first point about presidents getting too much credit and blame for the economy is a good one. Yet, they do provide headwinds and tailwinds, usually a little of both. Biden’s predecessor inherited an economy that was in its 91st consecutive month of economic growth in January 2017 with six consecutive years of 2 million plus annual job growth. To his credit, it continued and was lifted some by a temporary sugar rush of the corporate tax cut in 2018, before falling back to previous levels after the sugar rush waned. Once the pandemic hit, all bets were off and we retrenched.

Biden and Trump invested in stimulus payments to get the economy going providing money to spend. And, it helped tide us over until more of us started working. Was it the best use of funds? Arguably. Some contended we should have provided the subsidies to employers to keep people employed. I would preferred to have seen that, as people would still be tethered to their job. The recently passed Infrastructure Bill will provide some additional tailwinds as would the Build Back Better bill that is still waylaid.

Inflation is of course a concern. Yet, politicos like to highlight bad news when their tribe is not in charge and lessen the focus on good news. In addition to the new COVID strain, what gives me pause is the stock market continues to remain at record high levels. The question is how long can it remain there? If you know that, you are way ahead in the game.

https://www.washingtonpost.com/opinions/2021/12/22/biden-gets-an-early-christmas-gift-good-economic-news/

More Sunday soliloquys

I hope your weekends are going fabulously. For our Australian, Filipino, New Zealand et al friends, I hope yours was grand. Here are a few mix and match comments, around a theme of needed history lessons.

Speaking of that part of the world, my wife and I have fallen for an older Australian show called “Packed to the Rafters.” It lasted for about six seasons and our PBS station is doing reruns. The premise is during the housing crisis back in 2007-09 timeframe, a family called the Rafters have various adult children and even a widowed father living with them. They are an abnormally normal family during stressful times, so it makes for good theater. The writers are quite clever in focusing on one or two family members a show to reveal how they arrived to their present predicaments.

It seems the housing crisis was so long ago with the various travails we have had since then. What is interesting today is inflation is creeping up again due to guess what – housing prices going up. Hopefully lessons have been learned about selling mortgages to people that cannot afford them and then packaging crappy mortgage deals into investment products that understate greatly the risk. But, we seem to be people who are good at erasing history.

Yet, not only are we forgetting history, we have a concerted effort going on in the US to whitewash history, even if recent history, as if it did not happen. It is bad enough that Americans, as a whole, would fail miserably on history and geography lessons, but to avoid teaching some parts because it makes us look bad is just a bridge too far. While masking bad things is not new – read summaries about the Pentagon Papers, the banning of the song Strange Fruit,, the Freedom Summer murders, the Lavender Scare, McCarthyism, Native American genocide, etc. – there are parts of our history that don’t show up as much as they should.

Since we began with the housing crisis, let me close with real history lessons that do not get enough airplay. Two of the poster children for the housing crisis are Beazer Homes and Bear Stearns.

Beazer was a developer that would clear land and sell houses in a community fashion. It is reported they did not tell the prospective buyers the realtor, the inspector and the mortgage lender were all related to the Beazer business. So, many prospective buyers were sold a home that was more than they could afford, based on mortgage numbers that were presented as a perfumed pig, with variable mortgages so interest rates could go up 200 basis points each year, and a house that had few inspection issues. When the housing prices dropped beneath the mortgage owed, that caused an upside down financial dilemma. Many lost their homes.

Bear Stearns is an investment banker that no longer exists. It is reported they packaged these bad mortgages together in a bundle and called them Collateralized Debt Obligations or CDOs. The law of large numbers works only when good risks negate bad risks in large bundles, but if the majority of the risk is bad, that means the whole product is risky. Bear Stearns was over-exposed with these bad risks and it took them down. What is interesting is a financial analyst got a meeting a year before Bear Stearns collapsed and told the CFO they were going under. The CFO kicked him out and the man said he would bet against them and made a killing for himself and is clients betting that these over-leveraged entities would fail as housing prices declined. This is the theme of the movie ‘The Big Short.”

If we don’t know our history, then we will repeat our mistakes. And, as we speak there is a rise in white nationalism in this and other countries, people are trying to tell you the truth is not factual, and the financial markets cannot crash again.

The past serves as a reminder

Two old shows that my wife and I enjoy are focused on the past, especially when it rears its ugly head. An American produced show is called “Cold Case” where a team based in Philadelphia work unsolved cases that resurface. The other is “Unforgotten” which is a British produced show that works previously unknown crimes.

“Cold Case” has a unique style where they reveal the initial set-up of the crime, but not who did it. They go back and forth with the younger version of the character for a few seconds, so you know which older person that is. “Unforgotten” is told over a series of six or so shows, one crime per season. A body is discovered and the team has to begin to find out who, what, when, where and how. Both teams are led by imperfect leaders with their own set of problems.

The two shows tell us the past is never fully behind us. I know I would not want my past mistakes being brought up today, although I can confess I never murdered anyone. But, we should learn lessons from our past mistakes. Our friend Amanda revealed a quote on her blog the other day about focusing on the lesson and not the pain of the mistake (see link below)..That is easier said than done, but is a better goal than saying “woe is me.”

When people, businesses, organizations and governments do not heed the mistakes of the past, they are truly destined to repeat them. The US did not learn the lessons of Vietnam and invaded both Afghanistan and Iraq. A senator named Jim Webb who served in the military said if we invade Iraq, be prepared to stay for thirty years. That was eighteen years ago.

In the book “Built to Last,” the authors’ data revealed the most admired and successful companies tended to promote from within to the CEO position. They knew what worked and did not and who to listen to and who not to. I have seen many a new CEO come in and make changes that repeated past mistakes. Even if they came from within, I have seen CEOs repeat an earlier mistake due to arrogance. I am thinking of one large bank that no longer exists who made two of the worst acquisitions that should have been avoided for the same reason – both hurt the bank’s reputation. And, that should not have been news.

People are prone to do this in their personal lives. They believe their new partner will change for the better. They ignore signals that they have seen in previous partners. The most basic of signals is this one – if a partner treats you poorly when he or she is courting you, what do you think he or she will do once you became married or more serious?

The author Malcolm Gladwell’s excellent book “Blink” speaks of ignoring our subconscious signals when we make poor decisions. Our gut instinct is our collective history of experiences that tell us things before our conscious recognizes it, if it ever does. The examples of the book are many. A firefighter who tells his crew to back out of building as it is burning in an unusual manner. The art expert that knew immediately a painting was a forgery, but could not articulate why. The counselor who could tell with about ten seconds if a couple she was counseling was going to survive.

These people were not guided by whims. Their gut instinct told them something was amiss before they could articulate why. In the firefighter’s case, the fire was burning in the floor below, so his crew would have crashed through the floor, e.g. Their past experiences told them how to act. In organizations, the experience is collective, so sometimes a few people might know an action is poor (like Senator Webb did), but they do not have the power to influence leaders. Or the leaders were to blinded by their own arrogance to take advice.

The past tells us many things. While we should not be slaves to the past, as times do change, we need to understand what happened and why, so as not to avoid the same mistakes.

https://forestwoodfolkart.wordpress.com/2021/08/08/sunday-quotes-helpful-resources/

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.