Fair Tax – NOT!

Yesterday the house passed a bill taxing the AIG bonuses at a 90% rate. This is another example of the government using the tax code to punish (or reward) persons or groups they don’t (or do) like instead of for FUNDING vital public projects. This is why the “Fair Tax” will never be implemented in our or our children’s lifetime. Among other things the tax code is used to get politicians re-elected. The fair tax cannot do that. IDIOTS!!

Congress

The inmates are in charge of the asylum!

Class Warfare

Mouse In The House

Nothing strikes fear in the heart of a woman more than seeing a mouse in her kitchen. Catching or killing that mouse overrides all else. Even after the deed is done fear and doubt linger. How did it get in? Will more find the entry point? Are there siblings? Offsprings? Sleep is restless for days.

What A Great Idea!!

Many news reports claim students in the United States are well below average in academic performance. I recall one report that US students are 35th in the world with respect to math performance, behind most European and some African countries. Yet the US is about 3rd or 4th in spending per student. What is wrong with our educational system? Obviously taxpayers are not getting their money’s worth and our children are being cheated out of a decent education. Some school systems are attacking the problem by throwing more money at it as if the solution is more of the same. Other school systems are trying innovative solutions such as creating school competition (i.e. choice) with mixed results. Most liberal politicians influenced by teacher unions oppose the latter. However, earlier this month a saw a report on GMA on a highly effective experimental program to improve performance in Chicago schools. It’s called “Pay For Performance”. The idea is to “reward” students monetarily for achieving high grades. Funded entirely by private funds, students were given $50 for each A, $35 for each B and $20 for each C. In less than one year the grade point average increased by one grade level. In addition, GMA reported that students and their parents were much more enthusiastic and involved in their education. They actually looked forward to final exams and bragged about how much money they earned. Now I know that there are many opportunities for abuse in this program (i.e. student cheating, teacher bribing etc.) and critics claim this is simply bribing students to do what they should be doing anyway (focus on the money and not on the academics) but I think we need to do something in this country and this experiment deserves further investigation and expansion. Monetary rewards are a tremendous incentive to perform and improve. During my entire career in engineering management we used “pay for performance” to determine annual pay raises. Persons with the highest performance ratings are given the highest raises. Yes there are occasional abuses of the system but by and large the process served us well. Pay for performance is one of the best ideas I’ve heard of to improve the performance of the educational system in the US. I expect that teacher unions and liberal politicians will find fault with this program and try to kill it. To all my readers I hope you have a very Merry Christmas.

Greed

One of the liberals favorite words when it comes to free market economy is “greed”. But what is greed? Merriam Webster defines greed as: a selfish and excessive desire for more of something (such as money) than is needed. The problem with this definition is it uses relative words like: selfish, excessive and needed. These words have no absolute definitions so they are subject to arbitrary definition by anyone who wants to make a point or further their agenda. One of the favorite targets of liberal politicians and the liberal media are CEOs. But who has more greed, the CEO of Toyota (a fortune 500 company employing over 750,000 people) earning 1 million dollars annually or the president of The University of Chicago (a relatively small university probably employing only a few thousand people) earning 1.5 Million dollars annually? You could make a case that the university president is greedy relative to the Toyota CEO. It’s interesting that liberals never criticize as greedy liberal CEOs like Warren Buffet, the second richest person in the US, who made his fortune practicing free market investing. Thomas Sowell said in his column today: “The average pay of a CEO of a corporation big enough to be included in the Standard & Poor's index is less than one-third of what Alex Rodriguez makes, about one-tenth of what Tiger Woods makes and less than one-thirtieth of what Oprah Winfrey makes. But when has anyone ever accused athletes or entertainers of "greed"?” Some people think that greed caused the recent mortgage crisis. I agree. It WAS greed that caused the recent mortgage crisis. It was political greed of politicians to grant their constituents favors so as to be re-elected, it was social greed of moderate/low income people to live in houses with mortgages they could not afford and it was financial greed of investors buying risky investments based on those risky mortgages. Greed is relative like beauty – in the eye of the beholder or like pornography – you know it when you see it.

Be careful what you wish for

With all the talk these days about CHANGE by both presidential candidates it brings to mind a story I recall from my childhood. Be careful what you wish for. A small boy with a crippled, badly deformed left arm went to a wishing well one day. With his good arm he pulled out a coin and tossed it in the well saying: “Wishing well, wishing well, please change my arm to be like my other arm.” POOF: His right arm was immediately crippled. Moral: Be very careful of the change you wish for. It may not be what you expect. Also, watch out for unintended consequences. For example: The Community Reinvestment Act (CRA) passed in 1977 is designed to encourage commercial banks and savings associations to meet the needs of borrowers in low- and moderate-income neighborhoods. The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to relax mortgage loan qualifications. The intent was to make home ownership more available to low/moderate income families. A valiant goal. However, this act gave rise to the “sub prime” mortgage industry that is at the heart of the current financial crisis. Congress passed a $700 Billion dollar “bail-out” bill to shore-up the financial institutions from complete collapse. The saddest thing is that many of the low/moderate income families that this act was meant to help are losing their homes in foreclosure and declaring bankruptcy. Now their credit records are ruined and THEY STILL DON'T OWN A HOUSE!!