Nation's Homeless Capital

I took this photo yesterday of a homeless person completey huddled under a makeshift blanket "shelter"and tucked into a corner on the freezing streets of Washington. D.C.  

The person is in front of Starbucks, and they seem to have been provided some hot coffee to help-- a nice thing by the coffee chain. 

It has been particularly freezing this last week and seeing the number of homeless people suffering is unbelievable. 

Just being out for a few minutes bundled up in layers, I was still cold, so I can hardly imagine what it is like to be out on the streets, living like this for prolonged, indefinite, periods of time. 

When you see others' suffering in such a pronounced way, it is hard to take life's often silly daily problems as seriously, and we shouldn't.

When I juxatopse this scene, multipled thousands or perhaps millions of times over across the nation, it is also hard to understand a nation such as ours with $17.2 trillion dollars in debt.

Where the heck did all that money go? 

(Source Photo: Andy Blumenthal)

Nation's Homeless Capital

Debt Default--Now Or Later

So reopening the government, narrowing our deficit spending, and raising the national debt ceiling is coming together in planned negotiations this week. 

Despite all the talk, we continue to spend beyond our national means and basically we must raise the debt ceiling or else the game of borrow and spend is over. 

Almost like insatiable gamblers, we use up our money at the table, head to the pawn shop to sell our watch and car to replenish for the next game, and then borrow against our credit card to fuel our addiction to the game some more. 

Eventually though the house always wins and the borrower must pay up (or they get their legs broken or something nasty like that). 

So while the question posed by the pundits this month is whether the U.S. will default on its debt now, the real question is whether a default is just a matter of time anyway--as we continue to spend more than we generate in revenue as a country. 

Sure can we raise the debt limit again--hey, why not borrow more, if others are willing enough to lend to us (and for little to no interest too)?  

And can we through sequestration or more surgical spending cuts, decrease the rate of our deficit spending--however actually balancing our budget is not even on the table anymore, as booming entitlements for Social Security and Medicare are expected soon with the aging baby boomers to drastically increase our spending again. 

The hope that we will somehow, magically grow our way out is fanciful thinking--almost rising to delusions of national grandeur--that just don't mathematically add up (since we have a median GDP growth rate over the last 80 years of just over 3%). 

Perhaps, we don't care if we can't pay our debts, because we are the superpower and what is anybody going to do to us about it anyway?  

Or perhaps, we rely as a backstop on our ability to print more money and pay off old borrowed sums with worthless new money galore?

Maybe it's not a default if no one acknowledges it or we just get away with it...but somehow, someway, no one and no country can spend more than it generates in perpetuity.

If you believe in the endless virtual cycle of borrow and spend, then the mind control program is working just great, indeed. ;-)

(Source Photo: Andy Blumenthal)

Debt Default--Now Or Later

Government Shutdown - On The Street

Day #3 of the Federal Government Shutdown.

I am reminded on the streets of D.C. that there are many others hurting and in need. 

Pictured here are some hardworking folks striking against "unfair labor" practices.

They're up early and are standing there ready, presumably willing, and able to work. 

At the bottom it says, "Employer refuses to bargain in good faith."

With news coming again this morning about continued failure in talks on the government budget (and debt ceiling not far behind), we are left wondering when good faith and compromise will bring 800,000 federal workers back to their jobs. 

All these people have bills to pay, mouths to feed, and jobs to perform.

I read this morning how the Federal workers are feeling like "pawns" and "marginalized" like never before.

Perhaps, we can get more done by helping people feel a level of control, valued, and with purpose?

The world is still a big and scary place with lots of dangerous actors and challenging problems.

Rather then political polarlization and indecision, we need to stand firm by a definite set of sacred national values (while compromising on the implementation details), project the strength to defend them both domestically and abroad, and stay fair, faithful, and unwaveringly united to perform our vital role in this world. 

To solve large global problems, we need to be able to show that we can manage our own house in order first. ;-)

(Source Photo: Andy Blumenthal)

Government Shutdown - On The Street

Government Shutdown - Starbucks

So today is Day #2 of the Federal Government Shutdown. 

This is a picture from the local Starbucks that is typically billowing at lunch time--as you can see it's basically a morgue. 

Unfortunately, hard-working Federal employees, contractors, and local business are feeling the impact!

Even from those that are still working, there is word of "survivor's guilt"--like with a plane crash or other calamity, when those who survive the catastrophe question why they were so fortunate when the others weren't so lucky and perished. 

With both the budget shutdown and the impending debt ceiling showdown--we are facing the perfect storm, with real negotiation and compromise yet to emerge.

With this all, our significant national problems aren't going away--to the contrary, Iran and North Korea are still global nuclear threats, Syria still has chemical weapons, the economy remains on shaky ground (in the paper today, the once high-flying pharmaceutical company Merck is planning to lay off 20%!), the national debt continues to spiral out of control (albeit at a "slower pace"), cybersecurity remains a major national security risk (although Cyber Command continues to stand up its new headquarters and firepower), and so much more. 

Bubble stocks rose again yesterday after an almost 20% one-year return. Not only that, but the safety of gold took a beating again after an almost 40% one-year decline (full disclosure, I am a recent investor in the latter). One has to wonder how long it will take for sanity to prevail once again. 

(Source Photo: Andy Blumenthal)  

Government Shutdown - Starbucks

Government Shutdown - Rush Hour

Today was Day #1 of the Federal Government Shutdown.

Pictured here is rush hour in Washington, D.C. 

In terms of raising revenue to pay down our national debt, solve challenging problems facing our nation, or increase our global competitiveness--I am not sure how this gets us there. 

With around 800,000 people sitting at home or in Starbucks waiting to be recalled to work, about the only good thing you can say about the furlough is that it was easy to get a seat on the Metro. 

Sad, but true. ;-)

(Source Photo: Andy Blumenthal)

Government Shutdown - Rush Hour

Is This The Way It's Supposed To Work?

As talk and warnings escalate about a potential government shutdown next week (not that long since the last time this happened a couple of years ago), one cannot help wonder is this the way government is supposed to work?

The partisanship and fighting has gotten so that either nothing significant gets done or get's done by just one party leaving the other fuming.

The fight over healthcare reform pushed through for better or for worse has come back to haunt the Hill. Aside from a lot of talk about exchanges, I haven't found many people that even really understand the changes or whether it actually benefits them or not. 

The continuing Fed stimulus that many anticipated was going to start tapering off, but hasn't, has left many concerned whether there is another huge economic bubble building and what will happen to stocks, housing, and jobs when the Fed finally does pull back. 

The Sequestration which was never supposed to actually take effect, but was to replaced with more surgical budget cuts, continues to leave the nation vulnerable in terms of potential budget shortfalls for areas of national priority (e.g. defense and so on) and still leaves a mounting national debt (albeit growing at a slower pace). 

The seesaw between the threat of military intervention and the potential for diplomatic solutions with Syria and Iran on no less than weapons of mass destruction have us asking whether these countries are serious, stalling, and really willing to give them all up or just buy time in their efforts to get over the finish line of proliferation, hiding, and burying the stockpiles.

Somehow we seem to be fighting each other more than we are tackling the issues. 

Are we really talking with each other, listening with intent to understand, and seeing what is at stake?

We are playing brinkmanship on critical issues of national security that may leave us holding the toilet paper and plunger as we swirl around the bowl ready for the royal flush. ;-)

(Source Photo: Andy Blumenthal)

Is This The Way It's Supposed To Work?

Economics, Pendulum Style

To combat the recession of 2007, the Federal Reserve initiated an aggressive policy of Quantitative Easing--purchasing federal debt en masse to flood demand for Treasuries and lower interest rates to near zero to stimulate the economy. 

As of June 2013 the Feds balance sheet has swelled to over $3.4 trillion in assets of treasury debt. What happens when the Treasury has to repay those trillions? 

Who is the Treasury going to borrow that money from and at what interest rate? 

Just like raising demand for Treasuries lowered interest rates, increasing the supply of Treasury debt to pay back the Federal Reserve will make interest rates go way up the other way. 

Rising interest rates makes borrowing more expensive--e.g. buying a car with an auto loan is more expensive, buying a home with a mortgage is more expensive--and inflation can skyrocket. 

But what is worse is that despite the recent slowing of the growth of the national debt, many economists calculate the total US debt at a whopping $70 trillion when you include the host of unfunded liabilities including social entitlements such as Social Security, Medicare, Medicaid, as well as government loan guarantees (mortgage, student loan, etc,), deposit insurance (i.e. FDIC(, and the money owed to the Federal Reserve. 

What is really sad about this is that the entire wealth of American families in this country is guess what--also $70 trillion--which means that we are essentially a bankrupt nation:

Family assets of $70 trillion - Family liabilities of $70 trillion = a big fat 0 in the kitty!

To pay back the $70 trillion, it is not realistic that we will simply "grow our way out" of this fiscal mess with a GDP growth rate over the last 20 years of a mere 2.6%.  

Also, we will likely not confiscate people's assets to pay off the debt, rather we will print money--lots of it--so that we end up paying back the trillions of past debt in much devalued future money. 

Head we win, tails you lose!

The problem is that devaluing the dollar will mean that American family savings will become worth less as well--with the risk, at the extreme, of wiping out mass amounts of savings altogether. 

Despite sequestration reducing the rate of our debt growth, the aging baby boomers with the resulting liabilities for their care will soon escalate the debt problem once again. 

David Walker, a former U.S. Comptroller has warned about our national debt problem as well as many prominent economists. 

Like a pendulum swinging from one extreme to the other, the spendthrift ways of the past will by necessity lead to penny-pinching in the future, and inflation rates of near zero since 2007 will lead to hyperinflation after 2014.  

It reminds me of the story of Joseph in the Bible, with the 7 lean years follow the 7 fat years (in Egypt that time)--this is not just providence, but common sense economics. 

Good times will come again when there is a return to the mean and the pendulum hovers near center, but the swings until then can be wide and scary.

Of course, like taking your medicine, the earlier we start to course-correct our nation's finances, the sooner we get healthy again. ;-)

(Source Photo: here with attribution to zzz zzz)

Economics, Pendulum Style

Government By Decision

I saw this bumper sticker on a pole in Washington, D.C. 

It says "Puppet for President 2012" and I don't know whether this was referring to Democrats, Republicans, Independents, or whoever.

But it did make a statement about the perceived ability of government to lead and perhaps that someone is "pulling the strings."

Governance is the act of administering, managing and of course implies leadership and decision-making.

Yet what is driving the American people crazy is that our government seems for all intensive purposes broken, almost paralyzed.

Current readings are of political stalemate, problems that are too big and complex and the compromises too painful after years of excess, where indecision reigns supreme, and with that the popularity of government is at all time lows--10% for Congress and 36% for the President. 

Here's a basic example written about today in the Wall Street Journal: despite a drop in first class mail over the last decade (thanks to email and texting) from 100 billion to fewer than 70 billion pieces of first class mail and cumulative losses from 2006 to March 2013 of $41 billion, we still can't decide whether to cut Saturday mail delivery that could save over $3 billion a year alone. 

Other examples of government indecision are almost too numerous to name:

- Should we intervene in Syria's civil war that has taken more than 100,000 lives and displaced millions?

- When should we take action against Iranian nuclear facilities that violate nuclear non-proliferation and threaten world peace?

- How should we handle militant Islamic and Al Qaeda threats that don't seem to dissipate?

- What do we do about the mounting federal deficit with a national debt approaching $17 trillion that is still rising about $2 billion a day!  

- With fiscal cliffs, debt ceiling, sequestrations, and cuts to the U.S. credit rating, can we find our way forward? 

- What should we do to get people back to work with an employment level of 58.6%, still around the lowest in the last 30 years?

- How do we reign in entitlement spending that needy people depend on, but where nearly half (49%) of Americans households today receive transfer payments, and entitlement spending has risen to $2.3 trillion annually and now are over 60% of entire federal outlays. 

- How do we improve morale of the U.S. middle-class when only 33% think their children will be better off than their parents?

- What should we do about so many hanging issues out there--immigration reform, spiraling health care costs, improving our education system, balancing surveillance and privacy, and much more?

However, the ultimate question really is whether no decision is better than a decision?

With no decision, the problems continue to escalate until they sort of magically go away on their own (i.e. they are "overcome by events") or more ominously, they reach epic crisis proportions. 

With a decision to act, we may make good decisions that positively impact the situation or we may make bad decisions that have a negative impact, but even with a bad decision, we can monitor the effects and course-correct until we show true improvement.

Decisions often mean winners and losers--and no one wants to lose anything--and there are lobbyists and special interest groups--and no one wants to be voted out of office...so what do we do?

Oh no, I can't decide!

The reality is that we will will have to make hard decisions or they will be made for us--we will either be the masters of our own fate of the slaves of our indecision. 

We can take back control and fix what is broken or wallow in despair and disrepair.

We can act now or kick the can down the road and have much more painful decisions later. 

(Source Photo: Andy Blumenthal)

Government By Decision

Back To The Computer Stone Age

According to Charles Kenny in Bloomberg BusinessWeek (20 June 2013), the Internet is quite a big disappointment--because it "failed to generate much in the way of economic growth."

While on one hand, the author seems to see the impact that the Internet has had--"it sparks uprisings, makes shopping easier, help people find their soul mates, and enables government to collect troves of useful data on potential terrorists;" on the other hand, he pooh-poohs all this and says it hasn't generated prosperity. 

And in a sense, don't the facts seem to support Kenny: GDP is still in the 2-3% range, labor productivity growth is even lower, and unemployment is still elevated at over 7%?

The problem is that the author is making false correlations between our economic conditions and the rise of the Internet, which already Jack Welch pronounced in 2000 as "the single most important event in the U.S. economy since the industrial revolution." 

Kenny seems to think that not only aren't there that many economic benefits to the Internet, but whatever there is we basically squander by becoming Facebook and Youtube junkies.

It's a shame that Bloomberg BusinessWeek decided to publish such a ridiculous article as its "Opening Remarks," blaming the failure of the Internet for economic challenges that have been brewing for decades--with high-levels of debt, low levels of savings, hefty entitlement programs based on empty national trust funds, the global outsourcing of our manufacturing base, elevated political polarization in Washington, and various economic jolts based on runaway technology, real estate, and commodity bubbles.

It's concerning that the author, someone with a masters in International Economics, wouldn't address, let alone mention, any of these other critical factors affecting our national economy--just the Internet! 

Kenny adds insult to injury in his diatribe, when he says that the Internet's "biggest impact" is the delivery of "a form of entertainment more addictive than watching reruns of Friends."

Maybe that's the biggest impact for him, but I think most of us could no longer live seriously without the Internet--whether in how we keep in touch, share, collaborate, inform, innovate, compute, buy and sell, and even entertain (yes, were entitled to some downtime as well). 

Maybe some would like to forget all the benefits of technology and send us back to the Stone Age before computing, but I have a feeling that not only would our economy be a lot worse than it is now, but so would we. :-)

(Source Photo: Andy Blumenthal)

Back To The Computer Stone Age

Balancing The National Books

Bret Stephens had an interesting opinion piece in the Wall Street Journal (28 May 2013) called "The Retreat Doctrine."

He argues that America's retreat militarily from Iraq and Afghanistan may not mean revitalization for us by refocusing on domestic issues, but rather decline by prematurely ending a war with enemies that may not have ended their hatred and hostilities to us. 

Interestingly enough, it is not just on the battlefield that we are retrenching, but on many other fronts as well, for example: economically, we are cutting federal budgets; monetarily, we are anticipating cutting the $85 billion per month bond buying by the Federal Reserve; social entitlements like Social Security and Medicare are on the butcher block, defense cuts are imperiling military programs, and employment cuts have resulted in a labor force participation the lowest in 30 years. 

While many cuts are beneficial in terms of beginning to get our arms around the over $16 trillion deficit we've accumulated and in forestalling another rating downgrade by the big three credit rating firms, it is as Stephens implies, perhaps not a sign of health and renewal, but of national illness and a retrenchment of a global power. 

I remember in Yeshiva learning (Exodus 34:7) about the sins of the fathers being visited on the children and grandchildren--3 and 4 generations--and I always wondered how could a just G-d hold future generations responsible, accountable for what the prior generations did?

But perhaps, the answer is evident here, where we cannot blame G-d for our own actions, where we live big, beyond our means, and cause future generations to pay the piper.  

When the stock market is rallying--up almost 17% year to date and about 27% over the last year, while our GDP growth is only about 2.4% annually, something is very off-Kilter. 

You can argue that retreat is renewal or you can see retrenchment as leading to decline, but either way we will be paying the national bill coming due and all our children will be on the hook for cleaning up after the party is over. ;-)

(Source Photo: Andy Blumenthal)

Balancing The National Books

Righting Our National Economy

We made it through he fiscal cliff--whew!  But the economic landscape remains a minefield. 

In terms of our national debt ceiling, we already passed the $16.4 trillion mark at the beginning of the year and are on borrowed time (no pun intended) until about mid-February when we exhaust accounting gimmicks and can no longer pay our national bills. 

Then there is the elusive government budget where we are on a "continuing resolution" that funds the government at the prior years spending levels until the beginning of March; there is no agreement on what the budget should be after that. 

Finally, there is the Sequestration that was delayed from the beginning of the year to March, which will produce across the board budget cuts to government--not surgically, but sweeping cuts that will hit almost all major government spending. 

All of these budgetary and debt issues are highly contentious and politicized and involve substantial policy decisions in terms of tax reform, spending cuts, and even income and wealth distribution. 

As difficult as it is to navigate a mine field, there is genuine fear that our national luck is running out and the sides are digging in such that even if we get over another one of these hurdles (likely by another delay) or even two of these, what are the odds that we get through all three unscathed economically and with our national image and strength intact?

Already in August 2011, S&P lowered the U.S. credit rating because of these unresolved issues and political stalemate around them, and Moody (in September 2012) and Fitch (this past week) threatened the same putting us at risk of higher borrowing costs, inflation, and even recession. 

Bloomberg BusinessWeek (3 August 2011) using game theory seemed to advocate for political compromise--that produces a "deal no one likes" but avoids pure political victory by one party over the other where one party gives in and the other holds out, and also avoids "financial Armageddon" where both sides hold out and can't get any deal done at all. 

In games of "chicken" both sides "entertain the option of killing everyone" until they finally realize this results in mutually assured destruction (MAD). 

In Washington "everyone, however, is playing a game called 'election'" and "the only possible goal in that game is to win the next one"--in this game, the real question--is there the leadership to rise above the politics, the short-term focus, and bring the two sides together in compromise to forge a path through a difficult economic road ahead. 

Truly, there is really only one way ahead and it is through national sacrifice that will spare no one, but may save the country and our ideals and make us stronger in the end. We are at a dead end for kicking the can further--next step must be to right the ship through cooperation and making the tough choices.

Just like the Washington Monument is one, we must become one. ;-)

(Source Photo: Andy Blumenthal)

Righting Our National Economy

Have It When You Need it

At an event that I attended recently, I heard a young woman explain her philosophy on life. 

She said, her grandmother taught her: "Better to have it and not need it, than need it and not have it."

Thinking about it at the time, it seemed pretty wise--because you never want to be without something you really need. 

And good planning and survival skills say to always be prepared--you never know what happens. 

But then with the fiscal cliff and all the talk about social entitlements, I started to think about this some more. 

In a sense, as a society, we have come to think of social entitlements as something that we better have in case we need it--Unemployment Insurance, Medicare, Social Security, Medicaid and more. 

You never know when it's your turn to get laid off, sick, old, or needy. 

And isn't that what's it for--it's a safety net--these are like personal insurance and you never want to need the coverage and not have it. 

But as we should know by now, having it--doesn't come for free. 

So the question is how much social entitlements or insurance do you need--and part of the answer is how much can you afford. 

So is it really better to have it and not need it, than need it and not have it--if you can't afford what you're buying?  

In this case, our grandparents and parents having it and not really needing all of it--may mean that we and our children will not be able to have it when we do need it. 

To have social entitlements, we need to be able to pay into the system for it or borrow to finance it. 

Unfortunately, as a nation we have been doing more borrowing, because we have spent beyond our national means--we have even raided our very own social entitlement programs that we hold so dear, to pay for other things--maybe that's why they call it a trust fund, because you really do have to trust, almost blindly, that there will be something there, when it's your time to need it. 

It's great to have it, but if we are gluttons and don't responsibly plan for genuine needs--then as a nation, we really will be left needing and not having it when the time comes.

In short, spend all your money to soon, and tragically, there won't be any candy later. ;-)

(Source Photo: Andy Blumenthal)

Have It When You Need it

Resilience In The Face Of Disaster

This year when ball drops in Time Square next week to usher in the New Year, it will be a little different than in prior years, because rather than blanket cheer, there will be a good amount of consternation as we hit the debt limit of $16.4 trillion as well as the Fiscal Cliff where broad spending cuts and tax increases are to go into effect (whether in full, partial with some sort of deal, or in deferral).

Like the statue pictured here, the strength and resilience of the American people will be tested and we will need to stand tall and strong. 

In this context, it was interesting to read in Wired Magazine (January 2013) a interview with Andrew Zolli, the author of Resilience: Why Things Bounce Back, an exploration of the importance of resilience in the face of adversity. 

Whether in response to natural disaster like Hurricane Sandy or man-made ones like the financial crisis and terrorism, we need to be prepared to adapt to disaster, respond and continue operations, and recover quickly to rebuild and grow. 

According to Zolli, we need shock absorbers for our social systems that can "anticipate events...sense their own state...and can reorganize to maintain their core purpose amid disruption."

Adaptability is important, so that we can continue to operate in an emergency, but also vital is "self-repair" so we can "bounce back."

These concepts for resiliency in emergency management are similar to how Government Computer News (December 2012) describes the desire for building autonomous self-healing computer systems that can defend and recover from attacks. 

The notion is that when our computer systems are under cyber attack, we need to be able to defend them in an automated way to counter the threats in a timely fashion. 

Thus, acccording to GCN, we need IT systems that have situational monitoring for self awareness, real-time identification of an attack, continuous learning to adapt and defend againt changing attack patterns, and self-healing to recover from them. 

Thus, bouncing back from social and cyber disasters really requires similar resilience, and for some challenges, it may be sooner than later that we are tested. ;-)

(Source Photo: Minna Blumenthal)

Resilience In The Face Of Disaster

Building Happiness, One Contribution At A Time

There was an interesting editorial in the Wall Street Journal (20 December 2012) comparing people who win the [Powerball] lottery to those on social entitlements.

The author, Arthur Brooks stipulates that money unearned--"untethered from hard work and merit"--does not make people happy.

Brooks states that "Above basic subsistence, happiness comes not from money per se, but from the value creation it is rewarding."
And this seems to jive with the concept that the greatest producer of happiness aside from social relationships is doing meaningful and productive work (and generally good deeds), not having lots of money and things!

In terms of winning the lottery (big) and not finding happiness, there was another article to this effect in Bloomberg BusinessWeek (13 December 2012), about someone who won the $314 million Powerball jackpot and had at one time been the largest lottery winner in history--but in the end, he found nothing but misery (lost his granddaughter, wife, money, and ended up a substance abuser) and wished he had never seen that "winning" ticket. Instead, he appreciated his previous life when he was known for his "good works," and not just his money!

According to Brooks, "While earned success facilitates the pursuit of happiness, unearned transfers generally impede it." And CNN reports that now more than 100 million Americans are on welfare, and that "does not include those who only receive Social Security or Medicare."

The result as Brooks states is the fear is that we are becoming an 'entitlement state," and that it is bankrupting the country and "impoverishing" the lives of millions by creating a state of dependency, rather than self-sufficiency.

So are social entitlements really the same thing?

No. because without doubt, there are times when people need a safety net and it is imperative that we be there to help people who are in need--this is not the same as someone winning the lottery, but rather this is genuinely doing the right thing to help people!

At the same time, everyone, who can, must do their part to contribute to society--this means hard work and a fair day's pay.

However, With the National Debt about to go thermonuclear, and the fiscal cliff (in whatever form it finally takes) coming ever closer to pocketbook reality, the country is on verge on confronting itself--warts and all.

We all woke up this morning, and the world was still here--despite the Mayans foretelling of the end of the world today. Perhaps, the end was never meant as a hard and fast moment, but rather the beginning of an end, where we must confront our spendthrift ways and historical social inequities.

While we cannot erase decades of mismanagement, what we can do is continue the march to genuinely embrace diversity, invest in education and research, help those who cannot help themselves, work hard and contribute, and build a country that our grandparents dreamed of--one that is paved in opportunity for everyone!

Let us pray that we are successful--for our survival, prosperity, and genuine happiness. ;-)

(Source Photo: here with attribution to Brother Magneto)

Building Happiness, One Contribution At A Time

An Immigrant's Message

It was interesting getting out of Washington D.C. this week and talking to people outside the Capital about what they were thinking.

During Presidential campaigns and debates, I always hear the candidates say, “And let me tell me about (whoever) that I met from (wherever) and they told me (whatever).”

Usually, when I hear these anecdotes, I wonder what the real meaning of these are, given that they are hand-selected by the candidates to prove their points of view.

So I tried it myself in Florida this week to see what people where thinking about Washington and our national predicament—I asked, “What do you think?”

Well let me start by saying that I didn’t talk to as many people as a presidential candidate does—that’s for sure—but I also wasn’t looking a tag line for my next rally or speech.

So here are a few things I heard from everyday people, most of them immigrants or children of immigrants.

One person I spoke to was from Haiti and had settled in Florida.  So I asked what his concerns were.  He told me about the suffering back in Haiti after the earthquake in 2010 and how so little (relatively-speaking) had been rebuilt.  So far, I wasn’t really shocked at anything he said.  But then he went on to tell me how people in the Haitian community believed that the cause of the catastrophe was (no, not mother nature, but rather) that the U.S. government was testing new weapons in the Caribbean (from underwater submarines) and that this (accidentally) triggered the devastating earthquake in Haiti. 

I asked what made them think this, and he told me how the people back in Haiti had witnessed U.S. response efforts and how zones were “mysteriously closed off” and the event was handled in tremendous stealth.  I asked was it just him whom thought this?  And he told me that this was a widely held belief by the people there. 

Well, this was not like anything I had heard in the any of the candidate speeches during the election.  Maybe this guy was just an oddball, crazy, and telling wives tales about the going-ons in the Beltway, and everyone else was just feeling rosy.

So I spoke to someone else, a cabdriver from Romania living here for nearly 30 years – old enough to remember his country of birth but experienced enough to compare life there and here. He told me that he felt the people in Washington D.C. did not really care about him or others in the country. I asked what he meant by that.  He questioned our leaders of many decades (with the exception of two in the last 40 years—which I won’t name to protect the others), and he said that the others are basically just in it for themselves.  

With regards to the “fiscal cliff,” he said, “No one is willing to make the real decisions that the country needs.”  He went on to add, “Unfortunately, politics has become just a profession.” Moreover, he said that “People aren’t even thinking short-term [let alone long-term], they’re just not thinking at all!” 

This immigrant said he was worried generally about the future of the country and warned of what he believed was civil unrest to come, because he felt nobody was really dealing with our serious financial problems. He said that he had lived through a thousand-percent inflation back in his home country, literally, and that he felt we were going down the same road. Matter-of-factly he said, “Washington has bankrupted this country.”

Again, this was very different from the spin on most of the news shows these days, where the real estate recovery (however slight), consumer confidence (rising but on the edge with the rest of “the cliff”), and healthy personal and corporate balance sheets are all the rave. “What, me worry?” is the dominant attitude, not only about the “fiscal cliff” and the well known $16 trillion deficit, but also the other $86.8 trillion in national debt for entitlements, which according to the Wall Street Journal (27 November 2012) is not readily discussed. 

My wife spent time talking to a woman less about politics, but more about her life predicament. Her husband passed away after 27 years of marriage, and she was just eking out a living primarily on the survivor benefits. She was living in a trailer, and having trouble finding a job. (“There is a lot of age discrimination out there,” she said.) She said she was lonely, despite her boyfriend, and that what mattered to her was just having some nice people in her life to talk with.  Her current plans were to continue monitoring her boyfriend’s activities on dating sites—he didn’t realize she could do that – and visit Bulgaria. There, she would meet the family of her late father, who unbeknownst to her had a child with a mistress that she only learned about upon his passing. She was angry at the doctor who prescribed her hormones, which she is certain gave her breast cancer, and she indicated that if she could do it over again she wouldn’t have listened so unquestioningly to what he said. For her, alternative healing such as attending a “drumming circle” was helpful, especially in calming all “the chatter “and worry on her mind. 

While she didn’t talk about the country per se, this lady was clearly having a tough time in life and although she smiled frequently, the pain she felt was clear not only by the stories she told, but by the look on her face. 

So, these were some stories that I heard—a little different from campaign fodder—but very telling in a way about what REAL people out there are thinking and feeling—versus the sound bites. 

Now, we need to figure out how to dispel the negativity out there and help people and the country get it together.  It’s not enough to bicker, but we need a grand vision, a genuine strategy to get there, and the ability to articulate it to the masses—sacrifice will be needed, it’s time to get down to it and be real for at least the third time in 2 generations. ;-)

(Source Photo: Andy Blumenthal)

An Immigrant's Message

Either Way A Fiscal Cliff

Okay, so here's the dirtly little secret...

The "Fiscal Cliff" that everyone is supposedly working on to avert--is really unavoidable!

Yes, the Sequestration that was put in place that eliminates the broad-based tax cuts from a decade ago and reduces spending across military and domestic government spending--can be replaced by more surgical tax increases and spending cuts. 

But with a National Debt of more than $16 trillion dollars and one which has been trending up over a trillion dollars a year, we have gorged ourselves and spent beyond our means for too long--and the time to pay up is fast approaching.

For example, critical entitlement programs like social security and medicare are running out of funds and will not be able to cover benefits by 2033 and 2024, respectively.

What is even worse though is that the money you have been paying into "the system" from your payroll taxes for decades hasn't been put aside in trust for you, but has been spent on other things--sort of like robbing Peter to pay Paul. And now what?

At a time when national competitiveness is suffering, jobs are going overseas, test scores in science and math are trending down, and we have the lowest percentage of Americans working in 30 years, we are saying that we've essentially spent our last dime decades ago and have been doubling down with more and more borrowing--that we don't really know if we can ever pay back. 

While we would like to "grow" our way out, by having more people working, earning more, and paying more into the system, our growth projections of slightly more than 2% next year and a historical average from 1947-2012 of just 3.25%--this seems more than wishful thinking. 

More likely, as the percent of our national debt to GDP continues to rise and our national credit ratings are are at risk of falling, interest rates will start to rise first slowly and then faster to elevated levels to compensate for the increased borrowing risks, and we will see inflation rear it's ugly head--it is ugly because inflation will mean your savings are worth less or potentially even virtually worthless. 

This will make the $16+ trillion deficit also worth less, so we pay it back through inflation as Germany did with hyperinflation after WWI, and the essential wiping out of our personal savings. Viola, deficit paid down, but pay attention to at what personal costs! 

Unfortunately, the fiscal cliff is here and will happen whether spending is cut here or there and taxes go up on some or everyone. This is just the negotiation of how to spread the pain and spin the tale. 

And either way the fiscal cliff is going to hurt, because you have to cut spending and increase taxes leaving people with even less money in their shrinking pocketbooks, and if you don't, the credit agencies will continue cutting our national credit rating leading to higher interest rates on the debt and higher inflation--so either way, our creditors will get their pound of flesh. 

In the E.U. now, we are seeing the effects with countries from Greece to Spain, Portugal, Italy, Ireland, and more reeling from the impact, but this is only the beginning, because the lending spigot instead of being turned off, has been opened up further to kick the can down the road. But who will be the lender of last resort, when there is no one that can reliably pay it back?

In the end, you can't raises tax or cut your way out of decades of financial mismanagement, overnight. In the corporate sector, we say Chapter 11--what do you say for Western civilization? And what do we tell our children and grandchildren?

(Source Photo: Andy Blumenthal)

Either Way A Fiscal Cliff

Ominous Sky

This was the skyline in Washington D.C. this past week. 

I have never seen anything quite like it. 

You can clearly see the grey clouds forming overhead. 

And the contrast with the clear sky off in the back. 

The trees along the train tracks provide almost an end of days feel--just a few standing.

There is a guy on the train on the right with his head bowed back against the train doors--is he feeling sick, tired or just down with the weather. 

This picture was taken one day before the second Presidential Debate, only weeks before the election, months before we come up on the "fiscal cliff," and perhaps only a few seasons before as they say, Iran gets "the bomb."

Where is this train taking us, what are we going to do to solve the sizable problems ahead, and will these dark cloud lift or settle in on us?

Hope and pray that G-d gives us the good fortune to succeed in these trying times and that the sun shines bright again for all of us soon. 

(Source Photo: Andy Blumenthal)

Ominous Sky

Go Curly!

This was a funny picture hanging around a local eatery in D.C--at election season.

Curly for President--sort of reminded me of when I was in grade school and had a head full of curly hair and some of the other kids (especially the females in the class) fondly called me "chief curly chicken"--yeah, it stuck for about a year or two. 

Anyway, maybe this is something both Democrats and Republicans can agree on: the three Stooges--Moe, Larry, and Curly--were pretty darn funny. 

With the big looming issues facing America today (exploding national deficits, high unemployment, endangered social programs, declining global competitiveness--now 7th, and more), we can certainly use a little humor to get past it, along with a good dose of strong leadership and breakthrough solutions. 

Whoever you vote for--keep smiling!  :-)

(Source Photo: Andy Blumenthal)

Go Curly!

Mural of Brotherhood

Really love this mural of kids and adults holding together in joy and brotherhood, the big sun with the smiley face, and the butterflies.

This was posted up next to a local school near their track, field, and basketball courts. 

When all the world is topsy-turvy with riots and fighting, WMD and threats of annihilation, and all sorts of financial doomsday scenarios--it is uplifting to see this simple and pure painting spreading happiness.

Let's create a world for our children and grandchildren with more joy, positivity, and stability, and less stress, fear, and uncertainty.

(Source Photo: Andy Blumenthal)

Mural of Brotherhood

Can a Computer Run the Economy?

I am not talking about socialism or totalitarianism, but about computers and artificial intelligence.

For a long time, we have seen political infighting and finger-pointing stall progress on creating jobs, balancing trade, taming the deficits, and sparking innovation. 

But what if we somehow took out the quest for power and influence from navigating our prosperity?

In politics, unfortunately no one seems to want to give the other side the upper hand--a political win with voters or a leg-up on with their platform.

But through the disciplines of economics, finance, organizational behavior, industrial psychology, sociology, geopolitics, and more--can we program a computer to steer the economy using facts rather than fighting and fear?

Every day, we need to make decisions, big and small, on everything from interests rates, tax rates, borrowing, defense spending, entitlements, pricing strategies, regulating critical industries, trade pacts, and more.

Left in the hands of politicians, we inject personal biases and even hatreds, powerplays, band-standing, bickering, and "pork-barrel" decision making, rather than rational acting based on analysis of alternatives, cost-benefits, risk management, and underlying ethics. 

We thumb our noises (rightfully) at global actors on the political stages, saying who is rational and who is perhaps just plain crazy enough to hit "the button."

But back here at home, we can argue about whether or not the button of economic destructionism has already been hit with the clock ticking down as the national deficit spirals upward, education scores plummet, and jobs are lost overseas?

Bloomberg BusinessWeek (30 August 2012) suggests using gaming as a way to get past the political infighting and instead focus on small (diverse) groups to make unambiguous trade-off decisions to guide the economy rather than "get reelected"--the results pleasantly were cooperation and collaboration.

Yes, a game is just a game, but there is lesson that we can learn from this--economic decision-making can be made (more) rationally by rewarding teamwork and compromise, rather than by an all or nothing, fall on your sword, party against party, winner takes no prisoner-politics. 

I would suggest that gaming is a good example for how we can improve our economy, but I can see a time coming where "bid data," analytics, artificial intelligence, modeling and simulation, and high-performance computing, takes this a whole lot further--where computers, guided and inspired by people, help us make rational economic choices, thereby trumping decisions by gut, intuition, politics, and subjective whims .

True, computers are programmed by human beings--so won't we just introduce our biases and conflict into the systems we develop and deploy?

The idea here is to filter out those biases using diverse teams of rational decision-makers, working together applying subject matter expertise and best practices and then have the computers learn over time in order to improve performance--this, separate from the desire and process to get votes and get elected.

Running the economy should not be about catering to constituencies, getting and keeping power for power sakes, but rather about rational decision-making for society--where the greatest good is provided to the greatest numbers, where the future takes center stage, where individuals preferences and rights are respected and upheld, and where ethics and morality underpin every decision we make.  

The final question is whether we will be ready to course-correct with collaboration and advances in technology to get out of this economic mess before this economic mess gets even more seriously at us?

(Source Photo: here with attribution to Erik Charlton)

Can a Computer Run the Economy?