Todd Weber's Random Thoughts

November 25, 2010

Thanksgiving Day Thought

It is Thanksgiving Day, 2010, and as I consider this nation which I am bless to call my own, I am once again awed by its greatness and wonder. It is truly unique as the freest, safest, most prosperous and benevolent nation in the history of mankind.

Yet, there is also a twinge of apprehension and uncertainty as to how long it may endure. Forces of fundamental change have pushed us to the edge of a precipice from which, once overstepped, there may be no return. To avoid this will require the attention, self-discipline and thoughtful participation of a majority of citizens.

It is time for Americans to put aside trivial, meaningless pursuits, entertainments, idleness and apathy, and engage in rational thought and debate of the complex and weighty matters presently facing our nation. We must turn off the frivolous “reality” shows, sitcoms, and celebrity worship and exercise our minds toward dealing with substantive issues that truly matter. Let us cease thinking only of ourselves and our immediate comfort and gratification, and focus on what is best for the nation as a whole, both now and in the future. Such a focus will likely require a willingness to make sacrifices. As our forefathers sacrificed their fortunes and their lives to create this great nation, let us muster the same readiness to preserve it.

I urge you to take time to educate yourself regarding the pressing issues of the day, and also to learn about the origins of our nation. Read the writings of the founders of America, such as George Washington, John Adams, Thomas Jefferson, James Madison and others. Study also those who influenced them, such as Adam Smith, John Locke, Henry Blackstone, Cicero, and Montesquieu.

The United States of America has not survived and prospered by luck or accident. It has done so because of the wise and prudent principles upon which it was founded, among which are the right to life, liberty and the pursuit of happiness; limited government; free-market capitalism; the rule of law; freedom of religion; and equal rights for all.

Freedom is not free and the cost of citizenship in a free society is active participation in order to keep it free, safe and prosperous for all. Too many have either forgotten or never learned of this duty. As fellow citizens, we owe it to one another and to future generations to take seriously the responsibility of self-government – a rare opportunity in human history.

Have a happy Thanksgiving Day!

February 4, 2009

Obama limits executive pay, but socialism still on the way

Filed under: Politics — Tags: , , , , , — tkweber @ 11:10 am

I applaud President Obama’s action limiting to $500,000 the pay of executives of corporations receiving bailout money from the $700 billion Troubled Asset Relief Program (TARP).  I was against the bailout plan, but since it is done, and tax-payer dollars were used to keep these failing businesses afloat, then the government should have a say in how the money is spent.  Executives should not be rewarded for failure at public expense.

However, I’m still concerned about the government being so deeply involved in private business and the market.  Despite all the reassurances from the administration, I’m concerned that our nation continues to be led further into socialism.  If the new $850 billion Economic Stimulus Package, recently passed by the House and presently before the Senate, becomes law, it will be a gigantic leap in that direction.  Many are calling it the new New Deal, a repeat of FDR’s New Deal of the 1930s. What most fail to realize is that the old New Deal made the Great Depression much worse and of longer duration than it would have been if the government had kept it’s “benevolent hand” to itself.  I fear that the path being chosen by the Obama administration, like that of FDR, will make the present economic troubles much worse and last much longer.  What’s more, I fear that the only likely solution to such a situation may be the same as it was for FDR: another world war. 

Read about Obama’s recent action here: http://www.msnbc.msn.com/id/29003620 

I highly recommend this excellent book: The Forgotten Man, A New History of the Great Depression, by Amity Shlaes, New York: Harper Perennial (2007)

May 20, 2008

Investment Industry’s Suicidal Self-Interest

The May 2008 issue of Money magazine contained a one-page interview with New School university economist, Teresa Ghilarducci, titled: The Plan to Save Early Retirement, in which the economist contends that the U.S. government should scrap 401(k)s and IRAs and replace them with a government funded, mandatory, universal savings plan.  Under her plan, the government would contribute $600 a year and require people to deposit 5% of salary to their “guaranteed retirement account.”

 

What is her reasoning for this?  People are living longer and saving less, she says, and “a rich nation ought to be able to ensure a secure old age.”  How would this system work?  The government would have to “negotiate with the money-management industry.”  I was more than a little miffed by the socialist overtones of the article, so I emailed a letter-to-the-editor.  It didn’t get printed in the June issue.

 

In the June 2008 issue of Kiplinger’s Personal Finance (I subscribe to both magazines), a similar one-page interview appears titled, Savings Accounts From Day One, featuring Professor Michael Sherraden, director of the Center for Social Development at Washington University in St. Louis.  Professor Sherradan argues for “a lifelong system of accounts for everybody to save for important life goals – post-secondary education, homeownership, additional job training…retirement security.”  He points to “One bill in Congress [that] calls for $500 for all children and an additional $500 for the poorest.”  Who would manage such a plan?  “The major asset managers.  Good plan features would be simple investment options and low costs.”   

 

Then, it all became clear.  Two investment magazines run nearly identical articles in successive months promoting a government mandated, government funded, investment system for every citizen (and presumably non-citizens, too) operated by the investment management industry, for fees, of course.  I sent a letter to the editors of Kiplinger’s, too; but I don’t expect it to be printed there, either.

 

There is nothing “new school” about Ms. Ghilarducci’s plan to save early retirement.  It’s just more European-style, nanny-state, big-government.  Professor Sherraden should re-name his department at Washington University: The Center for Socialist Development.

 

Why do people who are supposed to be so much smarter than the average bear continue to look to Europe as the shining example of modern civilization?  Do they not see that Europe is crumbling under the weight of big-government socialism?  They have an aging population that is entirely dependent upon government welfare, which is entirely dependent upon high levels of taxation, which is entirely dependent upon taxable wage-earners – a pool that is rapidly shrinking due to Europe’s unsustainably low birth rate.  When there are no more people to tax, there will be no more government-supplied benefits, and then what?  It is a wholly unsustainable system.

 

Here in the United States, we have the likes of Barack Obama, Hillary Clinton, and the entire Democrat party who want to implement similar European-style socialism, and the financial services industry is cheering them on.  Why?  Follow the money.

 

The financial services industry is apparently licking its chops at the prospect of three-hundred-million-plus mandated retirement accounts from which they will collect management fees.  And, don’t think for a minute that such fees would be along the lines of the 1%-or-less that Vanguard charges on many of its accounts.  As with all government programs, it may start out small, but the case would soon, and continually, be made for higher and higher fees as the burden of managing such a monstrosity would put a tremendous strain on the ranks of selfless, public-serving asset managers.  Yeah, right.

 

Of course, we would then see an explosion of asset management professionals emerging from universities to get their piece of the action, just as the number of lawyers has increased like a population of rabbits to take advantage of the increasingly litigious nature of our society in the last thirty years.  At the same time, the lobbying efforts of this increasingly powerful sector would result in ever-higher government “contributions” to the mandated retirement accounts, as well as the fees paid to asset managers, which in turn would result in ever-higher taxes (enforced “contributions” to the government).  This, of course, will result in diminished economic investment and growth nationwide, less technological innovation, fewer jobs, more unemployment, a greater burden on the already terminal social security system, and so forth.  It would take only a few years, perhaps a decade or two, for the U.S. to end up in the same sorry condition as the nations of Europe.  Indeed, we are already, in many ways, headed in that direction.

 

This is the certain result of the investment industry’s apparent suicidal self-interest.  By promoting such a socialistic, mandated, tax-funded, universal retirement plan by which they hope to enrich themselves, they are also building the gallows on which they – and us all – will hang.  No doubt, they would be hugely enriched by such a plan – perhaps an entire generation of money-managers.  But, eventually the well will run dry, and the richest, most prosperous and free nation in human history will join the rest of the has-beens.  Prosperity will turn to poverty, not only monetary, but also in terms of will, creativity, liberty and spirit.  

 

Rather than supporting a plan for financial and societal suicide, it would serve the financial services industry and the entire nation much better to promote the virtues of self-reliance, personal responsibility, self-discipline, delayed gratification and thrift.  The investment industry ought to be pressing for parents and schools to teach basic financial management to children to encourage saving and investing on their own for a lifetime of financial security and prosperity, from which the industry and society would benefit not just for a generation, but forever.

 

Let’s stop listening to elitist academics who believe they have the answers for all of us knuckle-dragging ignoramuses who can’t think or act for ourselves – we who have built the greatest nation on earth.

 

Todd Weber

 May 20, 2008

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