Forced to Retire, Some Take Social Security Early

In an AP article “Paul Skidmore’s office is shuttered, his job gone, his 18-month job search fruitless and his unemployment benefits exhausted. So at 63, he plans to file this week for Social Security benefits, three years earlier than planned.” “Like Skidmore, 63-year-old Jan Gissel of Tustin, Calif., also was forced into retirement early. She turned to unemployment benefits when her technical support business failed and filed for Social Security last September. Together, the checks are keeping her afloat.”

I can relate to their situations. It was three months until my 65^th birthday when my employer sold out to a competitor. I received a very modest severance package and they extended my health insurance, employer paid, until my birthday. I applied for unemployment insurance. The official date for my social security would not occur until age 65 years and four months. You are allowed to apply for Social Security up to four months prior to your first benefit check. So I applied for that option. However I continued to search for a job. After all, living on Social Security alone would be a shock to most people.

Congressman John Boehner, appearing on Meet the Press, hinted about extending eligibility for Social Security to age 70. If you find yourself unemployed at age 60 or later you will not easily find employment except as a greeter at Wal-Mart.

MR. GREGORY: And so you favor raising the retirement age?

REP. BOEHNER: David, there are a lot of options about how you solve this, but I don’t want to get the cart before the horse. I think it’s important to have this conversation. It’s going to be a difficult conversation, but it’s time to have it and it’s time to come up with some solutions that are done in a bipartisan way to help address these problems.

Todd Purdum in Vanity Fair

Quoted on today’s Meet the Press

“The modern presidency–Barack Obama’s presidency–has become a job of such gargantuan size, speed, and complexity as to be all but unrecognizable to most of the previous chief executives. The sheer growth of the federal government, the paralysis of Congress, the systemic corruption brought on by lobbying, the trivialization of the `news'” by the “media have made today’s Washington a depressing and dysfunctional place. They have shaped and at times hobbled the presidency itself.”

Fareed Zakaria Returns ADL Award

(Aug. 7) — The Anti-Defamation League said it is “stunned” that Newsweek columnist and CNN host Fareed Zakaria is returning an award from the group in protest of its stance over the planned mosque near ground zero in New York City.

Zakaria returned the award, saying that the ADL’s calls for the project to be relocated compromised its mission to fight discrimination.

“I am not only saddened but stunned and somewhat speechless by your decision,” ADL National Director Abraham H. Foxman said in a letter on the group’s website. “I would have expected you to reach out to me before coming to judgment.”

The planned expansion of an Islamic community center, including a mosque, a few blocks from the site of the 9/11 terrorist attacks has led to bitter debate. Families of the victims say the center would be an insult to the memory of the dead, while figures such as Mayor Michael Bloomberg stated that forcing its relocation would be an un-American act of intolerance.

The ADL took a more nuanced position. It said that the project’s leaders had the right to go ahead with the project as they saw fit. Still, the ADL argued that the center should be moved out of sensitivity towards the raw feelings of those affected by the World Trade Center terrorist attacks, which killed more than 2,700 people.

“We are ever mindful of the tragedy which befell our nation there, the pain we all still feel,” the ADL said last month. “We believe the City of New York would be better served if an alternative location could be found.”

Zakaria said this stance betrayed the ADL’s principles. He applauded the Islamic center as an example of moderate Islam that is compatible with American ideals.

The 46-year-old returned the Hubert H. Humphrey First Amendment Freedoms Prize that the ADL awarded him in 2005, along with the $10,000 prize that went with it.

“What is at stake here is the integrity of the ADL and its fidelity to its mission,” Zakaria said in a letter to the group. “This decision will haunt the ADL for years if not decades to come.”

Still, the ADL isn’t giving up hope on Zakaria. Foxman said that the journalist would be free to renounce his position with no hard feelings.

“I am holding on to your award and check in hope that you will come to see that ADL acted appropriately and you will want to reclaim them,” said Foxman in the letter . (Aug. 7) — The Anti-Defamation League said it is “stunned” that Newsweek columnist and CNN host Fareed Zakaria is returning an award from the group in protest of its stance over the planned mosque near ground zero in New York City.

Zakaria returned the award, saying that the ADL’s calls for the project to be relocated compromised its mission to fight discrimination.

Zakaria said this stance betrayed the ADL’s principles. He applauded the Islamic center as an example of moderate Islam that is compatible with American ideals.

The 46-year-old returned the Hubert H. Humphrey First Amendment Freedoms Prize that the ADL awarded him in 2005, along with the $10,000 prize that went with it.

Still, the ADL isn’t giving up hope on Zakaria. Foxman said that the journalist would be free to renounce his position with no hard feelings.

“I am holding on to your award and check in hope that you will come to see that ADL acted appropriately and you will want to reclaim them,” said Foxman in the letter .

Growth Through Global Investing

This Morningstar article is indicative of the amount that Americans are investing in the rest of the world. Clearly the United States is not a leader. Our focus must be investing at home. Wait a minute, Businessweek reports that American corporation are sitting on $1.8 trillion.

By looking at the big picture and taking advantage of opportunities abroad, investors may experience higher returns than if they were invested solely in the United States. However, holding a diversified portfolio (both in U.S. and international markets) may be the best way to protect against global market fluctuations and risk.

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. All returns were calculated in U.S. dollars. Returns and principal invested in stocks are not guaranteed. International investments involve special risks such as fluctuations in currency, foreign taxation, economic and political risks, and differences in accounting and financial standards.

Source: Equities for each country are represented by Morgan Stanley Capital International Indexes and the U.S. stock market by the Standard & Poor’s 500^®, which is an unmanaged group of securities and considered to be representative of the stock market in general. Developed countries in this analysis include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United Kingdom and the United States.

Article reprinted with permission from Morningstar, Inc.

How the Rich Stay Rich

HP CEO forced to resign amid harassment claims

Mark Hurd has been the CEO of Hewlett-Packard Company since Carly Fiorina left that job in 2005. He was asked to resign as a consequence of either sexual harassment charges or some other internal misbehavior.

It has been reported that Mr. Hurd will get a $12.2 million severance payment, and nearly 350,000 shares of HP stock worth about $16 million at Friday’s closing price, plus an extension of options to buy up to 775,000 HP shares. Clearly he will never have to work another day in his life. Even at 4% interest the $12.2 million will provide him with an income of $488,000 per year. At a 39% income tax rate and allowing for no deductions he will have a net $200,000 per year for living expenses.

Under current law he could also sell those $16 million in shares as needed and everything above the current price would be taxed as capital gains. That is a rate of 15%. The rest of us who earn a living by working would pay our taxes at a higher rate.

This is what the GOP wants to perpetuate. I am sure members of the GOP can justify this situation. I just do not know how they will do it.

Middle Class Slow-roasted Homicide

“the middle class will continue to be an accomplice in its own slow-roasted homicide”

Today’s unemployment initial claims for last week are 479,000. Those claims have been in the 400,000 plus range since November 21, 2009. That continuing issue might be the real reason that the GOP will be successful in November.

This explanation provided by a friend, Burt Feinstein

We’re only three months away from the midterm election when a shockingly large number of American voters will inexplicably vote for Republican candidates. I have no idea if this will mean a Republican takeover of the House or Senate or both, but there will definitely be enough voter support for Republicans to significantly reduce the Democratic majorities in the House and Senate.

Why? Because too many voters tend to be low-information, knee-jerk Springfield-from-The-Simpsons types, and the Republicans have lashed their crazy trains to this new wave of inchoate road-rage to help sweep them into more congressional seats.

Here are a few of the ongoing economic conditions facing a vast majority of Americans, many of whom are all revved up to vote Republican in November. According to Michael Snyder of the Business Insider:

• 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

• 66 percent of the income growth between 2001 and 2007 went to the top 1 percent of all Americans.

• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

• In America today, the average time needed to find a job has risen to a record 35.2 weeks.

• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.

• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.

Oh, and the Center on Budget and Policy Priorities reported that wages for the highest 20 percent of earners rose by nearly 300 percent since 1979, while wages for the bottom and middle 20 percent increased only by 41 percent — combined. Plotted on a graph, middle and working class wages have flat lined for 30 years. Roll all of these tragic figures into a slow growth recovery and here we are. Most of us in the middle class are screwed.

And thanks to an alliance between the Republicans (which includes the tea party), the increasingly dominant far-right media, a traditional “old media” that panders to the far-right, and right-of-center “conservadems” who pander to the Republicans, too many voters have decided that the Republican Party might be better suited to turn all of this around.

The big lie here is that if Congress stops spending, cuts the deficit and makes permanent the Bush tax cuts, especially the tax cuts for the wealthiest Americans, our problems will be solved — even though these concepts are in direct conflict with each other. Not surprising given the ever-lengthening Republican syllabus of contradictions.

Here’s how this new batch of contradictions plays out.

According to Republicans and their conservadem enablers, we have to cut the deficit and pay for every program Congress passes or else we’re all doomed. We’re stealing from our children, they say. This has manifested itself in Republican filibusters of both unemployment benefits ($34 billion) and a new jobs bill ($33 billion over ten years). A Republican filibuster killed the jobs bill, and, after many failed cloture votes, the filibuster of the unemployment benefits was finally defeated and the Senate Democrats passed the extensions. Throughout the past year and a half, it’s been the same story. Any effort made by the Democrats to stimulate the economy has been filibustered by the Republicans. They say it’s because of the deficit and debt.

And yet they want to make the Bush tax cuts permanent, which would add $678 billion dollars to the deficit — and that’s just the cost of the tax cuts going to the top two percent of earners. In other words, the Republicans want to spend $678 billion in further giveaways for the wealthiest two percent, and they don’t care whether it increases the deficit.

By the way, the Republicans also recently voted against and defeated an amendment to strip Big Oil of its $35 billion in subsidies. Just thought I’d pass that along. Put another way, $678 billion in tax cuts for the wealthy? No problem. Deficit-shmeficit! But $34 billion in unemployment benefits for an out-of-work middle class at a time when companies aren’t hiring (say nothing of the aforementioned bullet-points)? Evil! Instead, the Republicans want to give $35 billion to Big Oil in the form of corporate welfare during the worst oil spill in American history while telling unemployed middle class families to piss off.

Do we have a clear picture in terms of who and what the Republicans care about?

It surely isn’t fiscal discipline or the deficit. And it surely isn’t the middle class. The Bush tax cuts, if extended, would add $2 trillion to debt, so it’s not that either. Throw in another policy started by the Republicans — the war spending (more of which was passed yesterday without any worries about CBO scoring or making sure it’s deficit neutral) — and there’s the vast majority of your deficit and debt for the next ten years. Not the stimulus or the bailouts. The long term budget impact of the wars and the Bush tax cuts literally dwarf the stimulus. Here’s the CBPP evidence in colorful graph form:

That big blue chunk represents the Bush tax cut portion of the deficit. The yellow represents the wars. The light blue is the tax revenue lost to the recession. And those really narrow tan and red strata are TARP and the stimulus. Clearly we need to elect more Republicans so they can make permanent the big thick deficit hogs and kill that thin section for the stimulus.

Now, if you’re a Republican, you might be clinging to the idea that extending the Bush tax cuts would have a stimulative effect on the economy (somehow) even though this hasn’t been the case for the last ten years other than for the wealthiest Americans who have once again disproved the trickle-down theories at the heart of Reaganomics by pocketing their share of the trickle instead of reinvesting in jobs and wages for the middle class.

The Bush tax cuts will not stimulate the economy.

According to Moody’s Analytics (hardly a left-wing apparatchik), for every dollar of government money spent on extending the Bush tax cuts, there’s only a 32-cent return on investment in terms of economic stimulus. Not a solid investment. How about cutting the corporate tax rate? Also a 32 cent returns in economic stimulus. Capital gains tax cuts? 37 cents. And, lumped together, there’s your Republican plan for growing the economy. Dumb investments. Goldman Sachs would short these policies. I’m not sure they haven’t, actually.

But what about the Democratic spending? For every dollar spent on unemployment benefits, there’s a $1.61 return in economic stimulus. Good investment! How about infrastructure spending? $1.57 return. Aid to the states? $1.41. Temporary increase in food stamps? $1.74. Even the Obama tax credits for the middle class, $288 billion of the Recovery Act, account for up to $1.30.

Meanwhile, the Obama administration is working with a deficit commission which will focus on trimming the deficit after (we hope) the economy and jobs are back on track. The Republicans, of course, voted against forming a deficit commission.

Given the choice between deficit spending that significantly stimulates economic growth or deficit spending that barely makes a dent, which choice are the Republicans trying to sell? The really stupid deficit spending for the wealthy that barely makes a dent in the recovery. That’s the Republican plan.

Also, contrary to popular far-right myths, it’s worth noting that the Democrats and the White House have no intention of allowing the tax cuts for families earning less than $250,000 to expire. Those tax cuts will be renewed this year. As for the top tax brackets, you find me a multi-millionaire who pays the actual marginal rate every April and I’ll show you a very rich moron. Most of these guys, after deductions and loopholes, pay an effective tax rate that’s much lower than the middle class tax brackets. So don’t tell me that millionaire Glenn Beck and millionaire Paris Hilton will be financially burdened by a 2.6 percent bump in their margin tax rate next year. Sorry, no. They won’t be. And why do middle class Republican voters give a rip about Paris Hilton’s tax rate? Because they believe they’ll be as wealthy as Paris some day. But read those bullet-points again. It’s not happening.

Unless there’s some sort of mass epiphany, or unless the Democrats actually speak up and take the discourse by the horns and fight, middle class American voters in November will augment the number of Republicans (and conservadems) in Congress mostly because they’ve been suckered into endorsing these insane Republican economic policies. Subsequently, the Republicans will balloon the deficit and undermine the economic recovery in order to give more handouts to the super rich. And the middle class will continue to be an accomplice in its own slow-roasted homicide.

Having Your Baby in America

Illegal aliens and are invading this country by using our Constitution to gain citizenship.

ABC World News posed the question tonight: Are women sneaking into America to give birth? The question was promoted by Senator Lindsay Graham of South Carolina who said women are coming to this country to “drop babies.” The answer apparently is YES. There are hotels, ABC reported, that are actually soliciting people to come to the USA on visitor visas and bearing a baby. Those children become citizens of this country. The ABC item did not discuss those illegal aliens that are entering the country and bearing their children here. Instead they reported on a young man attending UCLA who entered the country illegally at the age of four and is still not a legal resident. He was not ashamed to take ABC to the cramped home of his parents that is still his home.

The source of their claims is the 14^th amendment. The wording in that amendment is “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

The ABC report confirms that Senator Lindsay Graham is correct. The 14^th amendment was not written to permit illegal entry in our nation.

Judge Overturns Calif. Gay Marriage Ban

There is nothing in the U.S. Constitution about marriage. There are no federal regulations about marriage. No one in 1789 considered marriage an issue that should concern the government. Over the years individual states did pass laws pertaining to divorce and the federal government does recognize marriage in determining income tax payments and Social Security benefits.

Strict constitutional scholars will have a difficult time justifying regulations that define marriage. They could of course determine that just as legal marriage is authorized by local laws the definition of marriage can be defined by local law.

Proponents of gay marriage could argue that equal protection under the law also means the right of Americans to marry anyone they desire. After all marriage choice is personal and is in accord with the Declaration of Independence that reads in part: We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

I personally do not find any attraction to my own sex except as friends. However, it will not impact my life one iota if people of the same sex prefer to marry.

Tragic Unemployment

We have Exported American Jobs

ALAN GREENSPAN, to David Gregory on “Meet the Press” on August 1, 2010: “I think we’re in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession. Our problem basically is that we have a very distorted economy in the sense that there’s been a significant recovery in a limited area of the economy, amongst high income individuals … Large banks, who are doing much better, and large corporations … are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labor force — which is in tragic unemployment, long-term unemployment — that is pulling the economy apart.”

Apple Inc. the company responsible for the iPad, iPod, iPhone, and Mac computers, had revenues $15.7 Billion in the quarter just ended. Their income before taxes was $6.136 Billion. Their net income after taxes was $3.253 Billion. Clearly the cost of making, advertising and distributing all their marvelous electronic gadgetry was the biggest issue for them. It was not their taxes. Of course lower taxes wouldn’t hurt. This data was collected from Morningstar.

All of the items they develop are manufactured in China or other countries that have much lower labor costs. That is the problem facing the United States and all major industrialized nations. Manufacturers must make their products in low labor costs countries to be more profitable.

The problem surrounding service jobs is in many ways even more alarming. Dozens of companies have sent their customer service departments to Asia. My own experience confirms this fact. Companies I have telephoned linking to a nation there include Citi Bank, Dell Computer, Earthlink, and the Los Angeles Times. Labor costs for those functions is at least one fifth the cost in the United States or Canada.

Where does that leave the unemployed Americans who used to work in factories or the service sector? The 22 million people affected by the Great Recession will either take lower paying jobs than the ones they used to have or they will have to find other professions.

Neither Republicans nor Democrats have offered one worthwhile idea that will re-employ those who have lost their jobs during the past two years. Lower taxes will not bring hundreds of thousands of jobs, that are no longer in America, back to these shores. The lower taxes that Republicans promote will add to the $1 Trillion or more of unspent money that corporations are now holding for some future investments and even higher pay for their already well paid management.

You may want to read “Newsweek vs Businessweek: Growing American Jobs.”