GOVERNMENT DYSFUNCTION

We all complain about the government, yet often less than half of the eligible voters actually bother to vote. Maybe it's the "my vote doesn't make a difference" mentality, but it is rare to find effective government on any level. Our government leaders do not act as statesman, but simply as a bunch of politicians constantly campaigning for the next election.

Our Federal government seems to get nothing done, even often appearing not to even be making the effort. And when there seems to be an effort by some, the system usually breaks down and little real progress is made. The 2 party, 2 houses of Congress system is, to say the least, flawed. Our representatives make compromises on their compromises, simply because the "poll numbers" show them they need to get certain "pork" projects done to get reelected. It is rare that a bill that finally passes through Congress, after the House's and Senate's bills are reconciled, and a "compromise" is reached to reconcile the bills, ends up resembling the original intent. Spending is done haphazardly, because politicians are afraid to vote against something for fiscally responsible reasons, for fear that their future political opponent will use it against them in their next campaign. Rarely does a politician vote his conscience, but rather micromanages votes based on personal political consequences. We see this with jobs, economics, health, foreign affairs, and almost any and every other legislation. It is rare and far between when a meaningful piece of legislation is passed, without major flaws, loopholes, inconsistencies, and waste. Our government leaders are afraid and/ or unwilling to use sound financial reasoning, such as beginning the budget process with "zero-based" budgeting, so that programs that work are encouraged, and waste is eliminated.

Our State governments are in many cases even more flawed. Several states are nearly bankrupt, and in my state of New York, the State Senators and State Assembly representatives have not submitted a budget in time in recent memory. All these "leaders" resort to the blame and "it wasn't me" game, and threaten each other with lawsuits, vetoes, etc., without having the courage nor foresight to propose viable solutions.Often, our County and local representatives are even more dysfunctional. In Nassau County NY, out of nearly 240,000 votes cast this past Election Day for Nassau County Executive, the final margin of victory was less than 500 votes. As if that wasn't indicative enough of a political quagmire, far less than half of the eligible voters went to the polls. On the local level, the County blames the Town, who blames the Villages, or vice versa. Infrastructure is often neglected until instead of doing regular maintenance, major repairs are needed. This wastes money, as well as creating ill will, and worsening the quality of life.

So, what can be done? We, the people, NEED to send a message that we are tired of the empty rhetoric, and that politics as usual will NOT be accepted. We have to start on the local level, and get leadership that will make the tough decisions, even if they are sometimes unpopular. We must support LEADERSHIP and statesmanship, instead of being swayed by what a politician looks like, or how well they deliver a speech. We must ask, "What are you going to do about the issues?" Don't accept cliches, but follow up by questioning the how and why, and especially the how much aspect of a proposal. Do NOT blindly believe the cost nor time proposals given to you to get your vote - - - ask how? NEVER believe a politician that tells you he will cut taxes without cutting programs! Ask, "How will you balance the budget and pay for the expense?" Ask what efficiencies they are suggesting that would save money. Don't believe that most savings come from cutting big expenses. Anyone who truly understands the realities of budgeting and policy implementation knows that the most effective and realistic way to reduce expenses is to make numerous smaller decreases and look for numerous efficiencies.

Now is the time that the public MUST become less apathetic and more proactive. They must DEMAND that their political leaders actually become representatives of the people. We MUST begin on a local level because real change can occur MUCH more quickly on a local, smaller scale, than on the national level. Once we get the local government functioning (instead of being dysfunctional), we can then use that success as an example to change the state system, and eventually the national system.
This is NOT a short-term easy challenge, BUT I believe can and must be accomplished and achieved if we are to regain our greatness, and become true leaders of the rest of the world. Wr must eliminate the waste and dysfunction NOW!

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Housing Buyers Market - - - at least for a while

HOUSING BUYERS MARKET - - at least for a while

How does one really know when to buy or sell real estate? There are many factors involved, and without a crystal ball, you can't be 100% certain! Every day, the media publicizes a lot of confusing information, and it is very difficult for the average person to know what it really means.

We all know that during all of 2009 and most of 2008, in most areas of the country, housing prices have fallen, in most areas by more than 20% since the height of the market. However, many people tend to forget that the real estate market has experienced these down cycles before, albeit usually not as severely. What is unique about this "cycle"is that the dramatic drop in prices has been accompanied by record low mortgage rates! While one would logically think that would create a buyers market, the combination of high joblessness and under-employment, combined with the lower stock prices, and extraordinarily tight credit market (making mortgage loans much more difficult to get), has caused buyers market pricing conditions but neutral market market conditions. The number of buyers has been inconsistent - especially the number of qualified buyers. Buyers realize that they do not have to act with the urgency that they did when the market was higher because there are very few bidding wars out there. It took sellers quite a while to realize, or at least accept the fact that they were not going to be able to sell their houses at the pricing when the market peaked, and thus many homes either did not sell, or sold only after numerous price adjustment (PC way of saying "price drops"), and the number of days a listed home remained on the market increased dramatically.

Qualified buyers - - those with good credit (credit scores of 700+), at least 20% to put down, and sufficient demonstrable income - - got some "great deals." Lending institutions received billions to "bail" them out, but very little of this money went to loosening credit. Most of that money simply made the banks more profitable. The typical American's credit score was "arbitrarily" lowered because of how it is calculated, and the impact that most credit card companies lower the vast majority of individuals credit limits. This caused the credit ratios to change, and thus credit scores to be lowered. This, in turn, tightened the mortgage market even further, because individuals with seemingly good credit, saw their credit scores lowered because of bank policy that had nothing to do with them specifically. The continuous of this "circle of circumstances" was that this policy created even fewer qualified buyers, thus causing additional havoc in the housing market.

The fear of the recession and the joblessness rate created many potential buyers to shy away from house hunting. The Federal first-time housing credit, combined with the extension and enhancement of the program to cover many that have held homes for more than five years, has helped bring out some additional buyers. Since this program is, however an expiring one, scheduled to expire in mid-2010 (must be in contract by Aprkil 30 and close by June 30), there is an added incentive to buy a home. The indication that the recession has or is close to coming to an end, has created somewhat of an increase in consumer confidence, as has the general feeling that the joblessness rate has or neared its top, and should come down during 2010, should increase home buyin g in the next few months. The government has also indicated that it will exert pressure on lending institutions to make consumer loans, including mortgages, more readily available, which should also be a plus.

Therefore, with record low mortgage rates, low home prices, and a slight easing of the mortgage loan availability, combined with the tax incentive, the next few months should provide a limited window for qualified home buyers to take advantage of a great circumstance. Obviously, as the economy increases, and mortgage rates rise, and markets stabilize, the cost of home ownership will increase. A serious home buyer should take advantage of these conditions, before we return to less favorable buying conditions. Remember that the real estate market is cyclical, and there may not be a better time to buy a house for many years than there is today!

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WHERE's THE BEEF?

Several years ago, Wendy's ran a very successful and memorable ad campaign with an old woman screaming, "Where's the Beef?" This ad's theme, for those who may have forgotten it or never seen it was that Wendy's competitor's hamburgers were very, very small, while Wendy's burgers were substantial. This same slogan can be used when talking about and/ or evaluating the main two programs that the President and the Congress have been spending so much time on - - health care, and joblessness.
Yesterday, President Obama gave a speech (it is beginning to seem like the "Speech of the Day" club) about how he would like to have Congress address the extremely high unemployment situation (What took so long?). Some of the President's suggestions included help for small businesses, transportation, energy- efficient homes, etc. Mr. Obama stated that the U.S. has to "spend our way out of this recession." Since more than 7 million Americans have lost their jobs since the recession began about two years ago, and the unemployment rate is 10% (that's the statistic although the reality is far higher), Mr. Obama called the rate "staggering" and made several proposals (cost estimates of about $150 billion +) he said would stimulate hiring and put Americans back to work again. Those proposals included: bridge and highway construction (MY NOTE- short-term and long-term, infrastructure programs usually add value and provide something eventually needed); for small business tax cuts (including elimination of capital gains if expenditure was accompanied by adding jobs); and credits for making homes more energy efficient. In addition, the President recommended more protections re health insurance for laid off workers, and suggested additional spending for seniors and veterans, and additional aid to states and municipalities so they won't have to lay off workers. This plan, of course, would have to go through and be approved by a splintered Congress, which is extremely time consuming and the result is unsure. All of this is being proposed while the President continues to talk about the need to address the growing Federal deficit. Many Republican leaders have already scoffed at this proposal, and if any program finally passes, I fear it may be another case of "too little, too late," and contain as much "pork" as effective program. It is always easy to criticize and point out the weaknesses in a plan, but isn't it about time for politicians to actually work FOR their constituency, instead of constantly playing politics (SEE YESTERDAY'S BLOG ABOUT POLITICIANS VS STATESMEN)?
In the meantime, the health plan debate goes on. Last night, an announcement was made that a compromise was reached where the "public option" would be replaced by a different alternative. There was another announcement that a vote was taken regarding language about abortion, and the more severe exclusionary language would not be included. Since the House bill that was passed last month will differ substantially from this Senate bill, a joint compromise bill will have to be arrived at, after which both the House and the Senate will have to approve. Further complicating the matter is certain language in each version appears to be distasteful to a large number of the supporters of the other version. The truly sad thing is, that after all this time and expense, if and when a final bill is approved, there is no assurance that it will be better, less expensive, or provide any better quality medical care. In fact, many independent (?) studies have indicated that the likelihood is that insurance will be more expensive for many, and provide lesser coverage for those fortunate enough to presently enjoy good medical insurance coverage. The costs, medical liability issues, unnecessary testing, expense of drugs, malpractice grants, etc. do NOT appear to have "made the cut" in either plan, but, of course, we do not really know what the final plan might look for. However, I have a hunch, that when all is said and done, that little voice in my head will hear the old lady chiming in, "Where's the Beef?"

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Shouldn't Politicians Eventually Become Statesman?

SHOULDN'T POLITICIANS EVENTUALLY BECOME STATESMAN?

Since our American political system has become one where politicians seem to run for office forever and spend obscene amounts of money on their campaigns, we shouldn't be surprised that once elected, our elected officials are so often dysfunctional. When a bunch of guys sitting around in an office or in a bar often seem to have a clearer idea of what needs to be done than our elected officials, one should realize that we have approached a political reality that is the equivalent of the "inmates running the asylum." When more time is spent discussing Tiger Woods and his alleged trysts than how to put our jobless back to work, there is something very wrong with our society!
Our elected officials put together patchwork proposals, filled with "pork," that are unnecessarily expensive, and do not adequately address the needs of the American public. Our elected officials tell us that they recognize the problem, and that is of the highest priority. Then they tell another group that their problem is the highest priority. And then, they don't adequately address either!
Let's look at the United States' pressing needs at the moment. Most observers would agree that the economy and the joblessness rates are the most disturbing! Yet, let's look at how our government has addressed these challenges. The much- maligned TARP (meaning TROUBLED ASSET RECOVERY PLAN) bailed out our major banks, because of the theory that these institutions were "too big to fail," and that the ramifications of bank failures would cause economic catastrophe. The government is now elated that the plan will cost $200 billion less than believed, because of early repayment by several banks. Yet, two banks who have not yet repaid the monies, Citi (owing $20 billion) and Wells Fargo (owing $25 billion) now are pleading with the government to be allowed to repay these amounts, and the government is telling them that they cannot repay it unless they raise substantial additional funds. Citi and Wells Fargo state that not repaying the TARP funds puts them at a competitive disadvantage against those that did, because of the additional restrictions associated with TARP. Remember that many non-banks reorganized to make themselves banks in order to be able to receive the TARP funds (predominantly investment houses, etc). Now, the government is discussing how to account for this $200 billion "windfall," reportedly discussing paying down the enormous national deficit/ debt, and using those monies for other purposes, such as creating jobs. However, the language of the TARP legislation specifically speaks of lending, so most viable job programs could not be funded with those funds. Adding to the farce and follies is the fact that TARP was supposedly created so that banks would free-up lending, which it has not done. Most banks have used those funds simply to enhance their own financial position!
Several months ago, our representatives were SO pleased with themselves for creating what they were referring to as a "Credit Cardholders Bill of Rights." In their infinite wisdom, they announced what the legislation would require, but that it would not take place for nine months (NINE MONTHS!). So, of course, most credit card companies (translation= banks) have raised interest rates, lowered credit lines, changed to variable rates, etc. And, of course, because of the crazy manner in which our credit scores (such as FICO, etc.) are calculated, having reduced credit lines changes the ratio of debt to available credit, thus lowering credit scores. The lending institutions (translation= banks) then use that new score as one of their justifications for declining lending. Yet, our legislators have bailed out the "too big to fail" on the backs of the individual citizens!
The President continues to showcase high profile job summits, and give speeches about how essential job creation is. Then, on the other hand (or should I say "face"), he says that the government needs private industry to help take the lead, because the government can't do it alone! Isn't this a bit of revisionist history, when we consider that same argument could have been used regarding huge government infusions into big businesses, war efforts, etc.
And, what about our war efforts. The candidate Obama, at least partially, ran as the "peace" candidate, against the Iraq surge, and stating he would not have voted to go in when the first vote was taken (it's great when you're a candidate and you were not in the Senate and therefore did not vote at that time, under those conditions). Yet, now, President Obama wants to commit additional billions, as well as 30,000 - 35,000 US troops to an effort that could be referred to as a "surge" in Afghanistan, while at the same time promising to limit the amount of time troops will remain, giving the public the indication that substantial troop reductions would begin in July 2011 (18 months). Then on the following Sunday morning programs, Secretary of Defense Gates and Secretary of State Clinton strongly indicated that the 18 month period would be when the first of the troops would be withdrawn, and US troops could be there substantially longer. Defenders of increased military action and "surges" point to the success in Iraq, yet in the last few days, there have been substantial deaths due to bombings, etc. Does anyone really believe that when we eventually leave Iraq, that it will be a stable, sustainable nation? What is really our goal? Does anyone really have a plan? What do we expect to achieve?
The candidate Obama ran for President with the campaign slogan, "CHANGE." During President Obama's first ten and a half months in office, he is using economic advisors who were at least partially responsible for this mess in the first place (where's the change?), the same Secretary of Defense, his campaign opponent as Secretary of State, etc. To this observer, he seems to still be campaigning. Granted there is a need for communicating, but there is an even greater needed for real action that works!
We cannot just throw money at a problem, nor simply blame others for how we got there. We need some common sense and straight talk. It took the US a while to get into this mess, and it won't be overnight getting out of it. But the time for rhetoric is over! Let's create jobs now! Putting people back to work will be the fastest and most permanent cure for our economy. Provide incentive for employers to rehire. Provide even greater incentives for employers in "future growth" industries (such as alternative energy, gas exploration, etc., technology, and manufacturing)! Create a situation where the US becomes not solely a consumer-driven economy, but that we once again manufacture items here! Give companies an incentive to manufacture here instead of abroad! That would be monies well spent that would come back to the government in the form of taxes, less unemployment benefits payouts, etc.
Create something, and stop making excuses.
When Mr. Obama ran for office with the campaign promise of change, little did most of us realize that what he meant was that change would be the only thing left in our pockets. Let's get America working again, reducing our deficits so that our children and their children don't have to keep paying for our excesses, and regain the United States' dominance in the world economy.
How strange that while our economy has suffered, the an average price of a gallon of gas has increased by 50% since this time last year. And that is with reduced consumption! It's time for the American public to wake up, and demand that our politicians, once they are elected, act as statesman, instead of just continuing to be ruled by politics. Does it really make any sense that Democrats of Republicans keep voting as a bloc, regardless of the issue? The late Senator Charles Goodell summed up the situation, "Politicians are like antelopes. When things get tough, they pain their behinds white and run with the crowd."
The US public must demand leadership NOW!

HOW ECONOMIC DATA & THE HYPE CONFUSES!

HOW ECONOMIC DATA & THE HYPE CONFUSE

I am sure that many of you have heard that gold was a great investment, and that investors like gold as a hedge against bad economic news. Since gold is now experiencing its best year since its last peak in January 1980, it is a good time to review the reality. On December 3rd, gold reached a record high, exceeding $1,225 an ounce. A gold investor who purchased gold during the last peak at $850 an ounce, has seen a return of approximately 44 percent. To put that into perspective, if one reinvested dividends, the Standard & Poor 500 stock index multiplied approximately 22 times. Even Treasury vehicles rose more than ten times, and interest-bearing bank accounts (not including Certificate of Deposits) almost doubled! When one factors in inflation, gold investors are still VERY far away from breaking even on their investment! Am analysis of gold investing leads one ro realize that gold is NOT a good long-term investor, and that the security of owning something tangible for "peace of mind" can be very costly.
Similarly, the originally cost of the TARP bail-out has been recalculated because many banks have repaid the loans much earlier than forecast. The cost of the TARP bailout has therefore been recalculated downward by approximately $200 billion (over 10years). The Government has actually made money on many of the TARP loans repaid. Does anyone think they know why these companies are repaying early? Could it have anything to do with not wanting to have the government have the "leverage" over them?
Several months, the politicians and the media were celebrating what they referred to as landmark legislation regulating the credit card companies. However, the law that was passed would not take place for nine months after enacted. So what have the banks done? They've configure themselves to make significant moves ahead of the deadline, so they are in the most advantageous position possible. Many of the banks have raised their interest rates; many others have arbitrarily and across the board lowered credit limits. And to make the system even more ludicrous, the way credit scores are calculated, the banks lowering of credit limits causes many people's credit scores (FICO, etc.) to go down!
So, what did the banks do with the monies they received to bail them out? Wasn't the public led to believe that it was necessary to bail out the banks, so that credit would be available for purchases, mortgages, etc? Well, what most of the banks did was use the funds to make their own bottom line look better, while tightening credit more and more!
President Obama called a huge jobs summit, which appeared to accomplish less than a typical jobs fair! The President then made a speech that addressing jobs was a priority (then where does it go on the priority list with his other stated priorities?), but that it needed to be a combined government- private sector approach, because the government has to be mindful of the growing US deficit and its inherent problems, and that the government isn 't in a position to spend all the needed funds. Yet, if this is a priority, it must be treated as such! Since Mr. Obama took office, the U.S. deficit has grown from a ridiculously high $400 Billion, which he inherited, to over $1.4 Trillion today. We have been told that the Afghanistan surge will cost $30 billion (but that number is only the additional funds we are told will be spend over the next 18 months). Will anyone be surprised to see that number grow exponentially! On the Sunday morning shows, Secretary of Defense Gates and Secretary of State Clinton kept saying that basically there would be a slight first pull-out of some troops, beginning in July 2011! Haven't we heard before that there was "light at the end of the tunnel," as LBJ used to say?
Beware the jobless/ unemployment figures! I am always wary when the government produces "better than expected" figures, right before the President's big speech tomorrow night on jobs. Factoring in those that are counted, those that are working part-time instead of full-time, those that have given up looking, and those who have, out of desperation taken significantly lower paying positions, the joblessness and employment/ unemployment issues should the U.S.' number 1 priority! The U.S. must seriously address this issue for our economy to fully recover.
Are things a little better? Yes, I don't think we are getting worse, and I do believe there will be improvement. It is rumored that the Federal Reserve is already discussing when (not if) they will begin to raise interest rates. So, the one thing that any consumer who is in a position to - - who can afford to - - should do, is seriously consider purchasing real estate now! Mortgage rates are historically low, home prices are low, and qualified individuals with reasonable credit who can put 20% down, can get a mortgage on a properly priced home! Those considering it, but waiting are most likely going to be very disappointed when sometime next year, mortgage rates go up, housing prices begin to rise, and the Housing Credit expires! This may be the best real estate buying opportunity in some time!
Nobody can foresee the future, and nobody can pinpoint the precise low point of a market. Those than panicked and sold off stocks at their low, and did not step in when the Dow was about 8400 because they were waiting for the low, missed an opportunity to take some advantage. The ideal stock-buying strategy over time has always been dollar-cost averaging. That strategy has worked in up markets, down markets, and do-nothing stock markets. It takes dicipline, but averages out purchase prices so that the market swings are not catastrophes!
Patients, being wary of the hype, and understanding that all markets are cyclical is the best long-term strategy. Nobody ever makes a profit unless they sell, so one should be much more interested in a long-term, successful approach.

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30 Yr Mortgage Rates hit all-time low & other housing info

30 Yr Mortgage Rates hit all-time low & other housing info

Freddie Mac stated today that the 30-year fixed-rate mortgage average hit a new low. The 30-year average declined to 4.71% (with an average 0.7 point) for the week ending Dec. 3 from 4.78% last week. This new 30-year average is the lowest since Freddie Mac began its weekly survey in 1971. Last year, the average was 5.53%. Remember that this is the average 30- year rate, which means that many lending institutions are offering even low rates. Frank Nothaft, Freddie Mac's chief economist stated, "Low mortgage rates and the cumulative decline in house prices have contributed to an extremely affordable housing market and helped spur home sales this year . . . For instance, total new and existing home sales in October were 36% higher than their January low on a seasonally adjusted, annualized rate, according to the U.S. Census Bureau and the National Association of Realtors."
So, there is improving news in the housing/ real estate markets. The combination of the Federal housing tax credit, low mortgage rates, lower home prices, and some improvement in consumer belief that the worst of the recession is over, has created this improvement. As we enter the Holiday season, real estate "shopping" historically cools off until after the holiday season. However, this kind of news is hopefully a fore-teller of a better 2010 housing market.
Another promising indication is that the President is finally convening a Jobs-related summit for tomorrow, and hopefully, that will addressed the major weakness in both the housing market as well as the overall economy. Let's hope that our political leaders have finally understood that joblessness is what's keeping our economy from really growing, and they will address some real solutions to that situation. Amongst my suggestions: (1) Incentives for hiring in "progressive" industries, such as alternative energy, technology, etc-- that will NOT ONLY put people back to work, but also support industries will be necessary for the US to reach the next level. As an Ecobroker, I believe that incentives in "green-related" building and renovations will boost the economy, help the joblessness situation, and make houses more sustainable for now and the future; (2) Make the joblessness challenge the #1 Economic Priority; (3) Create incentives so that progressive industries benefit by hiring people, than by the cost-savings side-effects of layoffs. Let's put America back to work again!

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THE US MEDIA & AMERICAN PRIORITIES

If one's first contact with the US media took place sometime between 8PM Eastern Time last night, and this morning's local daily newspapers, the most likely reaction would be "Huh?" President Obama decided to have a primetime speech given at West Point broadcast to the entire country. In this speech, the President intended to clearly explain his policy toward Afghanistan, and explain simultaneously sending an additional 30,000- 35,000 US troops into the war zone, while also stating his intent to begin withdrawing those troops in 18 months. It appeared that this may have been the first time that this President got both the left and the right to agree, albeit for different reasons - - - many on the right upset because he announced a timetable and was not in this to win; while many on the left upset that this President, who ran, at least partially, as a "peace" candidate was sending more US troops in harms way, when they feel he should be withdrawing from Afghanistan. The most revealing thing about the post- speech reaction was that almost no one enthusiastically supported this plan.
In what was perhaps even more revealing about the US media, however, was the way the NY newspapers handled the front page of this morning's editions. The NY Post had approximately 20% of the front page headlined about the President's speech, but chose to dedicate approximately 80% of the front page to the Tiger Wood's trysts and women. Newsday split their front page differently; dedicating about 2/3 to the Nassau County Supervisor's outcome (one month after the election), and 1/6 each to the Obama story and to Tiger Wood's getting a traffic fine (referring readers to the Sports section). The New York Times dedicated the "above the fold" half of the front page to the President's speech, and to an analysis of Afghanistan options.
Once again, America has become distracted. Once again, a President has come before us and announced his plan to "temporarily" expand our war effort. Once again, the media has predominantly only given this a cursory review, accepting the inevitable. The most revealing thing last night was President Obama conceding that some are comparing this to Vietnam, but then giving his "spin" as to why it is different - - - actually having the audacity to use George Bush's explanation of how the US is broadly supported in this war, supposedly unlike Vietnam; and that the American public understands the dangers in the post 911 world. It is revealing that the President all of a sudden started sounding like a cross between his predecessor and Rudy Giuliani (who is infamous for referring to 911 in every fourth word!). Most revealing is that while some of the media questioned strategic points in the President's plan, there were very few outraged on this Vietnam analogy. What is being missed is the most important similarities between Vietnam and Afghanistan - - - both are un-winable situations; both are very costly in terms of both money and human loss; and both are concerned with a complicated foreign situation at a time when our focus should be on strengthening America.
The fact that our economy shed an additional 169,000 jobs in November, and that our joblessness rate is still over 10% should be attracting most of our attention. The huge federal deficits and lack of economic focus should be what most concerns us! The fact that what the US needs is "domestic nation-building," NOT building other nations, is what the priority effort should be! Emphasize alternative energies so that our dependence on foreign resources is reduced, and more US funds remain in the US! Subsidize job creation instead of supporting companies that use the subsidies simply to make profits for themselves! Emphasize production and manufacturing in the US, especially in industries that our essential to our future. Bailout the American citizens that are victims of this economy!
Nassau County finally announced that all (or most) of the votes have been counted and re-counted and elected a new County Executive. The ousted executive Tom Suozzi appeared popular, and was heavily favored to win re-election. Yet the combination of anger and frustration, voters fed up with high taxes combined with frustration with politics caused a significantly lighter turnout amongst previous Suozzi supporters and energized his opposition. Americans are getting fed up, BUT are not doing anything about!
The US was founded on the right to protest any inequities in the system - - - in the late 1960's and early 1970's enough people loudly protested the war in Vietnam that eventually the US got out of that location, after a huge number of deaths and injuries! And it was NOT the "Peace with Honor" that Richard Nixon promised in his campaign! It's time for us all to unite for what's best for America and change the nation's priorities, and support America - - - in the famous words from the movie "Network" "I'm mad as hell and I'm NOT going to take it anymore."
Let's get America working again!

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US Focus- Foreign Policy, White House Imposters & Tiger Woods

It seems that in America we are still not learning lessons from our past! This evening, President Obama is supposed to formally announce, at West Point, that there is a new policy for Afghanistan. We can expect a well-worded defense of a policy where we send an additional 30,000 to 35,000 additional troops to Afghanistan, but that the President announces that this is part of an overall "exit policy," (he probably won't call it that!) restricted for a limited period/ not endless (but don't expect an actual timetable), and that the additional troops are needed to assure that "we accomplished our mission," and that US troops will be training the Afghanistan military to take over that country's security. And, yes, this is from a man who a little over a year ago won the Presidency, at least partly because he stated that his opponents in the primaries and the election supported our war in Iraq (and Afghanistan), and he did not! Of course, he was NOT a Senator when that vote was taken, so it was easy to use some revisionist history! Certainly, the President will give another excellent speech. However, it seems that Mr.Obama has never stopped campaigning, even after he was elected! In a case of reality copying fiction, Robert Redford, in the movie, "The Candidate," famously asked, "What do I do now?" after the fictional inexperienced but handsome Senator was elected. It must be so very disappointing and disillusioning to the candidate Obama's many impassioned supporters who believed that Mr. Obama would change the country for the better. Unfortunately, for many, the only change has been the little bit of change remaining in their pockets as a result of these record deficits, recession, and high joblessness rates!
Think back to the Johnson, "There is light at the end of the tunnel," Vietnam-era declarations, and the reasoning that kept so many Americans there for so many years, at such a high cost both in human terms as well as financially, only to get the same or even worse results than we probably could have had leaving years sooner. If we really try to defend sending MORE troops into Afghanistan, when our justification for having over 60,000 troops there now (before the increase)is questionable, then I maintain it is time for the American people to once again consider peaceful anti-war protests, so that no more American lives are lost in a questionable war! Shame on President Obama, who stated opposition to President Bush's troop increases (he called them surges as you might recall). You can be fairly sure that the President's speech this evening will NOT use the word surge. How would you feel if it was your loved one sent in harms way, and rumor has it being deployed during the Holiday season! How interesting and predictable is it that President Obama has selected West Point as the location for this "announcement."
The press has given more publicity to the White House imposters who "crashed" a White House dinner party. But how much confidence should it give Americans if this could be done this easily at the White House, many do NOT feel comfortable permitting our government to oversee very much! There is MORE security at airport security sites! There is plenty of blame to go around for this error, which fortunately ended without disaster. But for Congress to be giving this less attention than they previously gave to football helmets says quite a bit about the problems in our political system, and governance. Watch carefully as the Secret Service blames the White House staff, who will blame the caterers, who will blame the event planners, etc. They are ALL to fault!!!
Yet, the media has spent more time and effort about Tiger Wood's minor car crash, and personal life, than about other issues. Tiger's situation has been the lead stories on radio, television, magazines, newspapers, etc. Tiger Wood's damaged his Cadillac SUV, and perhaps his image. That truly should NOT impact anyone other than he and his family!
I hope that we Americans wake up to the situation in Afghanistan before we are mired in another foreign war that does nothing constructive, but injures, kills, and damages lives, while utilizing even more US dollars from an economy with already a 1.4 trillion dollar deficit! Revisionists on the right will say that it is undemocratic and unpatriotic to oppose our war efforts, as they blame others for our "failure" (yes, I said failure) in Vietnam! The US again needs to become a leader, but NOT by fighting wars, but by leading the world out of the recession and high unemployment! Isn't it about time that we consider ramifications and inevitable outcomes of our actions, and address the real priorities (economic issues)?

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BLACK FRIDAY, CYBER-MONDAY: Good news?

The preliminary figures have been released regarding Black Friday, and depending on how you wish to view it, the numbers are either bad news, so-so news, or good news. Apparently more Americans purchased on Black Friday, but their average spending was down about 5-10% for the day, and the total retail sales were either flat, or slightly lower. Since today is so-called Cyber-Monday, we do not know yet what these numbers will show, but more retailers are offering Cyber-Monday sales than ever before!
So, what does that mean? Well, the good news is, that despite the ongoing recession, despite the high joblessness rate, despite the credit tightening (many of the larger banks have tightened, eliminated, reduced credit lines, and increased credit card interest rates charged, while changing their installment payment features, thus requiring higher minimum payments), despite the fact that merchants are being quite conservative about inventory-on-hand, more Americans are still buying gifts, and the total spent has not been reduced significantly. Also, many retailers began their promotions early or are stretching them out over a longer period of time, which makes the Black Friday numbers even more positive! Granted last year's holiday season was not a robust one for retailers, but considering the cost-saving measures many companies have implemented, I feel the overall indicators are positive ones.
I am guessing that the Cyber-Monday results will either parallel the stores, or be slightly better than the store results. These numbers might be slightly skewed also because of many sites stretching this sale period out over a longer period of time. I am of the belief that there will be a higher than usual number of last-minute shoppers this holiday season, but that retailers will have to be creative as well as use discounting to attract more shoppers. I also feel that consumers will still purchase for the holidays, but that the average spending per shopper will be somewhat lower than in the past.
Since many manufacturers are suffering like retailers and consumers, many manufacturers are offering discounts and/ or incentives to retailers at a much greater rate this season than in the past. That is also a factor in the lower consumer purchasing averages.
Having gone to a few stores, malls, and warehouse clubs both on Black Friday as well as on Saturday, it is obvious that this season is being kinder to some stores than others, and to some malls than others. On Black Friday, WalMart was packed for the Early Bird sales, butr much quieter the rest of the day. The store Friday afternoon looked like it must have been "packed and ransacked" in the morning, but was simply messy and not fully re-stocked on Friday afternoon. The warehouse clubs seemed to be doing business as usual on Friday! On Saturday, I went to two different malls, and while one mall seemed very quiet, the other was very busy. Some stores were obviously much busier than others. Yet, for example, the Apple Store at one mall seemed relatively quiet, while at the other mall was busy.
We need to start adopting the "half-full" instead of "half-empty" philosophy, or this recession will stretch out and linger longer than it would on its own. All too often, too many of the so-called "experts" analyze each piece of data independently, without trying to understand some of the many causes. Daily discussions of the prices of gold, oil, and the stock indexes. are as misguided as people looking for "quick kills" in purchasing stocks rather than long-term outlooks. Historically, investors who use "dollar-cost averaging" have out-performed most others, because they do not fall victim to normal and abnormal market swings. We all need to "sit back and chill out" and look at things through a broader window, and figure out the best long-term strategies.
Let's remember that when George Bush became President he inherited a budget surplus. By the time he left office eight years later, instead of a surplus there was a $400 Billion plus deficit. A little more than ten months after President Obama took office, the US deficit now exceeds $1.4 Trillion. We need to understand that deficit financing has long-term impacts and ramifications, and the US cannot simply keep spending without a plan for repaying it. That is why our dollar is so weak, even though the recession is a world-wide challenge, not just an American one.
Weak housimg markets, high foreclosure rates, high joblessness rates, etc., cannot and are not balanced out solely by spending and low interest rates. America must reconfigure our economy to make it stronger and more productive! We need to get people back to work, and keep them working. That should be the major thrust of our government's activities now-- on the Federal, State and Local Levels. Demand that from your government leaders!

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THANKSGIVING THANKS

Thanksgiving 2009 is a sadder year than most for many Americans. With the U.S. and most of the world in a deep recession, with high unemployment, with over 100,000 Americans still in "harms way" in battles in Iraq and Afghanistan, I believe it is more important than ever to step back and give thanks for our many blessings.
We should be grateful for the fact that Americans have more freedoms than almost any other place on the planet. We have the right to protest. We have the right to criticize our government. We have the right to elect our political leaders, and to vote out any politician that we are unhappy with. We have the ability to force politicians to better represent us by being vocal in our support or opposition of any policy.
Only in America, where we have free and democratic elections, do our citizens have the right to vote, and yet, in most elections, less than half of the eligible voters exercise that right. Here in Nassau County, NY, they are still counting the last of the votes in our County Supervisor race, and after over 240,000 votes have been counted, there is only a 160 vote difference. Now, when you consider that less than half the eligible voters actually voted, we can clearly say that whoever wins certainly has no mandate. But, we should be thankful that we have the rights!
Only in America, can I or anyone else, have the right to publish a blog, and as long as nothing illegal, libelous or slanderous is said, not worry about the legal ramifications! Only in America, can a former unknown become "famous" from a TV competition although finishing second, and then perform a controversial act on television that forced ABC to decide to cancel his morning GMA appearance, only to have CBS decide to have him on BOTH their morning, as well as their late night Letterman shows.
Only in America can we dwell on the negatives of the economy, and at the same time have Tiffany announce both revenues and earnings that far exceeded expectations.
Only in America, can we talk about the difficulty this year in keeping food pantries stocked sufficiently to feed the many feeling the pinch from the economy, and at the same time have Black Friday Christmas sales promotions all over the media.
Only in America can we talk about health care, yet have various solutions discussed that only address parts of the problem, while in some cases not considering the ramifications of some of the "solutions."
Only in America can we talk about justice for all, yet the justice that the wealthy, middle class, and poor enjoy is certainly often NOT the same justice!
Yet, with all its faults, we are lucky to be living in America. Here we can complain, we can argue, we can be charitable. Americans are amongst the most charitable people in the world, and in times of distress, have a long history of coming through. On this Thanksgiving holiday, we should all give thanks that we live in the U.S.

HOUSING NEWS UPDATE

The most recent housing report showed that sales for October 2009 were up 10.1% over October 2008. While that is certainly promising news, it must be considered in light of a few factors. The first factor was, of course, that October 2008 numbers were so dismal that even with an increase, there is plenty of room for improvement. Then, we must remember that some closings last month occurred as a result of the First Time Housing Credit, and the uncertainty at that time over whether it would be extended (remember it was originally set to expire at end of November). The continuation of historically low mortgage rates has certainly also helped. In addition, while sales were up, the average price of a house sold last month versus a year before is down, so, in other words, houses are still selling for less than in the past.
The good news are indications are that the worst of the recession is probably past us, consumer confidence seems to have improved slightly, mortgage rates should remain low for the foreseeable future (and hopefully the government will apply pressures on lenders to lend!), home prices are more affordable, the Home buying credit has been BOTH extend and enhanced, and most economists are calling for the U.S. economy to improve somewhat throughout 2010. The less-happy news is the high joblessness rate, the uncertainty in the economy, less than stellar public consumer confidence, and a seemingly prevailing attitude that "there is no rush" to do anything, and the overall wait-and-see attitude.
We have gone from a decade of a "seller's market" in the housing market, to a mixed market, to a buyer's market (where unfortunately NOT enough buyers are taking advantage - - - either being unwilling, afraid, or unable to). The real estate market has always been cyclical, and this market is the same in that way. We are probably at or near the bottom of the market now, and 2010 should probably see the beginning of the recovery. Those in a position to take advantage should do so now, because the combination of tax advantages, low prices and low mortgage rates have brought the true cost of home purchasing down significantly.
The industry and those interested in having a sound and robust housing market should implore their elected officials to address the most pressing economic issues now --- joblessness (and job creation), consumer confidence, responsible economic policies, and continued incentives that benefits consumers instead of just large corporations!

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The most recent housing report showed that sales for October 2009 were up 10.1% over October 2008. While that is certainly promising news, it must be considered in light of a few factors. The first factor was, of course, that October 2008 numbers were so dismal that even with an increase, there is plenty of room for improvement. Then, we must remember that some closings last month occurred as a result of the First Time Housing Credit, and the uncertainty at that time over whether it would be extended (remember it was originally set to expire at end of November). The continuation of historically low mortgage rates has certainly also helped. In addition, while sales were up, the average price of a house sold last month versus a year before is down, so, in other words, houses are still selling for less than in the past.
The good news are indications are that the worst of the recession is probably past us, consumer confidence seems to have improved slightly, mortgage rates should remain low for the foreseeable future (and hopefully the government will apply pressures on lenders to lend!), home prices are more affordable, the Home buying credit has been BOTH extend and enhanced, and most economists are calling for the U.S. economy to improve somewhat throughout 2010. The less-happy news is the high joblessness rate, the uncertainty in the economy, less than stellar public consumer confidence, and a seemingly prevailing attitude that "there is no rush" to do anything, and the overall wait-and-see attitude.
We have gone from a decade of a "seller's market" in the housing market, to a mixed market, to a buyer's market (where unfortunately NOT enough buyers are taking advantage - - - either being unwilling, afraid, or unable to). The real estate market has always been cyclical, and this market is the same in that way. We are probably at or near the bottom of the market now, and 2010 should probably see the beginning of the recovery. Those in a position to take advantage should do so now, because the combination of tax advantages, low prices and low mortgage rates have brought the true cost of home purchasing down significantly.
The industry and those interested in having a sound and robust housing market should implore their elected officials to address the most pressing economic issues now --- joblessness (and job creation), consumer confidence, responsible economic policies, and continued incentives that benefits consumers instead of just large corporations!

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ECONOMIC NEWS,JOBS&HEALTH-What it all means?

Over the weekend, and this morning, there was a lot of news and reports bantered about regarding the US and World economies, joblessness predictions, and the proposed Health Plan. As some anticipated, house sales in October were up 10.1% over last year. Any increase is always good news, but since last year's number were so dismal, it's not as good news as it might seem. But, at least it's somewhat encouraging! Several sources have predicted that the worst of the joblessness numbers will be over by the end of the first quarter of 2010, but not before the rate rises somewhat to approximately 10.5%. These same sources are predicting a slight decrease in joblessness throughout the balance of 2010, and the consensus prediction for the year-end 2010 is approximately 9.6%. It is probably an indication of where we are at now that many are cheering a 9.6% unemployment rate as good news! The consensus among economists is that we are nearing the end of the recession, and the recession will end by the second or third quarter of 2010, and would then gradually improve based on other economic news and conditions.
The Senate, voting along straight party lines, voted 60-39 (Who was that 1 Republican who didn't vote?) to permit the health plan discussion to come to the Senate floor. However, at least 4 Democrats (who have been labeled by the media as Moderates) have stated that they voted to let the bill be discussed, but are opposed to the "Public Option." The media is also reporting that the liberal bloc of the Democratic Party has said that if the "Public Option" is removed, they believe the plan will be too watered- down, and they would then have to oppose the bill.
It is important to understand that because of certain peculiarities in the Senate's rules, that it takes 60 votes to pass this type of legislation, not just a majority. Since, to date, the Republicans have opposed the bill unanimously, it would take ALL Democrats and the 2 Independents voting Yea to advance the legislation. Further complicating the issue, is the politics involved since one-third of the Senate, and all of the House, is up for election in November 2010. That is the reason that the pro-plan advocates have been trying to get this accomplished as soon as possible, because politics will become an even greater factor the closer to the mid-term elections we get!
Proponents of this health legislation state that it is necessary to cover as many Americans as possible, control medical costs, and make the health care industry more responsible and fair. Opponents complain that the legislation proposed is excessively expensive, legislates medical care policy, and does not rein in the true causes of escalating medical costs. Opponents state that is essential to cap non-medical aspects of medical liability cases, permit insurance companies to be sold nationally to create "economies of scale," bring down the costs of drugs, reduce/ eliminate waste including excessive tests done(because doctors feel they need to protect themselves in a litiganous society).
The reality is that there are truths and fallacies on both sides of the political aisle, and unless our politicians magically begin to act as statesman, we will not get a good plan that works and accomplishes many needed areas. It is essential to remember that the costs and numbers that are put forward and publicized must be taken with a "grain of salt," because historically costs are higher and revenues are lower than the advance projections we are given.
In a previous blog, I discussed what I felt were the most important factors that needed to be discussed. Nobody has all the answers nor all the solutions, but I hope that whatever decision is made is responsible, effective and considers all the ramifications of their decisions. It is hard to believe that a 2,000 page piece of legislation has not been loaded with "pork" to get it passed! The challenge, as usual, is that most politicians consider their primary "job" running for office and getting elected, rather than being a statesman for the public good.

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America's Health Plan

Everyone, whether Republican or Democrat, conservative or liberal, would agree to a couple of things about our health care in the U.S.: (1) The costs have escalated dramatically, and continue to rise at an alarming rate even during a recession; (2) All Americans should receive adequate health care. From that point on, the politicians, "spinners," pundents, advocates, etc. take over, and create opposing plans, none of which address both of the things that they originally agreed upon.
The plan passed by the House, and what appears to be the plan being proposed in the Senate, differ in many major ways. Yet, neither of them addresses the two basic issues listed above! The House plan passed was approximately 2,000 pages of verbal legal jargon, that few representatives read in its entirety. Most representatives assign that "heavy lifing" to their aides, who then summarize the plan to the Congressman. The very fact that the plan was passed almost entirely by one party and opposed by the other, indicates that politics, rather trying to create the best plan, is the rule! The Senate is now bringing up a plan that all the details have NOT been disclosed, and needs 60 votes to even get to the Senate floor to be discussed.
The American public hears the health proposals via the "spin-meisters" and politicians and advocates, who only state part of the issue. The Republicans discuss the malpractice issue (and its related costs) and the Democrats avoid that issue because politically they don't want to offend the trial lawyers. The Democrats discuss mandating coverage, and the Republicans object to mandates and the related costs. The Democrats speak of taxing big earners in one version or large companies in another, without discussing the ramifications. The Republicans avoid discussing how to address adequate health care for all, and instead object to the costs of the Democrats plans. An objective observer would say that BOTH sides are "spinning" both the numbers and the plans to make their ideas seem better.
In other countries, there are public health programs. A dentist friend of mine from London recently developed an illness, which was taken care of expeditiously and effectively, because, as he put it, he had "private insurance." In the Bahamas, there are both public and private plans. Canada has had universal health care for many years. However, these countries have far smaller populations that in the U.S., and plans that work in one country may not work in all.
We need to develop a different frame of mind regarding many issues related to health care if we are to accomplish the important task of achieving the two worthy goals stated at the beginning of this blog. (1) Health insurance must be able to be sold across state lines. That would increase competition, offer more alternatives, and somewhat lower costs. (2) We have to cap non-medical malpractice liability payouts, so as to reduce overall health care costs, (3) We have to be much smarter in terms of forcing unfunded mandates on employers, hospitals, local governments, etc ., (4) We have to have a more efficient drug creation and review policy, to reduce both the costs of bringing drugs to market, and increase usage of generics, (5) We have to curb the use of the huge amount of unnecessary testing done, much of which is done by doctors to protect themselves from medical malpractice liability, (6) We need to reduce government waste, by the continuous use by governments of multiple, off duplicative layers of beaurocracy, (7) We must permit whatever economies of scale can be effectively used to reduce costs, (8) We must create a better electronic system where x-rays, tests, etc., taken in one locale, are easily available to licensed professionals elsewhere, (9) A greater emphasis on prevention is essential, (10) A fair evaluation as to when alternative methodologies might be an important part of the medical puzzle, and most importantly, (11) WE MUST "THINK OUTSIDE THE BOX."
The American public cannot let the politicians do "their thing" with an issue such as this, where any plan approved will most likely be a hodge-podge, mish-mosh, expensive and eventually dysfunctional and unworkable program, that we must simply reform again in a few years. This is too important - - - let's get it right the first time!!!

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The Art&Science of Hotel Negotiations

All too often, organizations and corporations end up paying far more than they need to because they do not follow the basic rules of hotel negotiations:
(1) Always use a comprehensive Request for Proposal (RFP). This RFP should include ALL anticipated needs of the group, including approximate number of guest rooms, meeting room utilization, Food & Beverage requirements and budget, Audio Visual needs, complimentary needs, etc.
(2) Send the RFP to numerous hotels in area that might be able to meet your needs. Let the hotels know that you have done this. (Competition is good for you)
(3) Ask for either discounts to F&B list price if event is in same calendar year, or lowest of a discounted price in this versus subsequent years.
(4) Let the hotels know that you are on a relatively tight budget, and can only pay "x" for your F&B requirements. NEGOTIATE whenever possible!
(5) Ask if F&B department would be willing to work with you to have menus that both fit your needs, as well as your financial requirements.
(6) Ask for some accomodation re Audio Visual.
(7) Ask for waiving of Meeting Room rental charges if you either have a certain number of guest rooms or F&B revenue.
(8) NEVER lie to the hotel. In today's world, they know what you've done in the past, and how your group was to work with.
(9) Book as far in advance as possible
(10) Be flexible on dates, if possible
(11) Remember to structure all deals/ agreements as a "win-win" situation for both you and the hotel
(12) Let the hotel know of anything complimentary you might require
(13) Let hotel know your priorities
(14) Get everything in writing, and make the RFP an addendum to your hotel contract.
(15) Get give-back dates, where you can return a certain percentage of rooms without penalty (aka attrition)
(16) Don't be greedy, but be firm in what you need, and don't give back important needs
(17) Have an "expert" either within your organization or outside your group oversee all arrangements from the onset.
(18) REMEMBER that once you sign the contract, there is NO reason for hotel to offer anything additional.
(19) Depending on your group size and revenue, certain concessions available might include: % giveback to master bill; welcome drinks; welcome party; complimentary internet; complimentary meal(s); reduced or complimentary health club/spa; complimentary guest rooms, etc.
(20) THINK AHEAD- Consider any and all possibilities and the ramifications!

This is just the beginning of good negotiations. Doing this properly, and proper and thorough follow-up, in advance, will make life much easier once the event occurs.

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Why is economic news is so confusing to understand?

No wonder most people don't understand the economy. Often what might seem good on one hand, has bad side effects on the other. For example, the stock market rises- one would think that was good! But that was mostly due to the rising price of oil- bad news. But the price of oil is rising because the "experts" believe the economy is improving and thus more oil will be needed in production- good news! But that rise in oil prices causes the cost of living to increase- bad news. But that helps the Gross Domestic Product (GDP)- good news! But that then causes inflation- bad news. But that inflation means the economy is improving- good news! But then the Fed becomes concerned about inflation and raises interest rates- bad news! Which causes the value of the dollar to improve- good news! But that hurts exports because now American products cost more overseas- bad news! But that means foreign products cost less in the US- good news! But that hurts American companies competetiveness- bad news!
And so on, etc. So you see why economic news often seems co confusing. Because it is- what is good for one consumer, might be bad for another- what is good for one company, bad for another- what might be good for one sector of economy- bad for others.
The stock market is often the most confusing. On days when there is "bad news," the market often goes up, while on some "good news" days, the market sometimes goes down! While the Dow, or the S&P, etc., might go up, it does NOT mean that the stock(s) you own, will follow suit.
Too often, for the sake of a sound-byte, the media tries to over-simplify economic news. Yet the economy is by definition quite complex.
The one issue there should be some agreement on is that high unemployment is not good. Yet even in that case, the "experts" can't agree upon, nor act upon a viable solution.
The best way to think about the economy is this-- the difference between a recession and a depression is that it's a recession when it happens to someone else-- it's a depression when it happens to you!
It is my belief that a healthy economy requires certain factors to be in place - - low joblessness; high consumer confidence; a strong manufacturing sector; and reduced government deficits. That is what we must demand!

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How much is real, and how much perception?

It seems that every day there is another economic report out that different individuals interpret differently. Today, the joblessness report showed that "only" 502,000 new unemployment claims were made, which was 10,000 less than the previous month and 8,000 less than anticipated. The "gurus" jumped all over this report, letting us know that this was economic news. Although it probably was good news because things were getting significantly worse, it certainly wasn't good news for the 502,000 individuals putting in new unemployment claims. And this was on top of the over 10% already receiving regular and extended unemployment benefits, not to mention those who have taken lesser work or given up looking (estimates are a total of approximately 17.5%).
Also, in today's news, WalMart announced its 3Q economkic figures, and the net revenue was better than anticipated. That could be interpreted as good news, or not so good if one factors in that the increased net was based on lower than anticipated revenues, which means that obviously WalMart had made some "efficiencies" to improve its numbers.
Over 80% of the companies reporting 3Q figures have reported better than anticipated numbers. Does that mean that we are gradually coming out of the recession (hopefully), or that companies are cutting jobs making themselves more profitable, or that the "experts" are under-estimating, or some combination of the three? It all depends on PERCEPTION.
Most experts believe that the worst of the recession has passed, and that there will be gradual, but slow improvement during 2010. Historically, companies begin recovery periods by hiring part-time workers before they add full-time employees. However, since the average number of hours the American worker has dropped to only 33 hours per week, will companies then simply have existing workers put in a little more time. I believe that this figure of number of average hours per week will be a significant one to look at when we want to see how much progress is being made in getting out of the recession.
The housing market is an important one to follow as an indicator of the economy. Government incentives have slightly shored up the housing market, but it will not bounce back until there is some restoration of consumer confidence. For anyone who is in a position to buy a house, there has rarely been this great a buying situation, when you consider the combination of relatively low prices, low mortgage rates (average 30 year mortgage rates dropped today to 4.91%), tax incentives, and selection on market. Yet, many potential buyers are still adopting a "wait-and-see" approach, and just taking their time. Most experts believe that home prices, and mortgage interest rates will nudge up toward the second half of 2010. Again, consumer confidence and perception is a primary factor in this evaluation.
So, what is really going on? Huge US deficits, a weak US dollar, a recession, high joblessness and under-employment, are all unfortunate realities. Corporations have reacted by making themselves more cost-efficient, but unfortunately that exacerbates the unemployment challenge. The economy does not appear to be getting any worse! The next important step is to see how consumer confidence reacts. Halloween shopping was nearly 30% down this year, and if Christmas shopping bounces back somewhat, that will be an important indicator that consumer confidence is increasing. Many major retailers have already announced that they will beging "Black Friday" sales early, and be more aggressive in their marketing this season. Hopefully, some of the seasonal employment will be extended and we see a restoration in the job area as early as the second quarter of 2010. Vacation travel during the holidays, and overall travel in January and February of next year, will also be important indicators of consumer confidence.
Since most experts believe that one of the driving forces in creating this recession is the high cost of energy, job creation should be created by having the government create alternative energy incentives, and for hiring and re-training into that industry. T.Boone Pickens has promoted heavily his Pickens Plan, with the goal of US energy independence, by using alternative energy (he prefers windmills), and natural gas (because of its abundance in the US). Creating jobs in this area would be a short-term and a long-term solution, because it addresses not only employment, but a stronger US energy policy.
The American electorate must demand from it's politicians that they become leaders. Leadership and statesmanship means that "polls" should not dictate policy, but that they need to be effective problem solvers. It can be done, and must be done, for the U.S. to again become the strongest economy in the world. I truly believe that if the American public clearly demands "real change," instead of empty promises, we can "jump-start" our economy, and consumer confidence. I urge you all to join with me.

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The Long Island School Tax Dilemna

Since school taxes account for 60% or more of the real estate taxes in Long Island, and that ever-growing burden has been widely recognized, it is deeply disconcerting when Newsday this morning ran an article about how there was a wide disparity between the projected school tax for this year (projected when budgets were voted on) and the actual tax rate recently implemented. School districts like Roslyn, which projected tax increases below 2% are now actually imposing taxes greater than 4.5%. Across Long Island, the actual tax being imposed is substantially greater than the projections.
Several reasons have been cited, including: commercial tax assessment reduction resulting in a lower than anticipated tax collection; previous residential tax assessment appeals that lowered tax collections, etc. Whether that is the complete reason, or it is also a matter of "political spin," where school budget proponents use a favorable estimate when they are campaigning for the budget; or the overall economic crisis; or lower than anticipated grants received - - it turns out that homeowners end up paying for the miscalculation.
That being said, the real issues are the way our schools are paid for; the efficiencies or lack of efficiencies built into the present system; state and federal unfunded mandates. And though, lots of people complain about the costs, the debate always becomes a polarizing one between parents who say, "The children deserve the best," and stressed-out homeowners, who say, "It costs too much . . . cut . . . cut!" Yet neither side kis fully
examining all options. I truly believe it is NOT a matter of how much it costs to run schools, but how the money is spent! What efficiencies are schools not using that could save substantial monies while not having any adverse educational effect. Because it has never been demonstrated that educational quality is simply a matter of how much money is spent! For example, in New York City, there has been some evidence that the use of privately run Charter Schools create better educations, often at lower costs. Here on Long Island, for example, schools use varying class period lengths, ranging from 40 minutes to one hour. Most educational studies have indicated that the shorter periods create more effective learning because of attention spans. In addition, because of the way many teacher contracts are structured, the one-hour length creates an inability to get as many classroom hours per teacher, thus requiring hiring more teachers. Some high schools on Long Island use the One Principal/ One Asst Principal plus deans model, while others use the Principal, Asst Principal for every grade model, which obviously is a costlier model. Yet each model has its proponents.
On Long Island, different school districts range in size, yet each hires a Superintendent and staff, so therefore the larger districts enjoy economies of scale, and thus lower costs per students.
Similarly, there are potential savings if districts would use more centralized purchasing. In Nassau County, some school districts utilize BOCES to create better economies, but there are many more savings. For example, joint negotiating for buses, etc., would create savings for most districts.
Homeowners must demand accountability, or they give up their "right to complain." The methodology of voting for school budgets, where defeating a budget creates an automatic contingency budget, which saves little money but mandates how the money is spent, often creates an even worse alternative. We deserve better, and must demand a better, more streamlined, more effective and efficient system, which better educates and prepares our children.
Enough of being told, "We do it this way because that's how we've always done it." It's time to think outside the box!

HEALTH PLAN- Where we are really at?

Many have reported that the first step on achieving meaningful health care reform has been achieved when the US House of Representatives passed a nearly 2,000 page bill by the vote of 220- 215. It should be noted that only one Republican voted with the majority, and several more conservative Democrats voted against the bill. In order to get this bill to pass, the majority approved of very strong language prohibiting any funds to be used for abortions. The next step is for the Senate to vote on a health bill, and since the version in the Senate is considerably different from the bill in the House, if the Senate passes a bill, it would then go to a Senate-House Joint Committee gto "hammer out" a compromise bill. That bill would then have to be voted on by both the House and the Senate, and if approved, would then go President Obama to sign into law. It is very important to realize that this is a long process.
Even the Senate Majority Leader Harry Reid has said that he has doubts that the legislation can even be voted on in the Senate this calendar year. The Senate filibuster rules also makes it that you need 60 of the 100 Senators to even bring a bill to a vote, and, at least publically, the Senate Republicans have almost nearly stated objections. In committee, the only Republican to vote with the majority was Senator Olympia Snow of Maine, and even she has said that she will not support a bill that includes the so-called "public option." Republicans have stated that this bill should emphasize reducing health care costs, and that the US economy cannot afford anything that will further increase the deficit. Because of all the various provisions of this legislation, neither supporters nor opponents are 100% clear on all the provisions. The only thing certain is that both sides will "spin" the issue!
Because of all the public discussion on the issue, my belief is that some "watered-down" version of a bill will eventually pass, and that both sides will claim victory, and how they have served and protected the American public.
What is truly uncertain is exactly who will really benefit from this legislation, exactly how much will this really cost, will health care be improved in this country, who and what will suffer, and what are all the long-term and short-term ramifications of either action or inaction on this issue. While everyone would tell you that they believe that everyone should receive quality medical coverage, does this, in the long-term address that? How would the costs of medical malpractice insurance, unnecessary medical tests, etc., be impacted by this legislation? What works and what does not work in other countries that have Universal coverage?
Doesn't it seem that the public should be truly informed about such important legislation? It may be an excellent paln - - it may be horrendous; but we have certainly not been informed of how the 85% of Americans who presently have medical coverage will be affected (will their insurance benefits improve; will it cost less; will there still be an incentive for doctors to practice; will drug approval be impacted; will alternative medicine be considered; will there be more provision for enhanced preventative medicine; etc?). How much will the plan really cost, and what protections are built in for the American taxpayer? How will this plan save the consumer money? If there are taxes that will be imposed to pay for this plan, what will be the potential negative impact on the overall economy, and on employer-provided health care? What will be the impact on other medical treatments such as: dentistry; optometry; chiropractry; alternative/ holistic practioners?
While I certainly don't know the complete answer, I believe we should ALL be asking some important questions!

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SORTING THROUGH THE ECONOMIC NEWS

Last night, news media were reporting that they anticipated the jobless rate to rise slightly to 9.9%. At around the same time, it was announced that President Obama would today sign into law a bill that would: (1) extend unemployment benefit eligibility by up to an additional 20 weeks (meaning to a maximum of 99 weeks, if eligible- the maximum is for those 26 states where unemployment exceeds 8.5%); (2)extend and enhance the New Homebuyers Credit from November 30th until June 30th (This bill requires going into contract by April 30th and closing by June 30th). This bill will now NOT only provide first time buyers a tax credit of up to $8,000, but would extend to homeowners who've lived in their present home at least five of the last eight years (at a credit of up to $6,500); and (3) a modification of the law for businesses that have had losses to offset gains for more years back than the present law permits, thus hopefully freeing up cash flow for corporations.
Early this morning, the official joblessness rate was announced as a higher than anticipated 10.2%, the highest unemployment rate in 26 years. What is even more disconcerting is that this figure does not account for those no longer seeking employment, or working part-time, or in much lower positions. In addition, the average US worker's work-week is now averaging approximately 33 hours per week, one of the lowest averages in many years. One would therefore expect that the stock market would have a "correction" from yesterday's increase, and stock market indexes did indeed open sharply lower this morning.
What this means is that our political leaders need to seriously and immediately address the most urgent economic condition facing this nation today - - - unemployment and under- employment! While I believe the bill being signed today is both necessary and helpful, we now need to apply pressure on elected officials to use some "common sense solutions" to address both employment and other economic issues. Unfortunately, it is uncommon for political leaders to use "common sense." (Is a political leader using common sense an oxymoron?)
When I consult to a business, organization, or individual, I explore alternatives and explain all possible ramifications of actions or inactions. Isn't it about time our politicians did the same thing?

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Interesting News in Housing Market

Today, FNMA appeared to be prepared to alter its established policy regarding foreclosures on properties they control. It appears that they have made the decision to rent out these distressed properties instead of foreclosing and selling them. If this policy is maintained, it would go a long way toward stabilizing housing because it would somewhat reduce the "supply side" of homes by removing these distressed properties from the marketplace. The net effect of that should eventually be shoring up home prices, as well as reducing the amount of average days on market for houses listed for sale. It would also reduce "bottom-feeding" tendencies, and create a more realistically priced housing market.
In addition, the Fed's decision this week to maintain low interest rates for the foreseeable future, should help keep mortgage interest rates close to the low levels they currently are at. In addition, news about the Fed and certain large public companies working together to share the risk on distressed properties/ loans, should eventually loosen the mortgage lending market to some degree.
The recent election results have also indicated that people have become "fed up" with the high taxes they are paying. If this then translates into finally addressing the high real estate taxes paid in certain areas of the country, this will also help the housing market.
There also seems to finally be some awareness that we must control our energy costs, and if that rhetoric translates into some action, it would be another positive for the housing market and real estate industry.
Finally, if our politicians now get the message that the joblessness issue has to be addressed, and Americans begin to see some job creation and consumer confidence, then there will be a rebound in the housing market.
The consensus is that the housing market has or nearly has bottomed out. Therefore, 2010 should be a much better year.

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Economic & Political Developments, & THE "SPIN"

Election Day was a busy day in the US yesterday. Oh, not particularly at the polls, where light to lighter-than-usual turnouts of voters at the polls yesterday. It was a "spinner's holiday" because any Democrat defeat or Republican victory would be "spun" into a statement on the President. Corzine's loss in New Jersey was more because of the unpopularity of the Governor and his policies, as well as voter anger about taxes, than any type of national indicator regarding the President (in fact, in NJ, exit polls indicated that over 55% stated that their vote had nothing to do with Obama). Similarly, nobody should have been terribly surprised with the Virginia gubernatorial result. But, President Obama brought this "spin" upon himself by campaigning so often in Virginia, and especially in New Jersey. Nationally, ansd especially in the New York metropolitan area, it was a bad Election Day for incumbents, who an angry and anxious electorate took their despair and unrest out on. It reminded me of the line from the movie, NETWORK,"I'm mad as hell and NOT going to take it an ymore!"
The US House of Representatives indicated that it will probably vote this week on both an extension and enhancement of the popular New Homebuyers Tax Credit. The goal stated is to get the bill to the President by next week, far ahead of the November 30th deadline. Critics claim that there really has not been that much of an economic advantage, because those that bought houses would have done so anyway. That is probably somewhat true; however, what is not stated is when, and the economic urgency of making the housing market healthy sooner rather than later.
The "spinners" are also having a field-day over the reported jobless numbers. "Only" about 203,000 more jobs were lost last month, so since this is NOT worse than expectations, the stock market appears to be celebrating, at least on a short-term basis. That is until the next report, and someone "spins" the numbers another way.
The hot news this morning is the report that NY Attorney General Andrew Cuomo is going after Intel for anti-trust violations, similar to the recently settled suit in Europe. Are we supposed to be surprised that Intel applied pressure and coercion on PC manufacturers to use their chip, instead of their competitiors. However, since Intel already dominates the chip industry with approximately 80% of the market, how much coercion was really necessary? Anyway, it gives the politicos and the press something to divert their attention, now that the elections are over.
Our political leaders still seem to be hiding from the real central economic issue-- joblessness. Until the American public regains their confidence that jobs will actually be restored as opposed to lost, and that there will be both job creation as well as job security, our economy will have an uphill battle to recovery. We need to open our eyes, and ask why. We need to question the status quo. We need to have the politicians know that the time for rhetoric is over - - it is now time for real action. Change is just a word unless it becomes an action!

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STAY INSISTENT RE HOME CREDIT

Ever since Senator Reid's office announced that the Senate would be extending and enhancing the 1st Time Homebuyers Credit, there has been much less "buzz" around stating the urgency of doing that. My fear is that we are being lulled into apathy and the "it's going to happen" mode, while politicians play typical political games. The present credit is scheduled to expire November 30th, and we are already entering into the traditional slow season for real estate (just what we need on top of the present real estate reality). The market and the economy needs further jump starting, and this credit is one of the few government stimuli out there that goes directly to the American consumer. Remember that a healthy real estate market not only helps realtors, buyers and sellers, buit also helps mortgage brokers and banks, building trades including laborers and suppliers, builders, rtc. This credit is an example of the "trickle up" theory at it's best!
Realtors, bankers, homeowners, homebuyers, consumers, building trades, etc. must contact their representatives and senators, and let then know, that we want and need action NOW! Every day without this extention in place hurts the marketplace.
This extension should be a "no-brainer." Unfortunately, many politicians are just that - - politicians who are constantly running, instead of statesman who are governing. Tell your politicians that we want and need statesman NOW, and we will demonstrate that at the polls. This is NOT a Republican, Democrat, Conservative or Liberal issue - - this is an issue of helping to repair and mend our economy. Tell them all to do it NOW!

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Is Social Media Really Social?

Everyone talks about how important the use of Social Media is today. Depending on how comprehensive a definition you wish to use, social media can include sites like Facebook, Flikr, LinkedIn, TwitterActive Rain, MySpace,YouTube, etc., as well as Blogs, e-mail, personal or business websites, etc. But are these sites really social?
Granted you contact many other people. But far too often these sites are used so that an individual can somewhat anonymously "speak" to others, without having to make eye contact.
While I completely believe in using these media and do, I still believe the "old-fashioned" method of "face-to-face" contact, or picking up a phone are still more effective. Social media is best used to drive a reader's attention to a more detailed blog or website, and that those formats drive business or contacts to the writer or creator of the site/ blog. However, the use and effectiveness of a Blog or a website is ONLY as effective as how well that vehicle stirs interest or excitement in the reader. Blogs and websites must meet a reader's expectations, or they will only be looked at once!
Think about how often you send an e-mail and don't get a response. Or the response doesn't answer the question, or elicits another question. Think of the amount of time and energy that have been wasted, when simply picking up the phone might have quickly resolved the issue.
E-mail and social media are best used either as an introduction, or a follow-up to other forms of contact, or when the other more personal forms are impossible to achieve.
I fear that far too many are becoming too dependent on this non-personal form of communication, and that important messages might be misconstrued. Think about it.

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PERHAPS SOME GOOD ECONOMIC NEWS, FINALLY

he 3rd Quarter Gross Domestic Product (GDP) figures came out, and the GDP grew by a better than anticipated 3.5%, the best GDP news and first growth in a year. Senate Democratic Majority Leader Harry Reid's office has announced preliminary agreement on BOTH extension of, and enhancement to, the 1st Time Homebuyers Credit. The agreement in the Senate calls for extension of the credit which was scheduled to expire at the end of November to April 30th contract dates, as long as the closing is by end of June. The enhancement to the credit calls for a lesser credit (but still a very significant $6,500 credit) to be given to people who wish to sell one house and purchase another, as long as they lived in their first house at least five years. While critics say that people would have bought houses anyway, even if there was no credit, common sense shows that since there was a spike in 1st time house sales during that period, saying "it would have happened anyway," may be no more than political posturing. Of course, for this to take effect, the full Senate and House have to agree, and the President needs to sign into law. If you believe, as I do, that it is better to help people than the big corporations and banks (many of which got into trouble because of either their own greed or mismanagement), then I urge you to let your government officials know that you want this credit extension and enhancement.
Studies indicate that an essential part of economic recovery is a health housing market. These steps will help create that during this crucial time period. Most economists believe that the worst of the recession will be over by the end of the 2nd quarter of 2010, and so this "shoulder" period that the credit will help solidify is truly urgent.
We must also urge our elected officials to address the joblessness rate, putting people back to work in retrained positions, to help the US regain its position among the elite economies of the world. We have been let to believe that this is a worldwide crisis, which by and large it is. However, nations like Norway have very low unemployment rates (estimates are between 1.8%- 2%) because they have positioned themselves toward energy independence. China is another example of a country which has benefited from the economic weakness of other nations during this time (for example, a Chinese company is in soloe discussions with Ford to purchase Volvo, and another Chinese company has discussed purchasing Hummer).
We need to build upon these promising bits of economic news, and urge that our government officials understand that our number one priority has to be restoring the economy, reducing joblessness, and a health housing market. If the US does not have that as a base, then there will be little chance of other programs succeeding. We, as a nation, cannot continue to have huge and growing deficits, without a sound plan for recovery.
We also need to let politicians know that we are tired of empty rhetoric, but need detailed thinking that considers both the long-term and short-term ramifications of our actions.

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