Fig.1 – Consumer Price Index – Federal Reserve of St.Louis
May 30, 2022 – In March 2020, Federal Reserve Chairman Jerome Powell (Fed Chair Powell) was concerned that Inflation was not hitting the target of 2%, but falling further. Well, his wish finally came true. Inflation in April 2022 was at 8.3% (Fig.1), the highest in the last 40 years and well above the Fed’s target. However, the Federal Reserve with J. Powell as its chairman, continued to print money and kept interest rates (Fed Funds) to almost zero. The Federal Reserve (Fed) serves as the central bank of the United States and is an independent government agency. For over a year, some Economists have been saying that the Fed is behind the curve, implying that it has been late in raising interest rates to curb inflation.
The Federal Reserve (Fed) is following the same playbook as other political entities in Washington DC. The playbook is very simple: First, to deny that there is a crisis, then acknowledge its existence once it is obvious. This follows up with the narrative that the crisis is temporary and everything is under control. Finally, there is the reaction to fix the crisis once it becomes acute and there is no way of denying its severity. Reaction starts slowly, drip by drip, hoping that the crisis will be contained. When it is too late to control the crisis then they react aggressively and take a victory lap once it is contained. (more…)
January 30, 2021 – The MI generation constitutes the largest and most powerful voting bloc in the United States. Through its voting and economic power, it can transform American laws and corporate policies by engaging in the political process and public deliberations. Best of all, this process is free. The MI generation’s political and economic power will continue to grow as it becomes a larger segment of society as consumers and voters. However, the MI Generation is presented with the numerous challenges, such as student debt, climate change, inequality, and a divided nation. A nation that is governed by elected officials who seem to be interested in keeping their jobs than DOING their job. Their response and inability to lead the nation during the Covid-19 pandemic suggests that their priority is self-preservation and tribal loyalty than saving innocent American lives. At the same time, they are using the MI Generation as an automated teller machine (ATM) to fulfill their appetites for unchecked federal spending without any plans to pay for it.
The MI Generation can be defined as those born between 1980 and 2018 and are 51% of the population. It makes up 42% (ninety-eight million) of the voting population, large enough to be a decisive factor in any election. The MI Generation includes millennials and subsequent generation known as Generation Z. There is no precise date that defines millennials or Generation Z. However, Americans born between 1980 and 1995 are considered millennials, and those born after 1995 till 2012 are generally known as members of the i-Generation, iGens, or Generation Z. They have witnessed Covid-19 and the deaths of over 400,000 innocent Americans in 2020, dot-com bubble, the housing and financial crisis, two wars, and a divided nation, all within their short life span. With that backdrop they will have a consequential impact on national politics and corporate America for rest of the twenty-first century. (more…)
Photograph: Sue Ogrocki/AP
September 9, 2020 – Dr. Martin Luther King Jr. and Malcom-X must be looking down on us fifty years later wondering if much has changed in America. Racism and discrimination against Blacks is well and alive. Racism has been in America from its beginning and will continue to exist. One of the ways to address racism is for the Black community to take control over its destiny and take care of its own. That will require a focus on Black economic empowerment and self-sufficiency as advocated by Dr. King and Malcom-X. One possible solution towards economic empowerment and self-sufficiency is through an Adopt-a-Zip-Code program. A zip-code represents about 10,000 people, which is large enough to develop a self-sufficient community yet small enough to manage.
The idea calls for successful Black Americans to come together and provide their know-how, resources, and wealth to help Black majority Zip-codes. They can be called Black Empowerment Leaders (BEL), defined as the top 1% of the Black Americans in terms of income and wealth. The goal is to start community banks, build manufacturing facilities, schools, grocery stores, and whatever it takes to make their Zip-code self-sufficient by adopting it. This program would show the people in Black majority Zip-codes that someone cares and that education and hard work does pay off. There is no shortcut to success in life, and having a real-life successful person from their own ethnicity mentoring them would trump any government program out there.
There are at least seven self-made Black billionaires and about one million black millionaires in America. Surely, we can find about 5,000 (one for every 10,000 Black Americans) of them to dedicate their time, money, and influence to change Black lives by adopting a Zip-code. Some of them have enough wealth where they can afford to give one year or more of their time to help their respective communities. They can make their adopted Zip-code to be the next Greenwood. (more…)
“The upper class keeps all of the money, pays none of the taxes. The middle class pays all of the taxes, does all of the work.” Late Comedian George Carlin
August 29, 2020 – President Trump, who is a billionaire, presides over the richest cabinet in US history. The combined net worth of the cabinet is estimated to be $9.5 billion or more. Another way of looking at it is that this cabinet of about twenty-five people is worth more than forty-three million, or one-third, of American households combined. It appears as if socialism is camouflaged as capitalism, whereby the US government is centrally controlled by a few. One can argue that the US government has turned from a government of the people, by the people, and for the people into a government of one percenters, by one percenters, and for one percenters. More than 50 percent of senators, 30 percent of congresspersons, and 75 percent of Supreme Court judges are millionaires. This does not mean that all rich people are bad or do not care about the country. The reality is that Americans face inequality everywhere, whether it is in wealth and income, gender, race, education, or even representation in government.
Wealth and income inequality have been more pronounced during the last three decades. The federal tax code is one of the key factors responsible for the rise in income and wealth inequality. Republicans believe in the top-down or trickle-down approach of providing tax breaks to the top one percenters and corporations—one of the ways to distribute money up from the middle class and the MI generation. They believe that it will spur economic growth because the more money corporations have, the more they will invest. More investments will mean more factories and more jobs. This is despite the fact that for-profit corporations are interested in making money, and they cannot make money if there is no demand for their products (more…)
“The worst of capitalism and socialism”
July 25, 2020 – Health insurance companies have centralized control of how, when, and where a patient will receive medical services. Hospitals charge whatever they consider to be reasonable, regardless of the outcome. Drug companies maintain a virtual monopoly on prescription drug prices and exercise undue power over lawmakers through lobbying. Even Medicare, the largest buyer of health-care services, cannot negotiate better drug prices. The American public has been conditioned to delegate their personal healthcare decisions to insurance and drug companies, hospitals, and the rest of the health-care providers. Therefore, the health-care discussion is always around access to health insurance rather than the cost of medical care, which makes it anything but affordable.
The bottom line is that members of the MI generation are expected to foot the bill. They are required to pay 1.45 percent in taxes from their wages to cover Medicare costs for senior citizens. However, they may not get quality care when they become old and will really need it. As the father of a cancer-surviving son who is paralyzed, I have seen the best and the worst of the American health-care system. The fundamental issue with the American health-care system lies in the health-care narrative and public discourse.
The American health-care system has morphed into a beast that empowers health insurance companies, drug companies, hospitals, doctors, and everyone but the patients. Having health insurance coverage is defined as having access to health care. In the same vein, affordability of health care is translated as having lower-premium health insurance. However, there is no public discourse on the ever-rising cost of medical care that makes health care inaccessible and unaffordable. Medical care costs include hospitals, prescription drugs, doctors, diagnostic tests, and medical malpractice expenses. (more…)
“We cannot survive our way out of climate change denial”
June 27, 2020 – The rhetoric of climate change claiming that reducing greenhouse gases is detrimental to job creation and economic growth in the United States negates the fact that there will be no jobs if there is no planet. The Beltway Beast mind-set of having a binary choice of either pollution or jobs ignores the fact that more than 155,000 deaths in 2015 were related to pollution in America. Pollution alone could create lifelong health problems for the MI Generation and their children since it is associated with respiratory conditions and weaker immune system. The Trump administration blames China and India as the world’s leading polluters, which is true, but the United States is also one of the top three polluters.
The argument that China and India are big polluters and, therefore, America should also be one of the main polluters is self-defeating and suicidal. America does not need to compete with China and India in killing its people by producing more greenhouse gases from the use of fossil fuels. China and India are both paying a heavy price in reduced productivity and the mortality of their people. In 2015, China had 1.8 million deaths linked to pollution, and India had 2.5 million. That translates to about five thousand Chinese and seven thousand Indian deaths per day. Beijing is one of the top-ten cities with the highest levels of air pollution in the world. The city government, in December 2016, ordered twelve hundred factories to shut down because of the dangerous level of smog.
The Trump administration and a majority of Republican congressional leaders continue to deny that there is global warming. Therefore, they do not see any need to reduce carbon emissions, be part of international protocols, or solve the environmental problems facing the nation. Climate change is a long-term phenomenon, and its detrimental impact may not materialize for decades. Th e Trump administration will be long gone before that occurs. Therefore, the administration does not have to bear the responsibility of denying global warming while leaving the MI generation to live with the consequences. (more…)
Excerpts from Confessions of an Old Man
“There’s nothing like doing things with other people’s money.” President Donald Trump
March 22, 2020 – Every US president since Reagan has added hundreds of billions to the national debt compared to his predecessor. President Trump may top all the previous presidents by having an estimated annual deficit of $1 trillion by 2020 or even sooner. Congress and the White House have been living on the backs of the younger generation since 1980 by continuing to spend more than they collect in taxes. They have no plans to balance the budget, nor do they have any plans to pay back the principal on the debt. Having no intention or plans to pay the national debt is nothing less than stealing from the MI generation.
In May 2016 candidate Trump proudly claimed, “I’m the king of debt. I love debt.” As president, he has made it clear that he does not mind if deep tax cuts result in a ballooning of the national debt. He proved that by signing the Tax Cuts and Jobs Act in December 2017. During the 2016 campaign, candidate Trump bragged about using other people’s money. He said:
“It’s called OPM. I do that all the time in business. It’s called other people’s money. There’s nothing like doing things with other people’s money.” However, in this case, OPM is coming from the MI generation. The reason Congress and the White House don’t care and continue to add to the national debt is because it is not their problem. Congress’s own self-interest trumps any concerns it may have for high national debt’s detrimental impact on future generations. They will be long gone before any of the serious problems from uncontrolled national debt surface. (more…)
Excerpts from Confessions of an Old Man
“Washington borrows at 2 percent and charges students 7 percent in interest”
February 22, 2020 – The federal government has been profiting from student debt earning $66 billion on loans originated from 2007 to 2012, according to Senator Elizabeth Warren. The profits could be as high as $185 billion on new student loans made over the next ten years. According to the US Department of Education, the federal government charged interest rates from 4.45 to 7 percent on student loans in fiscal year 2017–18. At the same time, SoFi, a private company, offers student loans as low as 3.25 percent. The federal government uses a ten-year bond issued by the US Treasury as a benchmark for its cost, which was about 2.4 percent in 2017. It appears that Uncle Sam is even worse than the Wall Street banks when it comes to making profits from student loans.
To help students attend college, Congress passed the Higher Education Act of 1965. It guaranteed student loans against defaults, promised certain interest rates to the banks, and paid fees to banks for the administration and collection of student loans. Later on, the federal government decided to provide student loans directly instead of going through financial institutions. The Direct Loan (DL) Program began its operation in the academic year 1994–95. Under this program, the federal government provides the capital and loan servicing, and the loans are originated by colleges and universities. By July 2010, the program accounted for 100 percent of new student loans—a government-controlled student loan program. One of the shortcomings of student loans through the federal government is having virtually no option to refinance the high interest rates. This option has been commonly available for other types of loans in the private sector but not for student loans from the government. Lowering student loan rates to match the cost to the federal government could put its profits into students’ pockets and help grow the economy. (more…)
Excerpts from Confessions of an Old Man
“Take a look at yourself, and then make a change.” Late Michael Jackson
Michael Jackson’s song, “Man in the Mirror” can be taken as a challenge by members of the MI generation to take a look at themselves, take charge of their destiny, and make a change. And they have the power and tools in their hands to do so. They can also make their parents and grandparents help them accomplish that goal. For the first time in American history, millennials will represent the largest segment of eligible voters: 32 percent in 2018 and 34 percent in 2020. Democrats and Republicans, both parties being gravitated toward extreme positions, offer a great opportunity to make a change starting in 2018 and beyond. One can see the frustration of many Americans with the daily grind of working hard and getting nowhere, going through security checks at every high-rise building and airport, waiting in lines at every government office, and forever being on hold when calling a government agency or credit card company. The choice is to make a change or have the federal government take more control over our life.
The United States has fought communism and socialism since World War II to promote democracy, freedom, and human rights. However, it now finds itself working toward a socialist order and building a wall. It has a centralized health-care system controlled by the health insurance industry and the government (Medicare and Medicaid). The government decides how Americans behave financially by printing money and dictates how we spend money through the tax code. It is monitoring our emails, phone calls, and physical activities by placing video cameras at virtually every street crossing and in every building. Furthermore, American politicians pick their voters through the gerrymandering process instead of voters getting to pick their leaders.
The major impediment to a change and improving the future for the MI generation and the middle class are the two major political parties: Democrats and Republicans. Both parties believe they are the best for the country and that the country will not function without them. There is no room for a third mainstream political party or independent leader in their eyes. Both parties have done and will continue to do everything possible to keep third-party or independent candidates from even running for election. They have total control over who gets nominated for any public office at the state and federal levels.
A majority of Americans consider themselves as independent. However, they have no voice in the governing of the country. The bottom line is that both parties are the same when it comes to governing and living off the backs of the MI generation. Both parties’ leaders behave like children and blame one another and everyone but themselves for their failures to govern. Their only interest seems to be getting reelected, instead of serving the people.
“So the trillion-dollar question is how do you go about making a change, and what is the road map toward accomplishing that?” ….More
We are witnessing a grand, inter-generational Ponzi scheme that’s destined to drown our children and grandchildren in red ink. Our leaders like to call their strategy borrowing, but it is really tantamount to stealing—from our children, worse yet. Why? Because we have no plans to pay the debt. The real irony is that while civilian leaders from both parties insist that our national debt is not an immediate problem, a military man, former chairman of the Joint Chiefs of Staff Admiral Mike Mullen, has made the point that the debt is actually a national security threat. In a speech to business executives in September 2011, Mullen declared, “I’ve said many times that I believe the single, biggest threat to our national security is our debt.”
The Beltway Beast continues to borrow just to make interest payments that are estimated to be $5 trillion over the next decade. All the while we are doing nothing to pay down the staggering U.S. debt that is projected to reach $25 trillion by 2020 according to the Federal Budget Outlook of 2013 and 2014. Add to that $1 trillion in student loans and the result is a significant amount of money taken out of the economy that could be invested in creating jobs at home.
Equally alarming, perhaps even surreal, is that party leaders who can hardly agree on the color of the White House can be found nodding their approval at the fiscal fiction “that deficits don’t matter,” as then-Vice President Dick Cheney told a disbelieving Paul O’Neill, the treasury secretary in George W. Bush’s first term. That was over 10 years ago. Fast forward to President Obama, who told George Stephanopoulos in March 2013 that “we don’t have an immediate crisis in terms of debt. In fact, for the next 10 years, it’s [the deficit] gonna be in a sustainable place.” House Speaker John Boehner agrees that there is no immediate debt crisis. Neither one of them want to tell us who will pay the mounting U.S. debt.
