America’s Lost Confidence

I try not to let the current state of our economy get me down or the losses in my retirement portfolio. For the most part they have not. What has got me down and angry is the failed leadership of both our corporate and political leaders. First the tax issues of President Obama’s picks. If our political leaders cheat on their taxes, what do they expect the average American to do? Our system works because millions of Americans line up every year to pay their fair share of taxes to keep the country running.

Personally I do not see why anyone would need to cheat on their taxes. Individuals like Timothy Geithner should know the system well enough to barely pay taxes. I get my effective tax rate below 15% and some years 10% because I know the system.

On The Journal with Bill Moyers he played a sound bite of a top Morgan Stanly official basically explaining to management about their “retention award” in his own words, “…please don’t call it a bonus…” What a slap in the face to the American people. Not so much the fact that they are paying out a bonus, but that they believe the people are so stupid that we would believe rebranding the word bonus to retention award would have us believe it is any different. I guess the managers were being lured away by Merrill Lynch or Lehman brothers.

On top of this entire financial crisis you have the Madoffs of the world coming out of the woodworks. Guys who work hard, not to make you money, but to rip you off. As someone who works in the industry I want these guys to do hard time in the same prison with criminals who rob us with a gun instead of a pen.

Then the icing on the cake or should I say peanut butter. One of the largest manufacture’s of peanut butter blatantly let a tainted product be consumed by millions, killing about 8 people that we know of. As far as I am concerned this is a capital punishment case.

I know there will be people who say that it is easy to point out what is wrong and we need to focus on what is right. I think we need to point out what is wrong, demand change and do what ever it takes to get it. I am optimistic about America’s future because at the end of the day it is a government by the people and we can change what is wrong.

Are we Rewarding the Financial Irresponsible

I was sitting in traffic one morning and I started to recall a conversation between me, my wife and a few other people around 2002.  My wife asked a question something along the line, how is everybody affording all of these things.  Everybody being our neighbors, and things being in-ground pools, vinyl fences, pavers, new cars, and many other luxuries.   I stated, I guess they make loans and are in debt up to their eyeballs.  I went on to say that I can not live that way and what if something happens were people can not pay their debt.  Someone chimed in and said but everyone is in debt up to their eyeballs and what could happen to everyone.  

At the time I thought to myself that is no way to look at it.  Now with the bailout of financial institutions to big to fail and individuals who borrowed more than they can repay being bailed out one way or another, I am wondering who is better off.  I think the answer is those of us who acted responsible.  

For one thing if I get laid off from my job I have enough savings to get me through for 6 months or more.  The debt I am carrying is more than I would like, but manageable. Those individuals who made financial mistakes can not feel good about themselves and must have more stress than those who were responsible.  The ultimate test is would you want to trade places with one of the individuals going into foreclosure even if they are getting a deal.  I certainly would not.  

So the lesson is when mass numbers of people are irresponsible you can count on a government bailout but those who acted responsible will be in a better place.  

Tell us what you think.  Is the bailouts fair and do you wish you ran up your credit card or bought a house you could not afford?

Tipping at Year End

Every December I read articles telling me how much I should tip people like my barber/hair dresser, house cleaner, mailman etc. One article stated that you should tip them what ever the cost of their one time service is. So if a haircut cost $20 dollars, you give the barber a $20 tip in December. Does that mean I give my mailman 42 cents? Maybe we should make it like the income tax system and have progressive tipping. The more you make the more you give with adjustment for dependents and the elderly. I want to know who sits around and fells compelled to tell people how much they should be tipping.

Here is the problem I have with every article I come across. IT IS NOT A TIP. It is a gift for Christmas. Let me just say up front, I am not a Christian complaining that we are taking the “Christ out of Christmas”. The only reason I see that we are so concerned with tipping at year end is because of Christmas. So I say if you do not celebrate Christmas you may not want to give at all. Most people want to give anyway no matter what their religious beliefs are. So if you want to give here is what I think.

I much rather receive a thought out gift from a client than money. I would agree cash is king in most cases, but a gift says that you were truly thinking about the person. I would not put a price on the gift, but say that it should be something the individual may like. My barber likes different kinds of fruits. So I could have picked him up a fruit basket. I say could have because I also took the easy way out and gave cash. Not a lot. I usually give him an extra 3 dollars. This time I gave him 10 dollars. Why 10 dollars? I have no idea it just seemed right to me. But the fact is I was not thinking about him until I needed a haircut, so he got cash. I am sure he is happy with the money but a gift would have made him say wow, that guy remembered me.

Tell me what you think and not what you heard.