Tag Archives: Gainesville FL

Don’t Screw Up Index Investing By Making These 3 Mistakes

My Comments: First, my thanks to all of you who wished us well during IRMA’s visit to Florida. We came through unscathed. We were without power for a number of days and believe me when I tell you cold showers every day are not much fun. And we are now watching Maria carefully.

Second, there is increasing evidence that active asset management is starting to pull ahead of passive investing, which is the focus of this article, written a year ago by Walter Updegrave. Some of the references may be out of date but not the underlying message.

Passive investing as a strategy is always ok for some of your money. Overlaying it with some tactical steps to add value is the next step, something that can be done effectively without going all in with skills you perhaps don’t have.

Walter Updegrave – August 10, 2016

For consistently competitive returns, index funds and their ETF counterparts are the way to go. If you doubt that, just take a look at this new Vanguard research paper that lays out the case for indexing and check out the latest S&P Dow Jones Indices index vs. active scorecard, which shows that fewer than 20% of large-company stock funds beat the Standard & Poor’s 500 index over the five- and 10-year periods ending Dec. 31. But just buying index funds and ETFs doesn’t guarantee investing success. To do that, you’ll also need to steer clear of these three all-too-common indexing mistakes.

Mistake #1: Assuming all index funds are cheap. Since index funds simply buy the stocks or bonds that make up indexes like the Standard & Poor’s 500 or Barclays U.S. Aggregate bond index rather than spend millions on costly research and manpower to identify which securities might perform best, they’re able to pass those savings along to shareholders in the form of lower annual fees. Lower fees translate to higher returns and more wealth over the long term. That advantage is especially valuable today given the forecasts for lower-than-usual investment returns in the years ahead.

But not all index funds and ETFs are bargains. While many are available at an annual cost of 0.10% or less, others sometimes charge 10 times or more than that amount, according to Morningstar data. For example, one fund, Rydex S&P 500 Class C, levies a whopping 2.31% in annual expenses, prompting this headline on a recent post about the fund on the American Institute For Economic Research’s Daily Economy blog: “Is This the Worst Mutual Fund in the World?”

Before you invest in an index fund or ETF, make it a point to know how much it charges in annual fees, especially if you’re investing through a broker or other financial adviser. Then don’t buy unless its expenses compare favorably to funds or ETFs that track the same benchmark. You can gauge whether you’re overpaying by seeing how the expenses of the fund you’re considering stack up versus the expenses of the index funds and ETFs that made the cut for the Money 50, Money Magazine’s list of the best mutual funds and ETFs.

Mistake #2: Playing the niche index game. The beauty of index investing is that it allows you to easily and inexpensively create a well-balanced portfolio for retirement savings or other money you’re looking to invest. For example, by combining just three funds—a total U.S. stock market index fund, a total international stock index fund and a total U.S. bond market index fund (or their ETF counterparts)—you have the foundation for a broadly diversified portfolio of stocks and bonds that can get you to and through retirement.

But many investors fall into the trap of believing that the more bases they cover, the more diversified and better off they’ll be. And investment firms are all too willing to oblige them by marketing ever more specialized index offerings, allowing investors to invest in indexes that track everything from wind power and cyber security to obesity and organic foods.

Diversity is a good thing, but you don’t want to overdo it. Once you have a diversified portfolio of stocks and bonds, the extra benefit you get from venturing into investments that focus on narrow slices of the market or obscure niches can be minuscule or even disappear, since more arcane investments often carry higher fees. You also run the risk of ending up with an unwieldy and overlapping jumble of holdings that’s difficult to manage. And, let’s face it, a lot of what’s done in the name of broader diversification is really more about riding the latest fad.

In short, the more you stick to tried-and-true index funds that track wide swaths of the market at a low cost and resist the temptation to invest in every new indexing variation some firm churns out, the less likely you’ll end up “di-worse-ifying” rather than diversifying your portfolio.

Mistake #3: Using index funds to gamble rather than invest. When the indexing revolution got underway back in the 1970s, the idea was for investors to track the performance of broad market benchmarks like the Standard & Poor’s 500 index. The rationale was that since it’s so difficult to outperform the market, investors are better off trying to match the market’s return as much as possible.

Today, however, many investors see index funds as vehicles that can help them juice performance by quickly darting in and out of the stock or bond market as a whole or making bets on a sector they believe is poised to soar, be it growth, value, small stocks, energy, technology, whatever. ETFs are especially popular with such investors since, unlike regular index funds, ETFs are priced constantly throughout the day and can be traded the same as stocks.

Problem is, succeeding at this approach requires investors to have the foresight to know where the market or specific sectors are headed. That’s a dubious assumption at best. Consider how investors swarmed into tech and growth stocks at the end of the ’90s dot.com bubble, confident that double- or even triple-digit returns would continue, only to see shares crash and burn. Or, more recently, how pundits were predicting Armageddon for stocks in the wake of the Brexit vote, only to see the market climb to new highs.

Bottom line: Indexing works best when you use low-cost index funds that cover broad segments of the stock and bond markets as building blocks to create a diversified portfolio that matches your tolerance for risk—and that, aside from periodic rebalancing, you’ll stick with through good markets and bad. Remember that, and you’ll be more likely to benefit from all that indexing has to offer.

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Why Sign Up for Medicare If I Have Insurance Already?

My Comments: I’m increasingly asked about signing up for Medicare at 65 or not. This happens as more and more of us are still working at age 65 and expect to keep working for several years to come. This article by Matthew Frankel will give you the background necessary to help your decision.

by Matthew Frankel \ Jul 16, 2017

The standard eligibility age for Medicare in the United States is 65. However, many people don’t know if they need to sign up for Medicare if they already have other health insurance coverage, such as through a job, a spouse’s employer, from their former employer, or through COBRA. Here’s a quick guide that can help you determine if you need to sign up for Medicare when you turn 65 or if you can wait longer without paying a penalty.

How Medicare works with your other insurance

When you have more than one insurance provider, there are certain rules that determine who pays what it owes first and who pays based on the remaining balance. For seniors who don’t have other insurance, Medicare is obviously the primary payer. However, when you have other insurance, it’s a little more complicated.

Depending on the type of insurance you have (group coverage, retiree coverage, COBRA, marketplace coverage, etc.), Medicare can either be the primary or the secondary payer. If Medicare would be a secondary payer to your current insurance, you can delay signing up for Medicare Part B. If your current insurance would become a secondary payer to Medicare, you should sign up during your initial enrollment period, which is the seven-month period that begins three months prior to the month you’ll turn 65.

It’s also worth noting that although I’m specifically mentioning Medicare Part B, which is medical insurance, this applies to Part A (hospital insurance) as well. However, Medicare Part A is free to the vast majority of Americans, so it’s probably worth signing up for Part A whether you’re required to or not. On the other hand, Medicare Part B has a monthly premium you’ll have to pay, which is why it can make sense to delay signing up if it’s not going to be your primary insurance.

Who can delay signing up for Medicare?

So, whose insurance remains the primary payer? In a nutshell, if you have coverage through your or your spouse’s current employment, and the employer has 20 or more employees, your insurance plan remains the primary payer.

If you aren’t sure if your employer meets the “group health coverage” criteria, ask your employer’s benefits manager.

If you do qualify, you can delay signing up for Medicare for as long as you (or your spouse) are still working. Once the employment or your employer-based health coverage ends, you’ll have eight months to sign up for Medicare Part B without paying a penalty, which is a permanently higher premium.

It’s also important to note that regardless of whether you’re still working or not, if you’ve already signed up for Social Security benefits, you’ll be automatically enrolled in Medicare Parts A and B when you turn 65. If you don’t want to keep Part B, you’ll need to cancel it (instructions are on the Medicare card you’ll receive).

Who should sign up at 65, even if they have other insurance?

This leaves a fairly long list of other types of insurance that become secondary payers to Medicare. Therefore, if you’re turning 65 and any of these situations apply to you, you should sign up for Medicare during your initial enrollment period.

• You have group coverage through your or your spouse’s employer, but the employer has fewer than 20 workers.

• You have retiree coverage, either through your former employer or your spouse’s former employer.

• You have group coverage through COBRA.

• You have TRICARE, the healthcare program for military service members, retirees, and their families. Retired service members must get Medicare Part B when eligible in order to keep their TRICARE coverage. (Note: If you’re still on active duty, you don’t have to enroll in Medicare until after you retire.)

• You have veterans’ benefits.

• You have coverage through the healthcare marketplace or have other private insurance. Once your Medicare coverage begins, you’ll no longer get any reduced premium or tax credit for marketplace coverage, and you should drop this coverage as you’ll no longer need it (unless you’re not eligible for premium-free Part A, which is not common).

If one of these situations applies to you and you don’t sign up for Medicare Part B during your initial enrollment period, you could face permanently higher premiums when you do.

Disruption Of Confidence

Monday = Investing Money:

I’d like to think that my posts help someone, anyone? Professionally I’ve lived in the financial world for over 40 years and it pains me to say I haven’t a clue what’s going to happen next. What’s telling is that others, far more competent than I, don’t have a clue either.

Lance Roberts, whose comments I share this week, is a technician, attempting to glean clues from a rigorous adherence to mathematics and the signals that supposedly exist and reveal the future when correctly interpreted. Tread carefully.

Aug. 20, 2017 Lance Roberts Seeking Alpha

As noted last week:
“The weakness in the market previously, combined with the threats between the U.S. and North Korea, led to a fairly sharp unwinding in equities on Thursday which in turn triggered a short-term sell signal.

That sell-off has remained confined to the current bullish trend line but has threatened to violate the 50-dma (day/daily moving average). If the market is unable to regain the 50-dma on Monday, and remain above it for the balance of the coming week, the most likely move in the markets will be lower.”

I have updated the chart above (see HERE) through Friday afternoon. I followed that analysis up on Tuesday, stating:
“On Monday, the market surged out of the gate as headlines suggested ‘geopolitical risk’ had subsided. I find this particular explanation hard to digest, given the rising rhetoric of a potential trade war with China, violence in Charlottesville over the weekend, no resolution with North Korea, etc., so forth, and so on. I find little evidence of a global turn in geopolitical stresses currently.

Monday’s ‘buy the dip’ frenzy was no different. The question will be whether the market can both reverse the short-term ‘sell signal’ and climb above the previous resistance of the old highs? Such a reversal would end the current consolidation process and allow for additional capital to be invested.”

That was so last Tuesday…

The reversal, at least to this point, was not to be the case.

Exactly one week after last week’s sell-off, the market dumped again. This time it was the news of the complete dismemberment of President Trump’s “economic council” of CEOs along with the rumor that Gary Cohn would be exiting his position at the White House as well. While the latter turned out to be #FakeNews, the damage had already been done as market participants began to question the ability of the Administration to get its promised legislative action advanced.

Given the run-up in the markets since the election, which was based on tax cuts/reform, infrastructure spending, repatriation and repeal of the Affordable Care Act, the lack of progress on that agenda has left the markets pushing higher on “hope” and “promises.” The disbanding of the economic council has led to some disruption of that confidence.

Importantly, with the market currently on a weekly sell signal, it also compounded the bulls’ problems by breaking the bullish trend line that begins in February of last year.

This is not a “panic and sell everything” signal…yet.

It is, however, a potentially important change to the bullish backdrop of the market in the short-term particularly given the ongoing deterioration in the internal participation in the market. Note that when sell signals have been triggered from similarly high levels (vertical red dashed lines), subsequent corrections have been fairly brutal.

Previously, I questioned whether or not to “buy the dip?”

“My best guess currently is – probably. But not yet.”

I also stated the following two reasons for that sentiment:

1. Bull markets don’t typically end when the mainstream media is “peeing down both legs” over the 1.5% drop on Thursday.

2. The bullish uptrend remains intact and “fear” gauges remain confined to a downtrend.

This remains this week as well. The sell-off so far remains contained above the previous bullish breakout to new highs and remains above current price support levels. Furthermore, while volatility did pick up a bit on Thursday, it has not exceeded last week’s volatility spike, suggesting traders are less worried about a correction than media headlines makes it appear.

Trump Can’t Reverse the Decline of White Christian America

My Comments: Remember the context. Racial tension has been a hallmark of our society since the beginning. Think pilgrims vs indigenous peoples in the 1620’s. Think black vs white in the 1860’s.

Right now the tension is elevated, and coupled with Trump’s inability or unwillingness to quash the tension, overreaction is going to surface. Reaction, within limits, will allow the ideology behind the tension to fade or lose. Otherwise the message becomes all about the confrontation rather than the underlying false premises of bigotry, racism, religion and political ideology.

Robert P. Jones \ Jul 4, 2017

Two-thirds of those who voted for the president felt his election was the “last chance to stop America’s decline.” But his victory won’t arrest the cultural and demographic trends they opposed.

Down the home stretch of the 2016 presidential campaign, one of Donald Trump’s most consistent talking points was a claim that America’s changing demographics and culture had brought the country to a precipice. He repeatedly cast himself as the last chance for Republicans and conservative white Christians to step back from the cliff, to preserve their power and way of life. In an interview on Pat Robertson’s Christian Broadcasting Network (CBN) in early September, Trump put the choice starkly for the channel’s conservative Christian viewers: “If we don’t win this election, you’ll never see another Republican and you’ll have a whole different church structure.” Asked to elaborate, Trump continued, “I think this will be the last election that the Republicans have a chance of winning because you’re going to have people flowing across the border, you’re going to have illegal immigrants coming in and they’re going to be legalized and they’re going to be able to vote, and once that all happens you can forget it.”

Michele Bachmann, a member of Trump’s evangelical executive advisory board, echoed these same sentiments in a speech at the Values Voters Summit, an annual meeting attended largely by conservative white Christians. That same week, she declared in an interview with CBN: “If you look at the numbers of people who vote and who lives [sic] in the country and who Barack Obama and Hillary Clinton want to bring in to the country, this is the last election when we even have a chance to vote for somebody who will stand up for godly moral principles. This is it.” Post-election polling from the Public Religion Research Institute, which I lead, and The Atlantic showed that this appeal found its mark among conservative voters. Nearly two-thirds (66 percent) of Trump voters, compared to only 22 percent of Clinton voters, agreed that “the 2016 election represented the last chance to stop America’s decline.”

Does Trump’s victory, then, represent the resurrection of White Christian America? The consequences of the 2016 elections are indeed sweeping. Republicans entered 2017 with control of both houses of Congress and the White House. And because the Republican-controlled Senate refused to consider an Obama appointee to replace Justice Antonin Scalia, who died in early 2016, Trump was able to nominate a conservative Supreme Court justice right out of the gate. Trump’s cabinet and advisors consist largely of defenders of either Wall Street or White Christian America.

The evidence, however, suggests that Trump’s unlikely victory is better understood as the death rattle of White Christian America—the cultural and political edifice built primarily by white Protestant Christians—rather than as its resuscitation. Despite the election’s immediate and dramatic consequences, it’s important not to over-interpret Trump’s win, which was extraordinarily close. Out of more than 136 million votes cast, Trump’s victory in the Electoral College came down to a razor-thin edge of only 77,744 votes across three states: Pennsylvania (44,292 votes), Wisconsin (22,748 votes), and Michigan (10,704 votes). These votes represent a Trump margin of 0.7 percentage points in Pennsylvania, 0.7 percentage points in Wisconsin, and 0.2 percentage points in Michigan. If Clinton had won these states, she would now be president. And of course Clinton actually won the popular vote by 2.9 million votes, receiving 48.2 percent of all votes compared to Trump’s 46.1 percent. The real story of 2016 is that there was just enough movement in just the right places, just enough increased turnout from just the right groups, to get Trump the electoral votes he needed to win.

Trump’s intense appeal to 2016 as the “last chance” election seems to have spurred conservative white Christian voters to turn out to vote at particularly high rates. Two election cycles ago in 2008, white evangelicals represented 21 percent of the general population but, thanks to their higher turnout relative to other voters, comprised 26 percent of actual voters. In 2016, even as their proportion of the population fell to 17 percent, white evangelicals continued to represent 26 percent of voters. In other words, white evangelicals went from being overrepresented by five percentage points at the ballot box in 2008 to being overrepresented by nine percentage points in 2016. This is an impressive feat to be sure, but one less and less likely to be replicated as their decline in the general population continues.

Updating two trends with 2015-2016 data also confirms that the overall patterns of demographic and cultural change are continuing. The chart below plots two trend lines that capture key measures of change: the percentage of white, non-Hispanic Christians in the country and the percentage of Americans who support same-sex marriage. The percentage of white Christians in the country fell from 54 percent in 2008 to 47 percent in 2014. That percentage has fallen again in each subsequent year, to 45 percent in 2015 and to 43 percent in 2016. Similarly, the percentage of Americans who supported same-sex marriage rose from 40 percent in 2008 to 54 percent in 2014. That number stayed relatively stable (53 percent) in 2015—the year the Supreme Court legalized same-sex marriage in all 50 states—but jumped to 58 percent in 2016.

Despite the outcome of the 2016 elections, the key long-term trends indicate White Christian America’s decline is continuing unabated. Over the last eight years, the percentage of Americans who identify as white and Christian fell 11 percentage points, and support for same-sex marriage jumped 18 percentage points. In a New York Times op-ed shortly after the election, I summarized the results of the election this way: “The waning numbers of white Christians in the country today may not have time on their side, but as the sun is slowly setting on the cultural world of White Christian America, they’ve managed, at least in this election, to rage against the dying of the light.”

One of the most perplexing features of the 2016 election was the high level of support Donald Trump received from white evangelical Protestants. How did a group that once proudly identified itself as “values voters” come to support a candidate who had been married three times, cursed from the campaign stump, owned casinos, appeared on the cover of Playboy Magazine, and most remarkably, was caught on tape bragging in the most graphic terms about habitually grabbing women’s genitals without their permission? White evangelical voters’ attraction to Trump was even more mysterious because the early GOP presidential field offered candidates with strong evangelical credentials, such as Ted Cruz, a longtime Southern Baptist whose father was a Baptist minister, and Marco Rubio, a conservative Catholic who could talk with ease and familiarity about his own personal relationship with Jesus.

The shotgun wedding between Trump and white evangelicals was not without conflict and objections. It set off some high drama between Trump suitors, such as Jerry Falwell Jr. of Liberty University and Robert Jeffress of First Baptist Church in Dallas, and #NeverTrump evangelical leaders such as Russell Moore of the Southern Baptist Convention. Just days ahead of the Iowa caucuses, Falwell invited him to speak at Liberty University, where he serves as president. In his introduction, Falwell told the gathered students, “In my opinion, Donald Trump lives a life of loving and helping others as Jesus taught in the great commandment.” And a week later, he officially endorsed Trump for president. Robert Jeffress, the senior pastor of the influential First Baptist Church in Dallas and a frequent commentator on Fox News, also threw his support behind Trump early in the campaign but took a decidedly different approach. Jeffress explicitly argued that a president’s faith is “not the only consideration, and sometimes it’s not the most important consideration.” Citing grave threats to America, particularly from “radical Islamic terrorism,” Jeffress’ support of Trump for president was straightforward realpolitik: “I want the meanest, toughest, son-of-a-you-know-what I can find in that role, and I think that’s where many evangelicals are.” Moore, by contrast, remained a steadfast Trump opponent throughout the campaign. He was aghast at the high-level embrace of Trump by white evangelical leaders and strongly expressed his incredulity that they “have tossed aside everything that they previously said they believed in order to embrace and to support the Trump candidacy.”

The 2016 election, in fact, was peculiar because of just how little concrete policy issues mattered.

In the end, however, Falwell and Jeffress had a better feel for the people in the pews. Trump received unwavering support from white evangelicals from the beginning of the primaries through Election Day. As I noted at the beginning of the primary season, the first evidence that Trump was rewriting the Republican playbook was his victory in the South Carolina GOP primary, the first southern primary and one in which more than two-thirds of the voters were white evangelicals. The Cruz campaign had considered Super Tuesday’s South-heavy lineup to be its firewall against early Trump momentum. But when the returns came in, Cruz had won only his home state of Texas and neighboring Oklahoma, while Trump had swept the southern states, taking Georgia, Alabama, Tennessee, Virginia, and Arkansas. Trump ultimately secured the GOP nomination, not over white evangelical voters’ objections, but because of their support. And on Election Day, white evangelicals set a new high water mark in their support for a Republican presidential candidate, backing Trump at a slightly higher level than even President George W. Bush in 2004 (81 percent vs. 78 percent).

Trump’s campaign—with its sweeping promise to “make American great again”—triumphed by converting self-described “values voters” into what I’ve called “nostalgia voters.” Trump’s promise to restore a mythical past golden age—where factory jobs paid the bills and white Protestant churches were the dominant cultural hubs—powerfully tapped evangelical anxieties about an uncertain future.

The 2016 election, in fact, was peculiar because of just how little concrete policy issues mattered. The election, more than in any in recent memory, came down to two vividly contrasting views of America. Donald Trump’s campaign painted a bleak portrait of America’s present, set against a bright, if monochromatic, vision of 1950s America restored. Hillary Clinton’ campaign, by contrast, sought to replace the first African American president with the first female president and embraced the multicultural future of 2050, the year the Census Bureau originally projected the United States would become a majority nonwhite nation. “Make American Great Again” and “Stronger Together,” the two campaigns’ competing slogans, became proxies for an epic battle over the changing face of America.

The gravitational pull of nostalgia among white evangelicals was evident across a wide range of public opinion polling questions. Just a few weeks before the 2016 election, 66 percent of white evangelical Protestants said the growing number of newcomers from other countries threatens traditional American customs and values. Nearly as many favored building a wall along the U.S. border with Mexico (64 percent) and temporarily banning Muslims from other countries from entering the U.S. (62 percent). And 63 percent believed that today discrimination against whites has become as big a problem as discrimination against blacks and other minorities. White evangelicals also stood out on broad questions about cultural change. While Americans overall were nearly evenly divided on whether American culture and way of life have changed for worse (51 percent) or better (48 percent) since the 1950s, white evangelical Protestants were likelier than any other demographic group to say things have changed for the worse since the 1950s (74 percent).

It is perhaps an open question whether Trump’s candidacy represents a true change in evangelicals’ DNA or whether it simply revealed previously hidden traits, but the shift from values to nostalgia voter has undoubtedly transformed their political ethics. The clearest example of evangelical ethics bending to fit the Trump presidency is white evangelicals’ abandonment of their conviction that personal character matters for elected officials. In 2011 and again just ahead of the 2016 election, PRRI asked Americans whether a political leader who committed an immoral act in his or her private life could nonetheless behave ethically and fulfill their duties in their public life. In 2011, consistent with the “values voter” brand and the traditional evangelical emphasis on the importance of personal character, only 30 percent of white evangelical Protestants agreed with this statement. But with Trump at the top of the Republican ticket in 2016, 72 percent of white evangelicals said they believed a candidate could build a kind of moral dike between his private and public life. In a head-spinning reversal, white evangelicals went from being the least likely to the most likely group to agree that a candidate’s personal immorality has no bearing on his performance in public office.

Fears about the present and a desire for a lost past, bound together with partisan attachments, ultimately overwhelmed values voters’ convictions. Rather than standing on principle and letting the chips fall where they may, white evangelicals fully embraced a consequentialist ethics that works backward from predetermined political ends, bending or even discarding core principles as needed to achieve a predetermined outcome. When it came to the 2016 election, the ends were deemed so necessary they justified the means. As he saw the polls trending for Trump in the last days before the election, in no small part because of the support of white evangelicals, Russell Moore was blunt, lamenting that Trump-supporting evangelicals had simply adopted “a political agenda in search of a gospel useful enough to accommodate it.”

White evangelicals have entered a grand bargain with the self-described master dealmaker, with high hopes that this alliance will turn back the clock. And Donald Trump’s installation as the 45th president of the United States may in fact temporarily prop up, by pure exertions of political and legal power, what white Christian Americans perceive they have lost. But these short-term victories will come at an exorbitant price. Like Esau, who exchanged his inheritance for a pot of stew, white evangelicals have traded their distinctive values for fleeting political power. Twenty years from now, there is little chance that 2016 will be celebrated as the revival of White Christian America, no matter how many Christian right leaders are installed in positions of power over the next four years. Rather, this election will mostly likely be remembered as the one in which white evangelicals traded away their integrity and influence in a gambit to resurrect their past.

Meanwhile, the major trends transforming the country continue. If anything, evangelicals’ deal with Trump may accelerate the very changes it was designed to arrest, as a growing number of non-white and non-Christian Americans are repulsed by the increasingly nativist, tribal tenor of both conservative white Christianity and conservative white politics. At the end of the day, white evangelicals’ grand bargain with Trump will be unable to hold back the sheer weight of cultural change, and their descendants will be left with the only real move possible: acceptance.

This article has been excerpted from the new Afterword in the paperback version of Robert P. Jones’ book, The End of White Christian America.

The Danger From Low-Skilled Immigrants: Not Having Them

My Comments: To Make America Great Again, the presumably well intentioned mantra for those leading the GOP these days, someone has to overcome ignorance of economics and start paying attention to reality.

A positive corporate bottom line is the driving force for a healthy US economy. To reach that goal, we need people willing to spend time in the trenches doing whatever grunt work is necessary. Despite machines that increasingly automate the grunt work, a supply of young people has to match the demand created until artificial intelligence takes over.

The supply of labor is not going to miraculously appear. A greater number of us are old and fragile, and fertility rates among young men are declining. Exactly who is going to look after all us old folks because we refuse to hurry up and die?

We should be encouraging immigration and refugees. Yes, there is a potential security threat, which implies applying resources to screen and maintain a reasonable level of security. And yes, someone is probably going to get killed or maimed or whatever when someone nefarious sneaks through.

The laws of supply and demand are well known. Right now we have an increasing demand for labor, which can only stabilize with either more people being allowed into the country, or a large increase in the cost of labor to force more of into the trenches. Either that or starve, in which case you die. Some would have that happen since dead people are less likely to vote against those wanting to restrict immigration.

Eduardo Porter \ August 8, 2017

Let’s just say it plainly: The United States needs more low-skilled immigrants.

You might consider, for starters, the enormous demand for low-skilled workers, which could well go unmet as the baby boom generation ages out of the labor force, eroding the labor supply. Eight of the 15 occupations expected to experience the fastest growth between 2014 and 2024 — personal care and home health aides, food preparation workers, janitors and the like — require no schooling at all.

“Ten years from now, there are going to be lots of older people with relatively few low-skilled workers to change their bedpans,” said David Card, a professor of economics at the University of California, Berkeley. “That is going to be a huge problem.”

But the argument for low-skilled immigration is not just about filling an employment hole. The millions of immigrants of little skill who swept into the work force in the 25 years up to the onset of the Great Recession — the men washing dishes in the back of the restaurant, the women emptying the trash bins in office buildings — have largely improved the lives of Americans.

The politics of immigration are driven, to this day, by the proposition that immigrant laborers take the jobs and depress the wages of Americans competing with them in the work force. It is a mechanical statement of the law of supply and demand: More workers spilling in over the border will inevitably reduce the price of work.

This proposition underpins President Trump’s threat to get rid of the 11 million unauthorized immigrants living in the country. It is used to justify his plan to cut legal immigration into the country by half and create a point system to ensure that only immigrants with high skills are allowed entrance in the future.

But it is largely wrong. It misses many things: that less-skilled immigrants are also consumers of American-made goods and services; that their cheap labor raises economic output and also reduces prices. It misses the fact that their children tend to have substantially more skills. In fact, the children of immigrants contribute more to state fiscal coffers than do other native-born Americans, according to a report by the National Academies.

Russian Oligarchs May Have Used Donald Trump To Launder Money

My Comments: Every two years, I’m required to complete an Anti-Money Laundering (AML) overview and exam. At the local level, it’s mostly about drug money and efforts to turn illegal money into legal money with insurance and investment products.

The AML effort has the effect of reminding us about behaviors, questions, circumstances, patterns, etc. that are consistent with those used by people who were caught laundering money. If we get even a hint of AML behavior, we are required to alert a compliance officer immediately. The idea is to avoid any legal morass that is sure to follow.

What follows here is Chapter Two of a five part story that explores the long time relationship between our 45th President and Russian individuals. If you are disturbed, whether as a Republican or Democrat about the issue, then you owe it to yourself to read what is said below.

As Donald Trump entered the stage as a viable candidate for President, I was aware of relationships, comments, questions asked, financial outcomes, etc., that raised AML flags in my mind. If someone came into my office with similar circumstance, and refused to provide me with satisfactory answers to questions I posed, I would be bound to refuse any requests and report what was said, or not said.

His candidacy was for me a giant red flag. And nothing said and done so far by he and his team has caused me to change my mind.

Grag Fish \ May 30, 2017

Say you’re an oligarch in a country that loathes them but is powerless to do anything about their existence because the highest levels of government profit off their businesses, legal and not. While you might think you have it made, your position is actually quite precarious. Pull on your leash too much and start commenting on politics, and you might just find yourself in jail for tax evasion and embezzlement, or sent into exile according to the template that shut down a critical news channel first, and stealthily re-nationalized an oil empire soon after that.

You probably want to hedge your bets and find a country to which you can make a smooth exit, ideally spending a lot of time there and out of the government’s sight and mind. If things get bad, you can just pull your assets and stay abroad.

Many countries are happy to allow a wealthy foreign investor with millions in cash to set up shop permanently, as long as all that cash looks legitimate. And that condition could be a problem if you’re trying to wire it from a country under sanctions, or your income history has gaps indicating something shady went down.

Of course that’s why money laundering exists. One of the simplest ways to do it is to create a web of offshore companies strategically located in countries that don’t ask a lot of questions about where the money came from, but are just happy to take their cut. Many are the usual suspects in the Caribbean, but other favorites include the Seychelles, Cook Islands — which are now being called the Crook Islands by the natives thanks to their sudden surge in popularity as an offshore destination — and of course, Cyprus, which is heavily favored by Russians.

These offshore companies can cross borders, invest and transfer cash between each other, and after creating a frustrating enough web of transfers and exchanges, as many of them as vague and anonymous as possible mid-transit, they can invest in money-making ventures. Over time, they build small empires in their target destinations, which for Russians are often Switzerland and the UK, particularly London. But that’s fairly basic. The real pros are a lot sneakier than that, using charitable organizations and nonprofits as their identity shields.

These funds, as they’re called in Russia, are operated by LLCs that transfer assets, take out loans, and can make a single large organization doing all sorts of questionable deals and making eyebrow-raising purchases when viewed as a single entity, into a web of seemingly unrelated organizations with very different agendas. With enough records to have to sift through, they can hide their affiliations for years, often in plain sight, just because the web is too tangled to really unravel without a very good reason to spend months parsing paperwork.

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ACTION OR NO ACTION?

My Comments: Friends of mine are scared. I’m less so. I want President Trump to be a successful President; our future as a respected state on the global stage is important to me.

But I am less confident today than I was last January. Not because of the Russia issue, but because of his apparent lack of intellectual curiosity. His role as President dictates he move beyond his role as a reality TV host. I’m no longer sure he can or even wants to.

The media and others can be alarmist. After all, that’s how you get an audience and generate revenue. And there are apparently lots of reasons for us to be alarmed. But so much of what we read and hear is simply noise.

I also believe that we are overdue for an in-depth review of the fundamental issues and assumptions about government that go back 75 years and more. This is a healthy process that will either reaffirm the assumptions that got us where we are or cause us to make some necessary changes. I don’t fear change like many of my contemporaries.

Clearly there was and is an imbalance economically among demographic elements of our society. It’s increasingly apparent to me that income inequality is the driving force behind much of the tension in this country. Whether that gets remedied under a Trump administration remains to be seen.

What kind of society do we want going forward, and do we have the courage and conviction to make it happen? I hope we do, and I intend to do what little I can to voice my opinions.

By Zachary Karabell / Feb 12, 2017

Just weeks into Donald Trump’s presidency, you would think that everything had changed. The uproar over the president’s tweets grows louder by the day, as does concern over the erratic, haphazard and aggressive stance of the White House toward critics and those with different policy views. On Sunday, White House aide Stephen Miller bragged, “We have a president who has done more in three weeks than most presidents have done in an entire administration.”

But Miller was dead wrong about this. There is a wide gap, a chasm even, between what the administration has said and what it has done. There have been 45 executive orders or presidential memoranda signed, which may seem like a lot but lags President Barack Obama’s pace. More crucially, with the notable exception of the travel ban, almost none of these orders have mandated much action or clear change of current regulations. So far, Trump has behaved exactly like he has throughout his previous career: He has generated intense attention and sold himself as a man of action while doing little other than promote an image of himself as someone who gets things done.

It is the illusion of a presidency, not the real thing.

The key problem here is understanding Trump’s executive orders and presidential memoranda. Trump very quickly seized on the signing of these as media opportunities, and each new order and memo has been staged and announced as dramatic steps to alter the course of the country. Not accustomed to presidents whose words mean little when it comes to actual policy, opponents have seized on these as proof that Trump represents a malign force, while supporters have pointed to these as proof that Trump is actually fulfilling his campaign promises.

Neither is correct. The official documents have all the patina of “big deals” but which when parsed and examined turn out to be far, far less than they appear. Take the order authorizing the construction of a border wall between the United States and Mexico. The relevant section of the January 25 order read: “It is the policy of the executive branch to … secure the southern border of the United States through the immediate construction of a physical wall on the southern border, monitored and supported by adequate personnel so as to prevent illegal immigration, drug and human trafficking, and acts of terrorism.” That sounds indeed like an order to fulfill a controversial campaign promise. The problem? Congress initially passed a Secure Fence Act in 2006 that mandated the construction of nearly 700 miles of fortified border. By 2011, under the Obama administration, most of that was completed, with a mix of pedestrian fencing and vehicle fortifications. Since then, there has only been minimal funding for further fortifications.

The result is that Trump issued an executive order mandating something that has in many respects already been done—with no congressional funding yet to redo the current fortified border with a larger, more expensive structure. The president does not have the budgetary discretion to build such a wall, and it remains to be seen whether Congress will authorize what promises to be a controversial and redundant project. This executive order, therefore, changes nothing, and only mandates something that has already been mandated, already been constructed and that the president lacks the spending authority to upgrade.

Then take things like the Keystone pipeline permits, the promise to deregulate and the most recently signed orders about crime. The January 24 order on infrastructure begins with a sentiment almost anyone could agree with: “Infrastructure investment strengthens our economic platform, makes America more competitive, creates millions of jobs, increases wages for American workers, and reduces the costs of goods and services for American families and consumers. Too often, infrastructure projects in the United States have been routinely and excessively delayed by agency processes and procedures.” It then declares that the policy of the Executive Branch is to expedite the permitting of such projects. That was followed by two memoranda on the Keystone and Dakota Access Pipelines that had been denied permits during Obama’s tenure, which urges the companies to re-submit their permit applications for review.

That might seem like an order to have the pipelines built. But Keystone remains almost entirely an idea, and oil shipments and infrastructure from Canada have long since been routed elsewhere given the years and years of delay in ever authorizing it. The Dakota Access Pipeline is largely complete, with a major dispute over its passage through tribal lands, and here too, it is unlikely that a presidential memorandum has any legal bearing on how that issue is resolved given that it lies within the purview of the Army Corps of Engineers and cannot simply be countermanded by the White House.

Or take the orders of deregulation. Those were widely hailed as a rollback of Dodd-Frank, especially given that the morning that the order was issued, February 3, Trump met with bank CEOs and expressed his dislike for many of the legislation’s provisions. The actual order, however, delivers much less than it promises, merely directing the secretary of the Treasury to review existing regulations and report back on which ones might be refined to achieve better outcomes.

Or the crime orders signed on February 9, which were widely hailed as cracking down on “transnational criminal organizations” and “preventing violence against … law enforcement officers.” Nothing in the text of these orders is either objectionable or in any respect a departure from current law and policy. One order states plainly that it shall be the policy of the administration to “enforce all Federal laws in order to enhance the protection and safety of Federal, State, tribal, and local law enforcement officers, and thereby all Americans.” The other says that the administration will seek to use existing laws to crack down on trafficking. You would have known none of that from the headlines both supporting and denouncing the efforts. Breitbart claimed “Trump Signs Three Executive Orders to Restore Safety in America” while many took these orders as a sign that police will have new, expanded powers and protections. In truth, the orders changed the status quo not one whit.

On it goes: The recent crackdown on undocumented immigrants that followed Trump’s January 25 order on enforcement priorities may depart from Barack Obama’s post-2102 policies to de-emphasize deportation of undocumented immigrants who do not have criminal records, but it appears fully consistent with deportation actions during both Obama’s first term and during significant portions of George W. Bush’s administration. The orders on health care, on defeating ISIS, on rebuilding the armed forces—all were essentially statements of intent with no legal force and requiring no action except a mandate to relevant departments and agencies to study issues and report back.

The travel ban, of course, is different. It was an actual policy order that dramatically changed immigration and visa policies for seven Muslim-majority countries. It was swiftly rejected by the courts, however, which meant that the signature policy of the Trump administration is now not a policy at all—at least, unless and until the White House finds a different approach.

Yes, what the president says matters. Trump’s casual relationship with the truth and his carefree use of tweets set the public agenda and help determine how foreign countries relate to our government. Intent also matters, and clearly, the Trump administration is determined to do a variety of things—from border security to health care to trade to immigration—that many, many Americans find objectionable, wrong and against the best interests of the country.

And yet, words are not the same as actions. Trump can issue as many documents called executive orders and presidential memoranda as he wants. As the fate of the travel ban shows, however, that doesn’t mean that even the more meaningful ones are actionable, and the preponderance of the orders to date would in any other administration have been news releases stating broad policy goals that may or may not ever become actual policy.

But too many of us take these words as action. That confirms both the worst fears of what the Trump administration is and the greatest hopes of what Trump wants it to be: a White House that shoots first and asks question later, a White House of action and change that shakes the status quo to the core and charts a new path for America and Americans. To date, this White House has broken every convention and rule of tone and attitude, toward Washington and toward the truth. But in reality, it has done far less than most people think.

In the time ahead, as Congress turns to actual legislation and the White House presumably does normal things like propose a budget and specify its legislative ideas, there will be real actions for us to probe and debate. Distinguishing between words and action is essential: When senators say silly things about legislation, we know to separate those public statements from votes takes and laws passed. When leaders of other countries speak aggressively, we do not immediately act as if war is imminent; if that were the case, we’d have invaded Iran and North Korea years ago. Words should be taken as possible indicators of future action, but not as absolutes and not always.

Trump poses a challenge to decades of tradition and precedent. He is masterful as conflating words and actions in a way that enrages and alarms his opponents and exhilarates and excites his supporters. It’s more important than ever to distinguish what is from what isn’t. Understanding the difference between what this president says and what he does is one of the only things that will keep our public debate from plunging ever deeper into the hall of mirrors.