I’ve been giving a lot of thought to the concept of a “living wage.” A living wage is the minimum hourly rate needed to adequately support the wage earner and when combined with another adult, raise a family. The rate varies from state to state and region to region within a state.
In Connecticut, the wage for two adults raising one child would average about $12.00 an hour for each adult. (http://www.livingwage.geog.psu.edu/counties/09003) About $1.75 of each adult’s wage (15%) goes to child care and therefore it is one of the most costly components of the living wage after housing and transportation. An expansion of public education services for universal preschool and childcare programs could be implemented allowing a lowering of the living wage accordingly therefore eliminating a higher than required rate for people who do not incur that costly component. Healthcare is another costly component accounting for about $0.81 per hour (6.8%). All workers could be required to participate in a private insurance plan and providers could be solicited to offer minimum plans providing basic coverage at a predetermined contractual cost to the participant.
The living wage could be used to properly put our society’s true cost structure in order and instill personal accountability and responsibility. With a living wage, welfare benefits and their associated bureaucratic support structures could be significantly reduced and/or eliminated. Social assistance could truly be limited to those who need it, the seriously disabled and the elderly. Everyone else would no longer have any excuse for not working because even the high school dropout and the unskilled worker could find employment that would provide them with a means to take care of themselves. When coupled with another working adult, the living wage allows even those at the bottom of the wage spectrum to support raising a child. Without the availability of welfare, the incentive to have more children than one can afford would be removed and if bigger families were desired then one would be motivated to improve their skill set and look for opportunities to move up the wage scale.
In my opinion, if constructed properly through appropriate vetting, research, and debate the living wage could result in smaller government, a lower of tax rates, incentives for self-improvement, and a higher degree of global competitiveness.
Sunday, February 8, 2009
Sunday, January 18, 2009
The Fed and the Treasury Team Up to Bully Bank of America into Buying Crummy Assets
According to several news reports released Friday, Bank of America CEO, Ken Lewis, became concerned about going forward with the Merrill brokerage acquisition shortly after the deal was approved by shareholders on December 5, 2008. Mr. Lewis met with Federal Reserve Chairman, Ben Bernanke, and Treasury Secretary, Hank Paulson, on December 17, 2008 and according to the Wall Street Journal told them that he had concerns about closing the deal because Merrill's losses were "monstrous" and he was considering canceling the deal invoking a material change clause or repricing the deal to reflect the lower value of the company.
According to Mr. Lewis, both Fed Chairman Bernanke and Treasury Secretary Paulson told him that he needed to close the deal as is and failing to do so would have negative systemic consequences on the fragile banking system. Both government officials provided assurances that they would provide backstop funds to help Bank of America.
One thing that Bernanke and Paulson couldn't provide was assurances to the shareholders, you know, the people that CEO, Ken Lewis, is supposed to represent? This backroom deal didn't include the interests of the shareholders as they watched their stock plunge over 30% Thursday and Friday alone. Now comes the slew of lawsuits, investigations, and finger pointing. Of course this is exactly what Hank Paulson knew was going to happen explaining why his original plan for the $700 billion-dollar "Friends of Hank Bailout Plan" had provisions in it that his actions were not subject to review, criticism, or criminal prosecution. A government sanctioned Godfather so to speak. It appears that now our banking system and stock market have become nothing more than one giant Ponzi scheme. The only difference between Bernanke and Paulson and Bernard Madoff is that Mr. Madoff''s scheme was limited to the clients he could con and undetected by regulators and Mssrs. Bernanke and Paulson's actions are ripping off all Americans with the approval of regulators!
The fraud, corruption, and cavalier attitude by the same people who got us in this mess continues. It's time to say no more! If my money is going anywhere I want it to go to creating jobs repairing our country's infrastructure, creating our energy independence, and protecting our natural resources, that is, tangible assets that we can see, touch, and use.
President-elect Obama, throw out the bums and take no prisoners!
According to Mr. Lewis, both Fed Chairman Bernanke and Treasury Secretary Paulson told him that he needed to close the deal as is and failing to do so would have negative systemic consequences on the fragile banking system. Both government officials provided assurances that they would provide backstop funds to help Bank of America.
One thing that Bernanke and Paulson couldn't provide was assurances to the shareholders, you know, the people that CEO, Ken Lewis, is supposed to represent? This backroom deal didn't include the interests of the shareholders as they watched their stock plunge over 30% Thursday and Friday alone. Now comes the slew of lawsuits, investigations, and finger pointing. Of course this is exactly what Hank Paulson knew was going to happen explaining why his original plan for the $700 billion-dollar "Friends of Hank Bailout Plan" had provisions in it that his actions were not subject to review, criticism, or criminal prosecution. A government sanctioned Godfather so to speak. It appears that now our banking system and stock market have become nothing more than one giant Ponzi scheme. The only difference between Bernanke and Paulson and Bernard Madoff is that Mr. Madoff''s scheme was limited to the clients he could con and undetected by regulators and Mssrs. Bernanke and Paulson's actions are ripping off all Americans with the approval of regulators!
The fraud, corruption, and cavalier attitude by the same people who got us in this mess continues. It's time to say no more! If my money is going anywhere I want it to go to creating jobs repairing our country's infrastructure, creating our energy independence, and protecting our natural resources, that is, tangible assets that we can see, touch, and use.
President-elect Obama, throw out the bums and take no prisoners!
Sunday, January 11, 2009
Synopsis on the Economy - Not Much Going On.
The synopsis on the economy is bleak. Report after report rattle off depressing statistics of severely diminished economic activity, growing jobless rates, and worse statistics to follow into the year. It's a vicious cycle that only can only be broken by renewed confidence in the stability of our economy, most notably jobs.
In the waning days of George W. Bush's presidency there are now murmurs of attempts to disperse the second half of the nearly 3/4 trillion dollar TARP funds before President-elect, Barack Obama is sworn in. http://money.cnn.com/2009/01/10/news/economy/bush_request_restoftarp/index.htm?postversion=2009011012
In my opinion, the key component of the President-elect's economic stimulus plan are the jobs components. Jobs are what is needed to rebuild confidence and get people confident enough to resume their lives. The stimulus funds are not unlimited. Any further dispersing of the TARP funds needs to be specifically targeted and carefully monitored to ensure that our tax dollars are not being squandered by their recipients.
Right now too many Americans, even those gainfully employed, are severely afraid to do anything. The hemorrhaging of job losses needs to be cauterized. There has been a great deal of blood lost and the reserve supplies are low. Let's not deplete the blood bank on cosmetic celebrity surgeries while new patients are flooding the ER!
In the waning days of George W. Bush's presidency there are now murmurs of attempts to disperse the second half of the nearly 3/4 trillion dollar TARP funds before President-elect, Barack Obama is sworn in. http://money.cnn.com/2009/01/10/news/economy/bush_request_restoftarp/index.htm?postversion=2009011012
In my opinion, the key component of the President-elect's economic stimulus plan are the jobs components. Jobs are what is needed to rebuild confidence and get people confident enough to resume their lives. The stimulus funds are not unlimited. Any further dispersing of the TARP funds needs to be specifically targeted and carefully monitored to ensure that our tax dollars are not being squandered by their recipients.
Right now too many Americans, even those gainfully employed, are severely afraid to do anything. The hemorrhaging of job losses needs to be cauterized. There has been a great deal of blood lost and the reserve supplies are low. Let's not deplete the blood bank on cosmetic celebrity surgeries while new patients are flooding the ER!
Thursday, December 25, 2008
Status Quo for Financial CEOs.
Robert Reich, former Labor Secretary, for President Clinton predicts that CEOs of financial and other corporations receiving taypayer bailout money will not make the necessary structural changes expected by Congress and the American people. See http://robertreich.blogspot.com/2008/12/debate-to-come-over-wall-street-autos.html
Hopefully Reich is wrong but sadly I suspect he is probably right in his assessment that financial institutions and certain other corporate CEOs will continue with the status quo.
As a long-time investor in stocks I am appalled by the flagrant mismanagement of owner's equity that has taken place by cavalier CEOs and other "trust" custodians of some of our largest and most trusted corporations, specifically those in the financial sector. I am also appalled by the excuses being made by high-paid fund managers and business anchors with their trite comments and celebratory references to "Milton Friedman's" theory of free market capitalism. Free market capitalism does not exist and never has. Taken to its truest form it runs counter to democracy. The moral hazard clause is their catch all answer to the inevitable greed and corruption that quickly creeps in when the fox is left guarding the hen house and as we have all seen the moral hazard clause has now been deferred to us, the taxpayers.
Unlike "the most productive members of society," aka CEOs and other corporate rock stars, many of us have not bought more house than we can afford, leased cars we had no business driving nor lived beyond our means. Instead we acted responsibly and funded our own pensions in 401k and 403b plans (with help from financial institution lobbyists who helped to dismantle the traditional pension plans and convince the government to endorse the alternative through complicated tax schemes), saved for our children's college, set up health savings and daycare accounts only to have the funds stolen and/or squandered by the very people who had a fiduciary responsibility to act appropriately with their management.
I am outraged! I certainly hope that our new president is not inculcated by the very people that created this mess and instead is able to transcend "the system" and work for Main Street.
Hopefully Reich is wrong but sadly I suspect he is probably right in his assessment that financial institutions and certain other corporate CEOs will continue with the status quo.
As a long-time investor in stocks I am appalled by the flagrant mismanagement of owner's equity that has taken place by cavalier CEOs and other "trust" custodians of some of our largest and most trusted corporations, specifically those in the financial sector. I am also appalled by the excuses being made by high-paid fund managers and business anchors with their trite comments and celebratory references to "Milton Friedman's" theory of free market capitalism. Free market capitalism does not exist and never has. Taken to its truest form it runs counter to democracy. The moral hazard clause is their catch all answer to the inevitable greed and corruption that quickly creeps in when the fox is left guarding the hen house and as we have all seen the moral hazard clause has now been deferred to us, the taxpayers.
Unlike "the most productive members of society," aka CEOs and other corporate rock stars, many of us have not bought more house than we can afford, leased cars we had no business driving nor lived beyond our means. Instead we acted responsibly and funded our own pensions in 401k and 403b plans (with help from financial institution lobbyists who helped to dismantle the traditional pension plans and convince the government to endorse the alternative through complicated tax schemes), saved for our children's college, set up health savings and daycare accounts only to have the funds stolen and/or squandered by the very people who had a fiduciary responsibility to act appropriately with their management.
I am outraged! I certainly hope that our new president is not inculcated by the very people that created this mess and instead is able to transcend "the system" and work for Main Street.
Wednesday, December 24, 2008
President Obama Should Implement the Pickens Plan
T. Boone Picken's Plan to create a wind-power generation corridor to provide power to our electrical grid and redistribute the natural gas the power companies currently use to power trucks should be implemented by President-elect, Barack Obama and incorporated into his national infrastructure plan.
Getting America off of its 70% dependence on foreign oil is the key to our future prosperity. Energy independence, infrastructure and the design and development of next generation transportation products could be impetus for creating the economic driver which will add to the prosperity of our nation and grow our economy well into the latter part of this century.
Adopt the Pickens Plan. Let's find a way to re-energize our independence and celebrate our freedom!
Getting America off of its 70% dependence on foreign oil is the key to our future prosperity. Energy independence, infrastructure and the design and development of next generation transportation products could be impetus for creating the economic driver which will add to the prosperity of our nation and grow our economy well into the latter part of this century.
Adopt the Pickens Plan. Let's find a way to re-energize our independence and celebrate our freedom!
Friday, December 19, 2008
President-elect Barack Obama's Infrastructure Plan is Good for America
President-elect, Barack Obama's plan to rebuild America's infrastructure is the type of economic stimulus that America needs right now. Our country saw its greatest growth in the manufacturing of transportation products. The locomotive, the ocean liner, the jumbo jet and the automobile provided more good paying manufacturing jobs than any other segment of our society directly and indirectly.
As the computer age morphed into the information age American efficiency became the world standard accelerating the learning curve and reducing the number of workers required to run the old technology industries.
As I wrote in several previous pieces including 3 Pillars of Prosperity for America, it is time for a paradigm shift in our transportation products, transportation systems, and energy products. Building the 21st-Century transportation products, the infrastructure needed to support them, and alternative energy sources to become energy independent is the key to our future prosperity. Not only is it the right thing to do for our global environment it is the right thing to do for the American people as well.
If done right this program will ignite manufacturing, construction, telecommunication, green energy, and a host of related services especially in education and training.
Regardless of one's political affiliation it is time for all of us to get behind the incoming president and help him repair our battered economy and ensure a better America for our children.
As the computer age morphed into the information age American efficiency became the world standard accelerating the learning curve and reducing the number of workers required to run the old technology industries.
As I wrote in several previous pieces including 3 Pillars of Prosperity for America, it is time for a paradigm shift in our transportation products, transportation systems, and energy products. Building the 21st-Century transportation products, the infrastructure needed to support them, and alternative energy sources to become energy independent is the key to our future prosperity. Not only is it the right thing to do for our global environment it is the right thing to do for the American people as well.
If done right this program will ignite manufacturing, construction, telecommunication, green energy, and a host of related services especially in education and training.
Regardless of one's political affiliation it is time for all of us to get behind the incoming president and help him repair our battered economy and ensure a better America for our children.
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