My Answer to What I Think About…

image03This article was in response to being asked ‘what do you think about a graphic that compared Obama’s policies and how it has grown the economy in 5 years.

To sit and debate about which president and administration is “better” because of charts, numbers and facts that can be distorted to the benefit of one group or agenda is, and always will be nothing but partisan bullshit, fabricated to serve one’s beliefs, and justify their thoughts on the camp/flag they proclaim or belong too.

People have become so polarized and easy to manipulate that I simply don’t care for the state of the union. Getting you into debates on who is better is exactly what I would do (and do) when helping to craft information campaigns. We see this all the time especially on Facebook.

While you sit and argue about who’s the best…the sad fact is that in either case, the overall state of affairs in American society is in decline. They all have failed you. You just have been too used to the human nature of tribal allegiances for self perceived interests.

In the last 30 years, the administrations that began in the Reagan era, ushered in a new age of policymaking that has been economically devastating and socially irresponsible. The U.S. had risen to its zenith from WW2 to become the world’s absolute power in many areas like:

– Goods produced & exported (we were the largest producer of goods like TVs,cars,goods)

– Raw materials imported (we brought in iron, molded it into goods and sold them)

– We were the largest creditor (we loaned money out)

– Our education system was producing the world’s smartest

 

30 years later, every one of these is upside down. It took 5 administrations that all followed the same status quo to lead to

– We do not produce goods – we are a nation of consumers and credit cards

– We import way more than we export (to an extreme amount)

– We are the largest debtor (we owe more per capita than any nation on earth)

– We have fallen off the map in producing the world’s top scholastic performers

 

In the end, I don’t care so much anymore about U.S. politics. It’s become a breeding ground for the agenda biased to participate in and get some sort of hope that things are changing to their liking and a waste of my fucking time. Personally – both Republicans & Democrats since Carter have went from comical policy views and changes, to a future potential national security threat that has introduced social and moral policies that benefit specific people and organizations. Unfortunately, most Americans stay stuck in their one dimensional views, and care only to see their own camp winning an election based on a handful of self interests…if even that. But for entertainment, I’ll go over the stats in that chart to feed the stupid little minds that get influenced so easily by numbers and stats.

 

The Dow

This number is just a reflection of the monetary policy put in place in 2008 with quantitative easing. Of course it was going to go up, that was by design of bond buying and ZIRP policy (zero interest rate policy). Any basis to align the stock market Dow performance with the performance of an administration is a clear indicator of how unsophisticated the person and(or) organization is. To anyone with limited knowledge in how money works, go learn about govt role in market stability, bond buying, QE, and macro economics 102,103+.

The true beneficiaries of the DOW in today’s economy are not working/middle class people, but the institutional investors and firms that control asset wealth and management.

If the DOW was a real indicator of financial health, then Americans would not be in as bad financial shape they are. I applaud anyone who’s been savvy enough to ride the waves. For most, the cycles of booms and bust primarily affect those with 401K’s or equity based savings and have little to no understanding of financial markets.

We have introduced a tsunami of debt. As of this moment, we still are bond buying with QE3. Like any accordion effect, these policies of growing the economy through govt stimulation will come back to bite us. It was not Obama’s fault, it was not Bush’s fault…. It was the fault of the American voter, who let themselves be fooled into thinking these policies were OK for the nation. Luckily we have room for debt, but  just how much will be soon tested in the coming century.

 

Unemployment

This number will always serve any administration as it is NOT a clear indicator. Unemployment figures are based on a specific type of person/profile. The U-6 report is a better figure, but not ever used by political groups. It sums up the actual figure of people not counted as “unemployed” by federal standards.  Forbes Link on that here.

But let’s stop for a second and look at another fact… if the DOW is booming, that means the economy is growing. The DOW today sits at record highs, yet unemployment is celebrated because it went from 7.4 to 6.8%?????

In past stock market booms, unemployment sat in the 4-5% range, and was an indicator that companies were healthy and hiring, and the labor force was plentiful. In economics, the weighted figure of 4% unemployment is what represents a healthy workforce. But we don’t see that despite the record booms in the stock market. Why? Because the stock market DOW has capitalized from the quantitative monetary policy, inflating overall money supply, credit and dollar cost to a stock. This is why you can see a high stock market, but still high unemployment.

 

GDP

GDP growth of 4.1% in 5 years of Obama? Where did that number come from? The CIA keeps accurate records, untainted from politics or correlation vs causation graphs/numbers as their reason/agenda is different. Real GDP as reported by the C.I.A. shows a stark difference in that number: Here is the link to the C.I.A. …. its 1.5% if you did not want to visit link. If the math was adding up 5 years ( .82% x 5), then yes you have 4.1% growth, but that’s not how GDP is calculated.

also…

GDP per capita is not a measurement of the standard of living in an economy; however, it is often used as such an indicator unfortunately, on the rationalization that all citizens will benefit from their country’s increased economic production. GDP per capita is not a measure of personal income. GDP may increase while real incomes for the majority decline and/or never grow.

In the U.S., wages are still lagging in income despite rising costs and production of services. This has been the trend overall in the past 30 years. The stories of your mom/dad or grandpa being a kid and buying a burger,fries and coke for 25 cents are a thing of the past or the American dream that the father goes work, supports teh family while mom statys at home and raises kids are all a “dream” of the past. We had enormous purchasing power in the last century when there was true value to our economic production, but not as much today…which is why you see the “both parents must work to keep a household going effect” affecting just about every family in America.

Deficit GDP margin

You inflate an economy on paper, the deficit will always narrow itself. We became “richer” on paper by creating more debt, and in the process the deficit has to narrow itself.  Its also a number that is not celebrated by Republicans or Democrats…..Forbes

 

Consumer Confidence

These stats and figures are the most laughable. Typically generated by either left or right wing organizations, think tanks and agenda specific polling. I really don’t care to pay attention to any organization that goes out and interviews 1000 left or right leaning Americans questions like: Do you feel confident in our economy? or Do you feel safer with this president? It’s a joke used by media outlets to keep you looking at figures that show drastic swings to create perception.

What people really need to look at

– Trade/commerce in dollar terms with the global community

   Do we make things that other people buy domestically and globally? We primarily import to fill up Wal Mart, Target and all our stores, from our underwear to a loaf of bread. We have become a nation of consumers.

 

– Dollar value and strength

Is the American dollar holding its value globally? Easy answer the last 15 years. No.

 

– Personal debt/savings

Are Americans able to save after all expenses and cost of living? No.

During WW2 the U.S. govt sold to Americans “War Bonds”…. basically there was enough wealth in the fabric of American society to pay for the cost of going to war. Today that does not exist. Instead we borrow money, especially from China – to fund our operations. Our only saving grace has been the full faith and credit of the United States to repay them. (which means more taxes if needed, to pay debt)

 

– Total liabilities of a nation state with its income

  – August 5th, 2011: U.S. bonds credit rating globally from AAA to AA+. An unprecedented move in the history of the S & P. What does this basically mean? That the U.S. ability to create policy and manage fiscal policy is getting worse and it will cost them more to borrow …Here is official statement

 – US current account balance. Here is an amazing figure that will not be reported by politics also, as neither camp wants to admit to this CIA link here

 

Future Workforce and Innovators

– Output of emerging technology and labor(students)

54% of silicon valley startups were created by immigrants (that does not make headlines!)

– U.S. is falling behind badly as the world advances and global markets mature

Our future as a nation in the next century is highly dependent in S.T.E.M areas as the global economy is evolving to those needs. Unfortunately, our country is producing a really low amount of hi-tech, or skilled work force to enter this new machine age economy. The problems start as early as elementary school, as the education system in the U.S. seems to lack in early childhood development in areas of mathematics and sciences compared to the world. One look at recent OECD charts show the falling placement of US based school children when it comes to education.

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College costs and R.O.I.

One of the best areas for U.S. dominance has been the University level education and advancement system in the last 100 years. Admired by the world, it was and for the most part still is somewhere people want to go.

Unfortunately here we see problems beginning to infect it. In 2005 the bankruptcy bill paved the way for college costs to never be allowed in personal bankruptcy. In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which made it so that no student loan — federal or private — could be discharged in bankruptcy unless the borrower can prove repaying the loan would cause “undue hardship,” a condition that is incredibly difficult to demonstrate unless the person has a severe disability. That essentially lumps student loan debt in with child support and criminal fines, other types of debt that can’t be discharged.

What effect did this have in consumer debt and college costs? It skyrocketed.

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The cost to attend college rose dramatically, why wouldn’t they. Universities now saw that students could get bigger loans mandated and backed by the govt. The banks are just for profit entities, and it became an extremely profitable area for institutions to hold student debt. Since private loan organizations said, “Screw that”, we won’t back a private student loan at today’s college costs, the US govt has backed nearly all private loans. Its extremely profitable for Goldman Sachs, JP Morgan to underwrite these loans, as they are federally backed, and they cannot be erased in bankruptcy court. Instead the debt stays with you for life, and come social security/retirement, they have legal right to get their money before you do.

I have noticed even the next step in this vicious cycle of providing federal funding/loans for K-12 private schooling. With the K-12 learning getting dominated globally, the alarms that you need to send your kids to private/specialized schools will emerge. (Get ready for federally backed private loans for that too)

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The long term effect is that when a person stays in a state of perpetual debt, all they do is work to maintain, and never have the time or money to re-tool, or invest in personal innovation and entrepreneurship.

Here’s the worse part…..

We are not producing the talent needed to enter today’s, let alone tomorrow’s economy and innovate. Instead we have expanded H1-B visa, and imported cheap college talent to innovate here.

Personally, I see this when I go to engineering conventions. 50-70% of companies and people are from India and China. On one hand I say, good for them! In the other, I say what the hell happened to the U.S.??

Even at top U.S. research centers, we pay for postgraduate, and Phd pursuing students who are primarily immigrants from overseas. Here is U.C. Davis (Click Here) as an example, we work with them, as well as MIT,CalTech, Stanford and it’s the same trend. Immigrant students beating U.S. based students to top tier technological research center access and innovation and postgraduate programs.

While this is not a problem, and I love seeing people jump on opportunities as my parents were both immigrants, all this shows is the lack of our own efforts to produce and compete in tomorrow’s economy  – which is technology driven and global.

So while, kids today are entering the world with mounting school debt equivalent to home mortgages… their return on investment really is lacking as they can not place themselves in areas to economically advance and erase debt anytime soon. Instead the majority finish (if they finish) with degrees that really don’t give them any leverage in a quickly moving economy and have to start from ground up. It becomes more a show of statement that you went to college, but are hired entry level at $40K/year. When a kid comes out with $150,000-$300,000 in student loan debt from XYZ University, that really is messed up…. and so begins their lifetime of debt. (I will personally not allow this for any of my kids.)

What will happen if the current trends stay in place from the last 30 years and we fast forward 30 years from now? What will the state of the U.S be if we continue with these policies?

It’s not all a government solution. Education and Mentorship falls in place primarily with parents and social responsibility. I feel bad though, our economy is making it that both parents have to work to sustain. For them to work a long day, and then come home to commit to child development, academics, physical activity etc…it is more stressful today than 50 years ago. Socially our morals are in other places also…largely driven by media, whose primary objective is to create consumerism. I feel guilty in this sense, as it’s been part of my job to create perception, and use my tools, skills and psychology relative to my industry to program minds.

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Yay! I just got the new iPhone8 for $799… but I only make $800/week!
We psychologically reward consumption behavior in today’s economy.

 

My Ending Thoughts?

I don’t care who is the U.S. president.

I don’t care who is in congress.

I don’t care if Bush or Obama helped crash or grow the economy.

I don’t care about anyone’s policy, allegiances or political viewpoints.

I only control my own destiny and happiness.

That happiness is in large part from luckily having access to an extremely small but wealthy group of individuals and reading about others in the same group who I would ask questions about money, policy, management and they all seemed to express the same above and say the industrious, entrepreneurial and wealthy will always outpace global governments and policy to their needs successfully. It’s been happening for hundreds of years already and always will.

I sit on a balcony, living in Spain barely discovering myself in that pursuit discussing potential investments here as we overlook people who come and visit for a week or two. At the same time, money is coming into our pockets and my goals are now to engineer a lifestyle that sustains myself and truly be mobile, independent and needed.

I am more happy now, not because I have more money, but because I have more time and freedom mentally and spatially. I can truly take time looking out into the world and continue on whatever my passions are. I hope that anyone does this for themselves and encourage that regardless of race, country, background or group they belong to.

The most powerful  statement that changed me personally

“True wealth is not measured in money…it’s measured in time.”

I’m not going to sit and waste time or mental energy worrying about allegiances, Black vs White, Red vs Blue etc… I’m going to prepare myself and the people who want to figure out the world with me and dedicate my time in advancing economically as well as personally for the better.

By | 2016-10-27T18:34:38+00:00 July 26th, 2016|My Blog|Comments Off on My Answer to What I Think About…