Questions Heading into 2018

Here are 20 questions that are on my mind as we enter the new year:

  1. Will the stock market experience a correction (decline of ≥ 10 percent)?
  2. Will interest rate increases combined with quantitative tightening impact liquidity enough to trigger a material repricing of assets?
  3. Will war break out on the Korean peninsula?
  4. Will Putin take military action in Eastern Europe or elsewhere?
  5. Will President Trump do something stupid that gets a lot of people killed?
  6. Will the president’s mental condition become a major issue? (I do think Mr. Trump is experiencing cognitive decline [perhaps dementia] and, in that sense, is not well.)
  7. Will the president fire the special counsel?
  8. Will the midterm elections produce a change of control in Congress?
  9. Will inflation be materially higher than in 2017?
  10. Will the USD strengthen or weaken?
  11. Will I regret not buying bitcoin? (I doubt it, but it’s possible.)
  12. Will China be able to sustain its ridiculously high debt for yet another year? (They’re playing with fire, and I fear it’s not going to end well.)
  13. Will it become apparent that Great Britain was the first but not the last? (I still think the E.U. will unravel at some point.)
  14. Will Bernie Sanders and Joe Biden realize they’d be too old?
  15. Will the Millennials stop deferring to the Baby Boomers and start voting in larger numbers and exerting political pressure in a meaningful way? (I sure hope so, before the Boomers do even more damage.)
  16. Will people finally get their fill of Facebook? (The tool is fine; the addictions and propaganda aren’t.)
  17. Will people realize that allowing Alexa and its like into their houses to spy on everything that happens there just might not be a good idea? (For anyone except the hackers and intelligence agencies, that is, who must love it.)
  18. Will the Steelers locate their missing defense?
  19. Will the dragons survive?
  20. Will my broken bones finally heal?

New Year’s Resolutions

New Year’s resolutions are silly and a waste of time. Just in case I’m wrong, here are mine for 2018.

  • Meditate daily
  • Read at least one book per week
  • Volunteer and make new friends at the nursing home down the street
  • No alcohol from Monday through Thursday
  • Avoid ice cream and candy and press my War on Sugar
  • Exercise daily, with three or more intense workouts a week
  • Discover one or two great investment ideas
  • One silent solo retreat
  • Focus more on myself and the people and things that are important to me and over which I have some control or influence, and less on politics and society

It’s So Much Easier to Love the Baby Than the Man

How can you not love a baby? They’re so innocent. So cuddly. So cute. I have no idea what the baby Jesus looked like; however, I bet he was easy to love.

But then he grew up. And he wasn’t nearly as lovable. At least to some people. Indeed, to them, he was principally a threat. And the way powerful people handle threats is you deal with them.

I suppose, then, the ultimate question about this baby is, Was he someone to love or fear?

We can’t have it both ways, although we try. But, really, we can’t. We can’t truly love someone we fear.

So, was he someone to love or fear? That’s the great Christmas question in my mind.

But, to be fair, I suppose there’s another option. We can simply ignore him. We can truly ignore him, or ignore him while pretending we’re not (by claiming we love him while marginalizing him).

It seems that’s where we are in my country today. Not everyone. But most of us.

If there was ever any doubt (and, to some of us, there wasn’t), it was answered by our decision to make Donald Trump our president.

Donald Trump is the antithesis of Jesus. They have nothing in common. I’ve read articles by people around the world wondering how American Christians can embrace Mr. Trump. I find such articles amusing, for, after all,the answer is as plain as the nose on his face.

American Christians can support Mr. Trump because most of them love other things more than Jesus. Which is fine. That’s not only their right, but it’s also quite understandable. What’s not fine, however, is trying to cast Mr. Trump as someone he isn’t. By doing that, all the Christians are doing (most notably the evangelical community and the so-called religious right) is undermining their own credibility (assuming they have any left).

Some of Mr. Trump’s die-hard Christian supporters try to justify their allegiance by conceding Mr. Trump is an “imperfect vessel” (their words, not mine). They also remind us, using a well worn cliché that is always employed in a highly selective, partisan manner, that “no one is perfect.”

But of course, no one is talking about perfection. What we have here is the antithesis of all the values and principles that underpinned the teachings and life of the one born in Bethlehem more than 2,000 years ago.

Mr. Trump himself is constantly reminding us how great and successful he is, and that he’s one of the winners. He points to his great wealth as proof. He also constantly reminds us he has no time for those whom he refers to as losers. He ridicules them. Defames them. Pokes fun at them. Holds them in utter contempt.

Can there be any doubt Mr. Trump would consider someone like Jesus to be a loser? I think not. Of course, Mr. Trump won’t admit it, because he’s smart enough to know it could cost him votes.

So American elects Donald Trump to be its leader and still celebrates the baby’s birth. Go figure.

Why do we do it? I suppose it’s because it makes us feel good. Why not try to have it both ways. Moreover, how can you not love a baby?

But the baby Jesus was like every other boy born that day who managed to survive childhood diseases: he grew up to be a man. Not just any man. But a man who saw the world differently than most. A man who thought the poor were blessed. Who thought love was more important than possessions. Who rejected the way of power and domination. Who thought the manner we treated and cared for each other mattered.

Jesus the man said, “It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.”

It’s so much easier to love the baby than the man.

These People Just Don’t Care

The Republicans running Congress these days don’t care. They just don’t care. About the working people, that is. They only care about themselves and the fat cats who are keeping them in power.

When the Democrats regain control, and if they act in such a callous manner, I’ll lambast them, too. But for now, they have no say. All of this rests on the Republicans’ shoulders.

During and in the aftermath of the Great Recession, the Republicans steadfastly refused to take actions that would have spurred demand and helped put people back to work. The deficit is all that mattered. Consequently, it’s been a long, slow process to get from there to where we are today, with many, many unnecessary casualties along the way (suicides, drug overdoses, broken families, lost homes, skyrocketing student debt, etc.).

But now the deficits no longer matter. Now, the Republicans can do what they’ve wanted to do all along: give themselves and their cronies huge tax cuts — in other words, grab an even bigger slice of the pie for themselves. And put the tab on the backs of the working class.

On one hand, I don’t care. I’ll be fine; in fact, I’ll have more as a result of their tax cuts. The people who are going to get hurt the worst are the people who put the Republicans into power. So one could argue they’re merely getting what they deserve.

On the other hand, I do care. I care about what these people are doing to the country, both in the short term and especially the long term.

I’ve been around some of these people who don’t give a damn about the working man and woman. Long ago I realized they think the poor and working poor are lazy and deserve their lot. Indeed, many of them are pretty open about it in private. Conversely, they think they deserve everything they have — and more! They earned it. They’re entitled to it. They don’t even give a tip of their hat to the role that good fortune and luck play in it (or, conversely, bad luck).

It’s one of the reasons they’ve been so complicit with President Trump. While they wouldn’t be so crass to use Mr. Trump’s schoolyard vocabulary, they do in fact agree with him that there are winners and losers. In their minds, most people are losers. And they deserve what they get. The people with political power, of course, are winners in their minds. As are the rich who lavish them with donations, perks, inside information and other advantages that never come the way of the working person.

Meanwhile, the Republicans are stacking the deck further in favor of themselves and their rich cronies. Now that they have complete power, they intend to grab all they can.

And you can be sure they’re not finished. Just watch. They will claim that we have to cut back on Social Security and Medicare because of the huge deficits. Naturally, they won’t mention the role they played in inflating the deficit. It will always be someone else’s fault.

These people just don’t care. They don’t. They have plenty, and they’re not in any danger of not having plenty. Each man and woman for him and herself. That’s their motto.

I have no idea when the reaction will come, when those being screwed by these people will rise up and exercise the power they have at the ballot box. I don’t even know if that day will come in my lifetime.

If it doesn’t, then I suppose we’ll simply get what we deserve. Maybe they’re right: maybe we are losers.

But, of course, no one’s a loser. Or winner. That’s the language of people who are trying to justify their unjust and uncaring policies and actions. It’s the language of the entitled class that doesn’t care about anyone else.

The more appropriate term is people. Children. Women. Men. People.

When people care about each other, the Seventh Generation and the future of the earth and its inhabitants, this world can be a glorious place.

But you have to care.


You Get To Keep Your Stupid Red Hat Though

Josh Brown recently tweeted:

If they get this through, in its current form, will mark the complete and final takeover of America by corporations. You get to keep your stupid red hat though.

They’re getting it through. Not in its original form, but pretty close. Close enough to represent “the complete and final takeover by America by corporations.” But at least everyone gets to keep their stupid red hats.

The new tax law will result in a massive transfer of wealth to corporations and their shareholders from ordinary citizens and their progeny. If you’re fortunate enough to own financial assets, you may be one of the winners (provided you don’t live in a Blue State and you’re wealthy enough not to have earned income). If you don’t own a substantial amount of financial assets, then you and your kids are screwed. Especially your kids. And their kids. Any temporary benefits working and middle class people will realize from these cuts are likely to be offset by higher interest rates, a weaker dollar, future cuts to the Social Security and Medicare programs, and escalating health care and education expenses.

The national deficit will balloon as the result of this new law, which means your descendants will be inheriting an even larger debt burden, further eroding their standard of living. I guess people think we can simply add this to our tab and never have to pay it off. Or perhaps they’re just not thinking.

America’s tab of public and consumer debt already tops $40 trillion, including:

  • $20.5 trillion of federal government debt;
  • $14.6 trillion of residential mortgage debt;
  • $1.5 trillion of student debt;
  • $1.2 trillion of state government debt;
  • $1.1 trillion of auto loan debt;
  • $1.0 trillion of credit card debt; and
  • a staggering amount of unquantified debt represented by unfunded public pensions and entitlement programs (the present value of unfunded entitlements has been estimated to be $49 trillion).

The outgoing Fed chair, Janet Yellen recently said, “I would simply say that I am very worried about the sustainability of the U.S. debt trajectory. It’s the type of thing that should keep people awake at night.”

Up at night?! No one in this White House and none of the Republicans in Congress seems to be losing any sleep. To the contrary, they’re not troubled in the least; in fact, they’re content to make the situation worse, just so they can give more money to their wealthy donors (and themselves and their own families).

This decision to give huge tax cuts to corporations that are already highly profitable, awash in cash and valued at high multiples by the market, and to massively cut wealthy people’s taxes, convinces me more than ever that few people care about the future. Apparently, today is all that matters. Our children and grandchildren are the forgotten ones in all of this. Such parental narcissism is, quite frankly, disgusting. So much for being concerned about the seventh generation.

Former Reagan budget director David Stockman hit the nail on the head:

At the end of the day, the GOP tax bill boils down to borrowing more than $1 trillion from the American public in order to pay higher dividends to wealthy private stockholders.

Another stalwart Republican, Steve Schmidt, who managed the 2008 presidential campaign for his party, wrote:

This tax bill demonstrates, once again, the total collapse of all and any rigor around the policy making process in the GOP congress. It is built on a foundation of lies. It adds more than a trillion to the debt. No real conservative should vote for this.

A foundation of lies indeed. Pennsylvania Avenue and the streets around the Republican controlled Congress are rivers of lies these days. So much for draining the swamp. It’s worse than ever. The only thing that still surprises me is the number of people who are willing to believe the lies, including those who will be most hurt by the lies. Gullibility seem to know no bounds.

Back to Josh Brown, a Wall Street type (financial adviser and CNBC regular) whom I quoted at the outset. Brown wrote the following the morning after the Senate passed the tax cut bill. As usual, Josh gets it right.

There’s a possibility that last night’s preliminary step toward final legislation will take the number one issue facing America and balloon it into Rubenesque proportions. Economic inequality, which largely drove voters to lose their minds and cotton to candidates like Bernie Sanders and Trump, could explode over the next few years as a result of fiscal stimulus targeted almost precisely at the part of the economy that doesn’t need it. The fact that the people who do need the most help could end up paying for that is perhaps the sickest, most cruelly ironic joke that’s ever been told.

Unless you believe in magic, which I don’t. And remember, I’m speaking here against my own immediate self-interest. I’m not stupid and this isn’t virtue signaling – I genuinely believe the economy is better when participation is broader and not as concentrated as it’s been. Obama attempted to solve this but he failed. Trump is not even trying. He’d sign anything brought to his desk at this point, just to say he did it.

Indeed, this bill will exacerbate wealth inequity, further hurting the very people who have placed their hopes in Mr. Trump. It is, as Josh writes, “perhaps the sickest, most cruelly ironic joke that’s ever been told.”

And now watch: I guarantee you the Republicans will be coming for your Social Security and Medicare.

The events surrounding this new bill further convince me of the power of propaganda (as if I didn’t know). And of the dangers of slick charlatans and demagogues and people’s willingness to embrace them if conditions are right. And of the dangers of willful ignorance.

But it is what it is. At least I get to keep my Pittsburgh Pirates cap. And I don’t have to wear one of those stupid red hats.

Please Don’t Tell Me You Know How I Feel

I don’t want to hear it. I don’t want to hear anyone say they “know how I feel.” You don’t.

I know you mean well, but how I feel has nothing to do with you. By saying you know how I feel, you’re redirecting the focus to yourself. It’s called conversational narcissism.

If you’re suffering — battling cancer, grieving over the loss of a loved one, going through a traumatic divorce or whatever — I don’t know how you feel. I can assume it’s really bad, but you don’t need anyone telling you that, anymore than you need someone telling you something you’ll never believe (that they know how you feel).

It’s not that I’m good at responding to people in crisis. I’m not. Usually, I don’t know what to say. Sometimes, it seems the best I can do is not say something I know is false or, possibly, counterproductive, such as “I know how you feel.”

It’s hard, because sometimes I think I do know how they feel. And perhaps I do, to an extent. But not fully. Each person, and each person’s experience, are unique, despite humanity’s commonalities. Respecting that uniqueness is important, especially when the other person is suffering.

So sometimes all I can say is, “I’m sorry.” Or “I’m sorry for what you’re going through.”

I can say more, but only if I truly mean it. I can say, “Please feel free to call me if there is anything I can do.” But, again, only if I mean it.

And sometimes, I think the best we can do is what I saw so many people do when I was growing up in rural south-central Pennsylvania. Sometimes, dropping off a fresh baked pie or casserole is enough. More than enough.

Oh, there’s one last thing, Vera — something you’re good at but, if you’re like many people, may lose the knack for as you grow up. You can hug the person. Or hold their hands.

Sometimes words just get in the way.

What Makes a House Perfect?

Your parents signed a contract this week to buy a house, Vera. It’s in their targeted neighborhood and school district. Finding a suitable house was a long process. Inventory in that desirable area of Indianapolis hasn’t been high, but demand has been very strong. Often, houses sold within hours or a day or two. It was common for multiple bids to be received by sellers, triggering bidding wars. I think your parents were outbid on at least one occasion; perhaps more. But, finally, they landed one.

I haven’t seen the house yet, other than the photos on the realtor’s website. It looks nice. I think you’ll like it there. I’m pleased because it isn’t far from the Monon, which means we’ll be able to bike to your place.

As with almost all houses in this part of town, the house was built some time ago (i.e., it has some age, just like me). I’m sure there will be some things that need updating. Or perhaps some renovations will be in the works. Age has certain advantages when it comes to houses (construction quality usually was better back then), but certain disadvantages (certain materials weren’t available then). The bottom line is, the house probably will be very suitable and nice, but not perfect. That’s where you come into the picture. You can help make it perfect.

A perfect house, you see, has nothing to do with the quality of construction or type of materials used. But it has everything to do with what’s inside.

Inside a perfect house you’ll find a loving family. One whose members nurture, challenge and support each other. Who are there for each other no matter what. Who are kind and forgiving. Who laugh and celebrate together. Who cry and grieve together. Who are honest with each other. Indeed, inside a perfect house you will find the world as it could be.

You are one lucky little girl. You have wonderful parents. And you have your health and a bright future.

You and your parents already have a perfect house. But you’ll be moving soon. It’s not far from where you currently live. You’ll be leaving your old house behind. But you’ll be taking with you all the things that make your old house perfect and will make your new house just as perfect.

I can’t wait to visit.

What Are You O.K. With?

One thing I appreciated about the candidacy of Roy Moore, who ran for one of Alabama’s U.S. Senate seats and narrowly lost yesterday, is that it brought bigotry into the open. Mr. Moore thinks we’d be better off if we did away with all the amendments to the U.S. Constitution after the 10th amendment (i.e., do away with all except the Bill of Rights). Those amendments that Mr. Moore would ditch include ones that abolished slavery and gave women the right to vote. These comments weren’t merely a slip of the tongue on the part of Mr. Moore; they were entirely consistent with other comments he’s made over the years and during the campaign. Clearly, Mr. Moore would feel more comfortable living in pre-Civil War Alabama. Regardless of what I think about his views, I’m glad Mr. Moore shared so openly.

Of course, they’re not only his views. Of the 1,334,397 people who voted in Alabama yesterday, 650,436 (48.4 percent) voted for Mr. Moore. They thought he was O.K.; they wanted him to represent them in Congress. They not only thought his views were O.K., but also thought his character was acceptable. Mind you, in this 30s, Mr. Moore preyed on teenage girls. Yet he was only 0.75 percentage points away from winning a seat in Congress.

I’m glad for this particular election because it helps us recognize that such views are out there. Often, they’re kept undercover for fear of social ostracism. But they’ve been coming out in the open more lately, in part due to people like Mr. Moore and President Trump. But these men didn’t create the ideas; they’re merely legitimizing them and emboldening those who hold them.

It’s easy for those of us who have a comfortable middle-class life to dismiss or ignore the threats to equality and justice. It’s tempting to think those ideas have been discredited and the battle for justice and equality is over. But it isn’t. In fact, it will never be over.

Some people find support for such views in holy books, principally, the Christian Bible and the Koran. Others find it in tradition. Others find it in a longing for a highly structured society that would yield its principal economic benefits to them and “their kind of people.”

Regardless of motivation, these ideas are a force to be reckoned with. If left unchallenged, they will ascend in power once again. And whether they ascend or not, they are stronger today than most of us privileged white, urban people recognize or care to admit. Much work remains, that is, if equality and justice are guiding principles in your life.

The questions each of us answers, either overtly or passively through inaction, are:

  • Should a person’s future be defined, in whole or in part, by their sex, skin color or ancestry?
  • What are we O.K. with?

You may think the answer to the first question is obvious. You just have to remember that there are others who think the answer is obvious, too, but their answer is different from yours.

History tells us that humanity wasn’t given a playbook to follow. We create the rules for the society we envision and think is best for our particular situation and the values we embrace. It always comes down to, Who is writing the rules?

Quite a few Americans wanted to bestow Mr. Moore with the power to write rules. The question is, Are the rest of us O.K. with that? And, if not, what are we going to do about it?

The Nonprofit Scam

It’s that time of year again, when nonprofits are beating down doors for end-of-year donations. Some time ago I explained why I no longer contribute to most nonprofits. But, of course, I don’t care if others do. It’s their money; they can do with it as they please. It’s just that I no longer desire to subsidize the gross waste, redundancy, extravagance and inefficiency (including lack of results) that permeate the nonprofit world. That said, I’m sure there are some nonprofits that are doing wonderful work and are good stewards of their donors’ contributions (so if you’re working for such a nonprofit, please don’t get upset by this post). It’s just that it might take some work to confirm whom they are.

My current position was triggered by my time working for a nonprofit college. But the seeds of it were present long before that. I had earlier served on an executive volunteer board for the United Way. That was my first exposure to the extreme redundancies in the system. And it was then I first learned of the number of nonprofits that exist mainly (if not solely) to provide employment and income to their founders or executives (or faculty).

But back to colleges for a second. Today the Chronicle of Higher Education ran a story titled Private Colleges Had 58 Millionaire Presidents in 2015. The president of Wake Forest University received more than $4 million of compensation (which, to be fair, was overshadowed by the $9.6 million showered on the president of Savannah College of Art and Design in 2014). You can find all the presidents’ compensation here if you’re interested.

Colleges have had a relatively easy time raising money because many of their alumni have a strong sentimental attachment to their schools, which, of course, if a good thing for Mr. Hatch (president of Wake Forest) and the other millionaires leading our nation’s colleges and universities. Meanwhile, of course, our nations’ students and former students are carrying nearly $1.5 trillion of student debt. What a system we have.

I used to tell my students that, to understand the dynamics of a particular situation, they should follow the money. Most of the time, it’s that simple.

Fortunately for many nonprofits, their donors aren’t all that concerned where the money is going. But if they ever get concerned, watch out. The nonprofit world will be turned upside down.

Soul in the Game

I was surprised recently to read these words written by scholar and author Nassim Taleb (and former equities trader). Nassim is not fond of liberals. He’s not in the conservatives’ camp either. He’s probably more libertarian than conservative. But he’s less harsh on conservatives. He holds a special disdain for liberals, especially if they’re academics or economists. Or do-gooders who want to tell everyone else how to live. So you can image my surprise when I read his assessment of Ralph Nadar, a liberal by anyone’s standards. Nassim wrote:

I developed a friendship over the past few years with the activist Ralph Nadar … . Aside from an astonishing amount of personal courage and total indifference toward smear campaigns, he exhibited absolutely no divorce between what he preaches and his lifestyle, none. Just like saints who have soul in their game. The man is a secular saint.

Earlier in his writing, Taleb had commented about courage, sacrifice and heroism. He referred to a “new form of courage, that of the Socratic Plato.” He noted the privilege of “standing up for one’s values, … the highest form of honor.” He added:

No one has had more prestige in history than two thinkers who overtly and defiantly sacrificed their lives for their ideas–two Eastern Mediterraneans; one Greek and one Semite.

People who had soul in the game. People who exhibited “absolutely no divorce” between what they preached and how they lived.

Perhaps most of us don’t have it in us to be heroes. Or to be people who exhibit no divorce between what we preach and our lifestyle. I know I don’t. But it’s nice there have been — there are — such people. They inspire the rest of us. They give us hope. They confirm that words matter. That actions matter. That lives matter. That we matter.