2011 State Of The Union Show

After listening to NPR’s commentary of what I saw, I’m figuring they saw a different show. Their highlights were a spending freeze, targeted ‘investments,’ and Obama calling for civility.

What really happened is there was no call for civility. NPR is still carrying the water on the notion that calling for civility will silence Obama’s critics. If you can find anything relevant to NPR’s notion of civility in the transcript, please let me know.

Here’s Obama:

It’s no secret that those of us here tonight have had our differences over the last two years. The debates have been contentious; we have fought fiercely for our beliefs. And that’s a good thing. That’s what a robust democracy demands. That’s what helps set us apart as a nation.

. . . .

We are part of the American family. We believe that in a country where every race and faith and point of view can be found, we are still bound together as one people; that we share common hopes and a common creed; that the dreams of a little girl in Tucson are not so different than those of our own children, and that they all deserve the chance to be fulfilled. That, too, is what sets us apart as a nation.

. . . .

What comes of this moment will be determined not by whether we can sit together tonight, but whether we can work together tomorrow.

One of the most telling moments in his address to the nation was his cavalier mention of his health care plan and the rejection of the results of the mid-term election.

Now, I’ve heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.

Put simply, the flaw in the legislation is the legislation itself. From who drew it up (zero republicans) to how it was railroaded into law. The alternative will accomplish his goals of the pre-existing conditions, with the added bonus of actually lowering costs. Something Obama said he would not sign if it didn’t lower costs. If true to his word, he should be leading the charge to repeal and replace.

The notion of a freeze sounds good except for one major problem. He is talking about freezing spending at the current level, which is 4 times higher than just two years ago. To freeze spending after raising the level of it, as a percent of GDP, through all the TARP, stimulus, and bailout spending is not saving anything but the administration’s agenda of a huge and intrusive government, bought and borrowed in the last two years.

The American people were snookered into thinking that all that spending would be a temporary booster shot. Not a permanent growth in spending and government.

The president did speak of cutting back on the small stuff, the discretionary spending. Discretionary spending makes up about 12% of total spending. This was followed by more spending. We are not saving or cutting anything if we turn around and spend an amount equal to or greater than what was cut.

The speech wasn’t without a little comedy. Like when he said this . . .

And because the American people deserve to know that special interests aren’t larding up legislation with pet projects, both parties in Congress should know this: If a bill comes to my desk with earmarks inside, I will veto it. I will veto it. (Applause.)

I know he has said that before. Right before he signed bills with thousands of earmarks in them. So we are left to ask. Was he lying then and is he telling the truth now? And, do you still trust him to do what he says.

Another comedic moment came when speaking to the issue of cutting bureacracy. Oddly, it would have also been the perfect opportunity to speak to the issue of the intrusiveness of government, like the food police. But he passed on that.

Then there’s my favorite example: The Interior Department is in charge of salmon while they’re in fresh water, but the Commerce Department handles them when they’re in saltwater. (Laughter.) I hear it gets even more complicated once they’re smoked. (Laughter and applause.)

He made only a cursory mention of the need to cut spending in Medicare and Medicaid “which are the single biggest contributor to our long-term deficit.” He got that right. Social Security runs third. Fact is, there won’t be any solution to our financial woes without making these three entitlement programs financially sound by facing the reality that the benefits must be cut back to a sustainable level. As our population ages, the demands on these three will only increase and no amount of taxes increases will fix that. Meanwhile, we are to believe that cutting what amounts to petty cash compared to the total of unfunded liabilities is all that the president has to do. We have to have results, not just a committment to work on it. We know how true the president is to his commitments. They amount to merely ‘words, just words.’

Obama Supporters On Killing Spree

‘What’ you say? And in Washington D.C.’s suburb. How could this happen and not be reported? That’s a trick question. It assumes there is no political bias to news reporting. But to illustrate absurdity by being absurd, check this out.

Prince George’s County in Maryland borders Washington, DC. Democrats dominate the county and 88.87% of the residents voted for Obama. What you did not hear in the news was that there were 13 shootings in the first 13 days of this year in PG County. Why not? While the press is eager to paint Jared Loughner, the Arizona gunman, as the face of conservative talk radio and associate him to Republicans they completely ignored the murder spree in an area dominated by Democrats. Why isn’t the press painting the picture of this overwhelmingly Democratic county as the face of today’s Democrat – violent and out of control? Can we assume that if 90% of the people vote Democrat that there is the highest probability that those responsible for this killing spree are Obama supporters? What would the mainstream media say if this occurred in a county that was overwhelmingly Republican? They would say it was fueled by Republican hate. I guess the murder mess in a Democratic stronghold that borders our Nation’s Capital needs to be ignored.

h/t Mike Piccione, Editor of In The Crosshairs

Obama Called It Terrorism

The suicide bombing in a Moscow airport is believed to have been carried out by Christian Islamic militants. Death toll is at 35 and over 100 are wounded.

In Washington, President Barack Obama condemned the “outrageous act of terrorism” and offered any assistance.

I applaud President Obama for his correct use of the T-word. It was not an outrageous man-made disaster. That was a terrorist attack. Now if he will get DHS Secretary Janet (Big Sis) Napolitano on board, then everyone will be on the same page.

Link: Bombing at Moscow airport called terrorist attack

Your Bank Unmasked

Sometimes things just come along in a made-to-order fashion. Take for example PNJ columnist Mark O’Brien’s column entitled Florida Looking For New Money. Mark references this story where, responding to Gov. Rick Scott’s appeal for ideas to raise revenue, Rep. Irv Slosberg, D-Boca Raton introduced HB 313. A bill that would allow advertising space to be sold and displayed on state transportation property. Like ‘Geigo Turnpike’ or maybe even ‘Philly’s Cheesesteaks Highway.’

Having just gone through a vigirous campaing season, there is one thing still fresh in my mind when it comes to raising revenue in order to close Florida’s $3.6 Billion budget gap. It just escapes me why an answer so simple continues to be ignored by the ruling class. I contend, they’re looking in the wrong places.

Economist and former Florida independent gubernatorial candidate Dr. Farid Khavari shines the light on the banking system’s dirty little secret. Which is how banks can, and do, make money hand over fist on their depositors’ hard-earned money.

After you read how they do it, consider that we (the state of Florida and Florida’s taxpayers) can take advantage of this very same system to benefit the state and its residents, instead of Wall Street. It is done by reducing cost. Simply raising money by selling advertising or liquidating real estate does not have the long-term stimulus that reducing costs on everyone can have. All those who do not want to reduce your cost of living please raise your hand.

WHY ARE THE BANKS REQUIRING MINIMUM DEPOSITS?

Farid A. Khavari (Ph.D.) Economist

Certainly, give banks at least one big credit—they always find creative ways to extract money from their clients. We know and have heard a lot about these banks being bailed out, officers or high end corporate individuals receiving hefty bonuses, and of course the fees! Now, they are out on the hunt to get us again! Banks are now requiring minimum deposit amount, and/or accomplishing certain performances in terms of debit card purchases, having a CD or a savings account with them, as conditions for not paying fees! In clear terms: once a bank client subscribes to a package, the bank also offers to wave fees on certain services, which come with the particular package if they manage to meet the requirements of that particular package. In the past, these would have been free with no requirements for certain performances!

These requirements not only presents the epitome of all greed, but tops all other abusive practices—charging fees if a bank client account falls below the average minimum deposit requirement. This is absurd! In other words, banks want your money, but with conditions attached. If you fail to follow their specific requirements, then you would be required to pay penalties for utilizing your hard-earned money. It would be a dream if everyday businesses had that kind of leverage over their customers, but they don’t. The banks though had that leverage.

Granted, not all accounts the banks control are loaded with high deposit amounts. Many of them are in more turmoil that a bank needs. Which business in the world can claim to enjoy anything different—some accounts are without doubt clear headaches, but the overwhelming number of them are profitable, otherwise no business could last for too long. The same applies to the banks.

Surprising though, is that the majority of people that fall in the traps of banks. The banks justify the requirement for the minimum deposit due to the rising cost of entertaining the accounts, or the rising cost in general!

First of all, deposits are the lifeblood of banks, which makes it possible for them to come into existence and exist; without deposits, it is obvious no bank could exist. However, what make the banks prosper are these deposits, of which are lent out to borrowers! This lays the critical issue that not too many people are aware of dealing with banks. In most cases people think that banks exist from the difference between the amounts of interest collected through lending and paid out for the borrowed monies! This isn’t necessarily true. First of all, a bank pays non-significant amount of interest on a saving account much less on the deposits in a checking account. On the other hand, even if a bank pays interest on a deposit, they make at least over forty-five times more on interest than they payout on that amount! Here is an explanation. For example, when a bank receives a deposit of say, $100, it can and usually does lend out up to ten times by employing the “fractional reserve banking regulation,” which is legal, and is utilized by every bank in the United States. However, the banks pay only the interest on the $100, whereas collect interest on $1,000. It must be noted that the banks pay a much lower interest rate on deposits, presently, below 1% (one percent), but collects 4.5% on the $1,000.

($100 X 1% = $1 the bank pays, but collects, $1,000 X 4.50% = $45)

Now, let’s see how the minimum deposit requirement of $15,000 and monthly fee of $25 plays out for the bank and the clients:

According to this policy being increasingly utilized by banks, a $25 fee would be imposed, should the average monthly balance drop only one penny below $15,000. This apparently innocent measure would create a cash bonanza for the bank as the following calculation demonstrates.

Assume you keep an average of $15,000 in your account as demanded by your bank to avoid having to pay $25 fee. Using the “fractional reserve banking rules,” the bank would be lending out the amount of $15,000 ten times, which would be $150,000 ($15,000 X 10 times = $150,000).  Charging an interest rate of only 4.50%, which is being charged presently for mortgages, the bank would be making a whopping $6,750 interest annually, or, every month $562.50 on your money! Under this scheme the banks would be making over 45% (forty-five percent) interest on your $15,000 average balance in your account without even giving you a cent.

Do you have to worry about the high operation cost of the banks when they can make that kind of money with interest on your interest free deposit, yet penalizing you if you fail to assure them that amount?! Think about it!

We invite those banks, which do not use these kinds of abusive tactics and methods, to send us their names and contact information to make available to our readers.

Farid A. Khavari is author of nine books dealing with economics, banking, healthcare, energy, oil, environment, currency, and cost. For more information, please visit www.zerocosteconomy.com.

Copyright @ 2011 by Farid A. Khavari

S.O.T.U Preview

President Obama gives this preview to his State of the Union speech next Tuesday. With comment.

Wait a sec. You said ‘I won’t rest until every American who? wants a job can find one.” That was two years ago.

So the SOTU is just going to be more of the same. That’s disappointing.

Private sector jobs is what the economy needs. Not to be confused with union jobs. Unions can grow, or not, on their own. And tell the American people that the government has no interest or responsibility to help labor unions grow.

Some free advice Mr. President. Eliminate the FUD FACTOR, or you’ll be able to use the same speech next year.

Keith Olbermann Off The Air

Well, at least as far as pMSNBC is concerned. Friday’s show was his last. This makes half of a Libectomy for the cable network.

A statement from NBC Universal revealed the move late Friday.

“MSNBC and Keith Olbermann have ended their contract,” it read. “The last broadcast of ‘Countdown with Keith Olbermann’ will be this evening. MSNBC thanks Keith for his integral role in MSNBC’s success and we wish him well in his future endeavors.”

It is apparent how much MSNBC appreciates Olbermanns role in the network’s success. Dang, another American in the unemployment line.

Here’s an idea. The Ring of Fire can’t get enough of you Keith. Maybe you could get a job there? Glad I could be of some help.

I’m not gloating. Am I gloating?

Link: Keith Olbermann leaving MSNBC

Hu News That China Won’t Hear

The talks between Chinese President Hu Jintao and President Obama had some give and take on the economic front. The ‘human rights’ front was another issue. Hu pretty much excused his human rights atrocities as nothing more than growing pains.

Hu said China is a developing country with an enormous population facing challenges in economic and social developments. He said human rights must be viewed under those circumstances.

Pains like his communist government can not handle, manage, or feed its huge population. So some executions here, forced abortions and sterilization there, and other population control measures, imprisoning political dissidents and Nobel Peace Prize winners is just something they have to do while working to, get this, ‘improve the lives of our people and promote democracy and rule of law.’ {emphasis added}

At the risk of jumping the gun on this one, The Lunch Counter is holding back awarding President Hu Jintao the Most Ridiculous Item Of The Day award. The clincher will be when it is learned that no one in China will hear or see those words. You can bet the ranch that Hu’s statement was for U.S. consumption only. It was the bone President Obama wanted to make the visit look ‘productive.’

Rep. Steve Cohen Scraps Civility

Rep. Steve Cohen (D-Tenn) likened the GOP to Nazis today in the floor debate over repealing the government-run Democrat Health Care plan.

“They don’t like the truth so they summarily dismiss it,” said Cohen, who is Jewish. “They say it’s a government takeover of health care, a big lie just like [Nazi propagandist Joseph] Goebbels. You say it enough, you repeat the lie, you repeat the lie, you repeat the lie, and eventually, people believe it. Like blood libel. That’s the same kind of thing.”

Funny he would draw such a comparison. A student of history would note that Hitler was popular in Germany too before he became the monster that he did. He began his solidification of power by nationalizing health care.

I support his ignoring his Democrat soul mates’ call for ‘civility.’ You go Steve! The call for civility is nothing more than the hope that opposition to practically everything this administration has done will go away. It is another censor like ‘political correctness.’ Ain’t gonna happen.

Link: Dem Rep. Steve Cohen Likens GOP Health Care Attacks to Nazi Germany