Category Archives: Politics

How to Win an Election

“Raise more money than your opponents.”  Sadly, this strategy more often than not, leads to success in politics.  It also corrupts our political system and leaves us far short of our desire to have “a government of the people, by the people, and for the people.”

Once the money has been raised (and all the promises made), how is that money being spent by those running for office?  I didn’t have to spend a lot of time using Google to confirm my suspicion that the biggest expenditures are for “media buys,” somewhere between 55-75% depending upon the year and the political office being sought.

Political campaigns are a huge source of revenue for the major networks and their local affiliates.  It’s billions of dollars, and the related expenses are negligible.  It has to be the most profitable segment of their business.  Recognizing this, I wouldn’t expect to see much effort from the Media to advocate any changes.

But change is coming for the following reasons:

1.    Social Media is a powerful tool, which can be used to reach voters.  Television ads may still be effective with older voters but the end is near.

2.    The cost of using Social Media is negligible.  Those running for office will not have to sell their soul to the highest bidder to get their name and message “out there.” “Big money” will no longer be writing the script.  That should be appealing to every voter.

Every day we see how technology and Social Media is changing the way we live, how services and products are delivered to consumers, and how we interact with others.  In my next post I will discuss the coming revolutions in our political system that may bring us closer to the democracy our Founding Fathers envisioned.


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Next week, after the mid-term elections, we have the unofficial start of the 2016 Presidential Race (although numerous Presidential hopefuls have already begun “testing the waters,” traveling the country and watching the polls very closely).  For me, it’s a great time to be writing a blog because there will be no shortage of “subject matter” for the next 24 months.

Thanks to Hillary Clinton’s, big gaffe during her interview with Charlie Rose, “businesses do not create jobs,”  we are off to a great start.  The entire race looks a lot like a NASCAR race.  All the candidates are jockeying for the “poll position” that will give them an early lead.  Just as with the racing cars, it becomes a race of attrition, with the winner being in many ways, the last man or woman standing at the end.  NASCAR drivers have pit crews to get them back in the race when they have a malfunction or they need new tires, the politicians have their “spin control doctors” to get them back in the race when they make their inevitable gaffes.

Sometimes the damage from a crash or an engine malfunction is so great, that even the best pit crews, cannot get the driver back in the race.  It’s no different with politicians.  In the last presidential race Governor Perry, during a campaign debate, could only remember 2 of the 3 departments of the federal government he wanted to close down.  With that one gaffe, he was out, but now he’s back for this race wearing glasses, hoping to look more intelligent.  Sarah Palin was a virtual “gaffe fountain” which earned her my “Jerry Springer” award.

George W. Bush made so many gaffes he engendered the term “Bushisms.”  Joe Biden stated that the middle class had been “buried over the last 4 years.”  The problem was, this declaration was made at the end of the Obama administration’s first 4 years in office.  Al Gore made the ludicrous claim that he invented the “internet.”  But he recovered nicely with a simple power point presentation that won him a Nobel Prize.

Obviously, politicians from both parties continue to give us “well documented” evidence that we are not being led by our “best and brightest.”  Watching Hillary Clinton’s pit crew try to explain what Hillary was actually saying has been entertaining but it is also sad.  Her comment was so offensive that I have serious doubts about her completing very many laps in the coming race.  Even China and Russia came to the realization over the past century that businesses are more efficient at creating jobs than the government.

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“Where Have All The Flowers Gone”

For those of you too young to remember, this is the title of a song written in 1955 by Pete Seeger and made popular by the “Kingston Trio” and “Peter, Paul, and Mary” in the 60’s.  The question raised several times in the lyrics is: “When will they ever learn?”  (If you are not familiar with the song, I suggest you go to You-Tube and watch the music video.)

Why is all this relevant?  After all, this is not the 60’s.  But in some ways the situation in the Middle East today is not all that different than it was in Southeast Asia in the 60’s. (You know the history.)  We had to stop the plague of Communism before it could spread all the way south to Australia enslaving millions along the way.  It was called the “domino theory” whereby one nation after another would fall. They had to be stopped!

Now here is where I see similarities between the 60’s in Vietnam and the Middle East today.  In Vietnam it became obvious that most Vietnamese did not want us there.  The North Vietnamese wanted to reunify their country and the Viet Cong in South Vietnam wanted the Americans out.  Realizing just how much we were despised we came up with a program to “win the hearts and minds” of the Vietnamese.  Advisors known as the “Green Berets” were trained to work with the Vietnamese and to give them the ability to defeat the communist.  Billions (in todays dollars) were spent training the South Vietnamese and equipping them with the best weapons and lots of air support.  Yet almost 10 years later we beat a hasty retreat from Vietnam as the Viet Cong closed in on the capital, Saigon.  57,000 Americans lost their lives and many more were maimed for life.  In addition, several hundred thousand Vietnamese died.

Are you starting to see any similarities?  I took part in only one “joint operation” with the South Vietnamese and it was very evident that they did not have the same level of motivation as the enemy, why would they.  Their political leaders and the U.S. were asking them to fight against Vietnamese. And worse yet, what if they lost and the Viet Cong won.  Well that is exactly what happened and they paid the price after the Americans left.

Now to the Middle East 50 years later–after 10 years of training and spending billions to build an effective Iraqi Army they seem to be totally incapable of accomplishing anything against ISIS (a group that would make Hitler proud).  Our current Chairman of the Joint Chiefs claimed this past week, that the Iraqi army may need American advisors on the ground “to be all they can be!”  I wish he had been old to enough to experience how that strategy worked out in Vietnam.  He might have a different opinion.

So—“will we ever learn?”  There is no American solution to the problems in the Muslim world.  That is a very sad fact but it is still the truth.   And the sooner we acknowledge the truth and change our strategy, the better off we will be.

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When Did We Lose Our Moral Compass?

I would love to have feedback on the words I am about to write. Our country has never had totally pure motives when dealing with other countries or even our own citizens. However, I have always been able to rationalize our actions by telling myself, at least our “code of morality” is no worse than that of any other country, but I am starting to have serious doubts and it’s very troubling.

You are no doubt familiar with the drone attack, ordered by President Obama, to take out Anwar al-Awlaki in Yemen. Al-Awlaki was an American citizen who had moved to Yemen and was advocating terrorist attacks on the U.S. and U.S. citizens. Being a threat to America, his voice was silenced once and for all with the drone attack.

When this attack was reported in the news, the debate began over whether or not the President had the Constitutional authority to order the execution of a U.S. citizen without any “due process” as required by law. That debate continues but it is likely that nothing will come of it. I am not a lawyer and feel unqualified to question the legality of the President’s action against a self-described enemy of this country. But debating the legality of this attack is missing a bigger issue regarding what our government did in Yemen.

Al-Awlaki’s 16 year-old son, an American citizen, who had moved from Denver to Yemen to live with his cousins was targeted two weeks later and killed along with four of his relatives while having dinner 250 miles away. Why? Roger Gibbs, former White House Press Secretary, suggested the boy would not have been murdered if he had a more responsible father.

For me, this is not a “constitutional issue” but a “moral issue.” Evidently the President expressed regret about what happened to the son, but no one is being held accountable. You might think that as the world’s only super power we would have the opportunity to show not just our military might, but to also show moral leadership. Unfortunately we seem to be headed in the opposite direction.


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The Growing Wealth Gap

Income inequality and the gap between rich and poor are going to be “hot topics” as we move toward the mid-term elections in November and the discussion will become even more heated in 2016 when we elect our next president.  I believe these are serious issues and we need to find solutions.  Unfortunately, most of the proposed solutions we hear are geared to advance political careers with little thought given to the overall impact on our economy.

But before I speak about solutions I would like to point out what has caused a huge increase in the wealth gap over the past 5 years.  The rich, at their end of the spectrum, have investment capital.  The poor, at the other end, have very little if any investment capital.  With the Stock Market (as measured by the S&P 500) up over 125% during this period, it is obvious why the wealth gap grew dramatically.  However, during the prior 2 years the Market lost 50% of its value, and of course this narrowed the wealth gap.  (A market crash that narrows the wealth gap is not a solution to the problem.)

Capitalism will always favor those who have capital to invest, and unless we come up with a solution that encourages or even demands participation in the capitalist system, the wealth gap will only continue to grow.  I also believe that far too many politicians who claim to be advocates for the poor have an ulterior motive.  They benefit from having a constituency that is dependent on the government for their subsistence and that will always vote to keep them in office.

So how do we go about dramatically increasing participation in the capitalist system, with all the inherent benefits, currently enjoyed by those who have the means to participate?

Believe it or not, government can provide the answer.  Here’s how.  Every employer and employee (roughly 93% of the working age population) would be required to contribute to an investment account run by the government.  This capital would be invested in broadly based, low or no cost, passive index type market portfolios.  Employees would not have control over the investment decisions eliminating all the “emotional” mistakes that have severely damaged many retirement plans.

Wall Street would be against such a program because it would take away their ability to earn fees on what would be a very large pool of capital.  (But perhaps those on Wall Street, who believe they can “beat the market,” would be allowed to participate if they guaranteed that any underperformance would be made up out of their own capital.)   Something tells me there would be few, if any, money managers who would accept such a condition.

The amounts contributed, the allocation to equities relative to participant age etc. etc., would have to be determined but I believe that would not be very difficult.  Basically it would be a program that “enfranchises” most workers, allowing them to participate and benefit from our capitalist system.

A simple idea but it has to be a better way to go than simply redistributing income and/or wealth.

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I am among those who are very troubled by the “not guilty” verdict leaving George Zimmerman unpunished for taking the life of Trayvon Martin. However, what troubles me is the “laws” in Florida that gave George Zimmerman the right to carry a concealed weapon which he used to murder Trayvon Martin.

Laws define what is legal or illegal in our country. But the word “legal” is not a synonym for the word “ethical” or the word “moral.”  Those who made the laws governing the outcome of this case must share some of the guilt for this murder.

Throughout history we have had laws that condone unethical and immoral behavior to the detriment of many innocent people.  In our short history we have had many laws discriminating against innocent individuals based on their gender, race, sexual orientation and economic standing. None of these laws would today be considered ethical or moral rules for society. Of course “immoral and unethical laws” are not the sole province of our country. Throughout history we see a plethora of unjust laws making it legal to carry out horrendous crimes against innocent victims.

Those with power put laws in place and they are used to exploit those with little or no power. Those committing immoral and unethical crimes always defend their actions by stating that they have done nothing illegal. Apparently they have no conscience. But I am hopeful there is a “higher court” somewhere that will hold George Zimmerman accountable.


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Sequester III

My only experience with the Government budgeting process was my last year in the Marine Corps.  On my return to the U.S., I was stationed in Barstow, California and put in command of the NCO School and the Rifle Range.  When it came time to submit my budget request for the coming year I was given only one requirement by my Commanding Officer; “just make certain your budget request exceeds the current years budget.”  I didn’t really think about the implications until just recently when the howls of protest about the Sequester and the mandated cuts of 2% across all government departments approached.  A 2% cut would seem reasonable to most people, I think, but when you have grown accustomed to an ever increasing budget, it’s difficult to hit the (-) on the calculator.  All we hear is that a 2% cut threatens our ability to defend our Country even though we spend more on defense than the rest of the worlds’ governments combined.

I am not an expert regarding the Defense Budget but I have a suggestion as to how the Pentagon might save more than a few dollars of the taxpayers’ money.  The retirement benefits (including medical benefits) are a growing part of the Defense Budget.  Politically it’s easy to gain support for these benefits because these people “laid their lives on the line to defend our country!”  That is true for some military retirees, but how many?  Anyone who has ever been in the Military knows that it is a very small percentage of military personnel who are ever in “harms way.”  The vast majority, have jobs similar to every other government or private sector employee.  My recollection from my Vietnam experience was that it took 7 personnel in the “rear with the gear” (the REMFs) to support one combatant.  And of course a huge number of military personnel were in the U.S. and in other non-combat zones around the world.  In todays high tech military the percentage of military personnel “laying their lives on the line” is smaller than ever.  Even those flying the deadly drones in the Middle East, are based here in the U.S.

In my opinion, our Military should be increasing the care and retirement benefits dramatically for those who have been “in harm’s way,” but for those who have never been shot at, taken “incoming”, flown a plane, or walked through a mine field, they should no longer be allowed to retire with the same benefits as those who have.  Unfortunately, it’s the non-combatants who make all the spending decisions.


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Sequester II

It must give meteorologists satisfaction knowing that their track record forecasting the weather, while not that good, seems to be far better than government economists.  As the stock market continues to move ahead and economic indicators roll in showing the recovery is gaining strength, we are no longer hearing about the coming “bread lines” and the forecasted spike in the unemployment rate.  As I have recently said (well not that recently), maybe government budget cuts are giving businesses and individuals more confidence in the future.

With all this positive news about the economy, Paul Krugman (and his colleagues who continue to call for more government stimulus) must be at a loss for  words.  (That must be particularly difficult for Krugman, who I always think of as the “Jim Cramer” of the Economics profession.)  So far the best they can come up with is; “the news would be even better if we had more spending of the tax payers money.”  They should be celebrating the recovery but my guess is they would be a lot happier if the unemployment rate had spiked to 8.5% and the economy had fallen back into a recession.

As the recovery gains momentum President Obama will be distancing him self from all the dire forecasts, and find a way to take credit for the recovery.  That’s fine with me, “always better to be lucky than good.” Perhaps one day he will realize that “government” does not have all the answers.

As I watch the NBA playoffs, I can’t help but think that the government’s role is analogues to the officials who are there to enforce the rules.  The officials are not there to control the outcome.  Fans would become very frustrated and angry if the officials started dictating strategy to the coaches and players in the belief that they know what is best for the fans.  Our government also has a set of rules which they are supposed to follow, it’s called The Constitution and when politicians begin to bend the rules because “they know better” our democracy is in trouble.


Note for Advisors:  Mark Hebner, one of the early advisors to use DFA, is building a web based investment library.  He is searching for Matrix books for the years prior to 1999 and any investment books written by advisors.  The entire library will be accessible to the public.  If you are interested Mark’s email is  I think it is a great idea.


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Is It Really Your Money?

In Cyprus, perhaps not!  If you have not been following the latest financial saga of the bankrupt Cyprian economy, you should be. Cyprus may be a very small European country but the “rescue plans” for Cyprus being negotiated have serious implications for all of us.

Under the first plan, the government of Cyprus was going to confiscate up to 10% of all the money individuals had in Cyprus banks. Apparently the European Central Bank and the IMF will not loan the government of Cyprus more money until they rob their local banks. They announced the plan at the beginning of a holiday weekend when the banks were closed. No one would have to wear a mask, no one would need to “crack the safe,” they would simply move the private citizens money from the depositors account to the governments account. European central bankers must have been reading about Willie Sutton and took to heart his will known response when asked why he robbed banks for a living. Willie answered: “because that’s where the money is!”

The Cypriots’ Parliament voted the plan down, fearing a revolt from bank depositors who were going to be robbed. Those who crafted the plan quickly ran for cover saying it wasn’t really their idea. The author of the plan must have been that ubiquitous character named “Anonymous.”

If governments are going to take more money from their citizens they should announce their plan in advance so that people can plan accordingly. But this type of raid, on private assets, announced retroactively, is frightening. My friend Adam suggested I write about this and asked me if this sort of thing could happen in the U.S?

Well Adam, it already has. The state government of California raised the income tax rate in November of last year (no surprise there), but the shock was that it is being applied retroactively to January 1 of last year. Conceptually not a lot different than what the government of Cyprus was trying to pull off. When politicians use language such as “giving someone a tax break” it demonstrates that they honestly believe that all assets belong to the government, and they get to decide how much of our hard earned dollars we get to keep.

It’s perverse when you think about it. Governments exist to provide services paid for by taxpayers. If they want more funding they should have to ask taxpayers and not assume they can spend whatever they like. Confiscating “private assets” to pay for excess spending is immoral in a country based on the simple concept of the right to own “private property.” Sometimes I fear our government is moving us slowly away from that basic right.


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The “Market” sure seems to like the forced budget cuts even in the face of the “gloom and dune” scenario painted by our President and his so-called “economic” advisors.  The Market is not always correct as an indicator of future economic growth, but the Market’s record when it comes to forecasting is certainly more reliable than the economists serving our politicians.  Keep in mind that those forecasting the coming economic disaster are the same crowd who failed to see the “Great Recession” coming or the failure of the huge stimulus package that was going to reduce unemployment to less than 6% in Obama’s first term.  They are doing the best they can, but it’s a very difficult task, forecasting the future.

As has been widely reported, the spending cuts are such a small fraction of the total federal budget but even these small cuts seem to be having a positive effect on the economy.  Here in South Florida, as I look around, I realize there is a huge construction boom underway.  I was in L.A. a couple of weeks ago and observed the most new construction projects underway in recent memory.  (I am not talking about all the government funded infrastructure projects such as the “405 modernization” or the Port of Miami Tunnel.)

If in fact the economy begins to grow, it will be fun to listen to the “spin” coming out of the White House trying to explain why the disaster scenario did not materialize, and why they knew all along that the sequester was a positive thing for the economy.  That’s fine with me if it shows politicians that real government reforms regarding spending and taxes can do even more to simulate our economy.  If “spending cuts” turn out to be the juice that boost the economy we may see politicians competing to be known as the biggest “cutter” of spending rather than the biggest “spender” of taxpayer money.  Then again, maybe not, but we can dream!

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