Thursday, March 31, 2011


Sounds Boring - but it's not

I know what people who read this title think (LegerdeWHAAAT???).  This is going to be another story of the financial system and how corrupt it is.  It is going to be boring.  Corruption, yes; boring, no - and here's why:

I stumbled across this post by Omer Rosen.  This, in a nutshell, explains how banks were cheating clients on something called treasury-rate locks.  Now, I am not going to go into how all this works (Omer explains it so much better than I ever could), but I wanted to give folks my reaction to this (please read the post before continuing).

This was something corporate wizards bought into!  This was hedge fund managers and the people running retirement accounts buying these investments!  The banks were duping the financial services industry!  How could any normal person stand a chance against them?!?!  This thought process lead me to another one:  what happened to the days when companies bought their customer's loyalty - giving up short-term gains for a lifetime of profits?  Are there any of those companies still around (and no - I am not going to tell you a list of companies that are good)?  How can we get those days back?

Wizards and dried up wells

Well, let's start with the problem.  From my understanding of the situation*, in the 1990's, incentive structures really began to get more and more huge.  Incentives that were designed to cause top-level management to do what is in the best interest of the company (stock-options, profit sharing, etc.) ended up making management only do what was good for the company short-term (cooking books to inflate shares, taking on long-term high risks for short-term high profits, etc).  This, at least for the short-term, made the company look ridiculously profitable, and made the shareholders and the executives very rich.  It also made for some serious problems later on.  Execs were coming up with all kinds of schemes to make the company barrels of short-term money.  From shifting losses around to other departments (or even companies), giving out insanely risky loans, or insuring things that should never be insured (gambling and those insanely risky loans are just two examples), corporations were doing everything they could to grab as much money as they could while it was still out there to grab.  Eventually, though, everyone on the inside of this knew the well had to dry up.  Then September of 2008 hit.

In that month, all the credit markets froze.  What that means is, the well dried up.  There were massive withdrawals from money market mutual funds (from which most credit flows), and loan defaults were at an all-time high.  Everything financial was put to a halt, and the banks went into panic mode.  All the money grabbing was done.  There was a massive reset hit, and billions of dollars vanished in the blink of an eye.  Obviously there were other factors to this that I will probably discuss in a later post.

You would think that kind of thing would cause corporations to realize their mistakes, adjust their incentive plans, and start doing business differently.  You would think.  But that doesn't seem to be the case.  So, companies are back at business as usual.  Which brings me back around to the original intent of the post: to explore and understand why companies don't value customers and ignore long-term profit potentials.  They do it because their executives get paid better when they do it.  So, how do we fix this?

Education, education, and change

Again, I am not an expert at any of this.  This blog has many topics that have been and have yet to be covered, and I am no where near smart enough (nor do I have the time) to be able to become an expert on all of them.  But, here, again, are some of my thoughts and possible suggestions on this:

1. Education - I know, I already covered this subject, right?  Well, I mean we need to educate shareholders and owners and boards of executives on how to properly structure incentives to achieve long-term goals.  We need to make sure that well-planned, long-term incentives are part of every corporate game-plan to make a fortune - over a long period of time.

2. Education - Wait, what?!?!  You just said that!  This time, we need to educate the public on the math principles behind financial markets, and then how to apply those principles to new situations.  Us, at the lowest levels, could have stopped what was happening if we had understood the principles behind it and said, "I'm not going to buy".  The banks didn't hide how they calculated all of this, they just didn't say that it wasn't an ethical way to calculate these things.

3. Accountability - We need to start holding corporations accountable when they do under-handed stuff like this.  This, for me, is just like stealing.  You would arrest me and throw me in jail if I just came in and took money out of your vault, so why should we let you get away with taking money out of our pockets?

4. Incentives other than money - This is a society change that I never really liked.  We have moved away from doing things because they are the right thing to do and because they need to get done.  We now do things because they make us a lot of money and because they "feel good" (Those things usually cost a lot of money).  People need to realize there are other things than money that we should be worried about.  It used to be your banker was a trusted advisor, a friend, and a pillar of the local community.  They would work hand-in-hand with you to make your money work as hard for you as possible.  They focused on your long-term goals.  They took care of you, and you had no problem paying them for that.  On the big picture side of things, job creation, the country's stability, and infrastructure improvement should all be incentives to corporations as well.

5. People - We need to have the courage to stand up and say there is something wrong when we see something wrong.  We need to be able to tell corporations that act this way that we won't give them our money.  Until that happens, I don't foresee any changes to the current system.  I think businesses will always follow the money (even if it is just short-term).

When we decide to work together, build businesses that don't act like this, educate our people, and take a stand; we could make great things happen.  I hope that someday that will be possible.  Keep reading, folks, and I look forward to hearing from you soon.  Thanks.

*For those that want more reading, check here, here, and here (these are very lengthy and very technical posts).

Defiantly Patriotic

Hatred and a "Church"

Early in March, a supreme court decision came out in favor of the Westboro Baptist Church's (I want to make it clear that the Baptist Church is in no way affiliated with this "church") right to protest funerals, rallies, memorials, and pretty much whatever else they decide they want to.  If I sound unhappy, it's because I am.  Although I agree with the court decision, I cannot support that church.  For those of you who don't know the whole story behind the church, I will give you a summary to get you started.

Founded in 1967 in Topeka, Kansas by Fred Phelps, a civil lawyer known for his angry outbursts and constant harassment, the WBC started gaining media attention in 1992 by protesting a speech by Hillary Clinton during Bill Clinton's presidential campaign.  They really hit the media spotlight when they protested a gay hate crime victim's funeral in 1998.  Since then, they have protested military funerals, gay rallies, national memorials, church services, and on and on.  According to Phelps, between 1991 and 2007, they had participated in 30,000 protests in 34 states.  There have been many more since.  So, why are they protesting?  What is it that they don't like so much?

In a couple of words, not them.  They pretty much hate anyone who isn't them.  They hate gay people.  They hate Jews.  They hate Christians (that don't condemn gays).  They hate Hindus, Islam, the Pope, and they believe that Barack Obama is the Antichrist.  They say that the "scripture doesn't support racism", so at least they don't hate blacks...

This is a group that has perverted the word of the Bible and uses it to spread hatred.  And they have spread hatred.  Of them.  Which leads to my wondering yet again, why are we so easily swayed to react in the exact way that they want us to react?  Their goal is to spread hate, so why is it that we allow them to spread that hate?  I guess I have a strange take on this situation.

Patriotism and individual fixes

As much as I disagree with the message and tactics that the WBC uses, I am right now deployed to protect it.  So, I say let them do it.  I say that we allow them to protest.  I say we don't pay much attention to it (on a news media scale).  On a personal level, we should drown them out.  In ride the Patriot Guard Riders.  These guys follow the WBC and drown out the protests with engine noise and block the WBC from even being seen with American flags.  I am deployed to protect the right of those guys to do that as well (and I do it happily).  I understand that these guys are there with their hate at one of the most personal and awful moments in a person's life.  I don't know how my family would handle something like that.  It's tough, and I can definitely understand the hatred for this group.

Now, what does all of this have to do with patriotism?  I think that, even though this group is far from patriotic, I think the ideal is patriotic.  The fact that this group is allowed to exist - protected by the supreme court and all - is a testament to this country (and hopefully an end to Political Correctness).  I feel liberated by the idea that I can say whatever I believe without fear of retribution.  And you should, too.  This is not something you get in a lot of countries.

There is still the problem of protecting the sentiments of others.  The question keeps being asked, where do the rights of one end and the rights of another begin?  Like there is some line drawn on the floor of life.  I think that the rights of one can overlap the rights of another.  I have the right to write this blog in any manner I choose.  You have the right to not read it if it offends you or if you don't like what it's saying.  So, what about the funerals that are protested, or the churches, or the memorials?  You can't necessarily just leave.  You can't just stop listening.  How do we work that out?  Most would go, "We need laws!  That is just not right!"  I don't think we need laws.  I think that is part of the problem we have today.  We always turn to someone else to fix it.

Activism that is "Defiantly Patriotic"

What we need is activism.  Not activism to make laws, but activism to make the world make more sense.  We need more Patriot Guard Riders.  We need to use the rights that are available to us to turn the tables.  How many are up for going to protest the WBC during their church service?  How many want to show up and protest the protesters?  It seems like a simple solution to me (one of many that could be proposed).  If they can legally do it to me, then I can legally do it to them.  Turn-about's fair play, right?  We need to form ideas, rally around them, and make them happen with minimum government involvement.  "Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has." - Margaret Mead  To me, that quote says it all.  That is patriotism when it comes to America.

In the end, I am not here to put blame on big government, or even tell you that you are wrong if you are a believer in making a law stopping the WBC from protesting at funerals (this topic is just too big and complicated for there to be just one right answer).  I just know, for me, I don't necessarily like people telling me that I cannot do things and so I am not in favor of laws when I can see other ways to remedy the situation.  I am pretty confident though, that if we, as individuals, start solving our own problems, we will all get solutions we like.  I think that was the goal of the founding fathers when they risked everything to make this country. They said that they wanted to be free of the crazy number of rules they were put under. So, what did they do? They used activism (and eventually war) to make a change.  And that, my friends, is defiantly patriotic.

Tuesday, March 29, 2011

A journey into my world

In order to provide you with the best analysis available, I am going to hit you with a series of articles written on some older issues.  I want people to get a sense of what I am about before I start attacking the newer stuff.  So, I am officially declaring April old news month.  I will still try to get you the new stuff, but you will see rants on older topics starting April 1st.   Here is a list of some of the topics:

How banks duped the rest of the financial services industry

Government financials and why you should care

National Security - why we focus on the wrong things

Courts - do they have too much power?

What can history tell us about our current situations?

Celebrity:  Where they go wrong and what they are doing right

Westboro Baptist Church - The court decision in early March

Health Care - The debate, and what I think

I hope you all are as excited as I am to see these topics discussed.  I hope to continue to provide the highest quality content out there.  Please continue to read.  There is much more to come...

Sunday, March 27, 2011

Japan and Marines


I just found an amazing article on the tsunami relief efforts, and it made me wonder, why is it that we hardly ever see these sort of articles?  It seems like the world turns a blind eye to good deeds and then wonders why no one ever does them.  As a military man, I am well aware of the good deeds that are happening every day in many countries all over the world by us US Military folks.  Not talking myself up, but if that stuff isn't reported, then I know there is a lot of good stuff going on that I never hear about.  And that is sad.

In the above article, US Marines are helping Japanese by delivering food, water, clothes; helping with clean up efforts, search and rescue; and in general lending a hand in any way they can.  The article goes on to talk about how some Japanese still have some reservations about having US Military folks around and the idea that we are in Okinawa especially.  The intense fighting that took place on that island was some of the worst of WWII, and there are remnants of that  battle still in the Okinawan memory.  That, combined with repeated rape charges against the US Military stationed there (most notably in 1995 and 2008) makes it difficult to win them over.  But, I digress.  My point here is that even with a country that we are partnered with, we can have strained relations due to bad press.  My other point is that even in a positive article, it is our tendency to go negative.

We need to make sure that our good deeds are recognized as just as much (if not more) as our bad ones.  It is difficult to make our image better when all we report is negative press.  We make negative press such a hot item in this country, that I feel dirty watching it.  I feel like America is falling apart and that we are hopeless.  That is a great way to make people take action to fix the world...

The Internets and dysfunctional people

So, why does the press do this to us?  What happened to positive, happy news?  What monumental change came that made it so easy to go negative?

Well, I don't have all the answers.  I didn't watch much news before the internet came along (that happened when I was like 12).  I don't know what it was like before the internet.  However, I do know that when something as powerful as the internet comes along, it changes the landscape.  Information was out there for the taking, and people (for whatever reason) are attracted to the bad.  If the ratings were high for positive news methods, then we would be seeing positive news everywhere.  If we as viewers decided to watch positive articles, then that is what would be shown.

I do have an idea as to why we want to watch the negative news.  For the moment, it makes us feel better.  Makes us think, "Well, my life may be screwed up, but at least it isn't as bad as [Fill in Name Here]'s life.  Maybe I'm not so bad after all..."  We spend so much time trying to feel better that we forget to actually get better.  It seems to be a symptom of dysfunctional people.  I could be wrong...

Tweet it

So, how do we recognize the positive?  Most people won't yell about their own good deeds.  Anyone who does is immediately dismissed as an attention whore.  The only way to get recognition is for some third party to see the good deed and take action.  So, that is the first thing we can all do.

1. When you see someone doing something good, tell them thank you.  Write down what happened and send it to the local news.  Put it on your blog.  Tweet it.  Facebook it.  Take a video of it happening and put it on YouTube.  Get it out there so that others can see it and recognize the action.  Be the third party.  Make it known.  Celebrate it.

2. Stop watching and reading the negative.  Devote your time to the positive articles.  I am not saying that you shouldn't stay informed on what is happening, but for every negative article you read, try to read two positive ones.  If enough of us do it, we will start to affect ratings, and then the money will start flowing toward those sources that show the positive.  And don't just do it, either.  Spread it around.  Get your friends doing it, and have them get their friends doing it.  It only takes one person to lead many.  Be that person.

3. Third, and probably most important, is do good deeds yourself.   I think if more good deeds were done, we might get more coverage of it.  Especially if others follow 1 and 2.  We need more positive happening in this world.  Could it really hurt to hold the door open for someone?  Would it ruin your day to compliment a stranger (just be careful what you compliment on)?  Would it hurt to smile at the person passing you by and say, "hi"?  I doubt it.  I am not talking about huge feats of good (although if that is what you decide to do, I won't stop you).  Just everyday helping out expecting nothing in return.  This world would be better for it.

I think that if we had more positive news, we would have more positive deeds which would lead to more positive news, etc.  I could be way off on this.  I mean, I am only one guy.  But, you, my readers, you are a multitude.  And that's what it takes to change things.  Thank you for reading.  And you are all looking very smart today.

Thursday, March 24, 2011

Public Education

"She Boo-hooing"

As I look at my own experience with the public education my daughter is receiving, I wonder:  How did things go so wrong with public education?

My daughter started at a nice public school in Kansas.  She went to school, loved it, and got great grades.  She used to be so disappointed when the weekend came and she couldn't go to school.  Well, after a couple of years, I had made the decision to join the military.  Then, I got stationed in Oklahoma.  I found out that the public schools in Oklahoma are much different than the ones in Kansas.  My daughter's grades and desire to go to school immediately dropped.  She went from straight A's to almost straight F's.  Her passion for school went away, and she couldn't wait for the weekend.  When asked about how she was in school that day, all the teacher would tell us is, "She boo-hooing again.".  Her teacher couldn't even use proper English (much less give us any info we could use to help remedy the situation)!

Now, for all you Okies out there reading this, I don't want you to think this is a bash on Oklahoma.  I am merely trying to illustrate a point.  And that is, why is there such disparity across state lines?  Why is there such disparity with different public schools inside a city?  Why aren't we better at making school a place for kids to learn no matter where they go?

I don't have the answers to those questions, but they are questions we, as parents, should be asking our congressmen and our senators and our President.  I have heard each President come through saying that they are going to "fix education", but I have yet to see one do it.  What has happened since the 50s when our public education system was number one in the world?

People aren't stupid

Why is this so important?  Why should the non-parents care?  You see all the bad neighborhoods out there?  The low-income "projects" where most of the crime in this country happens?  Well, what is usually right in the middle of those places?  A horrible public school.  Most experts would say that public schools in those areas are a result of the poor neighborhood.  I believe that it is the other way around.  The poor neighborhood is a result of a horrible school.  Think about it, a kid (let's call this one Jimmy), goes to an awful school in a decent neighborhood.  Little Jimmy tries to learn, but he is not being taught very well.  Jimmy begins to believe he is a failure (a rational response to multiple failures).  As a result, he drops out of high school and ends up at a dead end job with a dead end life.  Out of his class of 500, 350 are able to go on, but 150 don't make it (current failures rates in some areas of the country are even higher than that now).  That is 150 people that stay in the community because they have no options to get out.

Those 150 have very few options, and soon, you get a lot of people in that neighborhood with no jobs.  Crime rises (esp. theft and armed robbery).  Businesses don't like high crime rates, so they leave.  More people with few skills and less jobs.  Over time, that build-up is detrimental to a neighborhood, and soon, you have what we are seeing today.  You want crime to go away?  You want to stop spending your tax dollars on people in society that don't produce anything?  Fix education.  Give the kids stuck in those neighborhoods the tools to move up in life and most will (some will still do the stupid thing).

I truly believe that most of our problems today stem from poor education.  Those kids are now ill-equipped to make sure their kids are well educated.  They go out and take out loans they can't afford because they can't figure out variable rate interest (current recession, anyone?).  They vote in leaders that promise that the government will provide everything for them (they are afraid they can't take care of their kids).  They shop at retailers that outsource everything because it is cheaper that way (blocking jobs and revenues that could be made in the US).  Social conscience is difficult when you are barely keeping your head above water.

The worst part of all of this, is these people aren't stupid.  They know and their kids know at an early age what the prospects are.  At age 8, there are kids out there that already feel that there is no hope for them to get out of the situation they're in.  They know they aren't getting the education they need to improve their situation.  They lose all hope.  They stop caring about what they should care about, and they move on to apathy, hopelessness, helplessness.  They give up.  They stop dreaming.  We are killing the American dream at grade school.  If we, as a people, can't stand up for the American dream, then what is this country?  It's not the one I believe in.

I love the founding ideals of this country.  I love the idea that it doesn't matter who you are or where you come from, you can make your life whatever you want it to be.  I love the idea that opportunity is everywhere.  That is the country I grew up in.  That is not the one poor Jimmy is seeing.  Why is it that my generation, growing up, had more optimism than the generation now?  I believe it's public education.

What do we do?

I am not going to sit here and say I have all the answers.  I don't know what pieces do work and don't work.  I don't pretend to be the one that would be able to fix everything, but there are some simple things that I think we could do to improve the public education system:

1.  Reform tenure in the K-12 level.  Tenure came about in the late 1800s to protect teachers from parents suing when the teachers taught certain controversial material.  It was put in place to encourage creativity and to allow idea exploration.  It was not put in place so they could just stop teaching.  At the K-12 level, there are many teachers using it as a cop-out so they don't get fired for not doing their job.  That is completely unacceptable.  We need to be able to fire teachers, how else do we hold them accountable?  We need tenure reform to make sure that teachers are able to be held accountable

2.  Stop attacking teachers.  This seems like it is contradictory to the above point, but it isn't.  There are many, many, many teachers out there doing a very difficult job and giving 150% to it.  They spend money out of pocket for supplies, and work on homework, lesson plans, and professional development on their own time.  They devote every ounce they have to their students and they get yelled at for it when the student is failing.  That is completely unacceptable as well.  There are too many factors that go into educating students for that to be a measure of a teacher's worth.  More to follow on this.

3.  Get parents involved.  If you are a parent and think that you don't have to be a teacher to your child then you are going to end up with a failing student for a kid.  Parents are instrumental to a kid's learning and without partnership from the parents, even the best teacher can't make a kid get an A.  You want that future doctor?  You better be willing to get all up into your kid's schooling.

4.  HOLD THE KIDS ACCOUNTABLE!  I put only a little stress (sarcasm) into this one.  Kids are not stupid. They quickly learn what how the system works.  They know that they aren't responsible for their education.  They learn that if they just do nothing, the school will basically just pass them, because having a failure is too much work.  They know that they can get through school with no effort whatsoever and they use that to their advantage.  If we started failing kids and held them accountable for their actions, then when they didn't pass, we could lay blame where it belongs (whether it's the teacher, the parents, the administration, education policy, or yes - Ohmygodno! - the student).

This would obviously not fix everything, but at least it would be a start.  To fix everything would take a team of super-geniuses that know education really well.  You have Administrations, changing standards, students, parents, teachers, principals, morals, values, special needs, policy makers, money issues, supply issues, and a whole host of other things that go into making education work right.  The top teachers, administrators, policy makers, and students should really sit down and come up with ideas to make things work the way they should.  We should look at what successful schools are doing.  We should look at demographics.  We should look at redrawing school districts.  We should look at teaching basics like balancing checkbooks and how to read loan agreements.  We need discussions.  We need voters and politicians who care.  We need policy, funding, and a whole lot of hard work.  And we need it now.  Our country's greatest threat isn't terrorists, China, or even financials (although those are all important).  Our greatest threat is not being educated enough to combat all of the problems we face in this great nation.

***EDIT*** I just found this and thought it was exciting enough to add.  Glad to see something is being done.

***EDIT 2*** If this keeps up, I may have to make a new section for it, but I found a great blog post on this.

US Politics

I just got done with a conversation last night with one of my former flight commanders, and I realized that I am not the only one out there that feels like this country has become too politicized to actually fix any of the problems we have.  Now, don't get me wrong.  I am not a US policy-basher who hates the country he lives in.  In fact, I love this country.  I think is the best country on this spinning rock we live on.  I want to see it successful.  I want my kids to grow up and enter adult life during the greatest period in this great country's history.  I just don't see it happening in the way we are heading.

Now, most people would blame this on the Republicans, or on the Democrats.  They would pick a party line and hold it forever.  I don't see it like that.  I see that very thing as part of the problem.  I can't get behind that ideology and I think we need a different approach.  I see the problem as a political system that has become out of control.  I may be wrong in some of the ways I see these things working, and if I am, please feel free to correct me.  I am always looking to learn!

The system is corrupt.  Head senators get "paid" to take certain positions on certain issues.  Then, they use their power to get everyone else to fall in line.  If you want to get re-elected to office, you will jump on board with the party position.  If you can't jump on board, then you get left to fend for yourself.  It is not a system that you change.  The system changes you or spits you out.  And we, the voters, just sit back and let it happen.  How many people can never back a candidate because none of them make any kind of sense to you?  That is how it happens (or at least that is how I understand it).

What we need are leaders that are willing to stand up and take the blows, and a voting public that backs those leaders.  I don't have to agree with every position my elected official takes, but I do have to know that (s)he has to have the moral fiber and cajones to stand up to pressure and fight for what the candidate thinks is right.  I want to go back to those days where leaders made bold speeches, character was all you had, and you fought to make your name stand for something.  Where are those candidates?  Please help me find them.

Please feel free to share this, comment on it, pass it around, whatever you want to do.  I don't even care about credit.  I just want people here to start thinking for themselves and maybe even rally around an idea.  That is the only way we get our leadership to make a difference.2WBFARMVMCF7

Thank you to all who read this.