The Swine In the Vaccine

The Swine in The Vaccine
By: Rene Velez Oct 28th, 2009

I keep hearing in the news that many parents and adults are holding back on getting the swine flu vaccine. In light of all the reported cases of people who have become ill and the fact that people in this country have indeed died from this flu, you would think that the general public would be running to get vaccinated.

As I understand it on an average year only a small percentage of people even get the yearly common flu vaccine. So to some extent it’s understandable that many people in the general population also will likely not get the H1N1 vaccine. But something just doesn’t add up.

Recently, in talking politics with clients and other professionals, I realized that there is a very clear discontent with our government. There is genuine distrust for the leadership of this nation and in how big business seems to be in a better position than the average citizen. People want health care reform but fear what the government will provide and what type damage will follow in the wake of government trying to work its way through the politics of big business. People do not feel our government tells the truth nor that systems designed to protect the public work.

Suddenly, it hit me. People don’t want to take the H1N1 vaccine because the government’s stamp of involvement is on the vaccine! Of course I have no proof of this opinion nor have I heard the media make mention of this. But, somehow it fits into the realm of possibilities. When have we as a nation developed a vaccine, in such short time, for something that has received such wide spread news and that has instilled fear in the general public? When in recent times have we heard anything positive about our government? All we here is how big business gets bailed out while small business get their credit lines closed and reduced.

People fear that this vaccine was probably produced too fast to be safe. Indeed the shortages that persist in some states was caused by the CDC’S miscalculation of how much vaccine could be produced. What’s more stories of parents who recount tales that their children got autism after vaccinations has not help form better public opinion on the vaccination. Ironically, the CDC’s recent efforts to clarify the public’s perception and to encourage people to get vaccinated probably have made the situation worse.


It seems that the swine in the Vaccine is our government!

This is interesting: Swine Flu Conspiracy http://www.youtube.com/watch?v=185HKE2c5Gg

O'bama's - Nobel Peace prize

Obama’s – Nobel Peace Prize
By: Rene Velez Oct. 09th, 2009

The world seems to be caught off guard at the news that President O’bama has won the Nobel Peace Prize. So was I. He is too short on accomplishments and too untenured a president to have claimed that prize. Surely, there are others with less resources and who have struggled much longer than President O’bama that are worthy of such a prize. I really do not know what to think of this news and I would take Mr. O’bama to task to earn this prize as time goes on.

American Foreign Policy – A Fragile Balance

O’bama does seem to believe that fundamental to the American future in a global economy and in terms of political clout, we have to be better than we have been in the past in forming relationships and how we exert our influence throughout the world, I would agree. I have on Occasion expressed that America as a country has to learn to be more socially, politically, culturally and militarily relative than we have in the past. Gone are those days in which by shear size and might we could easily force issues. The world is a more delicate place. Just as the American culture has grown and influenced the world abroad over time, many cultures and their inherent ways of thinking about world problems have come to influence us. America is a world melting pot for diverse cultures. It makes us unique as a world power. We must acknowledge, we must recognize and we must embrace the differences that may exist and that they are generally superficial but at the same time profound. Deep down each country cares about prosperity, education, health and the preservation of their cultures. How we go about doing this is different in each country. Communication mediums and technology have enabled us to be much more connected than we ever have before. Consequently, the impact of decisions are more pronounced and the shouting at one end of the world is quickly heard at the other end. We must acknowledge we live in a much more fragile international realm of politics and power. O’bama has taken a completely different view to welcome diversity, to establish dialogue and to be willing to listen rather than to impose an agenda. He has done this early in his presidency, and in a complete departure from the prior administrations. O’bama has recently faced a great deal of criticism for being overly apologetic. Although it may trouble us all to find the United States in this position, truth be told we have ignored the responsibility that comes with being a great power on occasion. Afghanistan is one example were after the fall of the Soviet Union, America failed to follow through and support the freedom fighters after they helped us accomplish our goal of giving the Soviets their Vietnam.. This lead to the rise in power of our enemy Osama bin Laden. What a different world would it be if we would have invested time and money when we had the chance.

The Psychopaths that Challenge World Peace

How do we achieve world piece when we have so many lunatics in positions of power. The recent United Nations assembly was a tremendous opportunity for Americans, if not the world to view first hand what the secretary of state and the president has to contend with when forming policy in the world. Khadafi is by all accounts a rambling disorganized statesman, that I think can hardly keep a straight train of thought. If his speech at the United Nations is any indication he is indeed a very poor political leader for his country. I can see why so many are angered by his presence. In analyzing the way the man thinks there is some under current that is foreign to the western world. He has a unique point of view towards how to respond to any question that is based on a primitive form of governance. I would dare to say, an eye for an eye. Hugo Chavez is another mad man. Deeply vested in his own illusions of grandness. Ahmadinejad, is in denial. He doesn’t even believe the holocaust actually happened. His limited knowledge and deeply rooted political views based on some perversion of Islamic law will never gain ground or respect in an international community. By themselves these leaders are dangerous primarily to their own countries. As leaders that influence world politics, who pay for their wild ventures, and who stand to manipulate developing countries and to destabilize others, they are a menace. But to ignore them would be much worse. To impose our will upon them is uncalled for or politically incorrect. An so we contain them with sanctions and in denying them access, until the people of their countries cry in anguish over lost opportunity. Those who cherish freedom bear great responsibility. Responsibility that if ignored then brings about great consequences. We can not ignore rogue factions and leaders. It’s the case of having you’re friends close and your enemies even closer.


Dialogue to Disarm

O’bama brings forth a message to the world that says we are all in this together. We need to work together to solve the worlds problems. This rings true with many people all over the world because many problems we face are global in nature, scope and impact. Global Warming, Nuclear Hostility, Renewable Energy, Health Care, Education, Global Economics, Terrorism and War, these are the things that affect us all. O’bama recognizes that in today’s world we the United States are not an island onto ourselves and that perhaps for the first time in history we have a sitting U.S. president that recognizes and who has taken the initiative to build consensus on a global scale. His propensity to recognize the promise of the working class, not just in this country, but throughout the world and not just the rich and powerful, draws us to a broader vision. But how do you establish dialogue in a world armed for conflict? I suppose the answer is one worldly educated leader at a time. One rogue political leader at a time. The reality is that to some extent many political leaders know what O’bama knows. This is to say they all think alike, we have to work together. To some extent even those that don’t are happy to be invited to the party. O’bama brings only one new concept to the table, the willingness to take a chance politically to bring about world change by establishing communication and making a deal and in knowing there are others out there that are willing to come to the talk show.

If he can do this and do it well….he might just deserve the Nobel Peace Prize. But bottom line, as of this time, he doesn’t deserve it. Let’s all hope he earns it.

The Jobless Recovery and Small Business

The Jobless Recovery and Small Business
By: Rene Velez Sept 28th, 2009


By most accounts in our current aspirations towards a recovery, we are seeing better times ahead but yet, everyone is asking, where are the jobs? Indeed as we somehow get ourselves out of this recession, jobs will continue to be hard to come by. Manufacturing, in the U.S. will likely increase production and take up any existing elasticity in their production capacity before taking on new employees. What’s more is that because we are essentially an information and technology economy, those with existing employment simply will have to do more with less labor as before. This is a kind of employment expectation creep. We are essentially assigned more tasks to perform, without increasing the labor pool. Typically, we simply work longer.

Many articles and studies show that as the global economy improves, emerging markets will have a greater increase in growth than some of the developed nations. This is in large part because companies from the developing countries shift their production activities to countries that have a lower cost of labor.

Small Business

Small business in the U.S. may play a very big role in adding jobs in the future, at least domestically. Many small businesses operate on profit margins that would not be considered viable businesses by larger corporations. It stands to reason that many small closely held businesses, have a very small net profit after covering employee salaries, overhead and salaries for their working owners. This profit in many instances may actually be so small that their no nothing left for a would be investor. Hence, the reason big business models do not consider them worthy of an investment.

We should understand that this does not mean they are not viable businesses. In the end they fulfill a very important role in our economy. They pay salaries, they employ many people, they pay taxes and they consume other services and products that further create jobs and help stimulate the economy. The multiplier effect of a small business is key to our current jobless recovery.

The Credit Crunch

During this recession banks have been forced to take a second look at their lending policies. Their mounting losses and the reduction of their capital base is being addressed by lending guidelines that are tightening up credit. I have come across many stories of banks reducing or terminating commercial lines of credit. In addition many small businesses rely on the owners’ home equity line of credit to meet short term needs when disbursements exceed collections. These too are under attack as banks are taking a second look and evaluating the underlying value of the real estate which is often the collateral for these loans. Even credit card companies are declining credit applications and reducing credit limits to shed the risk associated with losses and an overall tight credit market. I should mention that many small businesses rely on credit cards as the only means of short term borrowings to finance everything from inventory to the payment of taxes. All of this begs the question, how well will this jobless recovery pan out if these small companies that hire so many people could potentially be forced out of the market for lack of capital?

Government Reform or Banking Transformation

I see two possible solutions to the potential for small businesses to obtain much needed capital. (1) Government policy and programs to help small business. Kind of the SBA on steroids. (2) The banking industry taking on small business lending as with a high touch high service analytical lending model. Really get to know your borrower and business client.

Although government policy and programs are helpful, it does not seem likely that yet another government bailout program is going to be well received politically. The American voter , even if it means their own business, may not want the government to step in and create a small business welfare program. In addition , of the existing programs that are offered through SBA, the red tape and the work involved in meeting the program requirements and the banks hesitancy to administer these programs creates a barrier to many small businesses. Not just in the red tape but the cost of CPA’s and other people to get all the paperwork done. One just has to look at the SBA program to offer floor plan loans to auto dealerships and see first hand what comes of this. In all more government intervention may not be plausible.

The second idea is that banks get back into the business of lending to small business. Banks really are in the best position to do this. They have the bank account, they see the activity, they can request tax returns and informal financial statements. They get to know the character of the owners and in the end can form the best of relationships with their clients. The only real issue I see is whether banks are willing to take on risk, and whether they can gather the management and analytical expertise to do the job right. This last statement may not seem obvious to many people. But you should understand that banks are notorious for creating cookie cutter products that basically are form driven. If they don’t understand it, if there isn’t a form and if a loan committee can not analyze it; they simply do not lend you the money. I know that may be hard to believe but I can not tell you how many times I have had to explain to an MBA banker how to read a tax return and match it to a financial statement.

Knowledge Based Banking

My opinion of the failure of Wall Street and the banking system is that both became very entrenched on trying to assess risk based on some FICO score or some rating(which happens to be flawed) , and then transferring that risk via some fancy packaging we call a security debt obligation.

Let’s change how banking and Wall Street does business by doing what we should be doing better than any other developed country. By lending based on knowledge, analysis, skill level and the capacity to repay loans based on the probability of success. Sure this sounds like banking but, my point is banking has gotten away from its core function. A function of placing money where it has the highest level of achieving success and repayment.

Again this sounds easy and it sounds like what a bank should be doing but its hard work and requires a substantive infrastructure, of highly trained and well rounded business analysts to carry on the relationship.

President O'bama's Speech To Students

President O’bama’s Speech to Students
By: Rene Velez Sept. 8th, 2009

I promise this will be short. This is a country where freedom of speech is paramount to the democratic rights of our citizens. It is at the very core of being American and being a country where your freedom is protected. It is what keeps us from becoming the type of country , like Iran, where if we as a people do not like the turn out of an election we can not be silenced. We can not be forcibly told not to demonstrate, to speak and to protest what is willed upon us. However, with this power there is great responsibility.

O’bama was elected president of this country by a majority vote. He won the all important vote of the majority of the American public. Whether you like his politics, his point of view or any part of his party; he should be allowed to speak, and to be heard by any Citizen or visitor of this country. There is nothing he could say that in any way could endanger our young in an educational setting. And even if he were to utter a word of anything that would be out of line, it would doom his presidency. He is not about to take that chance. His views political or otherwise, as long as they are presented before the public, and subject to debate, should be heard by all.

Who Do We Think We Are?

As a parent I can not help but think that we all have a part to play in how badly we have managed this great country. For what we have done but most importantly for not getting involved in some way. For what we have failed to do. Essentially, for not being better informed and not taking ownership of our communities, our schools and our government. In general we simply assume someone else will handle it for us. We routinely, bury our heads in the sand. In the end we deserve what we get, for our own ignorance. And yet we have the presumptive right to make this same decision for our children.

To all the Mom’s and Dad’s in the good old USA, perhaps your complaints should be better addressed at the foul mouthed music the travels our airwaves and plagues the music industry. Perhaps we should be more interested at the violence and sex on television and in the video games our children play. Perhaps we should complain about the sexualization of teenage youths in advertising. Perhaps we should shout out on how we are poisoned by greasy and fatty foods that make us and our children fat and sick. Perhaps we should speak out about the quality of education and how poorly our teachers are paid.

There are a lot of topics that we need to speak out about. But never against our president’s desire to address the nation or its younger generation. More importantly is that we need to understand how to defend our positions and how to understand the political process. It is the only way we can arrive at a better world for our children. Exposing them to our country’s concerns not only educates them and prepares them for the real world. It also is a way in which our own children can educate us by bringing new ideas to the table and teaching us how we could do better.

Our Founding Fathers

This great nation was formed and fought for by many young people who where in their, teens, twenties and thirties. The life expectancy at the time was around 55, if you were lucky. They did a really great job forming a great country!........... We messed it up!

Health Care Reform - The Madness

Health Care Reform – The Madness
By: Rene Velez Aug. 31st 2009

Health care reform has to happen. Despite all the negativity over the Public Option plan most Americans realize that something has to be done. O’bama has done a poor job at selling health care reform to the American people. My perception is that he has distanced himself from the talks because anything that comes out of reform will be far from what people want. On the other hand distancing himself from health care reform issues may actually help the cause because he can not be blamed for what he has asked congress to propose, in a bipartisan effort. The question is, will he take the bull by the horns and truly reform health care? I doubt it. You must remember, he is a politician after all.

This is a complicated issue and overall I give our US government an “F” in coming forth with a comprehensive plan that people understand. Having had to shop for health care policy recently there is a lot to choose from. It is difficult to calculate what is your out of pocket costs, what is covered and if your current doctors are in any given plan. Despite all the news attention this topic is getting no one knows what we will be getting, or how it works. This has got to be the worst sales pitch for reform we have ever witnessed.

It is generally understood health insurance companies are making big profits while deciding what is best for you and often at odds with the doctor’s ability to practice. I don’t like a national health care policy. I don’t like the idea that we are substituting private enterprise’s profit motive in managing your health for the bureaucracy of government . Neither one will do us any good. Perhaps the best scenario is a private venture with government reform and regulation. Yet this is a compromise at best.

Start with the Basics

For the sake of accomplishment and to not waste any further time let’s address some basic issues that have to change. Rather than try to adopt a sweeping change to healthcare, let’s address the big pitfalls of the current system. I can just see the critics citing a piecemeal process. But that isn’t the case. We did not get into this mess overnight, so why should we expect to get out of it in one swooping move.

(1) Regulate health care companies so that premiums and operating expenses have to be approved. Just like we do with utilities. Cut out the extra pork and profits.

(2) Prohibit insurance companies from denying you coverage for existing conditions.

(3) Let’s cap medical malpractice liabilities. Let’s eliminate frivolous law suits that are expensive and do not prove negligence. Let’s come to terms with the fact that the practice of medicine is not an exact science.

(4) Let’s have an insurance portability act so you can take your insurance with you.

(5) Let’s have a government guaranteed insurance program, provided by private enterprise, specifically for high deductible policy holders that covers their out of pocket costs so that people do not suffer economic hardships. This is to be funded by minimal premiums as part of an elected payroll tax, or premiums you pay directly into the fund.

(6) Let’s provide a health care policy premium insurance so that the unemployed have continued and uninterrupted health care in times of unemployment. To be paid by a payroll tax.

(7) Let’s create regulations that allow you to buy medicines anywhere in the world to make medication affordable. Prohibit the drug companies from offering a different price for drugs outside the USA. Let’s also prohibit extravagant advertising and promotions programs that drug companies use to sell their products to doctors. This practice ads a tremendous amount of cost to medicines. There are less expensive ways to market to doctors that is informative and more cost effective.

(8) Let’s consider if Pharma and medical equipment needs closer regulation on pricing and profits. Then establish a new more equitable playing field that protects the consumer.

(9) Let’s revise bankruptcy laws to give people a clean slate when their bankruptcy is caused by extraneous health care bills.


I am not a health insurance expert and I am sure this is just a sample of the pitfalls. But we need to get back to the basics of providing affordable health care that people understand.

Taxpayers Already Pay For The Disadvantaged

In just about every urban city there is a health care hospital that can not turn you away in the event of an emergency. So the argument that people are dying because they can not get healthcare is not properly portrayed. There is some truth to this in that if they had preventive and ongoing health care they may not wind up in these hospitals but that is another matter that needs to be addressed.

These public hospitals are funded with tax dollars already, in a variety of ways. Many of these hospitals are some of the best hospitals you can go to especially for trauma. In Miami we have Jackson Memorial Hospital. Funded in part by a .5% sales tax. In addition it receives other tax awards and of course money from donations. It is known as an excellent hospital. No one gets turned away and we as taxpayer pay a large portion of the bill.

Then how can we, especially at a time of all time high deficit spending pile on an additional health care tab for the 15% of America that has no healthcare. Something is not right. We should also take note that in some cases, people choose (sometimes knowingly) not to have health care. The compassionate side of all Americans is to help those in need. America’s generosity is unequal to other countries. Yet I do not feel it is correct to impose a welfare system that benefits those who do not bother to help themselves. We must be cautious before we dole out public funds.

Health Care Bailout Syndrome

We should all be uneasy about how government proposes health care reform. Just look at how our government has bailed out big business. No strings attached, poor controls and checks and balances. Executives taking home huge compensation packages with American tax dollars. Let’s not be too quick on this matter. Let’s demand a comprehensive plan that coves what is needed rather than falling victims of the bailout hysteria.

Where Are Our Elected Leaders?

I keep asking myself the big question. With all the lawyers in Washington, DC why is it that only the opportunistic blind seem to get elected? Isn’t there anyone who can create a movement that is for the benefit of the American citizen? We do not want to destroy the health care system or keep companies from making a profit. We simply want a more even playing field. One that works for this great country and not just for the rich and powerful. Where are our elected leaders?

Tri-County Regionalism (In Miami)

Tri – County Regionalism (in Miami)
By: Rene Velez July 14, 2009


Often we hear of a local governments wanting to accomplish a particular goal. Typically, by a set of political mandates and or promises. The goals come in many forms; build better schools, create commercial business zones, attract big business, improve mass transportation, attract tourism, provide affordable housing, raise revenues for a hospital etc. etc. These are the things every city is trying to do these days. Each city has its own set of priorities and budgetary constraints. In areas where you have one metropolitan region next to another, often it is a wise decision to form partnerships with neighboring metropolitan areas to collaborate, create synergies and pool talents that help the region as a whole. Such is the case in our own Miami-Dade, Broward and Palm Beach Counties. (the Tri – County Region) However, not all that is done is always for the good of the whole. In fact at times the lack of cooperation is a stalemate that is in effect counter productive to the region as a whole.

Cooperation

For all the positives that could be said for cooperation among regions the reality is that rivalry often prevails. Let’s face it, competition among cities and among the politicians themselves is serious. Here in Miami, we want to be the best of tourism and of international business. We have the biggest airport and a shipping port to match. We have Florida International University and University of Miami. We have South Beach, Miami Beach and a culture that is diverse if not concentrated in Central, South American and Caribbean flavor. Broward and Palm Beach County have their own merits, and they too want to be best. Beautiful beaches, beautiful people, Florida Atlantic University, NOVA University and Ft. Lauderdale and let’s not forget the glamour of Palm Beach.. All three communities are vying for business, tourists, transplants(as in demographic shifts) and state and federal money. But in an age when mobility and networks prevail, no city can afford to live as an island. How then do we assure ourselves that cities work together to achieve what’s best for the state? Not only is Tri-County cooperation necessary, but state political pressure must also be applied to get beyond any apathy that may exist at any regional level. In other words you need to have some kind of state oversight on an overall grand scale.

Who Rules

Tri-County regionalism leads to a very contentious political arena. You have local leaders vying for position and control and then you have state officials who power play over local leadership. Why? Our democratic system, in its original form relied heavily on the good nature and ethical values of elected officials who preside over their constituents. This worked well in small cities and towns where people knew each other and had to literally face their constituents on a daily basis. Today, many people do not even know who their elected officials are. And politicians as a whole are more interested in pursuing their careers than they are on equitable decision making. (Of course there are exceptions and the media is important if not the very competition of forcing politicians down the right path). Nonetheless, state officials often are geared to making concessions to those areas and for those projects not only based on merit but also on what their backing can mean in terms of votes for a party or the elected official himself. Politically, this is getting the most bang from “your” buck! So, the Golden Rule is: He who has the gold, rules! As far as money you can bet the state ha more money than any one city.

Tri- County Regionalism is Like Globalism

Inferring from all of the above and about the state of tri-county regionalism in Miami-Dade, Broward and Palm Beach County I can’t help but think of how much our neck of the woods is similar to what is going on in global politics and on the global economic front. Here too we have vying powers and interests. Yet we have no real formal all encompassing mechanism to reach equitable solutions that help the planet. Instead we have initiatives, alliances and political interests that promulgate further initiatives as well as inroads to possible solutions. Cummulatively, we have in essence an ad-hoc , improvisational mechanism to respond to worldly needs and hope that we can stay on track to a better tomorrow. With each passing year, and many passing political regimes, we learn. We look back at mistakes, failed policy and lost opportunity and shoot for a better tomorrow.


As it relates to history, the human endeavor to learn and to perfect our existence is very inefficient. Looking towards the future, if we as a planet are to survive we need to work together. We are after all, one and a common people.

Democracy By Internet

Democracy by Internet
BY: Rene Velez June 16th, 2009


By all accounts the modern media infrastructure of television, satellite TV, world news networks and the like, have really done a great deal to make the world a much smaller place. Yet all of these large syndicated news networks that cover local and world events are in fact tainted in some way or another by the judgment of management, TV anchors , writers, researchers and let’s not forget the all important ratings initiative. All of this contributes towards a skewed perception or story telling that can influence how the masses respond to news events. There is of course the internet. Chat rooms, blogs, personal web sites all have a unique way to balance out reality.

Where Technology meets Sovereign Rule

The internet and the various social networks that exist today have great, although flawed potential, to let the world receive news through a collage of views that an attentive audience can decipher. Why do I say flawed? My thought is that modern media has been using the internet as a source of news and then spinning it to fit their program of news reporting. In addition we have to realize that social networks such as Twitter, Facebook, Myspace and related blogs all have their own authors view point and individual spin. Yet together as an expression of the thoughts and views of the people it may well be the most accurate accounts of historical story telling that may have ever existed since history was first written. In the end someone has to interpret these storylines, but collectively it portrays empirical statistical evidence of what a society or group of people could potentially be thinking and their associated points of view.

For sovereign nations all across the world who choose to silence their people and encapsulate them into their form of governance, technology today can be a powerful voice of the people. So much so that other sovereign nations may in fact adopt certain foreign policy initiatives based on what may be determined from a collection of internet voices. This is a sovereign threat to nations like Iran.

Iran – Theology vs. Technology

Current events in Iran would seem to indicate and in fact support what we have long known here in the states. Many Iranians do not agree with their government. A government that is in effect hostage to theological rulers who do not represent the well educated Iranian population or the younger generation. The internet has become a tool for revolutionary statements to be made internationally public about the short comings of Iranian rule. The best offense against threats of a rogue state such as Iran is coming directly from within. It is in my opinion a real opportunity for Iranians to let the world know how they really feel, to experience their anguish and to ask for the support of other countries. But at this juncture will anyone come. Certainly, current events do in fact undermine the legitimacy of the current ruling government. I would venture to say that not much is secret in a state in which a good majority of the population defies current rule. The magic cloak of a dictatorship will likely never be the same for any society that is generally closed. Maybe we should put this to work in North Korea?


Propaganda in the Age of Technology

Ask any knowledgeable military strategist and they will tell you, the propaganda machine, has never been more important in international conflicts and in war than it is today. Technology makes propaganda campaigns more scalable and affordable. Most importantly you can even direct specific campaigns to specific groups. This can be very useful in getting the message out.

Propaganda can be staged to help people, to gain support, to disseminate information, to persuade. It can be used to exchange information, to confuse or to misinform for a given purpose. The beauty of technology is that it can be done covertly without specific knowledge of the source or authors, and in real time.


Statistical Search Engines – Foreign Policy

How do we tally up the demographic cues that are being offered on the world wide web? How do we authenticate sources and authors? There is a greater need for data collection tools that can show us what is the current trend based on social networking sites without it costing a lot of money. Think of what the uses could be? By recognizing social patterns we could design better cars before consumers ask for them. We could understand critical changes in countries that are in economical and political flux before it becomes the evening news. We could then develop foreign policy to better deal with the ever changing global setting we find ourselves. We could figure out what is affecting people the most in certain industries and develop better business models to achieve higher profits.

Knowing what the masses are thinking and feeling is already a multibillion dollar business in the USA. We know that red is a very attractive color on a grocery store shelf. We know consumers want healthier food choices. We know sex sells. What companies such as Coca Cola and Procter and Gamble spend on marketing studies to figure what the masses want is staggering. In some cases these companies know more about you than you might know about yourself. A new spin on this is to have available to us, using the Internet as a source, what the trends are on a global basis so that not only are better business decisions made but also so that foreign policy is more precise, timely and better informed and accurate. The “I” in CIA might have to be changed to “Internet”. I know this sounds far off, but I don’t think it’s that far off from reality.


Conclusion

The IRAQ war is largely unpopular in the USA. This was a closed society to us here in the states. Our best intelligence failed to take into consideration the extent of infighting amongst citizens themselves and how different sections of the country really think. In short we had no inside portal to understand and to make accurate inferences. Would our intelligence of been different had we promoted the internet as a medium of communication and information gathering and then sat back and listened? There are all kinds of issues with this hypothetical but, assuming they could all be overcome, I think our intelligence might well have been more accurate without a foot on foreign soil. Keep in mind that intellect has been over throne many times in Washington.

Susan Boyle - Divine Inspiration

Susan Boyle – Divine Inspiration
By: Rene Velez April 21st, 2009

I typically shy away from watching American Idol. I admit that although it can be interesting, my basic distaste for the program itself is how contestants are treated. There is something about treating people badly in general that I find very distasteful. Although, I can well imagine the industry itself is ruthless. Perhaps, it’s because I, like many others, have been treated badly. However, more to the point it is because I am a firm believer that everyone has an inner desire to be great. We all have in us a desire to be liked and wanted and to some performing is a medium to acceptance. It is a delicate psychology and we should all learn to nurture our inner desire to perform and not to allow others to tear it down. We all know how brutal Simon, in particular has been on the show. I suppose some of it is an act, but I suggest the contestant's feelings are real.

The Divine Call of a Voice

After reading about Susan Boyle I decided to hear her sing on YouTube. Wow!, would be an understatement. We all are prone to prejudge others by what we see. In essence we are all prejudice, blinded by our own sense of sight. One look at Susan and we do not find her to be the example of glamour we have been taught to expect. But, she is by all accounts a beautiful example of real and divine beauty. She is inspiring as many of us have attested by our fascination with her talent to sing. Her ability is so great and so powerful it dulls our other senses into focused listening to her glowing voice. Every note she sings fills us with energy and humbles us to understand true greatness. I cried all three times I saw her performance. She inspired me to stray from my typical writings and to speak about her tremendous accomplishment.

Win by Never Giving Up

I don’t know Susan Boyle. But I would suggest she is brilliant. The response from the judges, and the audience tells us a great deal about how superficial we are. She, like many of us, was judged on looks only, despite her potential ability. All the judges were stumped at what they heard. They were blown away. Not even a struggle to contest her ability. The audience cheered her like the star she really is. Susan showed a great deal of “Moxy”, right from the start. Yes, she was fearful, but confident in her own abilities. Yet, my perception was that although confident in her ability she was also humble enough to accept defeat and solace in knowing….maybe it’s not all about winning. I think she went on stage and sang the best she could because she owed it to herself. Because she understood what many of us fail to recognize in a lifetime. Don’t give up! Showing up and giving it a go requires a great deal of inner strength, particularly when you know the world is judging you by what they see and not by what you can do. She sang and she illuminated our souls and then, was content to walk off stage into obscurity for the simple fact that she came, she saw, she conquered. I don’t think winning was on her mind at all. She is by all accounts a winner, not just for her absolute singing talent but because she served us determination and grit with the background harmony of humble pie.

Learn To Work From Your Strengths

I don’t know whether she realized it or not but she could not have picked a better song. She had the voice, the capacity, the emotion and sheer talent to bring that song to life. But I also listened to the words. It fit the occasion. She had a dream, and she brought all the pieces to work for her. The song is a story of having vision, of overcoming the odds, despite the challenges, despite the ridicule. Despite the cards life deals us. She played her hand well. It would be fair to say the hand of God delivered her a crowning moment. No matter how long she lives, this day may well be like no other day and she should be proud that she made of it what she dreamed it could be. She made it all work from a position of strength. She made it work for me and for many of you. When earlier I said she was brilliant, I was not referring to the British colloquialism, I was referring to real talent and intellect. Nonetheless in this case, both apply.

Conclusion

I have often made comments of how professionals, politicians, business people and society in general have a certain sense of apathy. In America today, we have a great deal of Apathy about what our country is capable of. As citizens we have a great deal of apathy about the role we play as citizens. We have apathy about reducing the deficit, cutting taxes and being less energy dependent. We can all learn for Susan Boyle! She has a dream! And she is a winner!

The Lost Opportunity of School Vouchers

The Lost Opportunity of School Vouchers
By: Rene Velez April 7, 2009


As American Citizens we have since the start of this country been afforded free public education. This education played a very important role in the development of our capitalist society although it has been anything but free. In just about every state the majority of the cost of a public school system is absorbed by real estate taxes. A taxing system that is levied base on the underlying value of your home and or business real estate. It does not matter whether you have children in school, or whether you are retired, in the end everyone picks up a piece of the tab. Although this may seem unfair I would suggest that everyone consider the cost of illiterate youth running around your community with no employable skills, and who eventually have families of their own and because of their lack of skills, they and their families, become to some extent or another wards of the state. A cost you will be responsible for. Now, the cost is not so high!


The United States – Socialist Republic of Education

Some of you may have come to realize that although we pride ourselves as a truly democratic nation, our schools system is more socialist than most will admit. We levy taxes on the real estate of the elderly, those without children and businesses as well as those who take the path of private and parochial schools, in order to provide education to the masses. I ask what could be more socialist? In this case I am not mocking the socialist nature of our educational system, however I do have some issues on whether it is effective and whether our system is just. Education needs to be made available to everyone. Education is by far the most effective way to overcome poverty, to solve basic life needs and to create an advanced society that is innovative and productive. Clearly, there are many even in this great country that would not have the means to a basic high school education were it not for public education. But is it the best? Do we sacrifice the notion of a free and democratic society, the right to choose how our children will be taught and what they are taught? In most states public education is under fire for not establishing high standards of education. Graduating students who are barely literate. Morals, ethics and values are not taught. The unfortunate truth is morals, values and ethics are not taught at home either. The administration of our public school system has taken a back seat to the politics of the day. So intertwined are the politics of our school system that often the governing councils don’t listen to the educational scholars who for many years have said we need to reform not only the schools system but methods of teaching. I dare to say we would be much better off separating academia from local and federal politics.

Insult to Injury

In many cases the public school options are so far off track that many parents have decided to make substantial economic sacrifices to “Double Pay” their way towards better education for their children. What alternatives do you have? Private Schools and Parochial Schools, are two options that require you to essentially “Double Pay” for your child’s education. I say “Double Pay” because you pay real estate taxes that support public schools, (which you do not use) and you pay “Full Price” tuition for your choice to produce an educated and productive citizen for this great nation. With any luck that student will also go on to college and will also have the formation of proper values, morals and ethics.

Our current tax code allows you the opportunity to deduct donations you make to qualified charitable organizations. The reason for this is simple. Congress has deemed the benefits charitable organizations provide the community and this country to be so great, you are allowed a deduction if you itemize on your tax return. I consider this very honorable. The benefits to our society are at least four times the billions of dollars donated every year. No government or business could provide the vast number of services that charitable organizations provide. Why? The labor is typically composed of volunteers who receive no pay at all! The insult is that you receive no benefit by producing a productive, educated citizen that is more likely than not to obtain a college education. That’s right there is no deduction for tuition paid for private schooling. Even if the only public education is a failing institution. The greatest, most democratic nation on earth, who claims to be the most productive and innovative of any other nation on earth has not been able to place a value on its most basic of all capitalist elements. The human element of an educated child! Clearly, congress and our politicians have it wrong and we as a free society have also failed to make them recognize this.

Vouchers Systems

The potential for improvement, through educational vouchers for those who choose and can afford to pay for private or parochial education, Pre-K to 12th grade, is significant. We will always need bright talented and motivated youth to lead this country in the future. Knowing this, why not create a voucher system that gives parents tax dollars to place your child in the school of your choice? Even if only a marginal rebate. We as a society need to understand that there are rather harsh consequences to this. For every dollar that is given back as some rebate to parents who’s children are in private or parochial schools there is one less dollar to fund existing public schools. This is a real threat to public school officials, teachers, bureaucrats, unions and of course to those children left with only public schools as an option. In full motion this, change in policy, tends to force issues that are already at play. Forces that would clearly indicate, our public schools system does not in many cases work. The biggest fear is that if you pull money away from public education it could eventually fail economically beyond what may be understood today. On the other hand, the reality is that if every parent that has a child placed in a private or parochial school placed their child in public schools, as is their right, the system would implode anyway. Few parents I have spoken to realize that by placing their children in private or parochial school under the “Double Pay” model, is in essence relieving or “subsidizing” the public school system. A school system that would otherwise have to come up with hundreds of millions of dollars more to find buildings, teachers, books, supplies lunches and a host of other expenses they are not currently incurring. In case you weren’t sufficiently insulted in my previous “Insult to Injury”, now is a good time to turn the other cheek and receive another.

Still vouchers deserve a great deal of merit. If you can come to terms with the fact our public schools system has already failed, then the next step is to look at alternatives to the consequences. This is what we call “looking reality in the face”.




What May Happen Under A Voucher System

(1) Many schools that are failing will be closed and resources would be concentrated into better schools.

(2) A smaller school system may allow the opportunity to focus more on fixing the core issues than on prolonging a failed system. There is no question that educational politics is in the way of a formal educational reform that will lead us into the 21st century. We need start doing different things to arrive at better results. Not everyone is college material, however we don’t have a single mind that should be wasted. Many technical positions and vocational programs can be put in place. At the high school level work and study programs can benefit those in poverty, reduce crime rates and still provide for productive citizenship.


(3) Charter Schools, essentially privately run schools funded by public tax dollars, will eventually become more common. These schools have shown tremendous promise. They typically have a very autonomous governance, so they are less likely to be influenced by politics. They tend to be more economically feasible and cheaper to run since they do not require the administrative layers that are very costly and are the norm in the public school sector. In essence more bang for every tuition dollar. They run like a business, not like a government. They typically have contracts that stipulate bonus dollars for performance. They have the ability to raise funds through charity. Parents can offer to subsidize certain programs. Some cater to certain vocational programs. In my opinion Charter schools are in fact the new generation of public schools.

(4) More parents may stretch that dollar and opt to place their kids in private or parochial schools. A real opportunity to strengthen the cultural and religious fabric of our society.

(5) Public Private School Ventures: This is a hybrid between a charter school and a private school. Essentially tuition is paid for by government, however because of demographics and other economic factors there may not be enough money to fund an entire school, parents would pay a small yearly tuition or pay for some school items such as supplies, books or provide volunteer services. This is a very new concept. At the heart of this system is to recruit parents to be a part of the educational system and essentially buy into education. I don’t know how many times I have heard public school teachers wish parents would attend PTA meetings. My feeling is that parents who pay have a vested interest in the success of the school, and there children.


Conclusion:

There are many challenges that are before us in education. We can not afford as a nation to relegate quality education solely to those who have financial resources to “Double Pay”. This only widens the gap in social class and weakens our political and economic place in the world. We as a society need to recognize that in many cases, public education has already failed. We need to adopt those systems, such as school vouchers, that reward citizens who are progressive about bringing about a better educated young adult. One who has a higher probability of competing in a global setting. We are at a turning point in basic education. We must start to think outside the box and recognize that no one solution will suffice. Variety and diversity in education is what will make this country a nation of nations. Our public school system was modeled at a time when the industrial revolution was in high gear. Our economy and the expectations placed on productive individuals have in fact changed. Yet, our educational system from Pre-K to 12th Grade as not reformed to a global standard. It may well be that our system of government, who oversees public education is no longer capable to deal with the diversity and complexity of an ever diversified public. However, the initiative to provide an education to everyone who is able and capable is still valid. Let’s find a way to break from the bondage of our past and find innovative ways to educate. We should not allow the divisive rhetoric of religion, separation of church and state to not fund parochial schools. Too much is at stake. Saying no to school vouchers is a lost opportunity to explore better models of education.

What Happened to Anti-Trust Law?

What Happened to Anti-Trust Law?
By: Rene Velez Mar. 18th, 2009

A closer look at the shear size of a company such as AIG and the impact on our national economy and its far reaching implications to our global economy make me wonder why congress would allow a company to get so big. By any account it is a monster that is feared by congress, the Fed and our secretary of the treasury. As I recall during my education in finance and accounting I do recall some laws that seem to imply limits to large corporations that had monopolies. It was not too long ago that ma-bell was broken up, Office Depot was not allowed to merge with Staples and Microsoft was charged with operating a monopoly. As it turns out no one is truly is looking out for the national economy in allowing AIG to become the apocalyptic, and financial nemesis that it has become. The Sherman Anti-Trust Act together with the Clayton Act do not seem to protect us from the sheer size and financial influence a large corporation or conglomerate can exert in a free market. Yet it’s devastating effects are upon us all as is evident in the historical bailout of AIG.

Sherman Anti-Trust and Clayton:

The following is an excerpt from WIKIPEDIA on Mar. 18th, 2009 and speaks to address the intention of these two well known laws.
In 1879, C. T. Dodd, an attorney for the Standard Oil Company of Ohio, devised a new type of trust agreement to overcome Ohio state prohibitions against corporations owning stock in other corporations. A trust is a centuries old form of a contract whereby one party entrusts their property to a second party. The property is then used to benefit the first party. In a corporate trust, the various corporations assign their stock to a board of trustees. The trust then issues trust certificates to the stockholders. They receive the financial benefits, while the board of trustees maintain operational control. By consolidating control of most companies in an industry under one controlling board, the industry is essentially monopolized.[7]
Around the world, what U.S. lawmakers and attorneys call "Antitrust" is more commonly known as "competition law." The purpose of the act was to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels. Its reference to trusts today is anachronism. At the time of its passage, the trust was synonymous with monopolistic practice, because the trust was a popular way for monopolists to hold their businesses, and a way for cartel participants to create enforceable agreements.[8].
The Sherman Act was not specifically intended to prevent the dominance of an industry by a specific company, despite misconceptions to the contrary. According to Senator George Hoar, an author of the bill, any company that "got the whole business because nobody could do it as well as he could" would not be in violation of the act. The law attempts to prevent the artificial raising of prices by restriction of trade or supply.[9] In other words, innocent monopoly, or monopoly achieved solely by merit, is perfectly legal, but acts by a monopolist to artificially preserve his status, or nefarious dealings to create a monopoly, are not.

Our Regulatory Framework is Outdated

The current economic crisis clearly is reflecting that our regulatory agencies are far behind and in many cases incapable of dealing with the economic structure of today’s large corporations. We can now see with certainty that we have not engineered the controls and safeguards to manage business in the 21st century. I continue to think free markets do work, but not without due caution and controls to prevent catastrophic failures that bring down a national economy. Scholars will look back at this moment in history and will learn much by our failures. Systemic control are in fact very important, the real question is how do you do that and not stifle innovation, creativity and the growth of an economy. We must find a balance in how to do this and we have to do it quickly. A completely unregulated economic engine is like building a race car with no brakes simply because you believe that the purpose of a race car is to go fast and nothing should slow it down. Any aeronautical engineer would tell you, you need to have landing gear on an airplane even though they serve no purpose in flight. Why then would anyone argue that controls and safeguards stifle economic growth. It is amazing to ponder on how creative and innovative mankind is. This is true in science as it is in business. However, we have a propensity to derail ourselves. Our sense of curiosity ability to innovate and experiment and to exert our will outside of the envelope is a dangerous thing. Systems, controls and regulation should not be of the nature to hinder our progression but rather to make us stop and think of the consequences of our actions.

In this economic crisis we allowed our economy to venture onto the edge of a cliff and we are in effect balancing on the center of gravity.


The Implications to Global Economics

International trade and commerce has served this country well. It has also created stability and economic opportunity for all who trade with us. International trade and commerce is bringing many emerging markets to the forefront of world politics and economic opportunity. Look at China, India and Brazil. This venture is feeding the hungry, clothing the poor, educating the masses and in sum improving the human condition for many countries.

As our global economy continues to evolve we should be very concerned about how we go about creating interdependent relationships on the global level. We must understand the repercussions of failed business, failed economies and how debt and other financial structures work and are supported. Why do I mention this? We need to be extremely fearful of what could precipitate from forming relationships with countries who’s banking system, economic system and monetary policy is severely flawed. Where a business failure in one country is marginalized, for the most part, to its boundaries, in an entire country economic failure, to the extent of what we face today in the U.S. could mean a holocaust, political unrest and even war.

Just as the U.S. has tried to be a responsible country in creating peace and avoiding conflict that saves lives we now have the obligation to make sure that no country could possibly fail economically to the point where all chaos breaks out and we are unprepared to address these issues. We must be preemptive.

Surely, we have only a limited control as to what we can have sovereign countries do, but we must be risk averse. The propensity and desire of other countries to emulate western economic power on a framework that is not suited to support that activity will in fact have profound effects throughout the world. Economic and political instability are key ingredients to war and political, cultural and religious ideology that is contrary to everyone’s desire for world peace and democracy. That being said I doubt there are many in congress (if any) that have a full grasp of the consequences and what are the drivers to these events. Economics is tricky and complicated to master.


Trends to the Future

There is much talk in the accounting profession to start to merge the standards of accounting into an international standard. In effect we will abandon historical cost accounting and adopt fair market value accounting. Many a seasoned accountant thinks this is a huge mistake. Adding fuel to the fire is the continued interest of merging foreign stock exchanges and in forming business combinations of capital markets in order to support multinational business activity. As emerging markets continue to expand and grow we will in effect need access to capital from around the world. Although, I feel that diversification of investment is a good idea, we must be extremely cautious of the inequities, abuses and the confusion of information that will be inherent in the complications of different economic climates, political risks, accounting rules and methods, regulatory systems controls and laws, competitive laws and a host of other issues of a modern day economy.

Does our president, our congress, our regulatory agencies have the ability to judge and limit the associated risks? The answer is a resounding NO!. No one is. No one company has their hands completely around this. In fact many are venturing into uncharted waters and learning as they go along. Many are making history in their own right and even ignoring the recommendations from experts in various disciplines. Why? Because of greed. , because of need.

The desire of countries, companies and governments to seize opportunity for greater wealth and for the maintenance of market share could well be the undoing of what greater good democracy and capitalism may offer. As the greatest capitalist country in the world we need to be cognizant that wherever we have influence, we will be blamed for the downfalls and potentially devastating effects not only of economic cycles but of failures of sovereign economies. History already shows us the Unites States has taken blame for many well intentioned efforts to help governments, and its people.

With the failure of so many large businesses in this economic downturn, do we as a nation abdicate our foreign policy and national responsibility to large multinational corporations? We need to start realizing that each U.S. company that ventures to a foreign country to do business is in effect an economic ambassador and by shear economic might and political influence is at the forefront of foreign policy. Congress, regulatory agencies and the like come along for the ride after the fact.

Congress Is Failing America!

Congress is Failing America!
By: Rene Velez Mar. 17, 2009

In some of my commentaries I have often cited the majority of America’s congressmen are lawyers by profession. Although I have been known from time to time to make folly of how lawyers have a funny way of making simple matters a complicated bureaucracy, I could not of imagined that they were as foolish as they are collectively. At minimum I would have thought there was a sense of safety in numbers, because someone eventually comes out and says……”wait a minute this doesn’t seem right!. Our congress has been fed the hook line and sinker, they have been hood winked, hog tied, extorted, deceived, lied to and they don’t even know it. These are the people we have in a position of power and trust of our money and government. I am in disbelief and if it were not for the seriousness of the matter I would think it’s a comedy of absolute stupidity. I need to add, I am not alone on this! I think what I say here most of America is beginning to understand.

The World As It Is For You and Me

If you or I (the typical average American) is having a hard time and we find ourselves having to cover for business mistakes, losses and a poor economy, we could try to find investors and or banks to give us financial assistance. If we were in the position of AIG, if somehow we could possibly convince a bank to loan us $165 billion dollars, there would not be a bank or investor in the country worth their weight in salt, that would give us money unless there was a contract drawn up. (Of course this is very hypothetical as no one would lend us or invest in a $165 billion dollar failure) But, for this illustration the terms and conditions would say things like, no excessive compensation to owners and officers, no distributions unless approved by lender, collateral of all personal holdings and even those of your children would be at risk, a guarantor would be required, like your rich grandfather or someone who had some financial weight. The stipulations for this kind of highly speculative loan would be long and extracting of the company and its owners. You probably could not buy a company lunch unless the lender approved it. Not only is this typical for lenders to do, but regulatory agencies would require prudent legal documents for such a loan and just about any newly minted attorney would tell you….you should have that agreement in writing, recorded and all the like legal procedures complied with. The truth is we would not likely get this type of loan unless we were holding some very special wild card that would amount to a miracle card. Something like an anti-aging drug, or the cure to all known diseases. Not even a cure for cancer would warrant a $165 billion dollar nailout. Oops, bailout.

So the question is , why didn’t congress create a better loan term document for AIG? Was there perhaps a shortage of lawyers? Did no one realize that there was an expectation of performance, repayment, control and transparency and accountability. These concepts of negotiated terms are so basic to a financial transaction that if congress has not properly protected US taxpayers, I dare say it is malpractice.

The Keys to The US Treasury

I know there is some document out there with terms and all, but it would seem that whatever the legal jargon on that document is the net effect appears to be, congress gave AIG the keys to the US Treasury and has told AIG, “write yourself a check and we will square it out later.” When I was a young boy visiting my relatives in Puerto Rico, I came to the realization, the small town I lived in was indeed very small and I was by no means living in Brooklyn. On a given day my cousins and some friends decided to go on a camping adventure through the cane fields and farms in the local area. So we gathered all the equipment and I was assigned the task of going to the local “Bodega” (a small country store) to secure basic provisions. This amounted to bread, butter some hard salami and other goodies. The only issue is I had no money. My cousin said, “don’t worry just go in there get the stuff and Miguel will put it on our list.” I didn’t know who Miguel was but asked, hey how does Miguel know who I am. My cousin replied, “ you are grandpas’ grandson from New York, everybody knows who you are. Indeed people I never met and that were not related to me knew who I was in town, knew I was from New York, thought very highly of my New York lifestyle, and even called me by my first name. Surely, coming from New York that was novel but truly I never gave it too much thought. I was not brought up to think I was more special than anyone although in retrospect, I was privileged among even my immediate relatives. I went as instructed to the Bodega, was kindly greeted at the door ordered my supplies and when I was finished, I was never asked to pay. Miguel simply said to say hello to my Dad for him and wrote down our purchase in a “school composition book” and told me to have a great day! That was they way things were done in Puerto Rico in that day and age and in many Latin American countries round the world. Today, I realize I was given that honor because I was wealthy compared to many in the town. I was also very well known because of my grandfather, who was well liked and respected in the community. I was indeed privileged to have doors opened to me by people who had much less than I. Who respected accomplishments by my grandfather and father and therefore looked kindly to their children. These people knew my grandfather would not abuse his credit or repayment obligation even though my grandfather never authorized or called ahead to say, let the kids put it on my tab. The only way that happens is when you have a tight community.

Such is the case in Washington. AIG has close ties to Washington and their power and influence must have been strong enough to bypass common sense and the ordinary course of how things typically get done so that congress simply wrote down $165 billion in loans in their congressional “school composition book”. Of course it doesn’t hurt when President Bush, the Federal Reserve Chairman Bernanke and Treasury Secretary Paulson have committed themselves and the nation with the political language of “Financial Crisis”!. All, on the eve of the presidential elections. That’s the grease that makes things move quickly in D.C.

Bankruptcy By Default

When I read that congress can not do anything, about executive bonuses paid out of taxpayer bailout funds, because those agreements were already in place and that contracts can not be voided I say; “Non Sense!”. That’s the most ridiculous thing I have ever heard. Let’s have a trial by jury and see if you can find a diversified group of Americans that will agree to not voiding those contracts. Why didn’t congress force AIG to file bankruptcy in order to get the bailout? Why didn’t congress invoke the laws of bankruptcy as a condition to a government bailout? Was there not a single lawyer qualified in congress the day AIG was given the keys to the United Sates Treasury? Let’s face it this is bankruptcy by default. When the only alternative is for you to seek a government bailout with taxpayer money the jig is up. You are by all accounts more than bankrupt, you are indebted to taxpayers and the United States of America. In the case of bankruptcy, the trustee has enormous powers. They can force the return of money paid out by a company to anyone or any company. Enforce contracts and make others void. They can dispose of assets, abandon them etc. They have all kinds of tools in their arsenal of laws to fix things. Of course somehow AIG did not follow what you or I would have to do. They just went to their rich “Uncle Sam” and asked them for help. After all, they are a credible, pilar of the financial community and a model business failure to boot. You know that’s worth about $165 billion dollars. When you’re failure is that big you get special dispensation in America. The fact is they declared bankruptcy and in deed filed a petition to the United Stated Government and its taxpayers and congress does have the means to void contracts they deem unjust. Salary or not. Now can we find a decent lawyer in our congress to fight for the American public? Anyone? Let’s not forget the credibility of congress and this great nation is at stake!


True Concern for our Future

I have but the utmost belief that this country will regain better days, but it is going to cost this country dearly. In addition to regaining ground we must do a multitude of things correctly simultaneously. Therein lies my fears. Our track record in allowing this crisis to happen and to respond to it leaves me and many Americans to be gravely concerned about our nation’s ability to handle these types of crisis without further sustained injury to the economic lives of our citizens. Our democracy as great as it is, is not used to or prepared for this modus operandi. I do not believe any members of congress have ever faced this type of crisis management and many are disconnected to the realities of the vast majority of our population. Many of our citizens will continue to get hurt in this arena and there is no safety net in place. The lacking leadership in this country and many of the economic inequities that has been coming forward for the past 30 years seem to be quickly coming to a head as the economy continues to contract. I know this seems alarmist. It really is not my style.

Plan for Action / Plan For Change

Congress needs to create a special committee to study analyze and become a special economic and crisis management team to make sure taxpayer money, the presidents economic recovery plan and a multitude of national priorities are carried out efficiently and effectively. The concept of a House and Senate bi-partisan legislative process conducting business as usual simply is not enough or efficient. Like many business ventures streamlining and fast tracking plans of action need to be implemented. In some ways the logistics of warfare could be put to good use in the current economic climate and in carrying out national initiatives. I realize as a democracy we deplore this concept. As much as I hate to admit it, we could learn from how the Chinese have managed to combine political ideology with capitalism.

I would not think of changing our form of government. My comments are geared towards changing how we do things not why we do things. We have to change how we do things in order to arrive at a different outcome. I don’t think in our country’s case it is fair to look back at history and apply exactly the same tactics that have worked in the past. The world, our position in it and the pace at which our global economies react are much different today than they were in 1933 or 1974. We need to recognize this and adapt. Congress and our president needs to somehow recognize that we need to change the business of politics if we are to be able to sustain a competitive edge. If we are to survive as a leader of nations.

The Faith in Your Politcs

The Faith In Your Politics
By: Rene Velez March 9th, 2009


It seems to me that it has come to the point when we have to talk politics and faith, all in one breath. Not that this should be so surprising when, you consider that the United States, the great nation that it is, was formed over two hundred years ago in large part by many seeking religious freedom, among other things. As part of this pursuit, every political, legal and business device was employed as a means to this end. The end did come and this nation became a nation where religious tolerance became not only a way of life but also a way of politics. Our constitution protects individual’s religious beliefs not only by means of common law but also as part of our constitution.

Having said that when did it become popular or a matter of proper form that no politician should utter a word as to their convictions of faith? Somehow from the beginning of when this country was formed through the late sixties it was a safer bet to stay silent, or at least not to stir the wine, by mixing politics and religion. I think somewhere their was an unwritten rule that said; be sterile if you want to get the vote of the masses. Yet, within I would say, (I am guessing) the last 30 years politics and religion seems to be at the forefront of many a campaign. What goes on here?

I suppose that part of the issue is that religious organizations have a great deal of political clout in terms of money and votes. In addition I believe that, the poor judgments and outcomes of corporate America together with the sins of politics (no punt intended) looks towards the values and morals of faith to lend a guiding hand towards, ethics and values. Some call this the right and wrong in terms of values or the left or right in terms of politics.

God Is With You

As an observer, I read stories in the press regarding conflicts about some peoples religious freedoms over the freedoms of another. For example; should a menorah be placed at a community center if the community is mostly Christian? Is this offensive? Or should a Christmas tree and Santa Clause be erected in a ‘round about’, in front of a Jewish temple? Or perhaps , most perplexing should a sculpture of the ten commandments be in display in a county courthouse? The latter has a peculiar twist in that our legal system tends to borrow a great deal from religion as a whole. We swear in witnesses on a bible. Our basic law of torts is derived in part by the very same commandments. We utter the words “God Bless America” in full glory and most people do not raise an eyebrow. The President of the United States is sworn in with is right hand on a bible. Our money says “In God We Trust”. Curiously, now that our banking system is in intensive care, we trust less in our banks, we are cautious with anything congress does and we despise corporate America for its evil ways. Right about now, God and the moral values of religion have my attention! God help my 401K, and deliver us from all evils!

The fact of the matter is that religion is in all forms of government and politics. We never really managed to separate church and state. Technically, churches and other religious organizations are not required to file or register for tax exempt status. However, they are obligated to follow the same tax laws that apply to other tax exempt organizations. Something the IRS is now interested in since the mega churches seemed to grow overnight into large financial dynasties. Some of what they do is in fact taxable. Or from a political point of view, or twist, their vast numbers and economic and political might make them more visible.

A Calling for a Moral Compass

Strangely enough religion is in politics today and politicians are less fearful although very calculated in how they embrace religion and politics together. Why? I think America, if not the world, has a calling for values and morals in how our country is governed and how equitable representation is made possible by political candidates. The desire for a moral compass is well founded and I suspect that it will endure for some time to come. I fear though that any strict adherence or association with any religious denomination is flawed at best. In the end the tensions, conflicts and extreme positions between the idealism of any religion is a greater liability than it is a resource. I suspect that in the end voters will get tired of ‘converted politicians’ and some will burn in hell for their choices. However, this speaks volumes for the dire need for straight non-biased ethics of elected officials. In the end people don’t care what religion the political leader favors, or sympathizes, only that they carry out there roles in a capable and well informed manner. Our political moral compass will not work solely through religion, it would work better through sterile intellect and through transparency and accountability, tempered with the sense of humanity of and for the voting public. What people want are smart politicians that are knowledgeable and well rounded, who act in the furtherance of our society and not on their political futures or for the interests of big money. If my suspicions are correct politics in this country will have to change and nothing is more of a catalyst to change than a bad economy and proof positive of the shortcomings of a congress who in large part could well be proven as incapable.

Ethics and Values as Part of College Education

I have in the past made mention of the urgent need to teach ethics and values as part of business schools. As a parent raising two kids, I have often thought that ethics, values and morals should come from the home. But in an era when a new generation of have-nots, that are coming from less than educated and well rounded social circles, are in fact meeting the challenge to work their way towards a college education, we must face the fact that many have not known the best of ethics and morals from their upbringing. I don’t mean this to be a criticism in any way. What I am trying to say is that we must embrace the disadvantaged, who strive to better themselves by means of an education, and have not been privy to the models of moral and ethical values to acquire those skills. If these models are not part of their upbringing then they should be, as part of their continued education. I would also like to mention, what I say here is not limited to the disadvantaged. My personal experience in knowing many a wealthy and advantaged contemporaries, who have it all, yet lack the very same models of ethics and morals. In some cases these members of our society could be worse. Why? Because no one typically denies them access and because they grow up with a mentality of entitlement through association of money and influence. In other words, they are spoiled brats. Yes, the lack of ethics and morals is an equal opportunity vise. People without ethics and morals have no social class. (how appropriate in that last sentence has two meanings, (a) They have no class, (b) and, there is no difference between social classes).

We are in fact a divided nation on Sunday! We deny children the right to public prayer at our schools and yet we expect them to have proper values and morals. This is not to say I don’t see the point of argument related to religious freedom in schools. I wouldn’t know how to draw those boundaries of rights. But, I suspect it would look like a cross between Picasso cubism and the those melted images on a Salvadore Dali. (I really don’t know how anyone can draw up denominational boundaries and be faire) I think the best way to teach ethics and morals to our children and in our colleges and universities is simply to teach it in a sterile and non denominational context. There is a right and a wrong. This is basic. You don’t need religion for that. Where it gets complex, we need to learn to analyze. In the end we will all make mistakes, but if we must, then let’s make the mistake that benefits society as a whole and hurts society the least. There is a way to teach this, although I realize it is not easy, and somewhat philosophical.

I leave you with this one sentence which I remember and try to follow in my personal and professional life. It is in fact, I think, an admission that life is not perfect and that we often face difficult choices and that often ethics and morals are not popular, but try we must even when logic fails us and the odds are not in our favor. :

“The most difficult thing to do in life, is to do the right thing!, Even when no one expects us to do the right thing and when no one is doing the right thing, and when no one wants to do the right thing for you.”

God Bless You!, Have Faith.

It's Middle America Stupid!

It’s Middle America Stupid!
By: Rene Velez Feb. 19th, 2009


Overtime I have come to realize that all of us have to some extent a disconnect on many matters. I have one when it comes to the Hip Hop fashions today’s kids wear. I just do not see the glamour or why its “cool” to wear pants that are falling off your waist. You can’t even walk down the street without your pants falling off, much less run for the bus. Why is it that making people look at your underwear as your pants hang on the shelf of your buttocks cute, or cool. If you’re going to do that hey, just cut out the patches of cloth and let the cheeks hang out altogether. At least the pants will fit. You know there was a movie made about a designer who did that when designer jeans were the fashion.

I realize some of this is generational. When I was a teen bell bottoms were in. Man, I would not be caught dead wearing straight leg pants. The bigger the bells the cooler those pants were. But at least I wasn’t baring my anatomy. I confess, my parents had the same expression on their faces as I do now about Hip Hop fashion.


Today’s Major Economic Disconnect

As I look at all these bailouts and the focus on American big business, the more I see that our leaders truly have a disconnect about the core of Americas economic engine. To paraphrase a Clintonite expression, “It’s Middle America Stupid”! I well realize the importance of our banking system, of our automotive industry, of capital liquidity. I realize the profound ripple effects that these bailouts and government programs have in terms of the potential positive ripple effects throughout our economy. However, I also see clearly that our government does not understand, nor do they seem to know how to reach the innovative powerhouse of middle class America and the multitude of small businesses that make up a significant portion of our economy. It’s Americas middle class families that make up a significant portion of our national economy, It’s the innovation and super-efficient small businesses that have created real value in an economy where manufacturing and many industrial jobs have gone to other countries. For all the money that you may put into American big business, a large part of that will wind up spent not in our country but to overseas companies that manufacture the component parts, if not the whole product, at cheaper labor rates than is available here in the states. My feeling is that a bigger bang for the buck can be achieved by investing in the small companies that manufacture products and provide services hear in the states than to Americas big businesses. It’s these smaller scale companies that manufacture just in time components, or odd lots, or special order items, or provide valuable hands on service, that make their cost affordable and effective compared to large corporations that can only exist through economies of scale and by outsourcing production to other countries with cheap labor.

The Tie in to the Disconnect Factor

So you might ask, why money doesn’t flow to these small and mid sized companies? I should make note that when I speak of small and midsized companies I am talking about companies with 10 to 200 employees with revenues of between $5 and $25 million dollars. Although many could be called small that are in the $100 million and under. I think there are several reasons. One thing that comes to mind is that these companies have small budgets. They exist and make money because they are generally private companies (non public companies) who’s owners earn a salary and make a living but may not have much left after all operating expenses. As a consequence they do not have lobbyist and political activists working for them. They are under the radar. These companies have small voices in terms of making political waves for the political leaders who oversee their geographic region. So to the extent their inequities do not receive any response, the likelihood that an elected official may face a negative nudge on votes come re-election is a minor risk for elected officials. Of course many elected officials seek out and do have members on their staff that assist them in attracting the largest amount of support for any favors that they may be able to dole out. You can well say that it’s a way of buying votes. Our political leaders are more inclined to be sensitive towards big business and to take votes and positions in their favor because of their campaign contribution and how they can swing votes than they are for small middle American and typically non public companies. So there is a redundant disconnect factor towards small business. This disconnect comes from the limited resources of the business and from elected officials lack of interest for small to medium sized businesses.

The Economy of Scale in a Bailout


Another issue with regards to bailing out Middle America is the cost. From a business perspective most people are not aware of the billions of dollars that are spent on marketing and corporate intelligence of figuring out markets, market niche’s or even what type of gadget a consumer would purchase at say Best Buy. In fact they even know that a certain color of packing is more attractive than another depending on whether the buyer is likely to be a man or a woman.

The potential cost of figuring out which small business is worthy of a bailout or an injection of capital is enormous. In fact so much so that it generally precludes the governments ability to approach a bailout to this sector of the economy. Wallstreet, venture capitalist and private equity firms spend billions of dollars in a given year simply to find, analyze and structure financing for small to medium sized businesses. This process is so involved that even when done correctly, even spending large sums of money and employing MBA’s, attorney’s, accountants and a host of other professionals there are many failures or at best low returns to make the effort not viable. To think or suggest the government could potentially take on this task and do it better than the number of firms that do this professionally is for the most part foolish.

In order for the government to address the economic downturn on the scale that is currently the case, the best and least costly not to mention the fastest way to institute programs and policy is by starting at the top of the food chain. So big business, with lobbyist and the political influence will and do have an upper hand to being bailed out despite their sins. Not that I think this is at all fair however, it may be the best our government is geared to do.


Conclusion

This situation and the inequity of government to be for the people speaks much towards how we are trying to resolve 21st century issues using 19th and 20th century strategies. At no time in the history of the United States has there existed such a mass of economic power that has been so important towards achieving the innovative and economic objectives of our nation as there are today via small to mid sized businesses. And yet government fails to be able to represent or to harness the great potential of this vital sector of our economy. Obama won the election because he represented change and everyone wants that change. Everyone knows change is needed. But how to come about that change still eludes us. In our current condition I don’t expect that this problem will be fixed. It is more likely that small to mid sized businesses will address and fix there own problems than government coming to their aid any time soon.

Why Aren't CPA's Part of the Economic Solution?

Why Aren’t CPA’s Part of the Economic Solution?
By: Rene Velez Feb 10th, 2009


The country is a buzz about the economic downturn of one of the greatest capitalist societies in the world. People’s confidence in the Corporate world is by recent accounts at an all time low. Government credibility and its effectiveness is in doubt. Despite our congress’ ability to bring about a stimulus package to our economic conundrum by pumping money into the system, their efforts are wrought with a vision of waste, lack of knowledge and leadership and of prudent exercise of judgment. We the people have made a direct connection with the influence and power of big business and that of the associated strings attached to our political leadership. The money has gone to the wealthy despite the dire straights of the common citizen. To add insult to injury, reports of corporations conferring dynastic compensation packages to executives, purchasing corporate jets and travel and entertainment junkets to luxury destinations leaves nothing less than a bitter pill in the mouths of Middle American families.

In Iran, fanatical Muslims are chanting death to America, and rejoice on our economic hard times. Shameful, especially in that we have in large part brought this recession upon ourselves through capitalistic greed. Even our allies look to us for a solution and have spoken out against unregulated and egregious capitalism.

Psychological Economics

To a degree any potential solution or combination of solutions must involve a mind altering jolt, to snap us out of the pessimism that prevails in today’s markets. Besides sound economic policy and true leadership nothing, could create the psychological catalyst to stimulate confidence and a renewed economy as the metrics of transparency. This economic situation requires the skillful salesmanship of a change agent that can back his/her rhetoric with proof by the numbers. I dare to say, nothing short of this will bring us out of the economic tailspin we are seeing. In the end the solution to any turnaround requires all involved to buy into the plan and become part of the solution.

To this end the accounting profession should be at the forefront of offering the systems, and metrics to show the American people and the world how well or badly, the government is performing on any taxpayer money it uses to leverage us out of this hole. The country needs to see, how many banks are saved, how many jobs are rescued, how many jobs are brought back in line, who is making money, what industries are being benefited, how much money is being put into service, how is the money being placed and who owns those companies that are getting the money. How much is each state, city and local government getting, what is the amount invested today and how will that help the state, city and the citizens into the future. Can a return on investment be calculated. What thought process and qualifying factors are being used to award government contracts and funds. No profession is better able to analyze, record, interpret and report these findings than the accounting profession. In a congress where some 90% of its members are attorneys, who may be well endowed in the nature of politics and the law, few understand accountability and how to present it in a fair manor. This is, in my opinion a major flaw to the American political system.



The Sidelined Profession of Accounting

I have for many years been very critical of how the accounting profession portrays the value they render to our great nation. We as a profession have failed to educate the average person of what we do and what our responsibility is to the public, even though “public” is the middle name of our designation. We have failed to take on congress and to gain our rightful place as watchdog of government spending. While we clearly perform many services, we do report many abuses, we do know the ins and outs of the inequities of government, we are hog tied and gagged by the power and influence of Corporate America and their partners in waste and deceit, our very own elected officials. We have a Government Accountability Office (GAO) that has a role to supervise, oversee, evaluate, establish rules and systems and to report its findings to all about government activities. Yet it is essentially powerless and toothless in its ability to enforce and enact change on those it reports on. The accounting profession has direct ties to the Securities and Exchange Commission (SEC) and is subject to the promulgated laws and rules when it performs audits of public companies, yet we lack the power and authority to command changes that would safe guard wealth and the economic security of this spectacular of all capitalist nations. Although we do by and large add great value to the capitalist system by fair and standardized reporting of those companies that trade in our capital markets, as well as on government activity, we are leashed to the ministerial tasks of our profession as opposed to establishing the forum for transparency and for internal controls that make for a better capitalistic system and democracy.

The theory of Laissez faire when implemented has created a glass wall to the accounting profession in that no one wants a meddling professional accountant putting obstacles and questioning the free market forces and the flow of capital. Certainly, many know that we are not well liked when we come calling for records and explanations during an audit. But asking the tough questions with a trained mind leaning towards skepticism is in fact, what brings about value to our economy as a whole. Yet, we have a professional obligation to a certain extent be regulators with a commanding authority. By no means should the profession interfere, but we should have, a commanding voice that has the power to compel investigations and analysis of industries and trends. This is part of our implied role as watchdog. We also need to have authority with teeth to bite back when abuses are demonstrated. To bring about legal action or law enforcement when it is demonstrated and reasonably understood that there is public risk in excess of reasonable reward. Essentially this is the “whistle blower” laws on steroids.

Think of what a difference that would of made in the banking industry and in having an opportunity to evaluate removal of the Glass-Steagall Act in light of today’s economic demise of both our banking system and our investment sectors. Think of the role a more authoritative accounting profession could of played in the analysis of overleveraged banks and in evaluating the lending process and the risk shifting of high risk mortgage pools.

The profession is so poorly weighted in its importance to twenty first century economics that we are doing the great capitalist society a great deal of harm. Here too is an example of a profession that has failed to evolve from the concepts of the industrial revolution to the needs our nation faces as a global economic power with long reaching implications for American interest throughout the world. If you don’t think so read the press these days and see how many countries blame the U.S. for shameful capitalist conduct.

The Tools vs. The System

By and large the theory, tools, metrics the required understanding to all those disciplines that make our economy work are there. What is lacking is the independent, funded working system and framework to oversee, analyze and debate and report issues in a master framework that strives to bring about effectiveness and efficiency of our capitalistic society and our global economic influence.

What the United States needs is a United States Economic Development Board of Governors that takes on the role of watchdog, information gathering and analysis of fundamental economic issues and promulgates required legislative initiatives by elected officials. These promulgated initiatives shall have the following requirements:

(1) Promote economic stability.
(2) Make for efficient capital markets.
(3) Provide for efficient and effective banking.
(4) Provide for fair and balanced international trade.
(5) Create systems and controls and reporting for a transparent government.
(6) Create public private partnerships for innovation and the improvement and development of the country’s infrastructure.
(7) Create an effective and efficient government spending system
(8) All promulgated initiatives to legislators should have clear and obtainable times frames for any required laws, bills and other executive orders. It shall also impose strict time frames for completion of the tasks and the spending involved.
(9) Create a system for national healthcare, funded by corporations and government.
(10) Create a system for a national retirement system funded by corporations, individuals and government.
(11) Create a system that allows federal, state and local tax credits for qualified volunteer services rendered by individuals and corporations.

I am sure there are more critical items we could add however, in essence we need to be able to address core issues that further our social and economic interests in order to maintain our economic well being.


The Success of Autocracies in the 21st Century


Two notable authors Fareed Zakkaria and Robert Kagan in their books “The Post American World” and in “The Return of History”, respectively, make brilliant commentaries of the rise of Autocratic governments such as China and Russia. These governments are a far cry from what our government is, what it will ever be, yet they have had great success in developing their economic might with dictatorship style of governess.

Not that I cater to this form of government, yet as of late I see some sense in the current talk of U.S. nationalization of industries. Of course only the current economic situation brings mention of this, worthy of presentation for a great democracy like the U.S. What I do think is the key driver to their economic success is not the form of government at all. It’s that their form of government brings about strict initiatives that are accomplished in record times. That concerted efforts and in effect prime directives initiated at the top, are acted upon and brought to fruition in Stalin type fashion is very admirable and deserves mention. At the most innovative companies this is a key form of governess. Our liberal democracy is expensive, wasteful, time consuming and generally ineffective and adversarial towards addressing social and economic issues in today’s 21st century global climate. To say this in other terms; our government can not and is not built for business. Every time we try we wind up with $10,000 coffee pots and $100,000 toilets. We need to find the way to incorporate the autocratic decision making and initiative based methods to steer social and economic based policy into our democratic way of government. We need to isolate our legislative process to how best to pass the laws required to manage our country and leave the initiatives, measurement and evaluation from concept to implementation to an independent body that injects and mandates the important drivers into our government.

With regards to autocracies, the fact of course that their government will not succeed because they are mistrusted and mal aligned to the interests of other countries is a topic of political struggle not one of economic benefit. I don’t agree with dictatorships yet we do and should find ways to co-exist with all sovereign nations.


Conclusion

For years we have made fancy talk about bringing business based approaches to government. That was great talk then. Today in light of the capitalistic greed and fiasco that surrounds us I am not too sure we want business in our government. But more to the point business ventures in government will never work because the focus and goal of our elected officials is skewed and opposed to the better interest of our nation. An initiative driven government in a democratic structure driven by an independent body as the way to "fast track" critical reforms is something we need to discuss and the accounting profession’s skill set together with an existing value system of honesty and integrity could be a powerful force in moving this country in the right direction. The question is who among us has the fortitude and desire to venture into such waters. Maybe, our new president should consider this structure and be ring master.