Technology: Savior or Catalyst to Apocalypse?

Technology: Savior or Catalyst to Apocalypse?
By: Rene Velez   06/19/2011

I am a technology person and an extensive user. Ever since I started programming in Junior college in Basic and Cobol, loading programs at Miami Dade Community College using key punch cards, I was sold. Don’t get me wrong, I wouldn’t wait overnight in the rain for a chance to get the first IPhone 4 or IPad 2, but I would proclaim the very many benefits of technology and the use of IT in business and in your personal life. After I earned a degree in finance, I somehow wound up getting a lot of work setting up computerized accounting systems. Everything from the small IBM XT computers to the state of the art scalable IBM AS400, I was setting up computers and doing system conversions for small mom pop companies to large corporate clients like AAA. I have even done some system design work helping programmers make user friendly screen interfaces and organizing programs to mirror operating work flows in accounting. Software. Hardware and programming have come a long way since then.

Thanks to technology we can order things on line 24/7, we can download music or a movie and be watching it in minutes. And not just on TV, we can see it on our IPod, phone or tablet. We can track our packages almost in real time. When the Mavericks won the NBA, text messages rang all over the neighborhood way in advance of the evening or morning news. If we have an ailment we now have CT scans and MRI’s to compliment the old fashioned X-ray. In short technology moves us and propels us forward. The benefits are staggering. And it will get faster, better, smaller and cheaper in time. Further it will be even more pervasive.

But, fundamentally, is it a good thing to have this instant gratification? Do we or should we as a race learn to be more disciplined about technology? It seems cultural lag, or the lapse of time before a new technology is adopted by the masses due to being able to understand, trust and accept technology almost doesn’t exist anymore.

We generally do not think having a family is a good idea at the age of say, 15 simply because our body can do it. You don’t give the keys to the family car to our 13 year old even though she may actually be going on 18 physically. We do not accept men and women into the military until age 18. In Florida, you can’t even have a drink if your married and in the military until your 21. Let’s face it we develop and learn slowly. Wisdom comes to us  in its own time schedule. Unfortunately, as for the human race, it could be centuries before we fully understand the consequences of our mistakes.

Many of the stresses at the global level are in fact being magnified because of the speed at which all events in our lives are now possible. Certainly not having social media like Facebook may not have changed events in the Middle East. But there are strong arguments that advanced communications and social networks have propelled human action and interaction. Likewise, the structural economic changes in this country due to the globalization of economies and the disparity between the underdeveloped countries and developed countries are having a significant impact on us. The middle class is taking a beating and technology may be in part to blame for rapid changes. Is it possible the speed technology gives us to interact and to conduct business and make substantive changes to the world we live in is outpacing the human ability of societies all over the world to adapt? Is this a potential catalyst for world instability?

Are we ready for all that may come our way? Do we all really understand the consequences of having instant gratification? I find it fascinating few people are talking about this.

As for myself, I learn everyday! I love the speed of light but patience is a virtue. I wish I knew when I was younger what I know today. Yet the journey, it makes me human. It balances the struggle and somehow, everything should be in it’s time and place.

No Bull In The China Shop

No Bull In the China Shop
By: Rene Velez Jan. 19th, 2011

President Obama has given a whole new meaning to rolling out the red carpet in Washington. It certainly is a tongue and cheek affair when we invite a communist country leader to the center of world democracy and treat him to a fancy dinner with world leaders. China after all is a country that is known for human rights abuses. I am sure the average American and pundit alike can think of numerous reasons why we should snub those communist dictators. In fact they might even be right. But of course the very same people have no problems buying the many “Made In China” goods we consume daily in this country.

The Exercise in Diplomacy

We should all exercise cautious diplomacy with the Chinese government and its leaders. Look at it this way, we all have worked with people that we may not really like. But, since we get paid to do a job, we exercise civility and we get the job done. China is such a player in the world market. We do not agree with their form of government but we tolerate them and work with them. Let’s face it, as long as they are not our enemy, we should not engage in a relationship that alienates us from them. President Obama is right in establishing dialogue with the Chinese government and in trying to bring the U.S. and China closer. This is not about selling out to the Chinese. It is about creating a strength in the common factors that affect both our countries and in the furtherance of world peace. Diplomacy with the Chinese makes perfect sense. We need not make an enemy out the Chinese simply because we do not agree, even in fundamental government policy and human rights issues. The Chinese already are well invested into the U.S. and in the world power structure and their leadership will have to evolve past communism and its current ideology and adopt mainstream world governance. The U.S. foreign policy has often failed due to a dogmatic attack on countries that are different than we are and in pure arrogance has created enemies were we had none. Let us not do this here.

China the Ally
We should not loose sight of the important role China plays in helping maintain world peace. Particularly in Asia. Recently, when North Korea has exercised reckless abandon in flaunting military power China has acted in good faith to maintain some order. Certainly, effectiveness can be questioned but China is a world power to be taken seriously. Anything the Chinese can do to avert any war is a major win and for that we should all be thankful. It is ironic that a country which has displayed human rights abuses such as those actions in Tibet and the jailing of a Nobel Peace Prize winner can actually be an ally of the U.S. in creating peace. It’s almost as if we are not talking about the same country. To be certain, many scholars have difficulty in explaining such a divergence. Then again here we have a communist country that has adopted capitalism and seems to be doing a fantastic job of it. Again we could easily criticize the Chinese in many areas, from pollution and environmental damage to poor working conditions and the manipulation of the value of their currency. Yet, we need to listen carefully at something the Chinese have said over and over. Hu Jintao and the Chinese government has said, we have some “unique” circumstances that are very different. In fact China has many challenges before it simply due to its shear population size. We all try to put meaning to the term “unique” and in the end we can’t help to highlight the differences. However, when all is said, they remain an ally of this country even if that friendship is shaded in hues we can’t easily comprehend. China does not easily fit into our, or the western world way of thinking.

The Trump Factor

Donald Trump, the world known real estate billionaire, has come out and defiantly called; China is our enemy. He cites human rights abuses, copy right infringements, hacking into computer systems, stealing technology, price dumping, currency manipulation, seeking political and strategic dominance etc. etc. Few would argue that Mr. Trump is not a wise man. In fact many, if not all, he mentions are in fact true by my quick accounting. However, I hardly would suggest calling them an enemy is correct. Simply, China is beating us at our own game and breaking many established rules in the process. In fact China is the envy of many U.S. corporations who wish they could command their environment, for profit, as well as the Chinese. China is to some extent what capitalism would look like in the U.S., if we had no regulations and human rights. You may want to consider the recent financial melt down on Wall Street, the disregard for risk, the highly leveraged companies, the request for bailouts and then huge compensation packages for the very executives that caused the collapse to begin with. Practically a collapse of the financial system of the greatest capitalist country in the world by a small few greedy capitalist. Seems to me the China shop on Wall Street was doing quite well until the American Bull walked in. I am not a fan of China nor a supporter of their actions or political ideology. But what are the alternatives? Should we allow a country with 1.2 billion citizens die of hunger, deprive them of opportunity and advancement? Allowing them to do this only accomplishes two things that are truly the enemy of America. Firstly they become a burden to the world and in particular the United States. Secondly, poverty, political unrest, the lack of opportunity are the recipe and breading ground for contempt, disorder and tomorrows terrorists. China is a thousand year old culture that is catching up very fast. Give them the opportunity and make a friend out of China. We should recognize that once that opportunity is had, nothing creates a motivator to fix ideology than the threat of going back to the misery of yesterday.

Conclusion
Without question China is an anomalie. We need to be very diligent in how we proceed with China. We need to exercise extreme diplomacy and strengthen our ties with them in order to improve our relations and gain a common trust with the Chinese. Only by working together can we hope to avoid conflicts with China and other global powers and in the long run we can aspire to someday help China become more democratic. Some anxiety with China is very understandable. What may add to that anxiety is that in this long journey with the Chinese we may actually learn something from them. When talking and working on all things China, we need to make sure we have a full grasp of all the factors in our relationship with them and avoid the “Bull” in the China shop. We should understand clearly, that their fortune is not our misfortune. It is a call for us in America to create another Sputnik moment that will galvanize this country, its leaders, government, businesses, citizens, educational institutions to be creative and innovative. To break the bounds of our current crisis and forge a new tomorrow.

How Economic Conservatism Leads to Liberal Taxation

How Economic Conservatism Leads to Liberal Taxation
By: Rene Velez Aug. 11th, 2010

As I read the current newspapers I read a lot of dire stories of how local, state and even our federal government is grappling with something most of us do on a daily basis. It’s called living within your means. A more technical jargon reveals the phrase “balanced budget”. Of course if we fail to balance the budget then we have additional financial jargon such as deficits, budget cuts, layoffs, program cuts and reduction of services. Of course on the personal level, when we can’t live within our means we can’t lay off the children but we can choose not to take a vacation, get a new car, we save less, incur debts and we don’t eat out. We may even go as far as to cancel certain services, such as the pool guy or the lawn service. Anything that is not essential. These are often hard choices that no one likes but many families have had to, at one time or another, make tough decisions to move on to better times.

Of course government has a much more difficult time trying to cut their spending. Typically it’s a political hot tamale because the public votes for those who provide a service no for those who cut. In addition bureaucracy has a bad habit of making it a real challenge to cut services because typically they are vital to a community and it’s often next to impossible to cut off funds to a civic service due to laws, mandated commitments, unions and a host of different interests. I believe it was Ronald Reagan that once said, “Once you provide one dollar of funding to a government it’s a dollar you will never be able to take away”, or something like that. Unfortunately, government is also used as a form of policy spending in the hopes of stimulating the economy. It is after all an enormous employer and consumer of goods and services. This too makes cutting back a very difficult choice.

Desperate Measures

The Great Recession has created an abundant need to cover the shortfall of revenues and aside from cost cutting, layoffs and reduction in programs and services we are seeing a number of ways to increase revenues. We are using programs that crawl through various databases to see who has not filed a return, paid for a license or is otherwise not paying taxes which are supposed to be paid by law. In addition we have increased millage rates in order to raise real estate tax revenues that have been downsized due to plummeting home values. Local and state governments have increased fees for services such as renewing your corporation, your auto tag to parking fees and have even invented new fees. It seems at the worst time possible government is exacting more out of its constituents when many are least able to afford it. These are contrary to the typical political stance most elected officials would take, although not unheard of. Why? Simply stated, politicians avoid such decisions because it affects them directly when elections come about. These desperate measures have some very negative under riding forces that have yet to be qualified. But in general, conservative measures to preserve government spending and to balance the budget can lead to liberal thinking and policy shifts that otherwise might not ever become mainstream.


The Tea Leaves

If anyone is paying attention to politics these days you should take notice of the Tea Party Movement. Some call them a splintered group from the GOP, and that may be partly true but the reality is there is no clear consensus. The fact is these Tea Parties are issue based and their issues span the spectrum from far out ideology to regional and local issues that may or may not be mainstream thoughts. One thing does seem clear to me. The activities of the Tea Party movements have more to with a disenchanted assembly of citizens than to any political party. A look at the primaries in many states this year and its simply amazing that some of these candidates have won these primaries. Even more so that they have won against long standing career politicians that are entrenched mainstream incumbents. The idea of replacing everybody who is responsible for all that is wrong in government seems to show itself at the polls. I find it ironic that at a time when conservatism, especially on the financial side of our everyday life, seems to be the order of the day, liberalism seems to be the under toe of what some might call a political uprising. That makes for a very interesting set of possibilities for years to come as big changes occur in the not so distant future.

Finding the Revenues

If by this juncture you are buying into what I am saying, you should see California’s desire to legalize marijuana. Here is yet another attempt to take conservative measures to balance a state budget, continue to provide services to the citizens of this enormous state and yet adopt legislation to legalize and of course tax marijuana consumption. Of course California is hardly exemplary of the rest of the country in thought, politics, law or ideology but, California is not alone. Other states want their share of the marijuana sin tax. A closer look at who is for and against these legalization laws and you will be surprised to see conservative, law abiding, officials who are taking another look at how to make this work.

Blurred Parties and Ideology

Without a doubt there are many changes coming in this country. Some caused by a paradigm shift in demographics as aging baby boomers retire and the new generation take their place. Another because of legacy issues that are all across the spectrum of politics, economics, energy, terror, medical care and everything else that shapes our existence. On any given day, it’s tough to tell who’s a Democrat and who is the Republican. I suspect that just as Charlie Crist of Florida has switched political sides from Republican to Independent this may be a sign of the future. It also speaks loudly to how the issues of the day are driving the points more so than political affiliation. For this very reason, and many others, the trend to more responsible, transparent and conservative business and government will lead us to more liberal ideology. You might say that extreme circumstances to conserve and maintain order generally require us to think liberally in order to adjust our expectations for a conservative future. It’s thinking out of the box on the rails of policy. It’s how innovation comes to bear in the technology sector or in corporate America. In the midst of the cold war, when we were so concerned over big brother watching you, Twitter would have been impossible because, who in their right mind would want the world to know what you were up to. In fact it would be suspicious as many misleading propaganda machines were employed all over the world. Yet today…..my how times have changed.

Magnolia Insurance and my Rant to Alex Sink

Magnolia Insurance and my Rant to Alex Sink
By: Rene Velez May 19th, 2010


In all that I do I try very hard to be fair. But when faced with circumstances that are unfair, I do not take kindly to the circumstances. In particular when there are people, corporations and a governemnt watch dog that is their job and responsibility to make sure things are done correctly and fairly for the benefit of society.......... When it all fails, all together and at once what do we have? We have a complete systemic failure that typically smells like general incompetence. When our goverment shares equally in this failure.........we need to speak up and be heard.

Here is my rant to Alex Sink, CFO of the state of Florida regarding the cancellation of my homeowners insurance policy, in a surprising and unexpected and almost unannounced fashion.

Dear Ms. Sink,
By sheer accident I came across the fact that my home owners insurance company was being liquidated by the Florida Department of Financial Services. Just one day ago I received a letter from Magnolia advising to seek alternative insurance because our policy would be terminated come May 30th.
Although I am sure the DFS has cause for liquidating the company, I am not at all pleased with how this is being done. Very little time to shop, 8 days til the policy lapses, poor notice from the company and none from the state. What in the world is your department thinking? There people and lives behind the policy being cancelled.
This leaves a very bitter taste which I am sure will be reflected in how I vote. As it is, the general public is angry at how poorly government serves it’s people. This is not the way to do business. I am an open minded and educated professional which understands and is accomodating to change. However, collectively a poor economy, rising costs of living, continued increases in the cost of home owners insurance, health care costs and impending increass in taxes leave people who are responsible and prudent in the management of their financial affairs wondering what DFS and other governmental agencies are doing for us. The department needs to pursue long term planning goals for homeowner insurance. You will no doubt need federal backing and perhaps legislation.
- No more of these sparsley capitalized insurance companies that are time bombs.
- No more Florida subsidiaries of national companies who’s only reason for creating a Florida company is to limit their losses in the event of hurricanes. The name of the game in insuring risk is diversification, across state boundries.
- Diversify loss risk by zip code and type of dwelliing to avoid concentrations in each insurer.
- Limit the amount of Re-Insurance.
- Curb the amount of premium revenues that can be used for marketing and market share growth and other non essential general and adminsitrative costs. Force investment superfunds to cover potential future losses. In other words “regulate”.
- Require Cross diversifying high yielding insurance products with high risk homeowner policies to spread risk among revenues.

Simply said there is a whole lot that can be done to bring insurers into the market and have stronger and profitable companies that won’t come crawling back to the state when we have several hurricanes in a season. Of course this requires tough legislation, hard bargaining and a willingness to leverage the states role in becoming an insurer of last resort. The insurance companies need to adapt and change their busness model if they want business in Florida. We simply can not allow them to come into our state and rake in the profits from lucrative policy underwriting and then leave the high risk business thinly capitalized and in the lap of limited state economic and management resources.
A simple timely notice and more time could of made a big difference in public perception. Instead we get an unequitable slap in the face.
Please do a better job. The people of this great state deserve fairness. We are not getting this because of poor planning and the shortsighted vision of corporate America and government officials who are asleep at the wheel.

With any Luck, I may have gotten my message accross. Keep in mind, I am not an insurance expert. Send, write, speak, be heard! It's really good therapy :)

The Great Oil Spill of The Gulf

The Great Oil Spill of The Gulf
By: Rene Velez May 12th, 2010


As of this late date there should be no debate that the oil spill that is currently occurring unimpeded in the Gulf is by all accounts a disaster. I can only imagine what I may find as I visit my summer destinations such as Naples and Vanderbilt beach and yes the white sandy beach of Sarasota. Listening to the news I can practically smell the oil and see the profound impact on the ocean wildlife and on the shores. For anyone that has never had the opportunity to visit the shores of the gulf in Florida, there is still plenty of beautiful and unspoiled wilderness and wildlife right here in my home state. Yet it is fragile at best.

Our Need for Oil

I recently attended a seminar hosted by FIU and presented by Exxon. It was a forecast of energy demand and consumption through the year 2030. Without a doubt oil is a big part of our current energy needs and that of a future yet to come. So I do not see a way around alternative for oil. Surely we could build more nuclear plants and this may be good but NIMBYISM may derail many of the attempts to build them. Let’s face it, just when O’bama came on board the concept of “Drill baby Drill” did not go over very well with many who feared exactly what is happening now. These dissenters of oil drilling off the coast of Florida have been vindicated in their vocal calls not to drill. I will tell you that even though I am for oil drilling, I could not have imagined this disaster. But I am not alone. The realty is that when you take the need for oil and the risks, we have to drill no matter what. Drilling is risky as is nuclear energy. So its easy to push it down and push it aside, especially when you see what is happening. But beware, doing nothing can be worse. Our need for oil goes beyond a demand and supply issue. It is also a national security issue and a way to avoid, to some extent, having to be sucked into military conflicts in the middle east. This incident hurts every aspect of our need for energy. This and the Exxon Valdes will be examples of what oil drilling in sensitive areas could be and what might happen at a nuclear power plant in your back yard. This negative association is profoundly devastating to innovation and the publics willingness to take on new and innovative ways of meeting energy demands.

Corporate America and Government Fails Again

It will be months and years of looking back only to find one underlying truth to this event other than its devastating reality. Corporate America failed to provide every failsafe measure that could have been undertaken and government was by default an unwitting accomplice by lack of proper regulation. Before corporate America waves the red flag of “The Cost of Failsafe Measures” on the American economy to the price of a gallon of gas. Let’s make sure they make a proper comparison to the cost of wars, the cost of national security, the cost to our environment, the damages to businesses and all other associated ripple effects in our economy. When you look at it from that perspective, an additional blowout preventer or other technologies will pale in comparison. It will also pale in comparison to the record profits that oil companies reported in just the last few years. The bottom line is that here too this should not have happened. We have the technology and the means. What we do not have is a management that is forward thinking. We fail to over engineer when it really counts because somewhere the bottom line is more important that the outcome of the risks as a whole.

Measuring Risk

Our energy policy, the energy industry and the financial meltdown have a common theme. One that the press is not talking about because it simply is not sexy in mainstream news. We as a society are in harms way in more ways than we care to understand or realize because we do not adequately measure risk. Just as AIG, Fannie Mae, Fredie Mac and the banking industry failed to analyze risk in their portfolios and in their products, many an industry is failing to measure risk and the ripple effects of large scale and interconnected industries. This is very important, because unless the real impact of risk is understood at every level of a business or an industry, then there is no way to establish rules to regulate or to prevent widespread waves of disaster.

Strangely enough the measurement of risk is something that every CPA that has an understanding of how and why audits work understands risk and its components. In a nutshell, as CPA’s we render opinions on managements representations of financial reports based on an elaborate set of measured risks when compared to what may be considered acceptable given the size of a population of elements. What is acceptable is a professional judgment call by the CPA. What is the measurement of risk is empirical as it is a real sample based on accepted statistical data.

In lay terms, envision everything that can go wrong given a set of circumstances then try to figure out the potential for that risk to occur. How to eliminate that risk to sizes that are either immaterial or that won’t have devastating consequences is a key analysis. And if for any reason there is no way of eliminating very large risks disclose it so everyone knows. Doesn’t that sound like what our government and corporate America should be held accountable for? Sounds like there is a huge service industry in the making for someone that can sell the product. In the case of oil drilling, it doesn’t take much imagination. All you have to imagine is how easy it may be for your home plumbing to develop a leak or to get clogged. Anyone that doesn’t live in a cave can well imagine the likely scenario.


The Punishment

Yes someone needs to get a good old fashioned spanking. In this case I recommend an oar will do the job nicely. The government should line up for a good whack with the paddle as well.

Along with accountability comes punishment. Their has to be some significant downside to not looking out for the public interest on these “preventable” disasters. Typically, for corporate America a financial punishment is the norm. A fine, the economic consequences of tort law can impose awards of financial damages to those harmed. These are okay, but in the end the consumer pays the price also. That is their big drawback. Further it takes years and years of legal battles and maneuvers and in terms of damages, you know you have to have money to have the law work in your favor and the attorneys get the biggest chunk of any possible reward. So it’s not what I call equitable justice. In other words its not entirely fair. I am not sure what the punishment should be, but I like the idea of taking over a portion of the company stock such that you can influence management, make required changes, void management bonuses and provide for a return to those affected through stock appreciation and the payment of taxes on those returns. In the end the company gets to buy back its stock. That’s scary stuff if the government can mutualize (as opposed to nationalize) your company for not mitigating risk appropriately.

Honestly, I don’t know but I am sure that in this case the punishment will be small compared to the damage done and come what may it will be years in the process. It simply becomes part of the cost of business and a problem for the next guy. We need to rethink punitive damage awards for gross negligence by corporate America and maybe even regulatory officials who have a job to do.

Arizona-Mex Immigration Laws

Arizona-Mex Immigration Laws
By: Rene Velez April 23rd, 2010


We all know what Tex-Mex food is. It is that cuisine that is typically regarded as Mexican, and of course does have Mexican origin, but with such a twist to the recipe that it’s not really Mexican. It is the Texas-Mexican variation, or simply Tex-Mex. Some consider it a refinement of the Mexican cuisine other regard it as the defamation of a culture. Clearly there is a middle ground. Both seem to cater to a world of hungry pallets. Perhaps immigration in this country is going the same way,

Arizona’s Immigration Reform

I have to say that I applaud Arizona for coming out with it’s version of immigration law. But not for the law itself. I applaud there motion to take matters into their own hands in light of the fact the federal government has failed to do so. Before you hog tie me and send me off to the whipping post let me explain. Any law that provides for racial profiling by local law enforcement, such as the typical police man standing on the corner, will likely be a bad idea. Clearly the public has a right to be alarmed in that these types of laws threaten civil rights. In case you are from else where in the country, we need to be sensitive as to the shear number of American citizens who could potentially have their civil rights trashed due to a poor local immigration law which is further compounded by officers who have no training or experience in this delicate of all methods of policing its people. Having a police state is not the way to address immigration law given the many other alternatives afforded to us in a highly advanced civilization such as our own. So to this regard the law is in fact a bad deal.

Nonetheless I have to believe that Arizona has good intentions. As a state it has its right if not an obligation to its citizens to defend its borders and to pass and enforce laws that provide for the peace and the safety of its citizens. We should also take note that we as a nation could very much benefit from better immigration laws. Is this enough of a statement to justify a law that potentially is in direct conflict with our constitutional rights? Absolutely not!

Forcing the Issue

We have on our hands an all out war in border towns within the sovereign country of Mexico. A war that is not being won. That very same war, the narco-trafficking, the murders and other violent crimes are indeed spilling over in some way or another into many border town states and communities. To this end Arizona should be supported in passing this law not for the law itself, but for pressing the issue at the federal level. Politicians within Arizona need to take a stand and get other border states to take a side. Each state should threaten to pass their own immigration laws until the federal government does its job. It is the federal government’s job to pass immigration laws and to secure the national borders on all fronts and protect this free and open society from alien threats. It is the federal government that needs to interpret the constitutional right of its citizens and stop nothing short of making sure civil rights are not violated. But in the end, each state has a duty to protect their own. Let me be clear in my thoughts. I don’t promote anarchy. I do not believe that revolutions of this type should in fact occur. But after many, many years and millions of illegal immigrants who use our public services and don’t pay into the system…….. we need results. Given the amount of time elapsed and the potential for homeland security threats, Arizona and every other border state needs to send the message loud and clear to Washington, D.C. If D.C. can’t fix it, we will.

Sometimes, a little revolution is a healthy thing. We should be watchful of how the press puts a spin on this sensitive issue. Racial profiling and civil rights issues are not a subject for sensationalist media. This is a complex subject matter that will require skill to solve and academics to put into perspective. But latching onto sensational claims of racism does not accomplish the basic need of protecting our borders.

To Profile is Human Nature – (to some extent)

I have a few thoughts on profiling. Profiling has become a dirty word. It has all sorts of connotations that are not very nice and based on prejudice. I looked up the term on the internet; “ the act or process of extrapolating information about a person based on known traits or tendencies, the act of suspecting or targeting a person on the basis of observed characteristics or behavior”. Okay….let’s profile a bit to see where that may take us.

If a policeman was walking down a street and hears a burglar alarm, then hears shots ring out and as he/she nears an intersection sees two people, a woman and a man, “suspiciously” in a hurry getting into a car, and notices that the woman seems injured, and then sees the car speed off. If after the officer, gathering their thoughts and seeing how the rest of the crowd reacts and parts way for these two people as they speed away, you conclude, “hey these must be the burglars, I will call in the car tag to call them for questioning, or worse yet simply call them suspected robbers, is this profiling. Under the definition above it sure seems to be. But it also seems we would also call it negligence if that same officer, did not use some intellect, some aspect of his training to logically deduce something from his observations that may apprehend criminals who could get away and perhaps cause further harm to property and perhaps life. In this case the active role of observation is not only profiling but should be part of an officers training.

What if later we found out, the couple was a married man and his wife, who was pregnant and who fled the scene of an actual robbery, because she came into labor. The crowd parted because they saw, and heard what the officer did not have the advantage of observing. Ooops! Profiling just went wrong. Nonetheless, we would expect the police officer to do nothing less under the circumstances.

I would submit that profiling is just as much a part of human nature as any other trait we humans possess. In it self profiling is part of our humanity. As human beings, it is how we use the information obtained from a profile (an observation) that matters. Perhaps profiling has such a negative stigma simply because it is so closely related to racism and civil rights violations. The two do seem to go hand in hand. I dare to say that to recognize someone’s race, in itself is not racism. In fact to not recognize another persons cultural, ethnic or religious background, for example, could prove to be quite awkward if not socially unacceptable.

In the U.S. we are no where near understanding or overcoming racism because we have not come to terms that the first step in overcoming racism is to recognize race, culture, ethnicity and all those other traits that help us begin to understand culture and allows us to be a part of it. Yes , we have come a long way though.

Racism and in particular racial profiling is in fact a very bad thing when the information that we extrapolate is used to hurt others. To deny opportunity, to deny civil rights, to abuse power over others. Obviously this is wrong and people who are educated know this. In light of crime waves, in light of poor national security and in light of immigration laws that are not being enforced, profiling needs to be understood. We as a nation need to be more understanding and seek some middle ground on this matter. I do believe in a free and open country. I would love to live with my doors unlocked every day. But that is not the reality, of the life most of us live. Some measures for security must be taken. The question is what is that middle ground. Where do you draw the line of being a free and open society and when do we begin to employ methods that could, if used incorrectly, impose restrictions on civil liberties. How do we implement procedures for security and not become a police state. I suspect there is no simple answer.

It is very unfortunate that amongst all of the wonderful nationalities that compose this great nation, some of us tend to stick out more than others. Some of us could in fact be more easily targeted than others. I hope we use our intellect to not allow this to divide us. I hope if anything that the strength of the American community shines through and that if and when we see abuses occur we stand up for one another, recognizing that we must to some extent secure our borders and provide for the common defense of our nation. But having said that, I will not allow my neighbor to be targeted, and we must talk more about race, culture, ethnicity and religion so as to create awareness and understanding and to educate ourselves and our society to prevent abuses which are unfortunately, part of the history of our world.

The Short Term Pain

It is unfortunate that no substantive progress in immigration law reform has occurred. People need to realize that any fix to this problem is likely to create other problems. Some businesses that rely on undocumented workers will suffer. Some communities will loose business. Certain jobs will not be filled because no one wants them. Worst of all some families could face being broken up. (This is one we need to prevent for sure) Immigration reform has not happened in this country because it is political suicide. That’s because we as voters together with the media make it that way. No one person can possibly stand up to the fire that it is. There is no way to solve this problem without causing some pain in some way. It’s like putting iodine on a wound. If it’s infected it will hurt, it will burn, it will not be pleasant. Yet we must face this pain and we must be careful not to lynch those public figures who want to make things better even if they are forcing through a law that may have some very bad side effects. Better that we acknowledge the root of the problem and applaud action and then try to deal with what is wrong than to condemn us all to inaction and even worse consequences. Let’s expend energy to fix the weak points rather than shoot down the entire bill.

Bottoms Up for HealthCare Reform

Bottoms Up for HealthCare Reform
By: Rene Velez Mar. 31st, 2010


Can anyone really explain the economics of healthcare reform? As it stands now only a few people in the entire country have any substantive grasp of the implications in the economic impact of healthcare reform. To make matters worse is that’s these people, if they are in fact talking, can not be heard on top of the noise of the media and pundits. Where is the old fashioned journalism that explains this stuff to the simple folk?

A Basic Premise

Supposedly there are 30 million or so Americans that stand to benefit in some way or another from healthcare reform. That’s a lot of Americans that do not have health insurance today that will be eligible. And of course part of the Miranda rights of healthcare reform are that; “if you can not afford healthcare, the government will provide some assistance so that you get healthcare coverage”. In order for our government to do this they are in effect, or at least partly taxing the wealthy to raise taxes in order to give health coverage to the less fortunate.

Some have called this a sweeping policy change. Some have called it socialism. Some have called it stealing from the rich and giving to the poor. We can not deny any of this. What strikes me as odd is that when it is said the public seems to think that this is somehow new. The fact is that this has been going on for a very long time. How do you think the child care credit, and the earned income credit work. How do you think that people who have paid nothing to very little into the program of Medicare qualify for Medicare? Households that make in excess of approximately. $155,000 know hat a phase out of certain tax preference items are. These are deductions that get taken away because you earn a good living. Or how about the alternative minimum tax? If you are wealthy and have lots on tax preference items you are forced to pay a minimum tax. There is in fact nothing new to this concept although applied in various ways. We have been doing it all over the place and in many different ways within the current tax code. So if healthcare reform is being touted as a socialist program or a wealth shifting program, guess what? You are very, very late to wake up and smell the coffee. This is part of the great capitalist system we have.

Perhaps what might be more appropriate is to call it the Bottom Up Economic Policy. As apposed to Ronald Reagan’s Trickle down Economics. Would it be too much to ask to consider that both may actually have their place in steering the economy in this country?

Bottom Up Economics

I have to warn anyone reading this, I am not an economics major. But I do have a appreciation to its guiding principles. So anything I say here is simply food for thought.

Reagan believed that if you provided tax breaks and other business incentives to the wealthy they would invest in major capital goods, start businesses that in turn would employ people who would pay taxes and spend their earnings thus stimulating the economy. It’s not only a great idea, I think its safe to say that the idea worked. This concept is called Trickle Down Economics. The trouble with this type of economic policy is that it relies on the premise that the wealthy, new wealthy and super rich in fact buy American, invest in America and create jobs in America. Guess what? The world has changed since Reagan was president. The rich buy foreign goods, which in turn create expenditures of capital goods in foreign countries, which employ foreign workers at low salaries, which pay no U.S Income tax, which produce foreign goods that make it to the US and create low margin returns to vast distribution chains that pay marginally low taxes.

The fact of the matter is that this Global recession and the weight of our deficit will in fact create slow and small GDP growth for many years to come. Yet GDP growth in the emerging markets will likely far outpace U.S. GDP growth. What compounds this further is that there is a growing demand for capital to be placed in foreign capital markets. This is to say that the rich, including the rich in America will place their capital in foreign markets in order to get a higher rate of return than they would by placing their money in American industry. Under this scenario Trickle down not only works very slowly, but the trickle will amount less than a drops in a bucket!

Empowering the Masses

Bottoms Up Economic policy has a very interesting component. It gives a very large mass of individuals resources and opportunity to create jobs, to start businesses mainly in the USA that big corporations and the super rich are not interested in because they do not produce enough of a return on investment to provide for shareholders. This basic concept together with scalable technology, efficient and modern micro manufacturing, robotic manufacturing and light industrial trades may have in the long term an underlying value that will have a meaningful impact on helping our economy. Yet, I doubt it will not be enough. The real savings grace to our American economy in an ever encroaching global market place is the export of highly skilled services and labor to emerging markets. In fact this sector is already growing despite a poor economy or maybe even because of it. This needs to be better measured, better understood and covered. Our understanding of Bottom Up Economics maybe the key to turning our economy around. The real danger is to believe what you get paid to believe and not forming your own conclusions based on your own observations and your higher sense of intellect.

Bottom Up Economics has at its core the concept of creating jobs in America, that invests in America’s future. These jobs create wealth both at the individual and corporate level and they pay taxes. They consume other goods and services. In large part they consume many goods and services that are of USA origin which is a further boost to the US economy.

Here is the proof. America is ripe for major infrastructure changes. From highways and bridges to metropolitan transit systems to major distribution and warehousing systems. We need better communications systems, wider access and availability of high speed internet access. We need better dams, we need better flood control systems. We need better schools and create more efficient homes, appliances and we need to retrofit energy wasting infrastructure, homes and transit systems to more energy efficient technology. Doing this creates a whole host of industry jobs and investment. Many of these jobs will not be done by CPA’s or Lawyers or Doctors. They will be done through skilled trades, construction workers, engineers, scientists and architects, surveyors etc.

If we fail to recognize that we as a wealthy and rich civilization, do not have an obligation to provide for a fertile ground for prosperity for the human capital that makes our civilized existence possible, we will likely fail and fall behind. How can we expect our work force to feel compelled to excel, or to take risks if they have less in terms of social benefits than those new and emerging market workers have?

Call it what you will, but let’s not be blind to what we are already doing. Let’s not become enmeshed in the propaganda and sensationalism of the evening news or in the tactics employed powerful industries that try to seduce you to the dark side of our national responsibility. Americans are not and do not want a handout. They don’t want a big government. But we need to find the solution to even the playing field so that together everyone achieves more. So that American do not fall behind the global curve and so they can compete effectively.

The Balance


The natural evolution of the global economy requires that we understand and are adaptive to the changing environment. Tax breaks for the wealthy and those that invest in America are good things. They are proven to work. But to steer this economy sometimes we need to change course, just as we have cars that steer in both directions. It simply is part of a good navigating system. We need to learn the inner workings of the flow of capital beyond our own borders just as well as in our own borders and learn that there is a way to make this economy work even when it may not seem logical. It’s like when you have to turn right in a sail boat and make it go forward even when your ultimate goal is to head left. Not at all intuitive, unless you have sailed.

What We Need in Consumer Credit Reform

What We Need in Consumer Credit Reform
By: Rene Velez April 1st, 2010


In case anyone has noticed, we are in fact behind the curve in a number of reforms. The next reform president O’bama has to take task to is Financial Reform. This is a very complex task. Ultimately, we have to balance placing safe guards to protect the country and the public but not strangle the wonderful system our capitalist system has in creating innovative products and in allocating capital. This is no easy task and is riddled with political mind fields.

Yes We Need Reform

Before anyone starts to talk you into the corner with the speech about; “we only need self regulation”, here is the just of that. HAVE THEY BEEN ASLEEP FOR THE PAST TWO YEARS! (Yes I am shouting.) The simple truth is that as a capitalist myself I do believe in the free market system. However, I also am not altered in my state of mind as to believe we do not need controls and safeguards. Having a financial system without regulatory controls is like hiring Madoff to be the Chairman of the Federal Reserve and have his accountant who handled his audit run Wall Street. Its like building a beautiful 1200 horsepower dream machine cruiser and simply dispense with providing the driver with a steering wheel and a braking system. What we currently have not only is proven not work, it is not in step with the global market place we are a part of. Although I would love to get into the complex I will try t limit myself to just the consumer aspects I have though of.

What Consumers Need

(1) Bank service charges need for removed from inactive accounts: The act of a bank charging you say $12.00 for having an account as inactive is usurious. So it is when they charge you a fee for a minimum balance. I recognize the need to know what accounts need to be closed but there are more effective ways to do so rather than chase customers away simply because they have a nest egg in some bank account.
(2) Bank Service Charges for Electronic Payments and Transfers: How many businesses get wire transfers as payment for the goods and services thay provide. To think that the bank making the transfer and the bank receiving the funds both are making a service charge for a simple bank transfer is also usurious. Think of it, if you get paid $1,000 via bank transfers or wire and both banks involved each charge $15.00 that’s a total $30.00 charge for that transaction. Effectively a 3% fee for that transaction. Is this the way to create the global market place of the future. That is a higher rate than check cashing stores charge to cash checks. And these check cashing stores typically cater to illegal transactions, tax avoidance schemes and fraud. To make matters worse is that every electronic transactions processed by consumers and businesses alike essentially are performing the accounting and bank processing function for these transactions saving the banks billions of dollars. No where in that 3% calculation is there an offset for what consumers are saving banks for utilizing cost saving technology in conducting their banking business.
(3) We need a complete revision of the consumer credit reporting and consumer credit scoring techniques. How is it possible that a person who is exercising prudent financial management and who recognizes that they have too many credit cards and decides to payoff and close a couple of credit cards gets penalized by a temporary lower credit score. This is insane. This is driven by capitalist that are bent on self destruction by having you stay in debt and buy there products. Of course there is a lot more that needs to be done. The standards for removing frivolous credit checks, for removal of errors and the improvement of consumer credit scores also needs to be reformed. This is another place where credit reporting agencies do not operate for the interest of consumers but rather for the interest of big industry. We saw gross negligence in the rating agencies that governed over rating mortgage securities and there are abuses here too.
(4) We need a complete overhaul of credit cards. The usurious rates given to people with good credit is impeding our economy. How is it possible that someone with a FICO credit score of 780 out of 800 get a credit rate of 29.95%.? This is just bad capitalism. And to think that the CEO’s of these organizations get million dollar compensation packages for making the stock look good. This at the expense of the economy and the country. We need to reward good creditors with a good credit and payment practices. Not drive them out of the market.
(5) Since deregulation of the banking industry in the 80’s banks have increasingly made a significant amount of revenues while raising bank fees and employing technology. However there is still a great deal of inefficiency built into the system. Consider the consumer or small business who has a bank account and a credit line. Firstly, the bank should already have a considerable history knowing the value of the bank account by seeing the transactions that flow through the account. Secondly, to have obtained that credit line there is a considerable application package that must be assembled to secure that credit. Typically an application, 2 years of personal and business tax returns, personal financial statements, business financial statements and whatever else they fee is required to ascertain your credit. Then they must comply with the Patriot Act and again we must supply many of the same documents. If you apply for another loan, say an equipment loan start chopping down more trees to produce the paper work to supply pretty much the same paperwork you have already given for the credit line and in the Patriot Act reporting requirements. This is a terrible inefficient way to conduct business. Just as we would benefit from a central healthcare information system, we would benefit tremendously with centralized credit information system that dispenses with the paper shuffling, secure creditor information, reduce both banking and business operating costs and yield better transparency for quality credit decisions. We claim to be the most technologically advanced capitalist system in the world and yet we are operating at a less than efficient level.
(6) We need to make some credit evaluations by credit card companies and other lenders “prohibited transactions”. It is appalling to think that credit card companies are analyzing how you spend your money to make determinations on your credit worthiness. Here is an example. As the economy turned south in 2008 credit card companies began scanning your buying habits to see if you were changing your buying habits from Saks Fifth Avenue to Target or Wal-Mart as a way to determine if your financial situation was in worse shape and cut your credit limit. This is needs to be a prohibited conduct. This measure of credit worthiness is akin to making credit decision because you are a single mother, an African American living in a poor neighborhood. Essentially Warren Buffets credit would be cut simply because he doesn’t own a personal yacht and hasn’t bought a new home since the 1960’s. This is simple and outright discrimination. It crucifies people for being financially responsible in difficult times.
(7) To spur our economy we need to consider a uniform interest rate for major consumer purchases. Such as automobiles, homes, boats, tractors, appliances. The idea is simple. Consumers need not be duped by facing difficult credit decisions when for example you buy a car. The dealer should not be able to give me a better rate and less of a hassle in obtaining that credit than I could get by simply going to my bank who already knows me and my credit history. The decision to finance major capital goods should ultimately be decided on the quality and reputation of the seller and the product and not on finance juggling. Ultimately, this not only cheats the consumer but it also impedes our economy. This system is designed to cheat the uninformed and uneducated. It is in fact financial discrimination.


I could go on and on with grotesque abuses of consumer credit and poor banking policy and administration. I will try to add to this list as time provides. Needless to say we have our work cut out in front of us and we as consumers need to speak up and make ourselves heard. We must not be bullied and intimidated by Capitalist that have skewed and abused their and our free capital markets. Our capital markets should serve the consumers and small businesses that make up 70% of the US economy. You can rest assured that there will be vocal and intimidating discussions on the matter. But we must not back down. I do not have an issue with some business leaders making multi- million dollar compensation packages. However, not when they are applying abusive creative money making and shareholder value appreciation schemes that ultimately sink our economy and treat consumers as economic slaves. I do believe that there is a way to hold the top talent in our financial industry accountable to our consumers and to our economy and also create shareholder value. The minds and intellect are there, they simply have been misled and become market bullies.


The Business Sector

Without getting into this on this writing, we do need Wall Street reform. Mortgages, creative financial instruments such as derivatives, CDO’s , trading in futures and the perpetual transferring of risks through insurance and hedges all need tight regulatory reform and transparency. We really need to take a look at risk concentrations, insurance products that transfer risk, pricing of these creative financial products and the establishment of proper markets for products that do not have a public market.

Further, the disclosure & reporting of hedge funds and the licensing and regulatory compliance of investment pools that individually and collectively have profound effects on our financial markets, our banking system and insurance busineses all have to be looked at carefully.

In addition we need to change how regulatory audits are performed. As a CPA it is literally amazing that Madoff's CPA was able to perpetuate such a vast fraud of the financial statements and that this CPA was virtually unknown both to the CPA societies and to the regulatory agencies that were supposed to read his financial statements.

There is too much here to chew so I will leave it at that, for now.

Exuberant, Irrational Politics and the Need for Change

Exuberant, Irrational Politics and the Need for Change
By: Rene Velez Mar 30th, 2010


I can’t help but notice the aftershock of healthcare reform in the United States. By far not what I would call a sweeping piece of legislation, but nonetheless a piece of legislative history that will, if it endures, have a profound effect on politics and the overall American experience. If the overall implications of this healthcare bill is not enough to stimulate your intellect then the aftershock of the republican party and pundits alike should provide for lively exuberant entertainment.

The Consequence of Change

For the better part of my professional career I was a self described change agent. All too often I found myself working in companies that graduated in the level of sophistication that dictated that the modus operandi had to change in order to allow the corporate goals to come into fruition. So it was that I had to learn not only to work with the leadership of different departments but clearly I found myself in the cross hairs of opposing leadership within companies that refused to change their ways. In all I have to say I was very successful early on only because I managed somehow to understand the other side, to concede on some points and to find a common ground. On the other hand I did work for a company that hired me specifically to bring about change only to be held in contempt by the very management/owners that wanted me to promote change. A very weird event that I have not forgotten to this day simply because there was no overcoming that. (This was a Brutus moment in my career.). The entrenchment was far too deep and the conditions were hostile enough that I had to leave that employment. But, this is very much a consequence of change. To the extent that healthcare reform has created such opposing partisanship is not just a sign of bad politics; as it is very much bad and ill willed politics. It is also a sign of fear that can be very destructive. Human beings fear change and the unknown. Don’t underestimate that ever! What is alarming is that high level individuals have taken such roughshod defiance of such a basic premise such as affordable and available healthcare for all. The divide among political parties on this issue should not be as wide and as opposed as what has been portrayed in the media. In fact it, in essence it is not. And yet the irrational posturing of the Republican party and the politics employed truly are a scar on that political party. The unwilling posture of a party that has been in power and who gave away tax dollars to the mega rich and to major corporations and then turned their backs on the very American people who needed a basic of basic reforms is practically unforgivable. But the reality is, this is part of the cycle of change. And we should be prepared as a society to see much more of this as we have many other large scale reforms that need to take place in order to put our house in order.


The Cycle of Change

Change often does not come in full doses. Especially not life altering change such as what we need in healthcare reform, energy policy, financial industry reform, immigration reform, election reform etc. etc. You have to look at it this way. If you have ever tried to loose weight, you don’t just stop eating. Typically, you also can not just take up marathon physical exercise less, you injure yourself. Sometimes change is best accomplished gradually. You walk before you take up running. You make better eating choices. In engineering change, you build consensus, you get the population to buy into your program. You make concessions and you even learn from the opposition in order to make your case for change stronger. The key of course is to have dialogue and to have interested and motivated parties that have an interest in bringing about better alternatives. But I must confess, that even in the best of circumstances, at least in my experience there are detractors and spoilers and saboteurs. People who simply are incapable of seeing the brighter side are detractors. Constantly focusing on the negative instead of the positive. People who rather than conform to the plan of change try to overpower you simply to gain influence by substituting the agreed plan with their own version and claiming credit for the better mouse trap. And then of course their are saboteurs. People intent on throwing the monkey wrench into the system just to make you work harder and exhaust the human capital that makes change possible. Seems to me the Republicans are making big mistakes in their political approach to being part of the process of the obvious need for change on various fronts. I have to emphasize that no plan for change is ever perfect. It has to be worked on. The healthcare bill leaves an enormous hole in cost containment and perhaps even in how to pay for it. It also fails to control medical malpractice. Despite these significant weaknesses we needed to get the bill passed and yet we need to understand that we need to continue on the path or cycle of healthcare reform and not give into the detractors, spoilers and saboteurs that are part of the cycle of change.

A Lesson from Prior Conflicts

This great nation has seen great change over its young history. For example, the revolution, the civil war, abolition, civil rights movements. All of these events had the effect of creating sweeping change to our way of life. There were real struggles, a great deal of fighting, there were detractors, spoilers and saboteurs in all of these great struggles that form part of the American experience. Sadly, there was also violence. There was bloodshed, murder and hysteria that at times was at the national level. Can we learn from these past struggles and avoid the violence. I certainly wish we could. I wonder if we have evolved far enough to avoid any form of loss of life. I don’t think we are there yet. Perhaps the one struggle we never seem to learn is to avoid the violence. This may be the biggest change that faces not only America but the world as a whole. Wouldn’t it be monumental if in the years to come we “America” can address all the major reforms we must make and not loose a single life in doing so? This may well be beyond what can be expected but still we need to try. We must learn that we can bring about change, we can argue, we can take sides but we must not loose focus of the greater good and not give into the concept of winning the battle and losing the war.

South Florida, South of The Border

South Florida, South of the Border
By: Rene Velez Feb. 11th, 2010

I have lived here in South Florida for 34 years. I arrived just after the major real estate bust of 1974 but I do recall that the pain was still evident as many where looking for jobs and real estate was cheap and in some cases development was essentially frozen. Since then we have had several cycles of boom and bust just as the rest of the nation has. Yet somehow the past two years are in fact a bit different.

The S. Florida U-Economy:

South Florida in particular has enjoyed mild recessions even when other parts of the country fared far worse. There are several reasons that have surfaced over the years. Some like to point out that illicit revenues from the drug trade has helped prop up the local economy. I believe that certainly there has been an impact but I would not go as far as to say that it has built Miami as some have suggested. Nonetheless, there is a great deal of truth to what some have called the “Underground Economy” in South Florida. This ranges from drug money, to organized crime funds from the North East and Mid West to flight capital from politically and economically unstable South American and Central American countries. In fact this has helped create an international banking system in South Florida perhaps more so that drug money. There is a long history in Florida of illicit transactions. From save trade, to rum running to exporting contraband to other countries. The geographic location and miles and miles of ocean front property makes it an easy peninsula of entry and exit. In fact geography is a major factor mild historical recessions.

Geography

As it turns out the elderly have been migrating into Florida for many years. The milder winters, and the warm sunshine has not only brought in senior citizens which make residence in places like Century Village and Miami Beach. They have in fact brought with them their wealth, their extended family and their social security checks. South Florida has a very high ratio of geriatric doctors compared to other parts of the nation, and indeed has helped create an industry of medicine. This has helped stabilize the local economy as it creates an underlying stable level of spending that is typically not affected by economic cycles. Geography plays an important aspect of this phenomena.

Then we must not forget that Florida has been a tourist destination since the beginning of the industrial revolution. Notable names such as Henry Flagler who built a railroad transportation highway all the way to Key West, realized early on that if you built it they will come. And come they have. Today it is not just the rich who seek the warm and kind weather of Florida as an escape from the cold. Millions flock to places such as South Beach and Ocean Drive to soak in the sun, drink their fill and dine at our restaurants. Where else can you get bargain prices for a piece of paradise in the middle of winter.

Then there are those factors that may well be of a lesser impact but should be noted. Miami is still a convention center destination. Where businesses come to show there products and wares, vacation and give seminars. It also has a considerable motion picture, movie and photography industry. When fashion designers from New York can not shoot up north or are preparing for their spring and summer catalogs, their choice location for filming and photography is South Florida. Longer days and the angle of the Sun provide for great natural light. And the warm weather are simply an opportunity few turn down. The Art Deco tones and Architecture is prime real estate and our beaches are still natural wonders or a paradise unspoiled.

The Bitter Cold in South Florida

The last two years has seen a considerable drop though in the local economy. As if an omen of the hard times we recently saw record cold days and had reports of snow flurries in Kendall Town and Country a local strip mall in Miami Dade County. “Snow Flurries – OMG”! I am seeing businesses close, retail centers with many vacancies, restaurants with no patrons and many tales of the unemployed. Real estate prices are back to 2000 and 2001 prices and in some cases may be back to 1990 levels. Seems like everywhere I go there is a shortage of small business credit, consumer credit, customers paying their bills late and concerns on cash flow. A recent networking event was filled with the employed and unemployed all vying for opportunity. There is a great deal of shoe leather being spent on trying to generate sales.

All in all there is a vibe, an undertow of concern and worry that stretches across the poor and the well to do unlike I have ever seen in South Florida. It’s a feeling I have not felt ever in all my years here in Florida. I recall pre-Reagan years concerns of the economy and mortgage rates of almost 18% and yet, not as much anxiety. What exactly is it, except of course for the obvious?

Conclusion

These are no doubt hard times but this too will pass. Albeit it will take more time than what history would suggest. I think it’s what people don’t say, or at least loudly, that is creating a negative influence on turn around. People are disappointed at the trend of bad news upon bad news and a loss of economic positioning. Large issues such as global competition, healthcare, a lack of government cohesiveness in solving issues, massive national deficits, the outlook on healthcare reform, the growth of real wage levels, a failing US infrastructure. You know just writing this is reason to panic.

Clearly, none of these issues occurred overnight. By the same token none will be fixed over night. So we must as Warren Buffet said, “adjust our expectations”. But there is more to it than that. We need accountability from our leaders. We need government to lead by example, and we need large corporate America to exercise restraint, ethical behavior and position invested capital, economic and human, to long term goals in a global setting

We need a national comprehensive strategy. A failure towards this end will only lead is further “South of The Border” than what our citizens are prepared to accept.

Running For/From Office!

Running For/From Office!
By: Rene Velez Feb 15th, 2010


We seem to have a flood gate open in the senate and house of political leadership that do not seek re-elections. It would seem that “running for office” just became “running from office”!

There is no question in my mind that running for re-election should at least be very interesting in the coming years. Americans are fed up with the in-ability of our elected leadership to address issues and to bring about comprehensive reform on the many issues that face this great nation. It is a difficult and treacherous path that any elected official faces in the years ahead. Politicians do not like uncertainty and do not like the odds when they are stacked against them. Loosing an election is not like simply not getting the job. It’s about loosing support and loosing your credibility. Something that lingers for years to come around your career. So politicians are rightfully fearful of the years to come.

I might be temped to call some of these politicians weak and fare weather leaders but, I feel there is more to it than that. A slow economy means shrinking political contributions to some respect. Many legislatures are aging as the baby boomer generation enters retirement age. So a natural shortage of political candidates is in the cards. Especially, when there is no honest way to make a living in politics. Here in Miami Dade county local commissioners wanted a salary. When it was put to the vote, voters voted against it. A bad decision, as a salary would have made it easier for qualified younger candidates to rely on that salary to make a living and to contribute to our community by serving.

Yet I do think there is reason to take notice of the number of politicians that will bow out in coming elections. Budget deficits, the partisan turmoil, angry voters, a bad economy, and the turmoil of reform all add up to extraordinarily hostile platforms for elected officials. Perhaps some may be thinking that they might be better able to serve on the outside than on the inside. It may well be more profitable too as many have discovered.

Academia in Public Administration

I am a firm believer in education. So it is only natural to look upon how universities can play an important role in helping create new political leadership. The benefits of universities creating new political leadership in fact may play right into their best interests. First, they stand to gain a great deal of recognition for prominent leaders. Second their graduates are more likely to vote favorably on university funding, or at minimum help raise much needed funding. An important note as education is key to maintaining corporate as well as political sustainability in the global arena in the future. Thirdly, universities can provide much needed information through research, polling and community involvement. It would be an ideal to say that universities are in a better place to bring fourth unbiased solutions to public administrative matters except that every university has its own political issues. However, given the short sighted vision that corporate America has shown in its acts of social responsibility, universities may fair better in their long range approach to problem solving. In fact universities may in fact be better managed on a fiscal basis than most local and state governments. Universities are known for building capacity. The act of building capacity comes from the non profit sector. It essentially entails the ability to bring about more programs and services by means of volunteerism and by bringing on board members and other leadership who volunteer talent to accomplish the mission and vision of the organization. Something governments, as of late, have failed at miserably.


Conclusion
Of course there is a real taboo about state university systems becoming involved in political issues. And this too must change. Universities are in a unique position to spread knowledge, to empower leadership in the hopes of applying that knowledge to the better good of mankind. Sounds like a good catalyst to better governance to me. Let us undertake some hands on research and development by assigning a live bankrupt government case to a universities faculty and its senior students. I hardly think we will be disappointed.

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!