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.