Author: haroldblackphd

Free at Last.

Warren Buffet said “How do you know the day that you become old?” the day came he stepped down as chair of Berkshire Hathaway. I know the feeling because 2025 was the year I finally felt my age. You know the saying that its weird when you realize that you are the same age as old people? It is weird. I feel great but my arthritic knees are 100 years old. I think that part of the reason was my going back into the classroom. The campus is very hilly and I stood and lectured for an hour and a half. The knees are now perpetually sore and hopefully will get better now that I am done teaching.

May 15 was my Liberation Day – the day I gave my final exam. I had forgot how much I enjoyed teaching. But I did not particularly like the fact that many students just don’t come to class. They look at the recording of the lectures instead. However, those that came to class made it worthwhile. One student came to my office hours and said that many of the terms in the study guide were not in the power points or the textbook. I said that I had substituted my own materials for that in the book and had posted them in the “announcements” section. He then said that he had never looked at that part of the course. Another student complained that I took off points when his definitions were correct but were not precisely what I had said in class – or on the power points. He was getting his definitions from the internet. Again this was a student who seldom came to class and who had not looked at any of the materials that I had posted.

I was told that this was the new normal. I guess I am old fashioned but I hated the technology. I had to put all the empty seats out of my mind. I came to realize that hardly anyone there had even heard of Paul Volcker, Alan Greenspan of Ben Bernanke. They didn’t even know who Diana Ross was!

The textbook used in the class was also wrong in many places. So I created my own powerpoints and readings for about half of the chapters. The early editions of the text were fine. I knew the authors and both were well respected scholars. However, they are long retired and the author of the revision is little known and knows even less about the subject matter. I might have adopted earlier editions of the book but not this one. The Finance department does not have any full time faculty in the area of financial Institutions. They are all in Corporate or Investments leaving the teaching of financial institutions to adjuncts or graduate students – who I like to refer to as walk-ons. Although smart, this is not their area of expertise. They do not know the literature. They do not know the research. They do not know the legislative history. So someone adopted this book and much of what they teach is wrong.

This got me thinking: is what you teach important or is how you teach what is important? Even if the material is wrong, if a teacher challenges the students, makes them think, analyze and synthesize, then isn’t that worthwhile even if what is being taught is garbage?

I showed the students how virtually every problem could be analyzed using supply and demand and present value. I also described verbally the equations and tried to show them how to make sense out of statistics. I would bring in news from current events that were relevant to what we were discussing that day. I wanted to show them how what we did in the classroom was relevant to what was going on in the world. That is why finance and economics are exciting. I remember once when a student told me that they didn’t know why they were enjoying my class because economics was boring. I told them that economics was exciting but economists were boring. My hope is that they will read the financial press daily and now understand what is happening around them. Hopefully, they will now look at issues differently. They no longer have to accept the status quo as truth. They now can intelligently think about minimum wages, usury laws, regulations, the CFPB, tariffs, gold, crypto, the Fed and all the rest. I hope they now realize the importance of being intellectually curious.

As always, some students will appreciate what I do and how I do it while others don’t. I was given a copy of my evaluations and per usual there were some very flattering comments and five that were not so much. One student called the course BS, the lectures BS and the exams BS saying that this was not a spelling bee. I listed six words in the syllabus that could not be misspelled else I took off a point per word (capital, receive, guarantee, yield and separate). I guess this student persisted in misspelling them throughout the term losing one point per misspelling. One said I was racist. I had a terrible time with allergies this term and walked into class and started sneezing. I said that I must be allergic to white people. After class a host of students came up to give me advice on allergy meds. Another said I was intimidating and made students feel stupid which is why they didn’t want to come to class. Others hated the exams. However, there were positive comments contradicting the negative ones. One in particular almost brought me to tears. But I thank them all for caring to respond. My evaluations have always been bimodal.

But now maybe some of them will not go through life taking the path of least resistance. I told them to be a healthy skeptic. I also told them not to believe a word I said in class. Some asked me if I were going to teach again. I said “Hell no.” This is a one-off. It has ruined my turkey season. I surely would not do it during deer season. And anyway I could never get pass the fact that when I retired 13 years ago most of the class were in the second grade.

The Black Anti-MAGA Pope? Our RINO president?

The New Pope

Who was Pope Leo XIII and why did the new pope pick his name? He could have been Pope Francis II but he chose Leo XIV. Since 1555 the newly elected pope has chosen a papal name. John is the most popular having been picked 21 times. Francis has been chosen only chosen once so Robert Francis Prevost could have been Pope Francis II. But since Prevost picked Leo XIV, then it must have been to honor Leo XIII.

I earlier posted whether we were going to get a black pope. I only looked to Africa. Well genealogists say that Prevost has black ancestry. Prevost’s mother was the daughter of a Haitian-born father and a New Orleans Creole mother – I presume a Creole of color. His grandparents are listed as black or mulatto in the Census when they lived in New Orleans but later listed as white when they moved to Chicago. BTW, both of my mother’s grandfathers are listed in the 1870 census as “mulatto.”  I don’t know how the Pope identifies himself. Has anyone asked? If he doesn’t identify as black, then is he black? I once wrote concerning gender identity, that identifying as something you are not does not make you something you are not. Does this mean that Pope Leo XIV is indeed the first black pope?  

The backlash against U.S.-style MAGA politics is being credited for the wins of Australia’s center-left Labor Party and Canada’s Liberals in recent national elections. But the new pope too?

Were Canada, Australia and now the pope elected as the anti-Trump? Jack Posobiec, a Maga type person said “This choice of the American cardinal was done as a response, as a message to President Trump.” Laura Loomer, a far-right influencer – whatever that is, called the new Pope “anti-Trump, anti-Maga, pro-open Borders, and a total Marxist like Pope Francis”. Steve Bannon agrees. We will see.

OutFoxed again?

Because of the lack of republican support, the president withdrew Ed Martin’s nomination to be US Attorney for the District of Columbia. Then the president announced that his new nominee would Judge Jeanine Pirro from Fox’s The Five. Does this mean that the show will now be The Four? She is the 23^rd person from Fox to be in the Trump administration. When Pete Hegseth was nominated I joked that who was next, Greg Gutfield? I wasn’t that far off. However, the one person who Trump has not nominated from Fox but should is Harold Ford, Jr.

Trump a RINO?

Yes Trump is a RINO. No self-respecting republican would impose these tariffs,  order a cut prescription drug prices and impose a millionaires’ tax. A republican who imposes tariffs, wants to fix prices and increase taxes? Say it ain’t so.

Trump blinked (again) when the U.S. and China tariffs announced a reduction in tariffs for a 90-day period. The US tariffs on Chinese imports will be cut to 30%, while Chinese tariffs on US imports will be cut to 10%. Hey, why is this reciprocal?

The White House iterated after the agreement with the UK that the 10% baseline tariff is here to stay.

Was this a “let them eat cake” moment when President Trump said because of the tariffs that “Children will have two dolls instead of 30 dolls”?

I don’t understand the president’s executive order that institutes a “most favored nation” policy for drug pricing, saying that it will reduce drug prices “almost immediately, by 30% to 80%.” The order would set prescription drug prices to match those of comparable countries but would only affect drugs covered by Medicare Part B for doctor’s office visits. But we don’t pay the full cost of the drugs. We only pay the copay. If his “cut” only covers those drugs covered by Medicare and given in an office but not at the pharmacy, then how will citizens see any savings? It seems that the government will save by paying less. But would this mean fewer drugs for Medicare? Currently there are 270 drug shortages in the US and the tariffs coupled with the cut in prices will mean even more shortages. One expert said that “You’re going to have companies that may not be able to bring the product into the United States.”

Who taught this president economics?

The president keeps talking about increased taxes for people making over $2.5 million. This would raise only $8.2 billion this year. Did we elect Bernie Sanders? The president is also considering ending a provision that allows hedge-fund and private-equity managers to pay lower tax rates. Hallelujah I am 100 percent for this! Currently, hedge fund managers share in the profits of the fund and those profits are taxed as carried interest at 20% rather than the 37% if it were considered as ordinary income. Close that loophole, Mr President. Of course with Scott Bessant and Howard Lutnick in the cabinet, don’t look for a lot of support from them.

Breaking news! 

Behold the power of Trump!

President Trump said earlier he would pardon Pete Rose for his federal tax crimes and “be signing a complete PARDON of Pete Rose, who shouldn’t have been gambling on baseball, but only bet on HIS TEAM WINNING.” The president criticized major league baseball for excluding Rose from Hall of Fame consideration. And now Major League Baseball has announced that Rose is now eligible for the baseball hall of fame along with Shoeless Joe Jackson and others banned for gambling. Why?

Here is what the president tweeted:

Major League Baseball didn’t have the courage or decency to put the late, great, Pete Rose, also known as “Charlie Hustle,” into the Baseball Hall of fame. Now he is dead, will never experience the thrill of being selected, even though he was a FAR BETTER PLAYER than most of those who made it, and can only be named posthumously. WHAT A SHAME! Anyway, over the next few weeks I will be signing a complete PARDON of Pete Rose, who shouldn’t have been gambling on baseball, but only bet on HIS TEAM WINNING. He never betted against himself, or the other team. He had the most hits, by far, in baseball history, and won more games than anyone in sports history. Baseball, which is dying all over the place, should get off its fat, lazy ass, and elect Pete Rose, even though far too late, into the Baseball Hall of Fame!

MLB commissar Rob Manfred stated that “permanent ineligibility ends upon the passing of the disciplined individual, and Mr. Rose will be removed from the permanently ineligible list.”  In a letter to Rose’s attorney, Manfred said that “a person no longer with us cannot represent a threat to the integrity of the game. Moreover, it is hard to conceive of a penalty that has more deterrent effect than one that lasts a lifetime with no reprieve.”

Rose is the all time hits leader in MLB with 4,256 hits. He also played in more games than anyone else. He will be remembered for many things but most of all for the collision with Ray Fosse at home plate in the 1970 all star game fracturing Fosse’s shoulder. In those days, players took the all star game seriously and played to win. Rose said “nobody told me they changed it to girls’ softball between third and home.” Now home plate collisions have been banned and I wonder what Rose would say about the NFL all star game now being flag football? 

But this is the age of Trump, right? After announcing the purging of DEI across America, MLB was worried that they would not be allowed to have the annual Jackie Robinson Day on April 15.Was there a deal done? End the ban of Pete Rose and you can keep Jackie Robinson Day?

Just wondering.

Are you elite?

I have a good friend who is very wealthy yet rants about the elites who are running (and ruining) America. I say to myself “If this guy isn’t an elite, then who is?”. Several years ago a local billionaire approached me to go to the superintendent of schools to advocate for a change in instruction that had proven successful in raising the proficiency of children from poor households. I said to him, why me? You are rich and influential in this town, so why me? He said that he was ignored because he was white and most of the kids affected were black. Does this mean that he wasn’t elite either? So apparently “elite” is not defined by wealth or race. Then how do you define it?

Are politicians elite? Do you consider Maxine Walters, Jasmine Crockett, Jaime Raskin, Chuck Schumer and AOC elite? What about Donald Trump? What about entertainers? Are Ophrah, Robert DeNiro, Tom Cruise and Samuel L. Jackson elite? Or Lebron James? Or Fifty Cent? Or Shaq? What about businessmen Elon Musk, Bill Gates, Steve Forbes or Jeff Bezos? What about grifters like Al Sharpton, Ibram X. Kendi, or Robin DiAngelo? Or intellectuals like Thomas Sowell, Shelby Steele, Andrea Ghez or Gene Fama? Or religious elites like the Dalai Lama and the Pope. What about Franklin Graham or Joel Osteen? Does being a Nobel Laureate qualify – with the exception of Ben Bernanke, Paul Klugman and Al Gore?  If any of them are elite then what makes them so?

Do you define elite by wealth? By fame? By notoriety? Is it power? By race? Is it prestige?  Some may say it’s the haves versus the have nots. But that is clearly false. It seems to be more the haves versus the haves. Do you have to be in power to be elite? That can’t be the case, because aren’t there elites who are currently out of power or do you fall from elite status when you are out of power?

It seems to me that the division of elite versus the nonelite is a Marxist concept. Recall the workers versus the capitalists? The bourgeoisie versus the proletariat? The elite versus the nonelite? One writer says “Elites, loosely defined, are anyone who is in the small minority of wealth, power, and prestige in the nation, who have influence or control over the structures that govern a country.” Well that definition is so riddled with holes to make it almost useless. Obviously, elite status changes and one can be elite today and not elite tomorrow. See Kamala Harris and Joe Biden. Does this mean that a political elite ceases eliteness when out of office? What about the economic elites? Bill Gates and Warren Buffett are clearly elites. But why? Is it their wealth? Then are the Waltons, Elon Musk, Mark Zuckerberg and Mike Bloomberg elite? What about the cultural elites like DeNiro, Taylor Swift, Kanye West, Jay-Z and Usher? Is Snoop Dogg elite? Then there are the sports elites like Lebron, Tiger, Messi, Ronaldo, Nadal, Kipchoge and Ohtani. What about the environmental elites like Al Gore and Greta Thunberg? Are they elites?

Is eliteness defined by who you are or what you do or who you were? Are you elite by birth (like King Charles) or by achievement like Jonny Kim. Who? Jonny Kim is an American NASA astronaut, who has an MD from Harvard’s medical school, a PhD from MIT, a member of SEAL team 3 with a Silver and a Bronze star, a naval officer with the rank of lieutenant colonel, a combat medic and sniper. Very few people have heard of him. So do you have to be famous to be elite? Are Russian oligarchs elite? Those who attend the World Economic Forum at Davos are called elites. But even at Davos, the elites are classified by the color of their badges. The most elites get a white badge with a hologram on it, giving them access to everywhere. I don’t know if anything of substance has ever come from Davos. I think that the global “elites” just like the lavish parties and seeing who has the spiffiest private jet or helicopter. And what about the Bilderberg group meeting in St. Moritz with 100 of the world’s most powerful “elites” who have been denounced as engaging in “sopra-national and non-transparent governance” – whatever that means. One observer said “this kind of gathering of powerful people of the globalized world goes against our principles of sovereignty.” Does this mean that these 100 have been running the world and we just didn’t know it? These meetings began in 1954 and are more exclusive than Davos. So is the Davos crowd really elite?

Yet clearly there are elites in the world. But how do you define it? I think a workable definition is akin to Justice Potter Stewart who in describing obscenity said “I know it when I see it.”

No toys for you!

What happens if we start seeing empty shelves in the stores? Eighty percent of our toys are made in China. Walking through Walmart looking for a new jigsaw puzzle, I was amazed at all the toys. Walmart sells over 1,000 different brands of toys. What will the shelves look like in a couple of months? Will they be empty or will they just be higher priced? With tariffs on China over 100% how much of that price will Walmart pass on to its customers? Well the president in his infinite wisdom sees the empty shelves as a good thing. All US ports have seen a sharp drop in shipping volumes. Trump was ecstatic saying “That means we lose less money. When you say it (shipping traffic) slowed down, that’s a good thing.” Commenting on the deficit with China, the president said “Frankly if we didn’t do business we would’ve been better off.” 

Trump still loves tariffs and says “They’re a beautiful thing for us. It’s going to make us very rich. And we’ll be paying off debt, we’ll be lowering your taxes very substantially because so much money will be taken in that we’ll be able to lower your taxes even beyond the tax cut that you’re going to be getting.” Of course, he is delusional – but who with any input has the guts to tell him? Is this a Saturday Night Live skit or has Boris Badenov sprayed the president with goof gas?

Contrary to the president’s wishes, an electric bicycle company in California is putting the Trump tariff on its price tag. The owner is a republican but he says that he has to keep importing his bikes from China or else he is out of business. So on his floor, he has identical bikes priced differently. The one imported before the tariffs has a lower price tag.

Another bicycle shop – one that you have to pedal – buys components from China and assembles the bikes in the US. The owner said that he once made his own handlebars but the ones from China were just as good and were cheaper. He said that he could buy US made components but his bikes would cost $1,000 rather than $100.

The president just called Fed chair Jay Powell a “fool” for keeping the fed funds target rate steady rather than lowing it. Trump tweeted “Oil and Energy way down, almost all costs (groceries and ‘eggs’) down, virtually NO INFLATION, Tariff Money Pouring Into the U.S. — THE EXACT OPPOSITE OF ‘TOO LATE!’ ENJOY!.” However, inflation was 2.4%, still above the Fed’s target of 2 percent. Trump is miffed by the Brits lowering their bank rate and wants the Fed to follow suit. However, the president of the St Louis Fed, Alberto Musalem who is a member of the Fed’s Open Market Committee, put the blame back on the present saying that the Fed will commit to further interest rate cuts until it is clear whether the Trump’s tariffs lead to persistent inflation or a one-time adjustment in prices. So take that Mr President! Anyway, Trump is making it more difficult for the Fed to cut rates. If and when it does, it will appear to all that the Fed’s independence has been compromised and it is bowing to political pressures. My advice to the president is simple – stop tweeting!

Another impact of Trump’s tariffs is that American corporations are stopping hiring. Polaris says that it is now in recession mode. BTW I have a Polaris 570 ATV and it is a wonderful machine. Highly recommended. Polaris now also makes Indian motorcycles. I had an Indian Scout and loved it. I hated selling it when I went through my end-of-life crisis moving to a three wheel Can Am. Other companies are freezing hiring until the full impact of the tariffs are felt. I know much has been made about 177,000 jobs being added in April, but much of that was in healthcare and finance. Recruiters who help companies find job candidates say hiring has been falling at a steep rate for two months. One company’s revenue from hiring activities is down 50%.

All of this is ominous but Trump seemingly has blinders on. He insists that his 10% tariff is universal and permanent. No matter if we had a surplus with a country. No matter if their tariffs are lower than ours. All will have a 10% tariff. 

But what of the deals? Aren’t there supposed to be 75 or so countries wanting to make a deal? But didn’t Trump just pause his “reciprocal” tariffs for only 90 days? How he can “negotiate” that many deals in so few days will be impossible. Mark Carney, the new Canadian prime minister, just visited the White House and no deal was reached. The White House is doing high fives touting a tariff deal with the UK – a country with which we have a surplus – that amounts to a nothingburger. The 10% tariff is still in place. The Brits will allow the import of some American beef and chicken. But hormone-treated beef and chlorine-washed chicken are still not allowed. The Brits will no longer put a tariff on American ethanol up to 1.4 billion litres (British spelling). This is in effect a quota. The same is true for the US importing of British autos, with the tariff set at 10% until a quota of 100,000 vehicles is reached. This is beyond absurd. Now the tariff on British cars will be lower than the tariffs on American cars made in Canada and in Mexico. Maybe the Americans can shift manufacturing to England. 

Perhaps more importantly to the British is their trade deal with India which significantly lowers both country’s tariffs. Donald Trump is credited with prompting the agreement. In fact, the UK’s deal with India is its third biggest after its agreements with Australia and Japan. Now, the UK has signed trade deals and agreements in principle with about 70 countries and one with the EU. Trump unites the world!

But what about the “negotiations”? One observer says “But so far it is pretty clear that countries coming in and wanting a ‘normal’ trade negotiation with both sides making substantive concessions are being rebuffed.” Apparently the administration is not really negotiating. It seems more like a take it or leave it with the 10% tariff being non-negotiable. Also, can Trump be trusted? Didn’t he just violate his own trade agreement with Canada and Mexico? 

Mom

On this Mothers’ Day we all pay tribute to our mothers. My mother’s reach was well beyond our household. We had to share her with hundreds of her other children. I remember when we were at a luncheon with some Atlanta school officials and the area superintendent had been one of her second graders. He told me that when he once visited her school and addressed her as “Harriet”. Mom immediately scolded him, saying “You are never old enough or big enough to call me “Harriet.” He said that he never made that mistake again. Mom was the first four year graduate of Fort Valley State University. In the school’s tribute to her upon her death, it was noted that she made a contribution to the university from her graduation in 1941 to her death at 101. What was not said was that she did not have the funds to complete her senior year. The university then waived all her costs to have her work in the registrar’s office that last year. Mother never forgot that generosity.

Here is her tribute from her alma mater, Fort Valley State University.

“Harriet Barfield Black, the first Fort Valley State College graduate, died Tuesday, April 14, 2020, following a life highlighted by her steadfast support for Fort Valley State University. The Atlanta resident was 101.

Mrs. Black loved most things passionately. However, her most important loves were (in no particular order) her family, her Atlanta church Friendship Baptist Church, her home church in Gray, Ga – St Paul AME Church, her students over a 52 year career as an educator and her alma mater, Fort Valley State University. She was an avid Wildcat and contributed to Fort Valley every year since her graduation as its first four year student in 1941. She celebrated her 101^st birthday on the Fort Valley campus where she was awarded the key to the city. Mrs. Black had an eidetic memory and could recall the names and personal information of all members of her graduating class of 1941. She loved Fort Valley and attended homecoming games well into her nineties. 

Prior to her death, Mrs. Black became widely known around campus for having made a gift to FVSU every year since 1941, the year she made history by becoming the first student to walk across the stage to receive her bachelor’s degree from FVSC.

Before becoming FVSC’s first graduate, Mrs. Black had earned her teaching certification in 1939 from then Fort Valley Normal and Industrial School only to be called back by the registrar two years later when the State of Georgia designated FVNIS as a college.

After graduating, Mrs. Black would go on to become a second-grade teacher in Atlanta Public Schools, a role she treasured. She would jokingly tell others she stayed in the post for decades because she never got “promoted” to a higher-grade level. During those years, she helped nurture thousands of students and developed a reputation for being a kind-hearted educator.

Family members recalled a story the perfectly illustrated her impact on her students. In her early days of teaching, students didn’t have access to federally funded lunches and had to bring their lunch from home. One student could only bring one biscuit for lunch, and, at lunchtime, she noticed him embarrassedly holding his lunch bag under his desk and eating his biscuit sheepishly so as not to be seen by the other students. She said nothing to the student, but for one week, she brought a single biscuit for her lunch. She elaborately spread a place setting for herself on her desk, placed her biscuit proudly in full display, and made a big show out of eating it and enjoying it. That show mitigated the student’s embarrassment and helped him feel more confidently part of the class. That was important to her, and why her former students have constantly stopped her, thanked her, and updated her on their life’s progress over the years.

Mrs. Black’s name became so synonymous with consistent alumni giving at Fort Valley State that the FVSU Foundation established a society in her honor. Members of the Harriet Barfield Black Society have made the solemn promise of an annual and ongoing charitable commitment to the University. The first members of the HBBS were installed during homecoming 2008.

“We are deeply saddened by the passing of Ms. Harriet Barfield Black,” said Fort Valley State President Paul Jones. “Ms. Black was a dear friend to FVSU and represented the spirit, dedication and loyalty that has allowed this institution to endure and prosper for 125 years. We are forever grateful for the outstanding example of service and giving that she provided and the opportunities she created for generations of Wildcats through her generosity.”

For her 101st birthday last year, she made the trip back to her alma mater to personally visit the institution that had empowered her life’s journey. Dozens of family members joined her and the City of Fort Valley, Georgia’s Pro-Tempore Mayor Lemario Brown, an FVSU alum, presented her with a key to the city. To honor her commitment and dedication to the University and others, President Jones declared that day as “Harriet Barfield Black” day on FVSU’s campus and throughout Wildcat Nation.

President Jones ordered the FVSU flags be lowered to half-staff in recognition of Black’s remarkable legacy at this institution and across the nation.”

RIP Mom. I love you.

Do mothers still say “potty-mouth”?

President Trump gave the commencement address at the University of Alabama. The speech was noteworthy for two things. First, the president did not wear an academic gown at Alabama. I know of no other commencement speaker so unattired. Second, in his speech, the president said that the internet people once hated him but now they ”kiss his ass”. I was shocked at the language and offended. Talk like that would have been unthinkable (and unspeakable) in such a public forum only few years ago. Yes I know that presidents in the past have been foul-mouthed, Richard Nixon and especially Lyndon Johnson come to mind. But that language was usually uttered in private. What was once private is now out in the open.

Our speech has coarsened and I wonder if I am the only one offended by it. Scatological speech seems to be accepted in today’s “culture”. I reported earlier on how the democrats have taken to cursing with aplomb. In stump speeches, in television interviews, on the floor of congress and even in hearings they are swearing like the proverbial sailor. I am sure that the republicans are doing so too but the only one frequently publicized as  using vulgarities is Donald Trump with a few f-bombs scattered here and there. Remember the president referring to some countries as “s-tholes”?

Even Kamala Harris has dropped an f-bomb. Jasmine Crockett would probably have been expelled from the congress in an earlier era and especially likes to spice up her language. How about“Somebody slap me and wake me the f-k up because I’m ready to get on with it.” Or when she told Elon Musk to “F-k off.” Ilhan Omar also told a reporter to “f-k off”.  Remember Rashida Tlaib when she said about Trump, “We’re gonna go in and impeach the motherf—er?” And this before a crowd that had plenty of children.

There is actually a website called Govpredict that listed 1,722 instances of politicians swearing last year. Also disturbingly is the florid use of s -t. The media is complicit by actually printing the words for all to see. This is the Chinese year of the snake but it is also the year of the f-bomb. Cory Booker said in reference to the president, “Listening to the president. Such a bulls-t soup of ineffective words.” Why, that maybe the world’s shortest word salad. Booker has also said “We are not going to give thoughts and prayers, which to me is just bulls-t. I’m sorry to say that as a man of faith, but I was taught that faith without works is dead.” Eh, Cory, what faith is that which you are a man of? Booker’s fellow democrat senators posted social media videos fact checking the president, each of them calling his claims “s-t that ain’t true.” It seems that the democrats all read (and apparently curse) from the same playbook. I guess their polling told them that the best way to connect with the American public is to curse. WTF.

I wonder what their mothers might said to their potty-mouth children?

I admit to being somewhat old-fashioned. I never heard my parents curse- except for that time that Dad dropped a bag of concrete mix on his foot. I have never cursed my children or used that language in there presence. Only on rare occasions do I curse. But that’s me. It is noteworthy that none of my friends curse either. Maybe I am living in a cocoon.

Yes I know that for a few years now we have been subjected to verbal abuse from loud foul mouth rappers. I am still amazed at all the vulgarities that blast out of cars these days. But it saddens me that this coarseness is now so acceptable and seems to be a natural partner of our moral decay. I guess that we should now accept all the coarseness, vulgarities and cursing of our modern “culture.” But pardon me if I don’t participate.

“Saving” Social Security

Pardon me for posting the penultimate lecture to my Financial Markets and Institutions class.

People are saying that Social Security is running out of funds and will go bankrupt. Those people that are clamoring to save Social Security seem to be under the impression that Social Security is going bankrupt and taking their benefits with it. Excuse me but this is crazy talk. Social Security cannot go bankrupt. What is confusing people is that the Social Security Trust Funds will be depleted in 2033. That means that retirees would receive 76% of their promised benefits not zero. The trust funds might be depleted but the only way Social Security will go away is if the sun goes super nova and wipes us all out. That is because Social Security is a pay-as-you-go system where the payroll taxes of current workers contribute to the payment to current recipients. As long as there are people working and paying Social Security taxes, benefits will be paid albeit reduced from current levels. Since most people prefer to receive 100% of the promised benefits rather than 76%, then how can Social Security be “saved”?

Here are some ways. Let’s do the easy ones first:

 Increase Payroll Taxes

Currently Social Security taxes are 12.4% on the first $168,000 of income. Yes I know they tell you that you pay 6.2% and your employer pays the other 6.2 percent, but who is fooling who (to quote Aretha Franklin). You pay the entire 12.4 percent. The 6.2% that your employer supposedly pays is coming out of your pay. So you can raise payroll taxes say to 15%. This will decrease your income today but will keep Social Security payments in the future from falling.

 Increase Income Levels Subject to Social Security Taxes

Just the first $168,000 of earned income is subject to Social Security taxation. There are proposals to raise if above $200,000 and some to remove the limit entirely. This would be accompanied with a proposal to have a maximum cap on the amount of benefits paid to the retiree.

Change the COLA from wage indexing to price indexing

By Instituting this change Social Security would have run surpluses every year from 1982 to 2023 except for 2021.

Now the more difficult ones:

Increase the Full Benefit Age

The full benefit age for those born after 1960 is 67. The earliest you can claim Social Security is at age 62. When Social Security was first implemented the full benefit age was four years past the life expectancy of the population. For example, my father was born in 1913 and had a life expectancy of 58 years. Now an individual who reaches age 65 is expected to live to 85. But when Social Security was enacted in 1935 the full retirement age was 65 and the life expectancy for men was 61 years and 65 for women. This means that Social Security was intended as a safety net rather than a retirement plan. Now men are expected to live to 74 and women to 80. Of course, it is less for blacks. Some estimates are that raising the full benefit age to 70 would make the system solvent for an additional 75 years. But I bet that the AARP would fiercely resist raising it because Social Security has moved from being a safety net to being a retirement pension fund.

Means test Social Security

Here Social Security benefits are determined by one’s income, instead of benefits being determined by what one has contributed. Also benefits can be determined by one’s income stream post- retirement. So if one has a 401(k) or 403(b), a pension or other benefits post-retirement, then their Social Security benefits would be reduced. This proposal is controversial because some recipients will be receiving less than their total contributions. My attitude is that I was forced to pay into this dog of a “pension “plan with its dismal rate of return and it is my money and I want it back.

Have more babies

Americans are getting older and living longer causing fewer and fewer workers to support an ever growing number of retirees. The declining ratio of workers to beneficiaries creates financial difficulties for Social Security. In 1960, the Social Security program had revenues of $12 billion and outlays just shy of $12 billion. However, by 2021, the smaller ratio led to outlays ($1,145 billion) exceeding revenues ($1,088 billion). The gap between outlays and income will continue to grow. By 2034, the last year before funds are expected to become depleted, the Social Security Trustees expect that costs will exceed income by $437 billion. When the trust funds are depleted, benefits will be limited by the income assigned to the program and absent changes to law, benefits would be reduced by 20 percent.

Is the solution to have more babies? That is not likely since birth rates are declining among all races and cultures. Although Hispanic birthrates are above those of white and black women, those birthrates are also declining. The rates in the countries in Latin America where most Hispanic immigrants are from are all below replacement (2.1).  Moreover, the birthrates of Hispanics in the United States are also falling. In countries that have offered economic inducements to have more babies, those inducements have failed to stop the declining birthrates. So it does not appear that trying to induce having more babies is going to work to “save” Social Security.

Privatize Social Security

Being a free market laissez-faire thinker, one would think that this should be my favorite. George Bush II tried to advance such a notion in 2005 but it failed. Why? Well the spectre of old gray-haired women picketing the congress is unseemly. Social Security funds are not invested per se so there are no significant returns coming to the recipients. Bush wanted to take part of the contribution to Social Security and have individuals put them in their own retirement accounts. Those account returns would be tied to the market and the accounts privately managed in equity index funds. The problem with such a proposal is that because Social Security is a pay-as-you-go program with current benefits being paid from current receipts, the program would suffer an instant shortfall. Would the government have to step in to make up that shortfall? That would be doubtful given the size of the existing government debt. 

If when first enacted, Social Security had been privatized, it would have been viable and would have produced greater returns than the current system. Consider that assuming historical rates of return, if individuals born in 1970 were allowed to invest in a stock market index fund what they pay in the Social Security taxes, those individuals could receive nearly six times the benefits that they receive under Social Security, around $11,000 per month rather than the $1,913 that Social Security would pay. Even a low-wage earner would receive nearly three times the return on Social Security. 

And a frivolous one

Since women live longer, they will receive more payments than men. In the spirit of fairness, delay their payments but not the men’s.

A Modest Proposal

My suggestion is to keep the current regime of Social Security in place and let it gradually fade away. Over time the 76 percent figure will continue to fall as the ratio of workers to retirees continues to fall. Social Security will eventually cease to be a viable source of retirement funds. Instead, remove the contribution limits on IRA accounts. There will be no need to try to privatize Social Security which would meet resistance from all the democrats and the AARP. Let IRA accounts be the alternative if donation restrictions were removed. The IRA contribution limits for 2025 are $7,000 for those under age 50, and $8,000 for those age 50 or older. Why not eliminate those limits? The reason is that the IRA contributions are tax deferred. Money contributed to an IRA is on a pretax basis. When the money is withdrawn is when they are taxed and then presumably at a lower tax bracket. The opponents will say that the increase in the IRAs will be at the expense of current tax receipts which are required to pay for government expenditures causing the debt to rise. Now that is a fairly easy solution – reduce government spending.

BTW, since none of my ideas seem to find traction, I don’t expect this one to do so either.

Pandering, illegals get paid and Ferraris

I guess President Trump’s campaign pandering to make overtime paytax exempt is going to become a reality. There is a bill to enact the exemption and cap it at $10,000 for individuals and $20,000 for married couples. I wonder if there will follow bills to exempt tips and Social Security payments, two other pandering proposals? Of course, the one exemption that Trump has ignored is the only one that I have suggested for the last 20 years – to exempt from all taxes the pay and purchases by active duty service personnel. I wonder why I can’t get any traction on this?

Did you see where the Administration is bribing illegals to self-deport? Illegals would use a mobile app and would receive $1,000 once they confirm that they have arrived in their home country. One illegal has already received payment after self-deporting from Chicago to Honduras. I wonder how many times an individual could collect? Couldn’t one just come back into the country and self-deport any number of times?

Can you explain to me the new 100 percent tariff on foreign movies? I guess Trump didn’t like Ingmar Bergman. Is he trying to cut off foreign movies made by foreigners or American movies made on foreign soil? I guess they could make a replica of London in south Georgia to film a James Bond movie. Or a replica of the Sahara desert in Death Valley for an Indiana Jones movie. If there are tariffs on foreign made movies, will other countries retaliate by putting tariffs on movies from American studios? Didn’t China ban American movies? Don’t the bulk of movie sales by American studios come from abroad? But like many things Trump, it just seems silly to me.

Some have called Trump’s tariff policy “uneven.” That is kind at best. Better call it chaotic, undisciplined and ad hoc. The president unilaterally imposed a tariff of 25% on imported automobiles. Never mind that the tariffs were on automobiles of US companies. Since the factories were in Mexico or Canada they got hit with the tariffs. He also imposed tariffs on automobile parts. As noted before, some parts cross borders eleven times and are tariffed each time. Since in the initial round of tariffs, aluminum and steel were hit with 25%, Trump then exempted them if they were used in automobile production, thereby avoiding a double tariffation (if there is such a word). Then the Administration said that manufacturers of U.S.-assembled cars could have a rebate equal to 3.75% of their retail price for one year and 2.5% the next year to offset their tariff costs for parts. Whew! This is getting complicated. But if the car is not assembled in the US, then the full tariff would apply. Since Ford’s electric Mustang is assembled in Mexico, it pays the full tariff and will see a price increase of around $12,000.

The impact on the automobile companies is predictable. GM says its costs will increase by $5 billion. Ford, which assembles most of its vehicles in the US (save the Mustang) saw its first quarter profits fall by 64 percent saying that tariffs will decrease its adjusted pretax earnings by $1.5 billion. Like many firms Ford has stopped giving forward guidance. “While Ford’s tariff bill will be lower than many competitors, the impact still amounts to “huge numbers,” said Ford’s Chief Executive Jim Farley. By the way, Ford is still losing about $1 billion a year on its EVs. How long can that be sustained?

Even Rivian, the EV maker, which is produced 100 percent in the US is telling investors that it too will be negatively impacted by the tariffs. It expects over $200 million will be added to its costs, presumably in increased costs for some parts. It will be interesting to watch how the sales of US vehicles are impacted by Trump’s tariffs.

One bright spot is that Ferrari is continuing forward guidance as its earnings beat forecasts. Ferrari reported net earnings of $466 million in the first quarter as its deliveries increased from a year earlier. Ferrari’s CEO said “Another year is off to a great start,” he said. “All key metrics recorded double-digit growth, underscoring a strong profitability driven by our product mix and continued demand for personalizations.” The company said that it was going to increase its prices for US deliveries due to the tariffs. Despite that, US deliveries were up 3 percent. I guess Ferrari’s price elasticity is fairly inelastic. Its owners seem to pooh pooh the increase in price. Ah, life in the fast lane. Ciao!

Is this your next pickup?

Have you heard of the Slate truck? It is a bare bones, minimalist tiny electric pick up truck. It is priced at $27,000 and if the federal tax credit hangs around, it will set you back $19,500. What do you get for that price? Not much. It has roll up windows, no info system, no touch screen, no radio and no paint. So I guess it is a blank Slate. However, you can pay extra and get those things and a bunch more. It does have a smartphone holder so you can still talk to Siri or use Waze. It is being backed by Jeff Bezos who seems to be the Elon Musk me too guy. “So you have Space X well I have Blue Origin! You have Tesla well I put a few million into Rivian and now I have Slate!”

Incredibly some writers are asking if Slate will be a Tesla killer. Huh? Was Yugo a Porsche killer? Was the Chevy Volt a threat to the Tesla Model S? The people that I know who buy Teslas are attracted to its technology. Slate is the anti-Tesla with no technology. They will appeal to completely different markets. Tesla offers the cybertruck which starts at $70,000 and goes up north of $100,000. Do you really think a teeny EV pickup with a 150 mile range and no gizmos will endanger Tesla? Not likely. However there will be a market for a cheap EV pickup. Given the high tariffs on Chinese EVs, it is impossible to get a cheap EV (there they start around $15,000). Toyota even makes a $15,000 EV for the Chinese market. Let’s just say that those who are wishing that the Slate will be a threat to Tesla are just Elon Musk haters who are hoping for Tesla’s demise which may happen but not because of Slate.

I have always wondered why all the US EV startups have started with high priced vehicles. Rivian which continues to have a look of surprise on it starts at $70,000 and go up towards $100,000. Every time I see one I say “Does that look like $70,000 to you?” Not to me. Lucids also start around $70,000 and go past $100,000. Of course the Big Three have their own EVs, Ford has the EV Mustang and the F-150 Lighting. General Motors has the Lyric, Blazer EV, Equinox EV and the Silverado EV. All are cheaper than the startups but no one thinks that they endanger Tesla. Do they? Well if they don’t then why would Slate?

So the F-150 Lightning and Silverado EVs aren’t considered a Tesla killers but a $20,000 pint-sized EV is? This makes no sense to me. Musk has promised but failed to deliver a $25,000 EV, there will be certainly market for the Slate. I would not mind having one at the farm. My first pickup was a bare bones F-150. It too had roll up windows. It had air conditioning and four wheel drive – an essential at the farm. If the Slate is available with four wheel drive, I could use it to haul stuff around the farm and take dead deer to the processor during deer season. I would not need my F-250 diesel for farm work and could use it for heavy loads and with my fifth wheel. I think America needs cheap EVs. But these will be no threat to Elon Musk and Tesla. 

Are American’s going to demand a vehicle with no auto light dimmer, no touch screen, no power windows and no backup camera. That remains to be seen. Yes all those are available as accessories and will they be so often demanded that Slate will start offering an upgrade with those niceties standard? Whereas I would never have a cybertruck, I might buy a Slate. On the other hand, I have no need or desire for an EV auto, regardless of price. 

It is noteworthy that the Slate will be built in Indiana which has 2 republican senators and 7 of nine representatives are also republican. It is probably a mere coincidence that since Trump is talking about getting rid of the $7,000 federal tax credit on US made EVs that Slate will be made in republican country. Want to bet that the Indiana republicans are already lobbying to keep that tax credit?