Monday, August 31, 2015

People, Power and Prohibition

Can Donald Trump be elected President of the United States?

Can Bernie Sanders?

Can abortion be outlawed?

Can the 2nd Amendment be repealed?

All of this is possible in the United States of America where the people control the governmental process through their votes.

The people are sovereign in our system.  They possess the supreme or ultimate power to do anything they want.

This seems to be lost on too many people who complain that they have no influence or power. It may seem that way when you are just one vote. However, those votes add up quickly.

Our Constitution also insures that change can be made fairly rapidly.

The entire House of Representatives has to stand for a vote every two years. The President every four years and Senators every six years. If you think about it, within four years you can change the entire House, the President and two-thirds of the Senate. With those numbers you can do almost anything you want, including passing a Constitutional Amendment in Congress. You still would need three-fourths of the states to agree but they also do not have terms extending beyond four years.

Why do I bring this up?

I am currently reading the history of the Prohibition movement that resulted in the enactment of the 18th Amendment to the U.S. Constitution which took effect on January 17, 1920.

It prohibited the manufacture, sale, or transportation of intoxicating liquors or the importation or exportation into or from the United States for beverage purposes.

It is an amazing story to consider that alcoholic beverages could have been prohibited especially when considering how much these liquid libations were ingrained into the culture and how significant the alcohol, beer and saloon business was to the economy.

A few fun facts from "Last Call: The Rise and Fall of Prohibition" by Daniel Okrent that shows just how ingrained intoxicating beverages were in the United States in the years before Prohibition.

  • In 1830 American adults were drinking, per capita, seven gallons of pure alcohol per year. That is equal to abut 90 bottles a year for every adult in the nation!

  • In 1875, fully 1/3 of all federal revenues came from taxes on whiskey and beer.

  • The number of saloons in America increased from 100,000 in 1870 to 300,000 in 1900.

  • Beer consumption increased from 36 million gallons in 1850 to 855 million gallons in 1890. Population tripled over this time but beer consumption (driven principally by Irish and German immigrants) went up 24x.

How did we get Prohibition? 

It started with a handful of women in Hillsboro, Ohio in December, 1873 who started praying, reading the Bible and singing in front of local saloons. This ultimately led to the formation of the Women's Christian Temperance Union in 1874 by a woman named Frances Willard.

The WCTU worked tirelessly at the state legislature and local school board level to require compulsory temperance education laws in schools. By 1901, compulsory temperance education was on the books in every state in the union. It then only took less than one more generation to get to their ultimate goal. Another lesson on how important it is to capture the minds of the young!

The establishment of the Anti-Saloon League in the 1890's (in Oberlin, Ohio) was the final key element in pushing the country to Prohibition. The ASL was the first strong special interest group which had a singular purpose, was backed by over 30,000 churches across the country and was not afraid to use the voting power of its members to influence (and intimidate) the political class. (Do you think the political class wanted to give up the beer and liquor tax revenue?)

The Anti-Saloon League knew that by targeting the margins in every election, that with as little as 10% of the vote, they could control the outcome of many elections.  They took no prisoners. Politicians that did not vote their way soon were quaking in their boots.

For example, by 1903 in Ohio , the ASL had targeted 70 sitting legislators of both parties and defeated every one of them as well as the popular Governor of Ohio who had persuaded some legislators to weaken a piece of legislation that the ASL wanted.

You can only be sure of one thing with a politician---they love their job. And you can't do that job if you lose your seat. The people spoke and the politicians listened.

The rest, as they say, is history.

Prohibition lasted until December 5, 1933 when it was repealed with the adoption of the 21st Amendment.

There is no better example of the power of the people.

They took away alcohol and they brought it back. Such is the power of the people.

I don't want anyone to ever tell me that they can't do anything or something can't be done to change our government.

The people have the power.

They just need leadership and the will to use that power.

History teaches us that when we look at Prohibition.

Wednesday, August 26, 2015

The Anchors Around Our Necks

Anchor babies are getting a lot of attention thanks to Donald Trump.

There were an estimated 350,000-400,00 children born in the United States last year to mothers who are illegal immigrants. As a result of the prevailing interpretation of the 14th Amendment to the U.S. Constitution each of these children are considered to be United States citizens.

To put that in perspective, that is about 1 out of every 10 births in this country!

Can you imagine anyone who voted for the 14th Amendment in 1866 at the federal or state level thinking that we would be conferring citizenship to this many as a result of this provision?

Birthright citizenship is extremely rare in most countries. In fact, Canada and the United States are the only countries with advanced economies that recognize it.

It is estimated that there are now at least 4 million minor children of illegal immigrants who are U.S. citizens. At least another 1 million children were brought into the country with their parents illegally.

It is a legitimate question to ask whether this policy (law? constitutional provision?) makes any sense today.

The Compounding Costs of Birthright Citiizenship

The costs of this policy are enormous.

Consider just the cost of K-12 education for these children and the burden this is placing on school budgets across the country. With average costs nationally approaching $13,000 per pupil, the illegal immigrant students are adding over $6.5 billion to school costs nationally.

Each anchor baby is also eligible for welfare which is guaranteed to U.S. citizens. As a result, their entire families benefit from our welfare dollars with food stamps, Medicaid, housing assistance and welfare cash assistance.

According to the Center for Immigration Studies, 71% of illegal immigrant Hispanic families with children were receiving some form of welfare assistance in 2009. That number was 57% when including all immigrant households. By comparison, only 39% of households headed by native born citizens were receiving any welfare assistance.

It is without question that the birthright citizen policy has proven to be an enormous incentive magnet for illegal immigration. It is a natural human desire to want to provide a better life for your children than what you had growing up. The people who come to the United States are coming to better their own lives but they are also clearly motivated for a better future for their children.

The decision to come to the United States is made even easier when you know that the American taxpayer is going to provide you with the money to help pay for the support of your children.

The longer term effects of this policy are even more insidious.

Due to the fact that you have minor children who are U.S. citizens living in households with parents who are illegal immigrants, those who want to enforce the immigration laws against illegals are called "heartless" because they want to "break up these families".  As a result, each birth further undermines any attempts to fix the problem. We just keep digging ourselves into a deeper and deeper hole.

These U.S.-born children of illegal aliens are also eligible to sponsor the immigration of family members once they come of age. At 18, an “anchor baby” can sponsor an overseas spouse and unmarried children of his own. At full majority age at 21, he can sponsor parents and siblings.

The bottom line is that the anchor baby policy sets in motion compounding effects that create multitudes of adverse impacts that further undermine our laws and any hope for a reasonable and rational immigration policy going forward.

As I have pointed out before, it is not that the United States is not already the most welcoming nation for legal immigrants on the entire planet.

  • Although the United States has less than 5% of the world's population, 20% of all international migrants reside in the United States.

  • 45 million immigrants currently live in the United States. This is 4 times as many who live in any other country in the world.

  • Approximately 1 million immigrants are granted legal permanent residency status in the United States per year. 10.7 million were granted permanent status over the last 10 ten years.

What is most troubling to American voters is the fact that all of this should have been preventable if we had simply enforced current immigration law over the last 30 years.

What Does The 14th Amendment Say?

That brings us to the 14th Amendment. What does it actually say?

Amendment XIV, Section 1, Clause 1:

"All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." (emphasis added)

That seems fairly clear except for the words I underlined above..."and subject to the jurisdiction thereof."

Is a child born in the United States to parents who are illegal immigrants "subject to the jurisdiction of the United States" when those parents are unlawfully present in our country?

This is the crux of the argument that is made by those (Donald Trump included) that believe that the 14th Amendment does not automatically confer birthright citizenship to children of illegal immigrants. At a minimum, they believe that Congress has the right to define what "subject to the jurisdiction thereof" means.  It has already been accepted that this means that children born to foreign diplomats do not gain U.S. birthright citizenship nor do members of certain Indian tribes.

I would further argue that the very actions of the federal government in not enforcing the immigration laws means that illegal immigrants that are here have effectively not been "subject to the jurisdiction" of the United States" by the consistent failure of our government to enforce the country's jurisdictional borders.  How can an illegal immigrant be considered to be subject to the jurisdiction of our country if they are here illegally but our government is doing nothing about it?

Trump and Polling

I found it interesting that in the most recent polling data I could find on the issue of birthright citizenship (Rasmussen, April 20, 2015), 54% of the respondents agreed that children of illegal aliens born in the United States should not "automatically become a citizen of the United States" compared to 38% who believed they should.

You can say what you want about Donald Trump but his polling numbers are where they are because he is striking a chord with a large segment of the American electorate. Look no further than those polling numbers on birthright citizenship and this was before Trump elevated the issue in public discussion.

Trump understands that anchor babies are an anchor around our necks if we are to have any chance to fix the immigration system.

We likely cannot (and should not) do anything about the past but we surely should not continue to compound the problem going forward be it by judicial challenge, legislation or constitutional amendment to remove birthright citizenship. I would advise moving forward on all three fronts to cover all the bases.

It is time to remove this anchor from around our necks.

Sunday, August 23, 2015

Conventional Wisdom or Conformism?

‘Everything that is really great and inspiring is created by the individual who can labor in freedom.’
                                                                                                        -Albert Einstein

When Dick Fosbury was a sophomore in high school he could not clear 5 feet which was the minimum qualifying jump height for many high school meets.

Fosbury high jumped like everyone else did in his sophomore year using the so-called ''straddle method" where he approached the bar and thrust one leg up and over the bar and ended up with his body straddling over the bar as he attempted to get his trailing leg over as well.

The Straddle Method

By the end of his junior year in high school Fosbury jumped 6'3" to break the school record at his high school. A year later he was runner-up in the Oregon state track and field meet.

How did he improve so rapidly?  He ignored the conventional wisdom and found a better way to clear the bar. His new high jump method became known as the "Fosbury Flop."

This is how Fosbury describes it.

I take off on my right, or outside, foot rather than my left foot. Then I turn my back to the bar, arch my back over the bar and then kick my legs out to clear the bar.” 

The Fosbury Flop

Five years after Fosbury started experimenting with his new method he won the Gold Medal at the 1968 Olympics in Mexico City.

By the next Olympics, 28 of the 40 competitors were using the Fosbury Flop. Today you don't find anyone doing anything else.

You can see the effect that the Fosbury Flop had on the world high jump record.

Fosbury's idea and his independence changed the world of high jumping.


Pete Gogolak was another individual thinker who came up with a better way to placekick a football.
Gogolak was the first college football kicker to kick the football soccer style rather than the straight ahead style that had been in use for decades. Rather than use the toe to kick the ball, Gogolak kicked the ball with the instep of his foot similar to the way he had learned to kick a soccer ball in his native Hungary.

Pete Gogolak kicking at Cornell University
Credit: Cornell University Athletic Communications

The rest is history. Gogolak (as well as his younger brother Charlie) went on to the NFL and changed the way the ball was kicked forever. There are no longer any kickers who toe the ball like Lou "The Toe" Groza did.

I thought of all of this today as I watched Bryson DeChambeau win the U.S.Amateur Golf Championship.


DeChambeau is another individual who has freely labored on his own to find something that works better for him. Bryson plays with irons that are all the same length (37.5"). His wedges are the same length as his 4 iron.

Bryson DeChambeau's irons

Whether uniform length irons will transform golf is yet to be determined but it certainly seems to be working for DeChambeau. Today he became only the 5th player in history to win both the NCAA Individual Championship (Bryson played for SMU) and the U.S.Amateur in the same year.

By the way, the other players that have accomplished that feat have gone on to pretty good careers playing golf.

Jack Nicklaus. Phil Mickelson. TigerWoods. Ryan Moore.

Where would we be if everyone always just conformed to the conventional wisdom?  History shows that we would be way behind where we are today but for the few who see things differently, and most importantly, are not afraid to pursue their ideas despite the inevitable ridicule and reprimands that come with taking a different path.

I started with an Einstein quote and I will end with one as well.

'There are few enough people with sufficient independence to see the weaknesses and follies of their contemporaries and remain themselves untouched by them.'
                                                                                                        -Albert Einstein

Thankfully there are a few who are both independent enough and can remain untouched by those who tell them they have it wrong when they know they are right.

Thank you, Dick Fosbury, Pete Gogolak.......and Bryson DeChambeau...... for showing us the power of your ideas, your independence, your inner strength and the inspiration you provide to all of us that conventional is not always wisdom. At times it is nothing more than conventional conformism.

Tuesday, August 18, 2015

Where Have All The Good USA Tennis Players Gone?

Can you name the top-ranked men's tennis player in the world that is from the United States?

I could not until today when I attended the Western & Southern Open in Cincinnati.

Suffice it to say that the United States is not producing tennis players like it did when I was younger and we had players like Pete Sampras, Andre Agassi, Jimmy Conners and John McEnroe.

In fact, there has not been an American male ranked #1 in the world since Andy Roddick in 2003.

Consider the number of weeks that Americans were #1 in the ATP rankings over the last forty years and you can see how far the USA has fallen.

Pete Sampras- 286 weeks

Jimmy Conners- 268 weeks

John McEnroe- 170 weeks

Andre Agassi- 101 weeks

Jim Courier-  58 weeks

Where does the best USA male tennis player rank today?  #12.

He is also the only USA male ranked in the top 25.

What has happened to the tennis talent in America?  Did it all of a sudden disappear?

That is undoubtedly not the case.

There is just as much raw talent and talent as there has ever been.

Quite simply, there clearly are not as many kids playing tennis.

And those that are playing are not putting the hours of practice in that kids did in the past.

The rest of the world has also caught up. When I was growing up tennis was dominated by the Americans and the Australians. It is much more of a worldwide game now.

In fact, the top 20 male tennis players in the world come from 14 different countries.

American Serena Williams remains the top ranked female player. However, there is only one other American woman in the Top 20 (Madison Keys #19).

Belinda Bencic (Switzerland) from my courtside seat today
#12 ranked female player in the world

Here is a chart showing the percentage of adolescents who play various sports in the USA.


Football, basketball and baseball have always been the top 3 in male sports but soccer seems to have taken a big chunk out of potential tennis players compared to what we might have seen in the past.

What is the answer to get Americans back on top in tennis?

More kids playing tennis.

And a few of those kids willing to put the thousands of hours of practice in order to be the best.

Or as Todd Martin an American tennis pro and instructor who was at one time ranked #4 in the world told Forbes magazine a couple of years ago about the decline of American tennis.

It’s a skills-intensive game that rewards individuals willing to hit thousands of balls a day. Few kids out there are willing to do that for the decade or so it takes to become elite.

Or as Chris Evert told The Wall Street Journal recently in a nice feature on her upbringing looking back from her 60th year.

The reason I did so well so quickly is that I practiced for hours each day—at night under the lights after school and in the mornings and evenings on weekends. In Florida you could play outdoors year-round, which gave me an edge over those who played only five months of the year.

Talent is vastly overrated. In any endeavor.

If you see a change in the perceived talent level like we are seeing in tennis today in the United States there is an explanation. It can almost always be traced to several missing ingredients.

Passion. Practice. Perspiration. Perseverance.

Give me those four and you will find success almost anywhere you go.

Toil trumps talent. Hard work beats heredity.

Do you want to know the name of the top ranked USA male tennis player?

John Isner.

Credit: Naparazzi via Wikipedia Commons

By the way, Isner is 6'10'' tall.

He chose tennis over basketball?

Smart decision.

It would have probably been even harder to be the 12th best basketball player in the world.

Thursday, August 13, 2015

Hillary Is No Patriot

What is a patriot?

The definition according to is,

"a person who loves, supports, and defends his or her country and its interests with devotion."

In my mind a patriot also puts the interests of their country over their own self interests.

For example, our Founding Fathers put their personal wealth, their reputations and their very lives on the line when they signed the Declaration of Independence. Benjamin Franklin uttered one of his most famous quotes upon that signing when he told his fellow patriots,

"We must all hang together, or assuredly we shall all hang separately."

Or consider all of the men and women who have put on the uniform of the United States to defend and protect their country. They are surely putting the interest of their country over their own self interest.

You can say the same about people like Martin Luther King, Jr. or Susan B. Anthony who were pilloried and arrested as they sought equal rights for blacks and women. They put themselves at personal risk for the bigger purpose of making our county better.

That brings us to Hillary Rodham Clinton.

This is Ms. Clinton speaking to the National Defense University Foundation after she was awarded their American Patriot Award in 2013.

Source: Chip Somodevilla/Getty Images North America via

Can she be called a patriot by any sense of the word considering what we know now?

It would seem to be an impossibility if you look at her current problems.

Let's consider the facts.

As Secretary of State she chose to ignore the governmental email system and establish her email on  a private server completely outside of the control of the federal government.

Why did she do this?

It certainly was not because of any interest or concern about her country.

She appears to have done it solely to avoid any requirement to disclose the contents of her emails under the Federal Records Act and the Freedom of Information Act and to shield herself from any personal embarrassment or risk to her future political career. It was done to circumvent the laws of her country plain and simple. There is no other rational explanation for what she did.

What is Hillary's explanation for using the personal server?  Her personal convenience. She did not want the hassle of dealing with two email systems. She did not want to be personally inconvenienced. Does that sound like a patriot?

In doing so she appears to have allowed top secret and highly classified material to be placed on her personal email server thereby putting all of our country's citizens at potential risk. As a result, her actions placed her country and its citizens at greater risk solely to protect her own self interest. Does that sound like a patriot?

We are already hearing the parsing of words and tortured explanations that the Clintons are famous for as the email investigation begins to gain momentum. Of course, all of this could have been avoided if Hillary had merely used the governmental system or turned over all of her emails to begin with.

Consider the chronology of some of her statements about the emails.

"I did not email any classified material on my email" (my emphasis)
-March 10, 2015 -
Notice she says that she did not email any classified material but she does not state that she did not receive any.
"I am confident that I never sent or received any information that was classified at the time it was sent and received. " (my emphasis) 
-July 25, 2015  -
Notice that she then hedges on whether it was classified at the time she sent or received it.

Her campaign now is saying the following.
"She never knowingly sent or received classified information and that none of it was marked classified at the time."  (my emphasis)
- August 11,2015- 
She now says she never did anything knowingly.  I guess it all depends on what the meaning of the word "knowingly" is, right Bill?

Of course, remember that all of Hillary's current problems are being caused because she did not want to be personally inconvenienced.

Does that sound like a patriot?

I noticed one other interesting fact when reviewing the facts and circumstances surrounding Hillary's emails that does not add up.

She claims to have turned over all of her work-related emails to the State Department for the period 2009-2013---30,490 in total.  However, she did not turn over 31,830 emails that were deemed "private and personal."

The "private and personal" emails were supposedly limited to matters such as "yoga routines," "family vacations," and "planning Chelsea's wedding." according to Hillary.

Does this seem as strange to you as it does to me?

My personal email volume is a fraction of what my business email volume is.

How is it that when Hillary Clinton was serving as our Secretary of State that she was receiving and sending more personal emails about vacations, yoga routines and weddings than business emails in the course of a normal day?

Who was she working for? What was her first priority?  Her country or herself?

It sounds like her Secretary of State duties was a part-time job if she had that volume of personal emails to send and answer every day.

Does that sound like a patriot?

Does that sound like someone who should be President of the United States?

Tuesday, August 11, 2015

Clinging To Their Guns

President Barack Obama is a gun control advocate but since he has been in office the number of new guns entering circulation in the United States annually has doubled---from about 7.5 million to almost 16 million per year.

This is one of several remarkable statistics contained in a recent article in The Economist.

All of this has been very,very good for the stock prices of the two largest publicly owned gun manufacturers in the United States.

Has all of this led to more deaths by guns?

No. Homicide deaths by firearms are almost 60% lower per capita than they were 20 years ago. There has been an uptick in deaths by firearms since Obama took office but it has primarily been related to suicides.

You might be surprised to learn that suicides each year account for almost twice as many deaths by firearms than homicides.

In exact numbers, according to the Brady Campaign to Prevent Gun Violence, there are 11,294 homicides by guns but 19,992 suicides.

Support for gun control is much weaker today than it was 50 years ago. According to The Economist, 60% of Americans wanted to ban handguns in 1959.  A recent Gallup poll found that support for a ban on handguns was only 26% today.

This view seems to be driven by those who believe that having a gun in the home makes a home safer. Only 35% of Americans held that belief in 2000. 63% hold that opinion today. and Gallup

However, despite this view, only about 30% of households actually own a gun. That is down from 50% in the mid-1970's.  All of this leads to the conclusion that all of the new guns are primarily going into the hands of those that already own them rather than an increasing number of armed citizens.

I guess in looking at these statistics you could say that President Obama was right about one thing when he said during the 2008 campaign when referring to small town voters across the Midwest that "...they cling to guns or religion..."

Obama has certainly not been able to do anything about gun control but he has been responsible for a lot more clinging to their guns than we have seen in a long, long time.

Sunday, August 9, 2015

The Late, Not So Great Democrats

I thought one of the best lines from last week's GOP Presidential Debates was by Marco Rubio.

Well, first, let me say I think God has blessed us. He has blessed the Republican Party with some very good candidates. The Democrats can’t even find one.

We continually hear about Democrats as being progressive, diverse, young and "in-touch" with the voters.

Let's look at their Presidential candidates. I will concede they are "progressive". Bernie Sanders is so progressive that he actually calls himself a Socialist. He was not even elected to the U.S. Senate as a Democrat. He ran as an Independent. I guess even Socialists can't get elected in Vermont when that party label is on the ballot next to their name.

However, how young is the group of announced Democrat contenders for President?

This is the age of each candidate ( including the unannounced Joe Biden) as of Election Day, 2016.

Hillary Clinton         Age 69
Bernie Sanders         Age 75
Martin O'Malley      Age 53
Lincoln Chafee        Age 63
Jim Webb                Age  70
Joe Biden                Age 73

Average Age             67.2

If you exclude O'Malley the average age is 70.

Compare that to the GOP contenders.

Jeb Bush                  Age 63
Marco Rubio           Age 45
Ted Cruz                 Age 45
Scott Walker           Age 48
Bobby Jindal           Age 45
John Kasich            Age 64
Rick Santorum        Age 58
Lindsey Graham     Age 61
Carly Fiorina          Age 62
Donald Trump        Age 70
Ben Carson             Age 64
George Pataki         Age 71
Jim Gilmore            Age 67
Mike Huckabee       Age 61
Rand Paul                Age 53
Rick Perry               Age 66
Chris Christie          Age 54

Average Age              58.6

What about diversity?

The Democrat candidates are comprised of 5 white males and 1 white female.

The Republicans have 2 candidates with Hispanic backgrounds (Cruz and Rubio), an African American (Carson), an Indian American (Jindal) as well as a white female (Fiorina).

How about the diversity of educational, professional and occupational backgrounds?

Four of the six Democrats are lawyers (Clinton, O'Malley, Webb and Biden). It is hard to discern from any biographical information what Bernie Sanders did to make a living before he entered politics. Filmmaker and free lance journalist?

Chafree was a farrier (he shoed horses) before entering politics. Of course, that seems to have merely been a diversion until he could succeed his father as U.S. Senator from Rhode Island.

There are a number of attorneys in the GOP field as well (Cruz, Rubio, Santorum, Christie, Graham, Pataki, Gilmore) but there is a much broader range of experience among the candidates.

Business majors and CEO's --(Trump (Wharton), Fiorina (Maryland)

Doctors--Carson (Neurosurgeon), Paul (Eye Surgeon).


Rhodes Scholar- Jindal

College Drop-Out-Walker

Air Force Pilot and Cotton Farmer- Perry

Son of a Mailman- Kasich

Son and Brother of a President of the United States- Bush

Old, White and Out of Touch?

It is not the GOP in 2016.

It is the late, not so great Democrats.

Friday, August 7, 2015

First Impressions on the First Debate

The 17 candidates had the opportunity to make a first impression on voters last night and here are my first impressions of them.

The Winners-The Main Event

It was difficult to pick a clear winner in the main debate (as contrasted to Carly Fiorina in the early debate) but I thought Marco Rubio stood out for his presence and his articulate answers. I also thought that Jeb Bush definitely suffers when he is on the same stage with his protege. I continue to believe that Rubio is the best candidate the Republicans can put on the ballot this year.

Mike Huckabee proved again why he rose to the top eight years ago. He had several of the best lines of the evening and surely helped his cause.

Ben Carson started slowly but finished strong. I thought he had a golden opportunity when the first question asked of him was whether he had the knowledge and command of the issues to be a viable candidate. I thought he should have said "that fixing our country's problems is not brain surgery. Sure. there are things I am still learning. However. if I can learn and excel at brain surgery I can certainly do this." A missed opportunity but he covered that with his strong closing.

Ted Cruz also had a good night and, based on last night, he could have positioned himself to be the most attractive option for those in the GOP who have found Donald Trump appealing.

The Loser-The Main Event

Donald Trump was the only loser. His bluster and bite seemed completely out of place on that stage. He simply was not ready for prime time last night.

The Also Rans-The Main Event

I thought all of the candidates other than Trump did a good job last night. Rubio was correct when he stated that the GOP has a deep group to select from while the Democrats are struggling to find one. Jeb Bush did not hurt himself but he also did not stand out. John Kasich definitely helped himself. Christie got the better of Rand Paul and might have moved himself up. Rand Paul has a warmth problem. He needs to smile more.

The Winners-JV Debate

In the first debate of the evening (also known as the JV debate or Happy Hour debate) I thought Carly Fiorina was the clear winner. She exhibited strong command and was concise and in control with her answers. Carly has run the best campaign to this point and she carried through with a great debate performance. She should move up in the polls and into the Main Event for the next debate.

Carly's challenge going forward is that she does not seem to radiate the necessary warmth that is necessary in a political candidate. She needs to smile more. Successful candidates have to be able to be competent and strong but also connect with voters. She needs to work on this if she is going to have staying power.

I thought Bobby Jindal was the best of the rest. He was strong in his delivery and did it in a warmer manner than Carly. Jindal helped himself last night.

Rick Santorum rose to the top in the last Presidential race through his debate performances and he carried that into last night's debate. His experience from four years ago definitely helped him. There was nothing that stood out in the debate last night from Santorum but I thought he was solid.

 The Losers-JV Debate

There was only one big loser in the first debate last night-Lindsay Graham. He came across as interested in only one thing-the fight against ISIS. However, he calls it ISIL. From my perspective, anyone who calls these guys ISIL has lost my vote before they even begin. See my blog post, Why ISIL, Not ISIS to see why.

Also Rans- JV Debate

Nothing else of note from the other candidates other than to ask why George Pataki and Jim Gilmore are even in the race? They have both been out of the political arena for over a decade.

Sunday, August 2, 2015

10 Observations About Hillary and Bill's 1040

I spent the early part of my career as a tax attorney and CPA and prepared and reviewed hundreds of individual income tax returns each year.

There is a lot that you can discern about a person's financial life by their tax return. It really is a window into the life they led during that year. What they received in income and where it came from. What types of investments they had. Their mortgage debt. Their charitable giving.

Hillary Clinton released her tax returns (and Bill's as they filed jointly) for the years 2007-2014 last Friday afternoon. Of course, it was on a Friday because that is when you release information in Washington when you don't want to get much attention from the mainstream media.

Remember in June, 2014 when Hillary was on her book tour and made this astounding remark when asked about her own financial standing as a member of the .001% on relating to the common people ?

"We pay ordinary income tax, unlike a lot of people who are truly well off, not to name names; and we've done it through dint of hard work," 

Of course, this is after she had earlier stated that Bill and she...

"came out of the White House not only dead broke but in debt,"  had "no money"  and "struggled to piece together the resources" for mortgages and her daughter Chelsea's college education.

Here are 10 observations that I thought were interesting when reviewing Hillary and Bill's 2014 return. I also glanced at a couple of other years as well but did not have the stamina to give them the same review as I did the 2014 return.

1. Bill and Hillary reported $28 million of Business Income for the year. Keep in mind that this is a net number after subtracting business expenses. Here are the gross income numbers for Hillary and the business activities in which she earned the money.

  • Author           $5.6 million
  • Speaking     $10.5 million
She deducted about $2.7 million as expenses against this income. She spent and deducted more than $1.1 million just for travel expenses!

2. Bill's Gross Business Income breaks down like this.
  • Speaking      $9.7 million
  • Consulting   $6.4 million
  • Author            *****     ( a measly $36,442 is all)
Bill incurred $1.6 million as expenses against his income and only $375,000 of his travel.  Bill, that is downright embarrassing for someone that used to use that much in fuel on Air Force One in a week.

It is interesting to note in Bill's expenses he took a $945 deduction for the business use of his home. This is a hot button issue with the IRS and you have to ask why would you even bother with this if you were Bill and Hillary Clinton? I understand the office use really relates to a portion of the barn on the Chappaqua property but taking this small deduction makes no sense to me.

3.  Pension and annuity income of $223,639 is reported on the return. This is from Bill's service as President of the United States ($201,700 is the legislated amount in 2014) and the remainder ($21,939) is from the State of Arkansas for his service as Governor.

4. Interest income of $25,171 was reported. All interest was from J.P. Morgan Chase Bank N.A. with the exception of $464 for interest on tax refunds.

Considering the low level of interest on bank deposits the Clintons must have a substantial amount on deposit with Chase. For example, the current interest rate on savings at Chase is .01%. To earn $25,000 there would have to be $25 million on deposit at Chase. The rate on a 10 year CD at Chase for over $250,000 is currently 1.05%. It would take about $2.4 million on deposit to generate $25,000 of interest income with CD's. Their cash balance at Chase is somewhere in between I would imagine.

5. Interestingly, for a couple who has about $28 million in adjusted gross income the Clintons have not reported any dividend income at all. Do they not own any stocks? Do they own equities but none pay dividends? Where is their money outside of Chase interest bearing accounts? You might argue that they are concerned with possible conflicts of interest but owning publicly traded stocks would seem to have fewer conflicts than the organizations to who paid them the enormous speaking fees they have taken. (See #10 below).

6. One possible answer is real estate. Bill and Hillary deducted $104,303 in real estate taxes for the year.

If you haven't seen it, you might want to check out this video produced by where a number of Millennials were asked to guess which Presidential candidate had lived in various houses. To say the least, these young voters were shocked when they found that all of the houses pictured in the video were (or had been leased) by the Clintons.

7. The Clintons also did not report any current capital gains or losses for the year. They did deduct $3,000 (the maximum annual limit) from a $702,540 capital loss carryforward. during 2014. This loss carryforward seems to relate to a long-term capital loss of $726,761 that was taken in 2008 on the disposition of an investment in Yucaipa Partnerships. It appears it was a complete loss on the original investment.

Looking further into this it appears that the Clintons walked away from Yucaipa when Hillary was running for President in 2008 for fear that the relationship with founder Ronald Burkle could prove embarrassing for potential conflicts of interest with some of the investments in the partnership funds that the Clintons were involved with.

However, all in all it appears the Clintons did ok while they were in Yucaipa.

This is what Wikipedia says about Yucaipa and Bill Clinton.

Former U.S. President Bill Clinton, a close friend of founder Ron Burkle, was an advisor to Yucaipa. From 2003 to 2006, Bill and Hillary Clintons' tax returns show total Yucaipa partnership income of $12.5 million. According to the 2007 summary provided by Hillary Clinton's presidential campaign, the Clintons earned $2.75 million from the Yucaipa partnership.

8. The Clinton's 2014 tax return shows $3,022,700 in charitable contributions. $3 million was to The Clinton Family Foundation. $20,000 to the First United Methodist Church (no indication where this is), $2,500 to St. Stephen's Armenian Apostolic Church ( on Google I found two churches by this name- Watertown, MA and New Britain, CT) and $200 to the Hot Springs High School Class of 1964.

These were the only contributions to any churches in the 2007-2014 period as reported in the Clinton tax returns. Did they just rediscover religion in 2014?

Interestingly, I could not find any indication in the IRS Exempt Organization data base that the Hot Springs High School Class of 1964 is a a qualified 501(c)(3) organization that would allow for tax deductibility. My guess is that this donation was for activities surrounding Bill Clinton's 50th high school reunion. These types of activities would normally not qualify for 501(c)(3) status unless the funds were going for an educational purpose such as a scholarship fund. Again, I find it strange that on a return with $28 million of AGI you are worried about a $200 deduction

9. Hillary deducted $3,816 as business expenses for "technical support". Is this related to IT support for the server for her own email system?  She also deducted the massive sum of $78 for "Security System Fees" in the return.

 Yikes! Did she think this would be sufficient to keep the Chinese from hacking her email?

10. Although the details of her $10.5 million in speaking engagement income is not in the 2014 Form 1040, Hillary released a schedule of her speaking engagements for 2013 when she reported $9.7 million in speaking fees.

Her going rate for the year appears to have been $225,000. However, she was able to get more for some engagements. For example, the Jewish United Fund/Jewish Federation of Metropolitan Chicago was charged $400,000. Is that because they are wealthier? Beaumont Health System in Troy, MI paid her $305,000 (we all know health care  has plenty of money) and Golden Tree Asset Management in NYC paid her $275,000 ( I get that as well, they have golden trees).

Hillary had a couple of incredible weeks on the speaking circuit in 2013. If only we all could bring in this type of money over a week or so.

For example, consider June 16-24, 2013. $1,435,000 in 9 days.

Society for Human Resource Management Chicago, IL $285,000 6/16/2013
Economic Club of Grand Rapids Grand Rapids, MI $225,000 6/17/2013
Boston Consulting Group, Inc. Boston, MA $225,000 6/20/2013
Let's Talk Entertainment, Inc. Toronto, Canada $250,000 6/20/2013
American Jewish University Universal City, CA $225,000 6/24/2013
Kohlberg Kravis Roberts and Company, LP Palos Verdes, CA $225,000 6/24/2013

Or October 23-29, 2013. $1,525,000 in 7 days!

SAP Global Marketing, Inc. New York, NY $225,000 10/23/2013
Accenture New York, NY $225,000 10/24/2013
The Goldman Sachs Group New York, NY $225,000 10/24/2013
Beth El Synagogue Minneapolis, MN $225,000 10/27/2013
Jewish United Fund/Jewish Federation of Metropolitan Chicago Chicago, IL $400,000 10/28/2013
The Goldman Sachs Group Tuscon, AZ $225,000 10/29/2013

It is all quite amazing.

Less we forget, a number of former Presidents almost died penniless including Jefferson, Grant, William Henry Harrison and Garfield. Harry Truman was heading that way until Congress passed a law (in 1958) establishing the first Presidential pension.

How times have changed.

Do we really want to give the Clintons two Presidential pensions?