tag:blogger.com,1999:blog-56648050410417524072024-03-08T00:54:22.175-08:00On Policy and Other Unnatural LawsDarrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-5664805041041752407.post-10806707200582559362014-02-06T20:13:00.006-08:002014-02-07T06:38:57.632-08:00How to appreciate a Paranoid Libertarian<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-size: 10pt; line-height: 115%;">A paranoid libertarian may not be
the highest exemplar of virtue or the most self-enlightened archetype found in
civilization. He or she does, however, abstain
from the madness which afflicts peoples, a madness lately known as
nationalism. In that way, a paranoid libertarian is superior to the agreeable or acquiescent authoritarian.</span><o:p></o:p></span></div>
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<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial, Helvetica, sans-serif; font-size: 10pt; line-height: 115%;">Lately, distinguished law professor
Cass Sunstein <a href="http://www.bloomberg.com/news/2014-01-30/how-to-spot-a-paranoid-libertarian.html">denounced paranoid libertarians </a>and their five mortal political shortcomings.</span></div>
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<blockquote class="tr_bq">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="font-size: 10pt; line-height: 115%;">[Paranoid libertarianism] can be found on the
political right, in familiar objections to gun control, progressive taxation,
environmental protection and health-care reform. It can also be found on the
left, in familiar objections to religious displays at public institutions and
to efforts to reduce the risk of terrorism. Whether on the right or the left,
paranoid libertarianism (which should of course be distinguished from
libertarianism as such) is marked by five defining characteristics:</span> </span></blockquote>
<blockquote class="tr_bq">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="font-size: 10pt; line-height: 115%;"></span><span style="font-size: 10pt; line-height: 115%;">(1) </span><!--[endif]--><span style="font-size: 10pt; line-height: 115%;">A
wildly exaggerated sense of risks;<br /><o:p></o:p></span><span style="font-size: 10pt; line-height: 115%;">(2) </span><!--[endif]--><span style="font-size: 10pt; line-height: 115%;">A
presumption of bad faith on the part of government officials;<br /><o:p></o:p></span><span style="font-size: 10pt; line-height: 115%;">(3) </span><!--[endif]--><span style="font-size: 10pt; line-height: 115%;">A
sense of past, present or future victimization;<br /><o:p></o:p></span><span style="font-size: 10pt; line-height: 115%;">(4) </span><!--[endif]--><span style="font-size: 10pt; line-height: 115%;">An
indifference to trade-offs; and<br /><o:p></o:p></span><span style="font-size: 10pt; line-height: 115%;">(5) </span><!--[endif]--><span style="font-size: 10pt; line-height: 115%;">Passionate
enthusiasm for slippery-slope arguments.<o:p></o:p></span></span></blockquote>
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<span style="font-size: 10pt; line-height: 115%;"><span style="font-family: Arial, Helvetica, sans-serif;">Nowhere did Cass Sunstein provide a substantive
defense for the hyper-vigilance of the National Security Agency’s bulk surveillance
of the entire American population. Nor
did Cass Sunstein examine <a href="http://www.theguardian.com/world/2014/jan/23/nsa-barack-obama-phone-data-collection-illegal-privacy-board">the twisted procedure</a> whereby the Executive Branch
re-interpreted the wording of the Patriot Act. Sunstein did not address how Congress created
a special <a href="http://www.lawfareblog.com/2013/09/congress-has-no-clothes-a-quick-and-dirty-summary-of-the-new-fisc-opinion/#.UvRS8vn4co4">FISA star court to bypass Article III review by the Supreme Court</a>
and allow the special court to rubber-stamp the National Security Agency’s
privacy violations. Sunstein failed to mention how <a href="http://www.theverge.com/2013/3/1/4043944/denied-in-the-supreme-court-warrantless-wiretap-opponents-are-losing">the Supreme Court refused to even review</a> the National Security Agency’s spying because it
was too secret to merit its attention. Instead, he launched a tired tirade against
the enemy within, paranoid libertarians.
<br />
<br />
<span style="background-color: white;">Nietzsche
once wrote that while in persons madness is the exception, in nations or
peoples madness becomes the rule. The paranoid libertarian remains
paranoid to escape this collective madness. It requires extraordinary
strength of mind and self-examination, and it looks like a sickness, paranoia,
to the masses caught up in the hysteria of the status quo.</span></span><br />
<br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="background-color: white;">Hermann
Hesse was a paranoid libertarian. He foresaw the coming madness of Nazi
Germany and fled the country. Franz Kafka expressed the alienation of the
paranoid libertarian well, and showed us how the state's oppression reduces us
to cockroaches. George Orwell was a freedom fighter for the Communists in
Spain before he became disillusioned and wrote 1984. He, too, became a
paranoid libertarian, and aimed his criticisms squarely at Communism and a
future West overtaken by Mass Surveillance.</span><br />
<br />
<span style="background-color: white;">Paranoid
libertarians distrust slogans and talking points. One such slogan is
"support our troops," which Noam Chomsky has described as pure
propaganda which has no meaning. Paranoid libertarians refrain from
military hero worship and piety towards the troops and their sacrifice, because
they know that danger and imperialist exploitation lurks beyond it.</span><br />
<br />
<span style="background-color: white;">Paranoid
libertarians sometimes say awful and unpopular things. <br />
<br />
Paranoid
libertarians say things which make us feel bad. They tell us we need to
not censor disagreeable speech. They tell us brave Americans are doing
bad things abroad. They tell us that the loyal inspectors at the airport
do not make us safer, and say that they laugh at our naked x-ray bodies.
Paranoid libertarians are unreasonable.<br />
<br />
But
paranoid libertarians have very rarely committed war crimes, have not managed
to topple foreign regimes, nor have they probably ever enslaved entire
peoples. Paranoid libertarians have not often engaged in <a href="http://www.informationclearinghouse.info/article8787.htm">idle triumphalism</a> as they tortured the indigenous. Paranoid libertarians do not usually
<a href="http://thelede.blogs.nytimes.com/2013/12/19/the-aftermath-of-drone-strikes-on-a-wedding-convoy-in-yemen/?_php=true&_type=blogs&_r=0">slaughter wedding parties</a>. Paranoid libertarians do not try to <a href="http://www.history.com/topics/bay-of-pigs-invasion">restorebanana republics to their rightful rotation in the hegemon’s axis</a>. Paranoid libertarians tend not to <a href="http://news.firedoglake.com/2013/01/21/the-fbi-wrote-a-letter-to-martin-luther-king-telling-him-to-commit-suicide/">blackmail</a>
<a href="http://www.theatlantic.com/entertainment/archive/2011/11/what-really-happened-between-j-edgar-hoover-and-mlk-jr/248319/">civil rights leaders</a>. Paranoid libertarians usually do not <a href="http://fair.org/take-action/media-advisories/wto-coverage-prattle-in-seattle/">slur mass protests</a> or <a href="http://www.capitolhillseattle.com/2011/02/now-that-was-a-protest-two-new-views-of-1999-wto-riots-on-capitol-hill/">put them down violently</a>.<o:p></o:p></span></span></span></div>
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<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial, Helvetica, sans-serif; font-size: 10pt; line-height: 115%;">The secret to happiness or to
higher living may yet elude most paranoid libertarians. They may have eccentric habits or inarticulate
expressions of viewpoint. Still,
paranoid libertarians recognize the great danger and incredible violence of the
state. And their paranoia, as such, is a
hard-fought struggle against the madness of the agreeable, the acquiescent, and
the outright authoritarian. <o:p></o:p></span></div>
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<br />
<div class="MsoNormal">
<span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Arial, Helvetica, sans-serif; font-size: 10pt; line-height: 115%;">You should not feel superior to the
paranoid libertarians as long as you still scribe excuses and elegies for those
of great power. And belittling them is
an exercise consisting almost always of either obsequiousness or ambition. </span><span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: 'Courier New'; font-size: 10pt; line-height: 115%;"> <o:p></o:p></span></div>
Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com1tag:blogger.com,1999:blog-5664805041041752407.post-57187051645329764472013-08-11T12:36:00.000-07:002013-08-12T18:10:15.435-07:00The 401(k)ship Society<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">In the </span><span style="font-family: Verdana, sans-serif;"><a href="http://www.nytimes.com/2013/05/01/opinion/friedman-its-a-401k-world.html">New York Times</a> i</span><span style="font-family: Verdana, sans-serif;">n May, frequent <a href="http://www.huffingtonpost.com/2013/05/01/matt-taibbi-thomas-friedman_n_3195621.html">Matt Taibbi whipping boy</a> Thomas Friedman announced: </span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<blockquote class="tr_bq" style="text-align: justify;">
<span style="background-color: white; line-height: 22px;"><span style="font-family: Verdana, sans-serif; font-size: x-small;">We now live in a 401(k) world — a world of defined contributions, not defined benefits.</span></span></blockquote>
<blockquote class="tr_bq" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif; font-size: x-small;"><span style="background-color: white; line-height: 22px;">If you are self-motivated, wow, this world is tailored for you. The boundaries are all gone. But if you’re not self-motivated, this world will be a challenge because the walls, ceilings and floors that protected people are also disappearing. That is what I mean when I say “it is a 401(k) world.” Government will do less for you. Companies will do less for you. Unions can do less for you. There will be fewer limits, but also fewer guarantees. </span><em style="background-color: white; line-height: 22px;">Your</em><span style="background-color: white; line-height: 22px;"> specific contribution will define </span><em style="background-color: white; line-height: 22px;">your</em><span style="background-color: white; line-height: 22px;"> specific benefits much more. Just showing up will not cut it.</span> </span></blockquote>
<br />
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">Companies, unions, and government certainly do less for us than ever before. Well, less for the vast majority of us, anyway. But before we too readily agree with Thomas Friedman about the state of the world, let us focus on <a href="http://en.wikipedia.org/wiki/401(k)">the 401k</a> in specific. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<h3>
<span style="font-family: Verdana, sans-serif;">An Examination of the 401(k) Defined Contribution Plan</span></h3>
<div>
<span style="font-family: Verdana, sans-serif;">Created in 1978, 401ks were undiscovered until the mid-1980s. </span></div>
<blockquote class="tr_bq" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif; font-size: x-small;"><span style="background-color: white; line-height: 19.1875px;">401(k) are "defined contribution plans" with annual contributions limited to $17,500 as of 2013.</span><span style="background-color: white; line-height: 13.315972328186035px;"> </span><span style="background-color: white; line-height: 19.1875px;">Contributions are "tax-deferred"—deducted from paychecks before taxes and then taxed when a withdrawal is made from the 401(k) account. Depending on the employer's program a portion of the employee's contribution may be matched by the employer. </span></span></blockquote>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The 401k offers two major benefits to the employee: tax-deferral and matching employer contribution. </span></div>
<h4>
<span style="font-family: Verdana, sans-serif;"><br /></span></h4>
<h4>
<span style="font-family: Verdana, sans-serif;">Tax-Deferral</span></h4>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">Tax-deferral allows the employee to reduce her income for her tax return when she pays into the 401k.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<blockquote class="tr_bq" style="text-align: justify;">
<span style="background-color: white; line-height: 19.1875px; text-align: start;"><span style="font-family: Verdana, sans-serif; font-size: x-small;">For example, a worker who earns $50,000 in a particular year and defers $3,000 into a 401(k) account that year only recognizes $47,000 in income on that year's tax return.</span></span></blockquote>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The employee then pays tax upon distribution. Notably, the considerable compounded income within the 401k becomes taxed at ordinary income rates. So, the employee pays her distribution taxes at rates more similar to Warren Buffet's secretary rather than Warren Buffet's own lower long-term capital gains rates. The IRS penalizes early distributions and also taxes them. </span></div>
<h4>
<span style="font-family: Verdana, sans-serif;"><br /></span></h4>
<h4>
<span style="font-family: Verdana, sans-serif;">Employer Contribution</span></h4>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The employer contribution may be the more seductive lure. Employers may contribute as much as $51,000 each year, or 100% of the employee's salary, whichever is less. As you may imagine, <a href="http://money.usnews.com/money/retirement/articles/2010/09/27/5-employers-with-generous-401k-matches">employers rarely contribute so much</a>.</span></div>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<blockquote class="tr_bq" style="text-align: justify;">
<span style="background-color: white; font-family: Verdana, sans-serif; font-size: 13px; line-height: 22px;">The most common 401(k) employer matching contribution is 50 cents for each dollar the employee contributes, up to 6 percent of their pay. That means that the maximum possible match an employee can get using this formula is 3 percent of pay.</span></blockquote>
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Thus, employees may shelter no more than roughly 3-6% of their pay into their 401ks, in addition to up to $17,500, plus whatever amount the employer matches as its contribution. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<br />
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The 401k program includes various other provisions, including a maximum deferral for highly compensated employees (HCE) pegged to the contributions of lower paid employees as well as an oft-praised automatic enrollment provision which allows employees to opt-out rather than refuse to enroll. </span></div>
<h4>
<span style="font-family: Verdana, sans-serif;"><br /></span></h4>
<h4>
<span style="font-family: Verdana, sans-serif;">The Managed Market</span></h4>
<span style="font-family: Verdana, sans-serif;">401k contributions go into market investments. But they do not enter the stock market directly. Instead, <a href="http://www.theatlantic.com/business/archive/2013/03/your-401-k-is-out-to-get-you/274408/">employer-selected firms</a> manage these contributions for a substantial fee. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<br />
<blockquote class="tr_bq">
<div style="text-align: justify;">
<span style="background-color: white; font-family: Verdana, sans-serif; font-size: x-small; line-height: 23.1875px;">Most defined contribution plans allow participants to select from a menu of investment options, largely mutual funds. The question is, who decides what's on the menu? About three-quarters of the time, these decisions are made by a mutual fund company acting as the plan's trustee. And (surprise again!) mutual fund companies are more likely to push their own funds onto employees than other companies' funds--despite the fact that they are legally obligated to act in the best interests of plan participants.</span></div>
</blockquote>
<blockquote class="tr_bq">
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif; font-size: x-small;"><span style="background-color: white; line-height: 23.1875px;">Let's say such a fund has a bad year. If plan trustees are acting solely in the interests of their participants, we would expect the identity of the trustee not to affect the chances that the fund is dropped from the investment menu. But that's not the case: a poorly-performing fund is much less likely to be dropped from a menu controlled by its sponsoring fund company than from a menu controlled by a third party. Fund companies are also much more likely to add their </span><i style="background-color: white; line-height: 23.1875px;">poorly performing</i><span style="background-color: white; line-height: 23.1875px;"> funds to plan menus that they control.</span></span></div>
<span style="font-family: Verdana, sans-serif; font-size: x-small;">
</span></blockquote>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">In addition to the subtle conflicts of interest, managed funds charge <a href="http://www.kiplinger.com/article/saving/T001-C000-S002-the-high-cost-of-401-k-fees-how-much-are-you-payin.html">significant fees</a> which are often concealed from employee-investors.</span></div>
<blockquote class="tr_bq">
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif; font-size: x-small;">Mutual fund returns in 401(k) plans are normally reported as net returns, meaning that fees for managing your investments are subtracted from your gains or added to your losses before calculating the annual return. Other costs, such as administrative and record-keeping fees, are often divvied up among plan participants but are not explicitly listed on individual investment statements.</span></div>
</blockquote>
<blockquote class="tr_bq" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif; font-size: x-small;">This lack of transparency is frustrating for investors . . . "Under the expense column, my 401k statement said I was paying zero. But in reality, I was paying about $1,500 a year on an account balance of about $120,000, even though the bulk of my investments were in very low-cost index funds.</span></blockquote>
<span style="font-family: Verdana, sans-serif;">These <a href="http://www.dol.gov/ebsa/publications/401k_employee.html">fees add up</a> over the life of a 401k. They can ultimately eat away the entire value of the tax deferment benefit. </span><br />
<blockquote class="tr_bq" style="text-align: left;">
<span style="background-color: white; font-size: 13px; text-align: justify;"><span style="font-family: Verdana, sans-serif;">Assume that you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000. If returns on investments in your account over the next 35 years average 7 percent and fees and expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account. If fees and expenses are 1.5 percent, however, your account balance will grow to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent.</span></span></blockquote>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">401ks are unremarkable in this regard, as most managed funds suffer from these kinds of fees. <a href="http://money.usnews.com/money/personal-finance/mutual-funds/articles/2012/06/18/some-401k-plans-let-you-take-the-wheelif-you-dare">Self-directed 401k plans</a> are available, but even these involve <a href="http://bawldguy.com/self-directed-ira-401k-fees-2750-termination-fee/">significant fees</a> of some kind. </span><br />
<h4>
<span style="font-family: Verdana, sans-serif;"><br /></span></h4>
<h4>
<span style="font-family: Verdana, sans-serif;">Inconsistent Overall Market Performance</span></h4>
<div>
<span style="font-family: Verdana, sans-serif;">Obviously, 401ks are subject to market risks. This distinguishes it from its government counterpart, Social Security. Thus, 401ks were hit badly in the financial downturn. Although the market has largely recovered to pre-crisis levels, many retired within those five years and began receiving distributions during that time. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div>
</div>
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<a href="http://www.briefing.com/common/images/content/pagecontent/DailyColumns/20130117120222201301171122SP500.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="280" src="http://www.briefing.com/common/images/content/pagecontent/DailyColumns/20130117120222201301171122SP500.gif" width="400" /></a></div>
<div>
<br /></div>
<div>
<br /></div>
</div>
<div style="text-align: justify;">
<span style="font-family: Verdana, sans-serif;">The chart above shows why equity markets continue to hold the attention of those who plan for retirement. Over the last twenty years, growth has been uneven but exponential. Nevertheless, timing can be everything. Thus, 401ks should never be the entirety of one's retirement strategy. The more interesting question is whether the 401k should ever become a core component of the retirement strategy. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<br />
<h3>
<span style="font-family: Verdana, sans-serif;"><br /></span></h3>
<h3>
<span style="font-family: Verdana, sans-serif;">The 401(k) and American Society</span></h3>
<div>
<span style="font-family: Verdana, sans-serif;">Let us return to Friedman:</span><br />
<blockquote class="tr_bq">
<span style="background-color: white; line-height: 22px;"><span style="font-family: Verdana, sans-serif; font-size: x-small;">We now live in a 401(k) world — a world of defined contributions, not defined benefits.</span></span></blockquote>
<blockquote class="tr_bq">
<span style="font-family: Verdana, sans-serif; font-size: x-small;"><span style="background-color: white; line-height: 22px;">. . .</span></span> </blockquote>
<blockquote class="tr_bq">
<span style="font-family: Verdana, sans-serif; font-size: x-small;"><span style="background-color: white; line-height: 22px;">Government will do less for you. Companies will do less for you. Unions can do less for you. There will be fewer limits, but also fewer guarantees. </span><em style="background-color: white; line-height: 22px;">Your</em><span style="background-color: white; line-height: 22px;"> specific contribution will define </span><em style="background-color: white; line-height: 22px;">your</em><span style="background-color: white; line-height: 22px;"> specific benefits much more. Just showing up will not cut it.</span> </span><br />
<div>
<br /></div>
</blockquote>
<span style="font-family: Verdana, sans-serif;">Friedman presents the New World(k) Order as a trade-off, but it appears the 401(k) world simply offers us fewer benefits and less choice. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">If governments, companies, and unions will do less for you, then they may become unbound by their constituencies. Assuredly, there will be fewer guarantees. But Friedman supposes too much when he states that the fewer guarantees will mean fewer limitations. </span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<br />
<h4>
<span style="font-family: Verdana, sans-serif;">Social Security compared with the 401(k)</span></h4>
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">The 401(k) is a creature of statute. Thus, the government may remove this incentive at any time. Social Security is no different in this respect. For Social Security, at least, the government mandates that employers match their the contributions of employees at a rate of 100%. That's a </span><a href="http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/240/~/social-security-and-medicare-tax-rates%3B-maximum-taxable-earnings" style="font-family: Verdana, sans-serif;">guarantee</a><span style="font-family: Verdana, sans-serif;">. In this specific way, the 401(k) is more limited than Social Security, and the choices are these: </span><br />
<br />
<ul>
<li><span style="font-family: Verdana, sans-serif;">For employers, do you want to match contributions 100% or less?</span></li>
<li><span style="font-family: Verdana, sans-serif;">For employees, do you want to accept the employer's 401(k) or not? If so, for how much?</span></li>
</ul>
<br />
<span style="font-family: Verdana, sans-serif;">Social Security also guarantees a predictable benefit amount, dependent largely on whether retirees begin distribution earlier or later in their life. But the 401(k) offers no such guarantee, as the value of your 401(k) depends generally on the value of the equity and bond markets and specifically on the stocks and bonds in your portfolio. </span><br />
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<span style="font-family: Verdana, sans-serif;">The 401(k) also limits productive contributions. Employees can only expect to place as much as 6% of their income into 401(k)s because that is the limit to which employers match their contributions. </span><br />
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<span style="font-family: Verdana, sans-serif;">The 401(k) offer one true choice which distinguishes it from Social Security: it allows high-earners to contribute more money. </span><br />
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<span style="font-family: Verdana, sans-serif;">Social Security taxes are levied only on the first <span style="background-color: white;"><span style="line-height: 19.1875px; text-align: -webkit-center;">$113,700/year in income, to a maximum of </span><span style="line-height: 19.1875px; text-align: -webkit-center;">$14,098.80/year (half from the employer and half from the employee). Thus, an employee who earns $200,000 in 2013 pays $7,049.40/year into payroll taxes and will receive a $14,098.80 benefit upon retirement, exactly the same as someone who earned $115,000 that year or $1,000,000 that year. The million dollar earner, however, may have more choice with the 401(k). Remember that an employer may pay as much as $51,000/year in matching contributions, up to 6% of an employee's pay, but the government limits an employee's contribution to $17,500/year. Thus, the $1,000,000/year employee can contribute up to 6% of $291,666.67. </span></span></span><br />
<span style="font-family: Verdana, sans-serif;"><span style="background-color: white; line-height: 19.1875px; text-align: -webkit-center;"><span style="font-size: xx-small;">Note: those over 50 may contribute an an additional $5,500/year, to a maximum contribution of limit of $23,000/year due to 'catch-up' plans. </span></span></span><br />
<span style="font-family: Verdana, sans-serif;"><span style="background-color: white; line-height: 19.1875px; text-align: -webkit-center;"><br /></span></span>
<span style="font-family: Verdana, sans-serif;"><span style="background-color: white; line-height: 19.1875px; text-align: -webkit-center;">So, the 401(k) is markedly preferable to Social Security, provided you are a high-earner. <a href="http://www.npr.org/2012/04/15/150632993/the-tax-man-cometh-but-for-whom">Roughly 10% of U.S. earners</a> met or exceeded year 2012's Social Security cap of $110,000. Thus, the 401(k)ship society primarily advantages higher-earners. </span></span><br />
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<span style="font-family: Verdana, sans-serif;"><span style="background-color: white; line-height: 19.1875px; text-align: -webkit-center;">Advantage: High-earners</span></span></h4>
<span style="background-color: white; font-family: Verdana, sans-serif;"><em style="font-size: small; line-height: 22px;">Your</em><span style="font-size: x-small; line-height: 22px;"> specific contribution will define </span><em style="font-size: small; line-height: 22px;">your</em><span style="font-size: x-small; line-height: 22px;"> specific benefits much more. Just showing up will not cut it.</span><span style="font-size: x-small;"> </span></span><br />
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<span style="background-color: white;"><span style="line-height: 19.1875px; text-align: -webkit-center;">The promise of the 401(k)ship society lies in its lack of limitations. Yet, t</span><span style="font-family: Verdana, sans-serif; line-height: 19.1875px; text-align: -webkit-center;">he 401(k)ship society provides its real freedom from limitations only to high-earners. This could be fair, but only if you believe, as Friedman seems to, that one's greater contribution will result in higher benefits. Since governments, companies, and unions will all be doing much less, why should we believe they will properly compensate contribution? </span></span></span><br />
<span style="font-family: Verdana, sans-serif;"><span style="background-color: white;"><span style="font-family: Verdana, sans-serif; line-height: 19.1875px; text-align: -webkit-center;"><br /></span></span>
<span style="background-color: white;"><span style="font-family: Verdana, sans-serif; line-height: 19.1875px; text-align: -webkit-center;">You must work in a number of fields which allow you earn the income and prestige commensurate with generous 401(k) plans and the high-income to take advantage of their benefits. Otherwise, you are just showing up. And in the 401(k)ship society, showing up just will not cut it. </span></span></span><br />
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<span style="font-family: Verdana, sans-serif;"><span style="background-color: white;"><span style="font-family: Verdana, sans-serif; line-height: 19.1875px; text-align: -webkit-center;"><br /></span></span></span>
<span style="background-color: white;"><span style="font-family: Verdana, sans-serif;">Update: A commenter adds the following; </span></span><span style="background-color: white; color: #222222; font-family: Calibri; line-height: 18px;">The tax deferral discussion overlooks a couple of important points. The vast majority of 401K users will not take their distributions directly from their 401K plans. Instead they will perform a tax-free rollover into an IRA upon leaving their employer, either for retirement or another employer. Typically distributions from an IRA will the occur during the retirement years when the tax bracket is much lower. For example, a retiree once </span><span style="background-color: white; color: #222222; font-family: Calibri; line-height: 17.98611068725586px;">in the 25-28% tax brackets when working could later find herself </span><span style="background-color: white; color: #222222; font-family: Calibri; line-height: 18px;">in the 15% tax bracket. </span><br />
<div id="yui_3_7_2_1_1376355748356_2331" style="background-color: white; color: #454545; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; text-align: start;">
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<div id="yui_3_7_2_1_1376355748356_2334" style="background-color: white; color: #454545; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; text-align: start;">
<span id="yui_3_7_2_1_1376355748356_2333" style="color: #222222; display: inline; float: none; font-family: Verdana, sans-serif; font-size: 13px; line-height: 18px; text-align: justify;"><span id="yui_3_7_2_1_1376355748356_2332" style="font-family: Calibri; font-size: small;">There is one case where it is to one's advantage to keep her funds in a 401K upon leaving. If one loses her job and has not found another employer and she is 55+ years of age, she can access her 401k funds without penalty. At that point, one can roll an 401k into one's IRA.</span></span></div>
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Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-39734921722236408112013-03-16T09:45:00.001-07:002013-03-18T08:40:47.042-07:00On Gay Marriage<br />
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<span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt; line-height: 115%;"> Over the past year, we have witnessed <a href="http://abcnews.go.com/Politics/high-profile-politicians-changed-positions-gay-marriage/story?id=18740293">several high profile public figures</a> ‘come out’ in favor of gay marriage. </span></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt; line-height: 115%;"> In May
2012, Joe Biden <a href="http://www.politico.com/news/stories/0512/75954.html">declared he was ‘absolutely comfortable’</a> with gay
marriage. </span><span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt; line-height: 115%;">Soon thereafter, Barack Obama opened up about <a href="http://abcnews.go.com/Politics/transcript-robin-roberts-abc-news-interview-president-obama/story?id=16316043&singlePage=true">his ‘evolution’</a> on the issue. <o:p></o:p></span></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: x-small;">I have to tell you that over the course of-- several
years, as I talk to friends and family and neighbors. When I think about--
members of my own staff who are incredibly committed, in monogamous
relationships, same-sex relationships, who are raising kids together. When I
think about-- those soldiers or airmen or marines or-- sailors who are out
there fighting on my behalf-- and yet, feel constrained, even now that Don't
Ask, Don't Tell is gone, because-- they're not able to-- commit themselves in a
marriage.<o:p></o:p></span></div>
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<span style="font-family: "Verdana","sans-serif";"><span style="font-size: x-small;">At a certain point, I've just concluded that-- for me
personally, it is important for me to go ahead and affirm that-- I think
same-sex couples should be able to get married. </span><span style="font-size: small;"><o:p></o:p></span></span></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt;"> Most
recently, Senator Rob Portman (R-OH), admitted that he has come to support gay
marriage in the two years since his son revealed to him that he was gay. <o:p></o:p></span></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt;"> These
conversions reflect very personal considerations. These leaders have predicated their
support of gay marriage upon notions of comfort, familiarity, and close contact
with gay individuals. </span><span style="font-family: Verdana, sans-serif; font-size: 12pt;">I found this odd, because I have referred primarily to Constitutional principles in which to assess the legality of gay
marriage.</span><span style="font-family: Verdana, sans-serif; font-size: 12pt;"> </span></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt;"> Initially, it seemed the equal protection clause of
the 14th Amendment protected gay marriage. The equal protection
clause prevents legislative “prejudice against discrete and insular minorities,” because such prejudice “may
be a special condition, which tends seriously to curtail the operation of those
political processes ordinarily to be relied upon to protect minorities, and
which may call for a correspondingly more searching judicial inquiry.” <i>United
States v. Carolene Products Company</i>, 304 U.S. 144, fn. 4 (1938). Gay individuals and gay couples appeared to
me to be discrete and insular minorities worthy of protection. Gays uniformly profess to be ‘born that way’
and unable to change their sexual preference through will power. In this sense, gays are like blacks and other
racial minorities who were simply born into their ethnic background. Women are actually in the majority, and yet
legislation especially affecting them is subject to heightened scrutiny because
of historical bias against them. Through
American history, the government and society has frequently discriminated
against gays, who comprise only about 3.5% of the population. Indeed, the biological distinction between a
homosexual man and a heterosexual man is considerably slighter than the
biological differences between a heterosexual male and a heterosexual
female. Courts should recognize
homosexuals as a discrete and insular minority, and should protect them from
majoritarian legislation which specifically targets their interests, such as
the Federal Defense of Marriage Act or state anti-gay marriage ballot
measures. <o:p></o:p></span></div>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt;"> Marriage
is more than a mere interest, and courts recognize a fundamental right to
marriage. In <i>Loving v. Virginia</i>, an interracial married couple challenged
Virginia’s prohibition on miscegenation.
A unanimous court joined Chief Justice Earl Warren in overturning
Virginia’s anti-miscegenation statute.
He wrote: <o:p></o:p></span></div>
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<blockquote class="tr_bq" style="text-align: justify;">
<span style="font-family: Verdana, sans-serif; font-size: xx-small; mso-bidi-font-style: italic;">Marriage is one of the ‘basic civil rights of man,’
fundamental to our very existence and survival.... To deny this fundamental
freedom on so unsupportable a basis as the racial classifications embodied in
these statutes, classifications so directly subversive of the principle of
equality at the heart of the Fourteenth Amendment, is surely to deprive all the
State's citizens of liberty without due process of law. The Fourteenth
Amendment requires that the freedom of choice to marry not be restricted by
invidious racial discrimination. Under our Constitution, the freedom to marry,
or not marry, a person of another race resides with the individual and cannot
be infringed by the State. <i>Loving v.
Virginia, </i>388 U.S. 1 (1967). </span></blockquote>
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<span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt; mso-bidi-font-style: italic;"> <span style="font-family: Verdana, sans-serif;">As a fundamental right, any legislative impediment to
marriage must overcome strict scrutiny. Laws
to prevent gays from marrying one another<i> </i>lack any discernible rational
basis, much less do such laws address a compelling state interest. <a href="http://www.businessinsider.com/the-legal-case-against-gay-marriage-2012-11#ixzz2NiaWcozh">Gay marriage critics assert</a> </span></span><span style="font-family: Verdana, sans-serif;"><span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Verdana, sans-serif; font-size: 12pt;">that the institution of marriage
promotes and protects the bearing and rearing of children</span><span style="font-family: "Verdana","sans-serif"; font-size: 12.0pt; mso-bidi-font-style: italic;">. While certainly true, gay
marriage critics have more trouble explaining how denying the marriage franchise to
gays furthers the purpose of bearing and rearing children. What great danger follows the union of Fred
and Ted, in the eyes of the state? </span></span></div>
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<span style="font-family: Verdana, sans-serif; font-size: 12.0pt; mso-bidi-font-style: italic;"> <span style="font-family: Verdana, sans-serif;">None. It is really only societal discomfort and unfamiliarity which motivates a prohibition
on their marriage. The high profile conversions to gay marriage may seem too personal, even troublingly so, given their sophisticated legal training and their oaths to uphold the Constitution. Nevertheless, they cut directly to the political instincts of gay marriage critics. Opposition to gay marriage is really about discomfort and unfamiliarity. The expressed personal character of each high profile defection in support of gay marriage has clarified an important point; opposition to gay marriage lacks a rational basis. </span></span><br />
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<span style="font-family: Verdana, sans-serif; font-size: 12.0pt; mso-bidi-font-style: italic;"><span style="font-family: Verdana, sans-serif;">March 18 Update: <a href="http://www.theatlanticwire.com/politics/2013/03/hillary-clinton-same-sex-marriage-video/63220/">Hillary Clinton declares support for gay marriage</a>, stating: "</span></span><span style="background-color: white; line-height: 21px; text-align: start;"><span style="font-family: Verdana, sans-serif;">I support it personally and as a matter of policy and law." </span></span></div>
Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-65929197279653214442012-10-26T08:24:00.005-07:002012-10-26T08:34:11.836-07:00Dual Tracking Endures<span style="font-family: Verdana, sans-serif;">When home borrowers allegedly default on their mortgages, TBTF banks often Dual Track. Banks will begin the loan modification process for the homeowner. At the same time, banks will refer the account to an attorney for foreclosure. This Dual Track procedure allows banks to more easily reject loan modifications. Dual Tracking seriously prejudices home borrowers. </span><span style="font-family: Verdana, sans-serif;"><br /></span><span style="font-family: Verdana, sans-serif;">Early this month, California Monitor Katherine Porter released<a href="http://big.assets.huffingtonpost.com/Report-Final-4p.pdf"> her first report (.pdf)</a> associated with the National Mortgage Settlement. Ben Hallman has provided <a href="http://www.huffingtonpost.com/2012/10/02/mortgage-settlement_n_1933058.html">a helpful synopsis</a> of the report. </span><span style="font-family: Verdana, sans-serif;"><br /></span><br />
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<span style="font-family: Verdana, sans-serif;">Porter, who was appointed by California Attorney General Kamala Harris to oversee the settlement, focused on dual-tracking she said because it is one of the most harmful servicing practices that banks were required to reform. Dual-tracking also suggests broader institutional problems that have plagued the foreclosure industry for years, including a lack of communication between various departments at mortgage companies, she said. </span><span style="font-family: Verdana, sans-serif;">"Dual-tracking <a href="http://www.huffingtonpost.com/2012/02/16/national-mortgage-settlement-foreclosure_n_1279535.html?ncid=edlinkusaolp00000003" style="border: none; color: #2b0073; list-style: none; margin: 0px; outline: none; padding: 0px; text-decoration: none;" target="_hplink">c</a>osts people their homes," Porter said. </span><span style="font-family: Verdana, sans-serif;">She has "tempered optimism" that banks will stop dual-tracking and make other reforms required by the settlement.</span></blockquote>
<span style="font-family: Verdana, sans-serif;">Porter wisely tempered her optimism. The Consumer Financial Protection Bureau (CFPB) has retreated from banning Dual Tracking as part of its proposed new regulations. Although the National Mortgage Settlement Five must cease Dual Tracking, the rest of the industry may continue this harmful practice. A recent New York Times editorial asks, <a href="http://www.nytimes.com/2012/10/23/opinion/will-foreclosure-abuses-ever-end.html">Will Foreclosure Abuses Ever End?</a></span><span style="font-family: Verdana, sans-serif;"><br /></span><br />
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<span style="background-color: white; line-height: 22px;"><span style="font-family: Verdana, sans-serif;">[The Consumer Financial Protection Bureau's] proposal retreats from many existing requirements. It does not impose any meaningful standards for loan modifications beyond those already required by various federal programs and agreements, many of which will expire in the future and none of which apply to the entire industry. In a stunning reversal, the proposal actually permits dual tracking.</span></span></blockquote>
<span style="line-height: 22px;"><span style="font-family: Verdana, sans-serif;">The CFPB's actual <a href="https://www.federalregister.gov/articles/2012/09/17/2012-19974/2012-real-estate-settlement-procedures-act-regulation-x-mortgage-servicing-proposal#p-33">loss mitigation proposal</a> is quite tame. </span></span><br />
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<span style="line-height: 22px;"><i class="E-03" style="color: #363636; font-family: athelas-1, athelas-2, Georgia, serif; font-size: 16px; line-height: 25px;">9. Loss mitigation procedures.</i><span style="color: #363636; font-family: athelas-1, athelas-2, Georgia, serif; font-size: 16px; line-height: 25px;"> Servicers that offer loss mitigation options to borrowers would be required to implement procedures to ensure that complete loss mitigation applications are reasonably evaluated before proceeding with a scheduled foreclosure sale. The proposal would require servicers to exercise reasonable diligence to secure information or documents required to make an incomplete loss mitigation application complete. In certain circumstances, this could include notifying the borrower within five days of receiving an incomplete application. Within 30 days of receiving a borrower's complete application, the servicer would be required to evaluate the borrower for all available options, and, if the denial pertains to a requested loan modification, notify the borrower of the reasons for the servicer's decision, and provide the borrower with at least a 14-day period within which to appeal the decision. The proposal would require that appeals be decided within 30 days by different personnel than those responsible for the initial decision. A servicer that receives a complete application for a loss mitigation option could not proceed with a foreclosure sale unless (i) the servicer had denied the borrower's application and the time for any appeal had expired; (ii) the servicer had offered a loss mitigation option which the borrower declined or failed to accept within 14 days of the offer; or (iii) the borrower failed to comply with the terms of a loss mitigation agreement. The proposal would require that deadlines for submitting an application for a loss mitigation option be no earlier than 90 days before a scheduled foreclosure sale.</span><span style="font-family: Verdana, sans-serif;"> </span></span></blockquote>
<span style="line-height: 22px;"><span style="font-family: Verdana, sans-serif;"><br /></span></span>
<span style="line-height: 22px;"><span style="font-family: Verdana, sans-serif;">The CFPB may permit Dual Tracking, but state-level consumer protections and the common law should not. Victims of Dual Tracking still have a variety of legal remedies available to them even if the Federal government refuses to regulate its TBTF banking enterprises. </span><span style="font-family: georgia, times new roman, times, serif; font-size: 15px;"> </span></span><br />
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Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-9739717100209066062012-10-02T17:45:00.004-07:002012-10-02T17:45:41.737-07:00The Hardest Hit Fund<span style="font-family: Georgia, Times New Roman, serif;">As part of the financial relief package known as TARP, the Federal government has an array of homeowner assistance programs. You may have heard of some of them: the Home Affordable Modification Program (HAMP), the Home Affordable Refinance Program (HARP), and possibly even the FHA Second Lien Program (FHA2LP). </span><br />
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<a href="http://gregblog.blueroof360.com/images/hardesthitfund.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-family: Georgia, Times New Roman, serif;"><img border="0" src="http://gregblog.blueroof360.com/images/hardesthitfund.jpg" /></span></a></div>
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<span style="font-family: Georgia, Times New Roman, serif;">You probably remain unaware of the <a href="http://www.makinghomeaffordable.gov/programs/unemployed-help/Pages/hhf.aspx">Hardest Hit Fund (HHF)</a>. In 2010, Treasury allocated $7.6 billion to the HHF for distribution to the following 18 States and D.C.:</span></div>
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<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Alabama</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Arizona</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">California</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Florida</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Georgia</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Illinois</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Indiana</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Kentucky</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Michigan</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Mississippi</span></li>
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</td><td style="margin: 0px; padding: 0px;" valign="top"><ul>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Nevada</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">New Jersey</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">North Carolina</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Ohio</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Oregon</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Rhode Island</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">South Carolina</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Tennessee</span></li>
<li><span style="font-family: Georgia, Times New Roman, serif; font-size: x-small;">Washington D.C.</span></li>
</ul>
</td></tr>
</tbody></table>
</div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">In its most recent report <a href="http://www.sigtarp.gov/Quarterly%20Reports/July_25_2012_Report_to_Congress.pdf">(.pdf)</a>, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) came down hard on Treasury's neglect of HHF. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<blockquote>
<span style="font-family: Georgia, Times New Roman, serif;">SIGTARP reported that as of December 31, 2011, the latest data then available, <b>HHF had spent only $217.4 million to provide assistance to 30,640 homeowners</b> — approximately <b>3% of the TARP funds allocated to HHF</b> and approximately 7% of the minimum number of homeowners the state HFAs estimate helping over the life of the program. </span></blockquote>
<blockquote>
<span style="font-family: Georgia, Times New Roman, serif;">Treasury has not set measurable goals and metrics that would allow Treasury, the public, and Congress to measure the progress and success of HHF. Treasury set a single goal for HHF: help prevent foreclosures and help preserve homeownership. Treasury deferred to individual states to set goals but did not require those states to set measurable goals. </span></blockquote>
<blockquote>
<span style="font-family: Georgia, Times New Roman, serif;">Treasury has stated that establishing static numeric targets is not suited to the dynamic nature of HHF. Taxpayers that fund this program have an absolute right to know what the Government’s expectations and goals are for using $7.6 billion in TARP funds. By refusing to set any goals for the programs, Treasury is subject to criticism that it is attempting to avoid accountability.</span></blockquote>
<span style="font-family: Georgia, Times New Roman, serif;">[bold is mine]</span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>
<span style="font-family: Georgia, Times New Roman, serif;">The SIGTARP report also remarks that Treasury has failed to even track the progress of the program and has refused to publish the progress recorded by the various states. </span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>
<span style="font-family: Georgia, Times New Roman, serif;">States have experienced various amounts of success with HHF. For example, Kentucky's Unemployment Bridge Program (UBP) <a href="http://www.kyhousing.org/full.aspx?id=4510">has averted 1,500 foreclosures</a>. The <a href="http://www.kyhousing.org/protect/default.aspx?id=3586">UBP</a> has broad eligibility and provides generous benefits.</span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>
<blockquote class="tr_bq">
<span style="font-family: Georgia, Times New Roman, serif;">The maximum amount of assistance is $25,000 or 12 months, whichever occurs first. Of the $25,000, the maximum amount that may be used for reinstatement, all related fees and payments to bring your loan(s) current, is $12,500 (effective with closings on or after May 7, 2012). To get started, click on <a href="https://wwwapps.kyhousing.org/KHC_ProtectKYHome/NewUser.aspx" style="color: navy;">Get Free Help</a> at the top of the page.</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">Applicants must meet the following guidelines and the mortgage must be with a <a href="http://www.kyhousing.org/protect/servicers.aspx" style="color: navy;">participating servicer</a>.</span><br />
<ul type="disc">
<li style="margin-bottom: 12px;"><span style="font-family: Georgia, Times New Roman, serif;">Maximum amount of liens on the property cannot exceed $275,000.</span></li>
</ul>
<ul type="disc">
<li style="margin-bottom: 12px;"><span style="font-family: Georgia, Times New Roman, serif;">Maximum of two liens permitted on the property.</span></li>
</ul>
<ul type="disc">
<li style="margin-bottom: 12px;"><span style="font-family: Georgia, Times New Roman, serif;">Applicant(s) must demonstrate a need for assistance.</span></li>
</ul>
</blockquote>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Notably, Kentucky's UBP still has $93 million left to disburse. </span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>
<span style="font-family: Georgia, Times New Roman, serif;">South Carolina's Homeownership and Employment Lending Program (HELP) extends relief even to those who have suffered divorce, a death in the family, or medical disaster. But HELP has only <a href="http://www.businessweek.com/ap/2012-09-13/sc-spends-small-slice-of-federal-mortgage-aid">expended 12% of its total</a> reserves. Officials speculate on why the South Carolina has delivered so little aid: </span><span style="font-family: Georgia, Times New Roman, serif;"><span style="color: #222222; line-height: 23.370370864868164px;"><br /></span></span>
<br />
<blockquote class="tr_bq">
<span style="font-family: Georgia, Times New Roman, serif;">The reasons range from people being too embarrassed to seek help to those assuming the free, too-good-to-be-true offer is a scam, he said.</span> </blockquote>
<blockquote class="tr_bq">
<span style="font-family: Georgia, Times New Roman, serif;"></span><span style="font-family: Georgia, Times New Roman, serif;">An advocate for the poor says South Carolina's program is too limited in who it can help, while a legislator in charge of the House budget for economic development blames poor marketing.</span> </blockquote>
<blockquote class="tr_bq">
<span style="font-family: Georgia, Times New Roman, serif;"></span><span style="font-family: Georgia, Times New Roman, serif;">"A lot of people don't believe it will help them," Ingram said. "We're constantly telling people not to self-exclude. At least apply. The worst that can happen is you're turned down. The best is, you'll save your home."</span></blockquote>
<span style="font-family: Georgia, Times New Roman, serif;"><br /><br />Treasury deserves only some of the blame for HHF's obscurity, as states reveal varying degrees of participation. Through HHF, California has averted over 16,000 foreclosures, North Carolina nearly 8,000, Ohio over 7,000, but New Jersey's Homekeeper a paltry 750. <br /><br />In the larger scheme of financial relief, HHF's $7.6 billion constitutes a mere drop in the bucket. Last month, the Federal Reserve launched QE3. Banks appear to reap <a href="http://www.cnbc.com/id/49249106">the lion's share of the benefit</a> from the Federal Reserve's $40 billion per month purchase of Mortgage-Backed Securities. Too Big to Fail's corollary may well soon become Too Small to Save.</span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><span style="color: #222222; font-size: x-small; line-height: 23.370370864868164px;"><br /></span></span>
<span style="font-family: Georgia, Times New Roman, serif;"><span style="color: #222222; font-size: x-small; line-height: 23.370370864868164px;"><br /></span></span></div>
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Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-9226258309795836962012-09-16T09:07:00.001-07:002012-09-16T09:12:05.744-07:00Executive Compensation in the Health Insurance Industry<span style="font-family: Arial, Helvetica, sans-serif;">I do not yet have health insurance. As I begin to shop around for health insurance, I will be asking providers how much they pay their executives. I would rather subsidize my health care than subsidize their bottom-line. </span><br />
<br />
<br />
<h1 id="Head" style="background-color: white; font-family: Arial, san-serif; font-size: 20px; line-height: 21px; margin: 0px 0px 5px; padding: 0px;">
<a href="http://www.ama-assn.org/amednews/2012/05/28/bisf0531.htm">Compensation for most health plan CEOs rose in 2011 — to $87 million in total</a></h1>
<div>
<br /></div>
<blockquote class="tr_bq">
<span style="background-color: white; font-family: 'Times New Roman', Times, serif; font-size: 16px;">Executives in the top spots at the country’s seven largest publicly traded health plans were paid a collective $87 million for their services in 2011.</span> </blockquote>
<blockquote class="tr_bq">
<span style="background-color: white; font-family: 'Times New Roman', Times, serif; font-size: 16px; text-indent: 10px;">Cigna CEO David Cordani made the most, at $19.1 million. Humana’s Mike McCallister had the smallest compensation package, with $7.3 million. </span><span style="background-color: white; font-family: 'Times New Roman', Times, serif; font-size: 16px; text-indent: 10px;">The base pay of most CEOs is around $1 million, because of tax rules on executive salaries. But in every case, other financial rewards pushed the total pay packages into the multimillions. In 2011, Cordani made 94 times the average primary care physician’s compensation, using the latest Medical Group Management Assn. figures.</span></blockquote>
<div style="text-indent: 10px;">
<span style="font-family: Arial, Helvetica, sans-serif;">I will be avoiding the country's seven largest publicly traded health plans, including Humana. </span><span style="font-family: Times New Roman, Times, serif;"> </span></div>
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<span style="background-color: white; font-family: 'Times New Roman', Times, serif; font-size: 16px; text-indent: 10px;"><br /></span></div>
Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-14325815588734073702012-08-27T20:17:00.003-07:002012-08-27T20:24:19.551-07:00Sign your name at the Top<br />
<h4>
<a href="http://www.livescience.com/22714-curb-financial-dishonesty-tax-forms.html">Individuals less likely to lie if they had to sign at the top of the document instead of at the bottom</a></h4>
<blockquote>
The team then partnered with a U.S. automobile insurance company for a real-world experiment. They sent out more than 13,000 policy-review forms, which asked customers to report the current odometer mileage of their cars. Half of the customers received a modified form, where the honesty statement and signature line appeared up top. Comparing these readings with the company's latest records, they found that customers using the sign-at-top form reported driving their cars more than those with the standard sign-at-bottom form. The results suggest customers with the standard form were more willing to report lower mileages to reduce their insurance premiums. </blockquote>
<blockquote>
Seeing the signature up front reminds people of their own moral standards, Mazar explained.</blockquote>
<br />
Jason Dana, a University of Pennsylvania psychologist, then speculates that the mere novelty of signing a document at the top may explain most of the effect. Thus, if we were to sign all documents at the top, the novelty would abate and honesty levels would return to normal. Nevertheless, in a tax self-reporting study, those signing at the top overstated their income only roughly half as much as those signing at the bottom. <br />
<br />
When we swear an oath, we usually do so before we give testimony. Therefore, our oath-taking action should occur prior, and not subsequent, to the speech action. The positioning of a signature may not matter as long as oath takers direct their attention to the signature first. <br />
<br />
Notably, courts employ more than oath-taking to ensure testimony is truthful and reliable. Courts rely even more heavily on cross-examination, whereby an opposing party questions the witness, to establish the truth of the matter. I wonder whether non-hostile perusal and questioning of individuals who have filled out forms would further increase the reliability of reporting. Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-18232696126915593792012-08-26T10:35:00.001-07:002012-08-26T10:35:24.406-07:00Gov't Capture: Gov't Sachs<div class="separator" style="clear: both; text-align: center;">
<a href="https://p.twimg.com/A1PaNHoCEAE-Qwv.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="480" src="https://p.twimg.com/A1PaNHoCEAE-Qwv.jpg" width="640" /></a></div>
Via <a href="http://geke.us/">Geke.US</a>Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-27754710294028973422012-08-26T10:30:00.003-07:002012-08-26T10:30:53.969-07:00Gov't Capture: Monsanto<div class="separator" style="clear: both; text-align: center;">
<a href="https://p.twimg.com/A1PacMFCUAACFiO.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="473" src="https://p.twimg.com/A1PacMFCUAACFiO.jpg" width="640" /></a></div>
Via <a href="http://paper.li/NewsVortex/1320319416">the Black Swan</a>Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-11134511861794762642012-08-26T07:52:00.001-07:002012-08-26T07:52:16.546-07:00Could Eminent Domain Seize Mortgage Loans?<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/AhiXVLTHdUs?feature=player_embedded' frameborder='0'></iframe></div>
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Economic Depressions require Creative SolutionsDarrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-67549553561432247442012-08-26T07:43:00.002-07:002012-08-26T07:45:56.224-07:00Federal Budget: CBO's 'Fiscal Cliff'<br />
<h4>
<a href="http://www.theatlantic.com/business/archive/2012/08/cbo-us-is-on-track-for-a-terrible-2013-recession-unless-congress-acts/261461/">Derek Thompson: CBO suggests Congress must act now</a></h4>
<br />
<blockquote class="tr_bq">
<span style="line-height: 18.984848022460938px;">CBO projects that the so-called "fiscal cliff" -- a double-whammy of tax hikes and spending cuts -- in early 2013 will produce a short and sharp recession followed by rising unemployment throughout the entire year. </span></blockquote>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
<br /></div>
<blockquote class="tr_bq">
Nobody should want the economy to crater again. Republicans and Democrats agree that 98% of taxpayers should benefit from the same low rates they have today. The GOP is as nervous about swift cuts to defense as Democrats are nervous about swift cuts to non-defense discretionary programs.<br />And so, we'll almost certainly get a deal. <span style="font-weight: bold;">This is sure to make the staunchest deficit hawks furious.</span></blockquote>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
[bold is mine]</div>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
<span style="font-weight: bold;"><br /></span></div>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
Nobody wishes the economy to crater again. But I would be furious with such a deal. I'd like to see two of the three things happen which the CBO so fears: </div>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
<ul>
<li><span style="font-size: 12.727272033691406px; line-height: 18.984848022460938px;">immediate across-the-board tax hikes (which effectively repeal the Bush tax cuts)</span></li>
<li><span style="font-size: 12.727272033691406px; line-height: 18.984848022460938px;">deep defense spending cuts</span></li>
</ul>
</div>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
I would delay cuts to discretionary programs until recovery. </div>
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<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
Obama may finally play brinkmanship with the GOP; he's in a great position to get his lower 98% Bush tax cut extension without having to compromise with the GOP on the top 2% cuts. He may yet blunder if he refuses to put defense cuts on the table to balance out discretionary cuts. Unless he does, its possible the GOP may hold hostage non-defense discretionary cuts for a deal that would extend the top 2% Bush rates. </div>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
<br /></div>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
2013 will be a poor year, anyway. </div>
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<br /></div>
<div style="background-color: white; font-family: Georgia, times, serif; font-size: 12.727272033691406px; line-height: 18.984848022460938px;">
A little more pain now; less lingering pain down the road. </div>
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Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-3068917715439646302012-08-26T07:29:00.000-07:002012-08-26T07:29:53.687-07:00Welfare Work Requirements still in force<br />
<span style="font-size: small;">Conor Friedersdorf rebuts Romney's absurd charge, namely: <em><b>the Obama Administration . . . gutted federal work requirements for welfare recipients, and that anyone can now collect a welfare check without even trying to get a job.</b></em></span><br />
<span style="font-size: small;"><em><b><br /></b></em></span>
<h4>
<a href="http://www.theatlantic.com/politics/archive/2012/08/tiny-explainer-welfare-work-requirements/261357/">Tiny Explainer on Obama's Work Requirements</a></h4>
<div style="font-family: arial, helvetica, sans-serif; font-size: 16px;">
<span style="font-size: small;"></span> </div>
<blockquote class="tr_bq">
<span style="font-size: small;">Recently, in response to a request from a bipartisan group of governors for more flexibility, the Obama Administration has said the federal government would consider waiving existing work participation requirements for states that were experimenting with "new, more effective ways" of helping welfare applicants find work, "particularly helping parents successfully prepare for, find, and retain employment."</span><span style="font-size: small;">Critics of the move argue that it provides states enough leeway to water down work requirements, and that the executive branch lacks the legal authority to make the change. The administration has countered that the change is legal and gives states useful flexibility during an especially tough economy for the poorly educated.</span><span style="font-size: small;">Either way, the Obama Administration hasn't gotten rid of the work requirement or laid out a new theory of what it ought to include. It has given states the ability to seek executive branch approval for new methods.</span></blockquote>
<div style="font-family: arial, helvetica, sans-serif; font-size: 16px;">
</div>
Obama's Executive Order allows experimentation at the State level. How is that a bad thing? I wish Romney supported Federalism as much as Obama sometimes does.<br /><br />Reagan exaggerated welfare abuses for political gain. Romney is worse: he's intentionally distorting welfare policy for political gain.<br />
Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0tag:blogger.com,1999:blog-5664805041041752407.post-72058583728124420922012-08-26T07:23:00.002-07:002012-08-26T07:23:28.605-07:00Apple's Assault on the East Asian Engineering Paradigm<div class="tr_bq">
Our opening link comes from the Verge:</div>
<h4>
<br /></h4>
<h4>
<a href="http://www.theverge.com/2012/8/24/3254422/apple-samsung-trial-verdict">Jury: Samsung copied Apple, should pay at least $1.049 billion in damages</a></h4>
<blockquote class="tr_bq">
<span style="background-color: #fafafa; color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;">After a surprisingly short time, court officials informed us that the jury in the Apple v. Samsung case had reached a verdict — and when it came, it wasn't good news for Samsung. The jury found in Apple's favor almost overwhelming, deciding that Samsung had infringement upon Apple's intellectual property with multiple devices. Apple won't be getting the more than $2.5 billion it had asked for, but it will be getting at least $1,049,343,540.</span></blockquote>
If Apple got 40% of what it asked the jury to award it, then it has done very well. Its a defeat for Samsung, which lost on all of its counterclaims.<br />
<br />
<blockquote>
<span style="background-color: #fafafa; color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;">The jury didn't think much of Samsung allegations of infringement, either. They didn't feel that Apple had committed a single count of infringement — at least not anything that Samsung had demonstrated — against either Samsung's standards-essential or utility patents. As such, the company will be receiving nothing for its troubles. </span><br style="color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;" /><span style="background-color: #fafafa; color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;">It wasn't all gravy for Apple, however. The jury found that the company's legal team didn't prove Samsung had broken any antitrust laws or violated its agreements with ETSI. Still, it was a meager get for Samsung, considering the jury also found that Samsung can't enforce its '516 and '941 patents against Apple due to "patent exhaustion" — in this case, the fact that Intel already has a licensing agreement with Samsung, and the company shouldn't be allowed to double-dip.</span></blockquote>
In case you feel yourself second-guessing the jury, take a look at the smoking gun:<br />
<br />
<h4>
<a href="http://www.engadget.com/2012/08/08/apple-samsung-internal-document-mimicry/">Apple seizes on Samsung internal document as proof of mimicry</a></h4>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.blogcdn.com/www.engadget.com/media/2012/08/samsung-evidence2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="224" src="http://www.blogcdn.com/www.engadget.com/media/2012/08/samsung-evidence2.jpg" width="320" /></a></div>
<div>
<br /></div>
<div>
Wired has <a href="http://www.wired.com/gadgetlab/2012/08/what-apple-v-samsung-means/">a rather mediocre take</a> on this whole affair. Samsung presents itself as allied with the American consumer. Not exactly.</div>
<div>
<br /></div>
<blockquote class="tr_bq">
<span style="background-color: #fafafa; color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;">“Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer,” Samsung said in an official statement. “It will lead to fewer choices, less innovation, and potentially higher prices.” </span></blockquote>
<blockquote class="tr_bq">
<span style="background-color: #fafafa; color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;">Indeed, since the jury deemed Apple’s iPhone-related design patents and user interface patents infringed across such a wide spectrum of products, other handset makers — Android manufacturers, in particular — may find themselves in Apple’s sights for future patent litigation.</span> </blockquote>
<blockquote class="tr_bq">
<span style="background-color: #fafafa; color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;">“The result will likely be an increase in costs to Android users because of licensing fees to Apple,” Houston-based intellectual property lawyer Steve Mitby told Wired. In layman’s terms: expect Android phones to cost more. “This will drive many Android consumers over to Apple. Next to Samsung, the biggest loser today is Google.”</span></blockquote>
<br />
Apple is the only true innovator. Knock-offs are not choices, they're just knock-offs.<br />
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<span style="background-color: #fafafa; color: #444444; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 11px; line-height: 13px;">“The Federal Circuit has a history of scaling back big damages awards, which may spell trouble for Apple’s $1 billion in past damages,” Mitby said. ”However, on the core issues of infringement and validity, the Federal Circuit is less likely to reverse. So even if Samsung is able to reduce the monetary award, the jury’s decision spells trouble for the future of Samsung’s product line –- which is an even bigger financial issue for Samsung.”</span></blockquote>
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Incorrect. The judge has not awarded punitive damages yet and the $1 billion figure constitutes only actual damages. In reality, the total dollar figure Samsung may owe to Apple will more likely be larger than that reported this week. </div>
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In this case, Samsung embodied the East Asian Engineering Paradigm. Top engineers, mostly educated in the West, are assigned to decode and then copy Western innovations. They sell these near knock-offs very dear domestically and behind high protective tariffs. Domestic sales subsidize entry into the American market. </div>
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Usually, the East Asian Engineering Paradigm works. But Apple has struck back. </div>
Darrenhttp://www.blogger.com/profile/02188454614377895063noreply@blogger.com0