Monday, July 24, 2017

SPECULATION ON PUTIN'S MOTIVE

In its July 31, 2017 issue Time has a detailed description of Russia’s meddling in the U.S. elections, and President Obama’s plan to respond to and limit the damage.  Massimo Calabresi, an accomplished reporter, provides an in-depth and clear description of the surrounding events.

Speculation

The dictionary defines speculation as forming of a theory or conjecture without firm evidence. Since the election debacle, Democrats and Republicans have engaged in it ad nauseam.

Let me join the fray. I want to speculate, without evidence, of course, that the real winner of the 2016 Presidential election is Vladimir Putin, the President of Russia. You might be thinking how. Let me elaborate…

O.K., step back, relax, and watch the conjecture as it unfolds. Remove your political blinders and put your hat of speculator on. Hard to do, yes, but try. You have nothing to lose and much to gain: increased clarity and perhaps more objectivity. Escape your political paradigm and discover what might be going on under our noses without realization on our part.

How do you do that? Imagine that you are sitting in an arena and watching the drama unfolding under your eyes. Look at the actors’, imagine their motives, examine their style, and speculate on their actions.

If Putin’s goal was to cast doubt on our democratic process, he surely has done that. If Putin’s goal was to harden the divisions in America between Republican and Democrat constituencies, he has done that. If Putin’s goal was to engage the White house and Congress in a time absorbing charade, he has done that.  If Putin’s goal was to undermine our democracy, he seems to have succeeded.

Why the Animus?

The Obama administration got involved in the last Russian Presidential elections siding with those opposing Putin. It has been reported that the State Department donated $ 400,000 to the party opposing Putin’s candidacy. The so-called reset of the Russia-USA relationship went awry from the start as Clinton alienated Putin and his associates. How? By working behind the scenes to oust the Kremlin-friendly President of Ukraine.

Putin might have concluded that the USA and the European Union’s goal was to contain Russia and diminish its traditional sphere of influence, to surround it with former satellite nations now converted to NATO membership, and to relegate Russia to second tier world power.  

Lets not forget that the collapse of the Soviet Union left deep wounds and scars amongst the ruling class of that era. Many saw it as a deliberate humiliation imposed on their country by the U.S. and its allies.

I speculate that these factors triggered opportunistic actions by Putin and his associates. First, he took advantage of events distracting the Obama Administration by annexing Crimea, and second, by stoking irredentist aspirations of the large Russian-speaking community living in neighboring countries.

Immediate rejection and condemnation of the Crimean annexation by the West overlooked important factors. Most inhabitants of the Crimean peninsula are ethnic Russians; and, Crimea had been an integral part of Russia for centuries. It was Khrushchev, an ethnic Ukrainian, who arbitrarily assigned Crimea to Ukraine. The Russian fleet is based there. It was odd that its main naval base resided not in their country but in a country wanting to join NATO.

The Russians followed the Crimean annexation with encouragement to rebels in the eastern and most industrialized part of Ukraine to secede. An attempt perhaps to create a buffer zone separating Russia from the encroaching NATO.

There is a lot of evidence that Russia did try to meddle and mess around in our elections, raising questions about the transparencies of our elections, and providing fodder to conspiracy and collusion theories. All the intelligence services are unanimous about it, and so are the intelligence services of our major allies. What is at issue is the implications of the Russian cyber invasion, and the damage it created to our civil discourse and faith in our institutions.

The Loser

Clearly, in the short term, the U.S. has been victimized.  Its role in the world has been diminished by revelations that Russia was capable to compromise its elections.

Questions were raised in people’s mind whether Trump’s election is legitimate, even though the instrusion did not change any votes.  As a result, the U.S. has a diminished president.  Some people have concluded that Putin has something on Trump, and that Trump is doing Putin’s bidding.

Congress has been sucked into a variety of investigations that distract it from taking actions on priority issues such as healthcare, tax code reform, and infrastructure investments.

The DNC has been exposed to ridicule for its quixotic shenanigans and infighting. Wholesale changes followed in an attempt to clean the slate of staffers favoring one of the other presidential candidates. Democrats are angry with Putin, and some blame him for Clinton’s loss, including Clinton herself. Their get-tough-on-Russia has reached hysterical proportions.

The Republicans have found themselves embroiled in a narrative casting suspicion on the character of key actors. Many of its elected officials have been mercifully pilloried and ridiculed by the “heroic” press.  Democrats have coopted them in enacting legislation to punish Russia where it hurts the most, its economy.

Mainstream media, in its self-assumed heroic role, has often found itself ahead of events, having to double back and retract premature  “Breaking News” or half-baked scoops.  Rather than reporting the news, many in the media flooded the airwaves and the newsprint with negative news about Trump and his administration. The imbalance in the reporting has alienated many viewers, thus reducing its viewership.

The Winner

The clear winner in the short terms is Putin. He has emerged from the situation with more gravitas, as someone with which we must deal. He seems emboldened enough to rattle his sword and impress the world that without Russia major problems such as ISL and North Korea cannot be solved. He has managed, with his “divide and conquer” strategy, to pit American against American.

In the long run, it will be a Pyrrhic victory for Putin. He has energized Americans against Russia and his regime. An energized America is someone to be reckoned with, as the cold war should have taught Putin. America has the power and resources to do Russia substantial harm, where it hurts most, its economy.

What Next?

The wisest thing to do is to let the Special Counsel do his investigative job. Congress should return to its important role of enacting laws that benefit the life of every American.  The Democrats must return to the role of the loyal opposition.

President Trump needs to stop sending his daily twits. He needs to take on a thicker skin and ignore criticism hurled at him by an adversarial press. He needs to remain focused on the agenda that got him elected.


The press must focus on reporting, not making the news, not speculating as to people’s motives and loyalties. A clearer separation between opinion and facts needs to be established. Reporters must act in a way that gains the confidence and support of the consumer. Otherwise, readership and viewership will continue to decline, thus dooming the very existence of the press, as we know it.

Thursday, July 6, 2017

Financial Advice We Can All Use

About a week ago I ran into an article that caught my eye. The article talked about seven signs that you are headed toward a financial blind alley. It also advanced a few ideas on how to get out of the bind.

We live in a materialistic world where success is often measured in financial terms or by the number of “toys” we purchase or lease. The pressure to keep up with others encourages going into debt.

The Temptations Are Many

You are led to believe that if you don’t buy a home you might be falling behind your peers. On the surface, there is nothing wrong with buying a house. We all need a place to live so we might as well buy a house. The government encourages us to buy a home by permitting to deduct the mortgage interest and real estate taxes from our gross income, those reducing our tax bill. Lenders encourage us to buy a home by offering access to low interest rates and low down payments.  Lenders expect you to buy umbrella insurance to protect your home (and their asset).

Successful people are notoriously incapable to manage their finances. Often they do not have a budget. They do not pay attention to the interest they pay with their credit cards. They spend more than their cashflow permits, and they forget to set aside a fund for the rainy days. To keep up with their peers, they will buy a second home, a boat, or RV – three notorious cash eaters. 

Seven Signals of Trouble

1.    You have more than 3 credit cards. Why? So that you can spend more, and possibly juggle the monthly minimums.

2.    At least one credit card is maxed out. You have to use another card to make your purchases.

3.    You are not able to pay more than the minimum. As a result, you accumulate exorbitant credit card interest.

4.    You have no idea how much interest you are being charged each month by your credit card companies.

5.    You spend more than your income. This is an issue when it happens month after month with no end in sight.

6.    You do not have a rainy day fund that covers 6-9 months of your living expenses if you are ill or unemployed.

7.    Your mortgage payment exceeds 25% of your income. Many folks are house poor because mortgages are beyond their limits.

When more than one of these signals is at play, the red light should go off in our heads prompting us to leap into action.

Other signals that you might be in serious trouble can be insidious. For example, you and your partner avoid talking about your financial problems, or you have arguments about money, or there is finger pointing as to responsibility for the debacle.

What Can We Do?

The article that I referenced earlier gave a number of suggestions. Here are the key ones:

1.    List all your debts including amount, interest, and minimum payment.

2.    List your income for the month including wages, interest received, dividends, and other cash payments you might be receiving.

3.    Cut ruthlessly. Use money you save to reduce other debts.

4.    Explore ways for you to increase your income. Second job? If partner is not working, should partner get a job?

5.    Adopt the rule that if you are not able to pay for a purchase at the end of the month, you do not buy.

6.    Reduce the number of credit cards to 3.

7.    Write a plan. Focus on debts with the highest interest rate or start from the bottom with the smallest debt and work you way up.

8.    See if you can consolidate your debts. There are reputable companies that can help you do that.

9.    Do the math. If your debts are more than 50%, consider declaring bankruptcy after consulting your CPA and tax attorney.

Early victories can be motivating. Track your progress bi-weekly so that you might spot trends and opportunities. Read Beverly Harzog book The Debt Escape Plan for further ideas.

You can never get enough of what you don’t need because what you don’t need will not satisfy you.

This saying applies to money, luxury, and dessert.

What’s the Payoff?

To start off, peace of mind!

You don’t have to stay up at night wondering how are you going to meet your obligations. Secondly, and possibly, more importantly, improved relationship with your partner and family members.

Remember, you are a failure if you ignore the problem, not for creating it in the first place. We all make mistakes. Let’s correct them and learn from them.