Saturday, September 27, 2008
To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 andup.. So divide 200 million adults 18+ into $85 billion that equals $425,000.00.
My plan is to give $425,000 to every person 18+ as a "We Deserve It Dividend". Of course, it would NOT be taxfree. So let’s assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends$25,500,000,000 right back to Uncle Sam.
But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.
What would you do with $297,500.00 to $595,000.00 in your family?
• Pay off your mortgage – housing crisis solved.
• Repay college loans – what a great boost to new grads
• Put away money for college – it’ll be there
• Save in a bank – create money to loan to entrepreneurs.
• Buy a new car – create jobs • Invest in the market – capital drives growth
• Pay for your medical insurance – health care improves
• Enable Deadbeat Dads to come clean – or else
Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers andevery other company that is cutting back. And of course, for those serving in our Armed Forces.
If we’re going to re-distribute wealth let’s really do it.
If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen 18+!
As for AIG –
• liquidate it.
• Sell off its parts.
• Let American General go back to being American General.
• Sell off the real estate.
• Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We deserve it and AIG doesn’t.
Sure it’s a crazy idea that can "never work." But can you imagine the Coast-To-Coast Block Party!
How do you spell Economic Boom?
I trust my fellow adult Americans to know how to use the $85 billion We deserve the "We Deserve It Dividend"more than the geniuses at AIG or in Washington DC.
And remember, The Family plan only really costs $59.5 billion because $25.5 billion is returned instantly intaxes to Uncle Sam.
Monday, September 22, 2008
A pistol-packin' Looby Loo: the Left's worst nightmare -- Frank Sinatra would have 'got' the joke. In the words of the great political philosopher, they all laughed at Christopher Columbus when he said the world was round.
They're all laughing, too, at John McCain for choosing Sarah Palin as his running mate. The usual suspects took one look at this pistol-packin' momma and reacted like John McEnroe to a disputed line call: you cannot be serious! Certainly, the pick came, as the Americans say, out of left field. But Sarah Palin is centre stage now, and suddenly it's game on. Stern, God-fearin',
gun-totin' Sarah Palin. Will she get the last laugh? At the very least, McCain has got a wonderful sense of mischief -- a quality sadly lacking in most politicians. The way the Left, both here and in America, are contorting themselves is a joy to behold.
Sarah Palin is every Guardianista's worst nightmare. It's reminiscent of how they used to patronize Mrs Thatcher 30 years ago. What did this small-town girl know about anything?
How could any woman expect to run a country and raise a family? What does she know about foreign affairs?
Of course, they weren't saying that a woman couldn't be Prime Minister, you understand. Just not this woman. Shirley Williams would have been fine, but this ghastly, lower middle-class Snobby Roberts woman from Grantham, of all places -- AAARGH!
It's been hilarious watching the sisterhood tie themselves in knots over Sarah Palin. They've been in full Glenda Slagg mode -- dontcha just hate her, dontcha just love her? On the one hand she's a feisty, capable woman shaking up the political establishment, while juggling a family and career. I don't know how she does it.
But on the other, she's a Godfearing, gun-totin', good ol' girl. She hunts, she fishes -- she's a Republican, for goodness' sake. Sarah Palin is every red-blooded redneck's fantasy figure, every randy schoolboy's Mrs Robinson. She could have stepped straight out of one of long-lost cousin Michael's Ripping Yarns. Cheerleader, beauty queen, dominatrix of the Harper Valley PTA,
mother of five, mayor, governor and now a heartbeat away from the Vice-Presidency. You couldn't make her up. Law And Order's Fred Thompson, once a presidential candidate himself, hit the 'Baby Seal' on the head when he said the Left were in a blind panic over what to do about Palin. Joke's on you: John McCain, displaying a sense of mischief rare in politics, with his choice of Sarah Palin, surrounded by her family, as his running-mate.
What they are doing is what they usually do when confronted with something which offends their world view -- character assassination. Every 'liberal' newspaper and TV network has sent hatchet men north to Alaska to dig for the dirt beneath the tundra. What they discovered is that 80 per cent of Alaskans think she's doing a great job. A supermarket tabloid is claiming she had an affair, which she denies.
Apart from that, the worst the scandal-hounds have come up with is that Palin, as governor, put pressure on a police chief to fire her former brother-in-law. Given that said brother-in-law had beaten up her sister and threatened to kill her father, I'd say that far from abusing her office, she showed considerable restraint. I'm surprised she didn't put a bullet in his head.
The big talking point is the pregnancy of Palin's 17-year-old daughter, Bristol , who is soon to marry her boyfriend. That's what I call a shotgun wedding! Still, it kills the wild rumour that Bristol is really the mother of Palin's Down's syndrome baby, Trig. You've just got to like a woman who calls her son after a character in Only Fools And Horses. Although it's probably
fair to assume she doesn't have a working knowledge of Cockney rhyming slang, otherwise her daughter would never have been christened Bristol. When Palin talks about shattering the glass ceiling, the sisters are supposed to cheer -- except most of them suspect her idea of shattering a glass ceiling would be with a both barrels blast from a 12-bore. She epitomizes the 'God and guns' mentality at which Barack Obama and his supporters sneer. They use 'small town' as a pejorative term. That's not how Middle America sees it. John Mellencamp wrote his hit song Small Town as an ironic take on Hicksville, USA . He even performed it at an Obama rally earlier this year.
Back at you: democrats say Sarah lacks the experience for the top job -- but neither do Obama or Biden. But that hasn't stopped Middle Americans adopting it as an anthem. Mellencamp must be just as horrified as Springsteen was when Ronald Reagan purloined his anti-war Born In The USA as a campaign song. It's not that the Americans don't do irony, as European 'sophisticates'
always maintain. It's just that sometimes, my dear, they don't give a damn. A good song is a good song -- and to hell with the message. Most Americans were born and raised in a small town. Her values are their values. The mantra from the Obama camp is that she lacks the experience to be VP. In truth, she has more executive experience than either Obama or his Neil Kinnock-impersonator sidekick mate Joe Biden, neither of whom has ever run anything. But, wail the sceptics, what about foreign affairs?
Admittedly, Palin has never slagged off her country at a mass rally in Berlin. But Alaska's next door to Russia. She's got more experience of dealing with Russians than anyone outside of corporate hospitality at Stamford Bridge. Who is Putin more likely to be wary of -- Barack 'we must negotiate with dictators' Obama, or Looby Loo packing heat? To paraphrase the Duke of
Wellington, "I don't know what she does to the enemy, but she scares the life out of me."
Palin reminds me of the old joke about what's the difference between the IRA and a woman with PMT? You can negotiate with the IRA. What she does have in spades is experience of the energy industry -- the number one concern right now. Palin would drill, drill and drill some more -- polar bears, or no polar bears. And when the oil companies got greedy, she imposed a windfall tax. Unlike Gordon Brown, who'd keep it, she gave every Alaskan a $1,200 rebate.
With all the hoop-la, it's easy to forget that she's running for Vice-President, not President. Not yet. Sarah Palin: The next Margaret Thatcher? Time will tell... That's what really frightens her condescending opponents. Not that we've a leg to stand on in Britain. We've got Harriet Harman, a chewed fingernail away from the top job -- and she's never shot a moose in her
Friday, September 19, 2008
1. Reinvest your profits When you first make money, you may be tempted to spend it. Don’t. Instead, reinvest the profits. Buffett learned this early on. In high school, he and a pal bought a pinball machine to put in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Buffett used the proceeds to buy stocks and to start another small business. By age 26, he’d amassed $174,000—or $1.4 million in today’s money. Even a small sum can turn into great wealth.
2. Be willing to be different Don’t base your decisions upon what everyone is saying or doing. When Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. He worked in Omaha, not on Wall Street, and he refused to tell his partners where he was putting their money. People predicted that he’d fail, but when he closed his partnership 14 years later, it was worth more than $100 million. Instead of following the crowd, he looked for undervalued investments and ended up vastly beating the market average every single year. To Buffett, the average is just that—what everybody else is doing. To be above average, you need to measure yourself by what he calls the Inner Scorecard, judging yourself by your own standards and not the world’s.
3. Never suck your thumb Gather in advance any information you need to make a decision, and ask a friend or relative to make sure that you stick to a deadline. Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking “thumb-sucking.” When people offer him a business or an investment, he says, “I won’t talk unless they bring me a price.” He gives them an answer on the spot.
4. Spell out the deal before you start Your bargaining leverage is always greatest before you begin a job—that’s when you have something to offer that the other party wants. Buffett learned this lesson the hard way as a kid, when his grandfather Ernest hired him and a friend to dig out the family grocery store after a blizzard. The boys spent five hours shoveling until they could barely straighten their frozen hands. Afterward, his grandfather gave the pair less than 90 cents to split. Buffett was horrified that he performed such backbreaking work only to earn pennies an hour. Always nail down the specifics of a deal in advance—even with your friends and relatives.
5. Watch small expenses Buffett invests in businesses run by managers who obsess over the tiniest costs. He once acquired a company whose owner counted the sheets in rolls of 500-sheet toilet paper to see if he was being cheated (he was). He also admired a friend who painted only the side of his office building that faced the road. Exercising vigilance over every expense can make your profits—and your paycheck—go much further.
6. Limit what you borrow Living on credit cards and loans won’t make you rich. Buffett has never borrowed a significant amount—not to invest, not for a mortgage. He has gotten many heartrending letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you’re debt-free, work on saving some money that you can use to invest.
7. Be persistent With tenacity and ingenuity, you can win against a more established competitor. Buffett acquired the Nebraska Furniture Mart in 1983 because he liked the way its founder, Rose Blumkin, did business. A Russian immigrant, she built the mart from a pawnshop into the largest furniture store in North America. Her strategy was to undersell the big shots, and she was a merciless negotiator. To Buffett, Rose embodied the unwavering courage that makes a winner out of an underdog.
8. Know when to quit Once, when Buffett was a teen, he went to the racetrack. He bet on a race and lost. To recoup his funds, he bet on another race. He lost again, leaving him with close to nothing. He felt sick—h e had squandered nearly a week’s earnings. Buffett never repeated that mistake. Know when to walk away from a loss, and don’t let anxiety fool you into trying again.
9. Assess the risks In 1995, the employer of Buffett’s son, Howie, was accused by the FBI of price-fixing. Buffett advised Howie to imagine the worst- and best-case scenarios if he stayed with the company. His son quickly realized that the risks of staying far outweighed any potential gains, and he quit the next day. Asking yourself “and then what?” can help you see all of the possible consequences when you’re struggling to make a decision—and can guide you to the smartest choice.
10. Know what success really means Despite his wealth, Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He's adamant about not funding monuments to himself—no Warren Buffett buildings or halls. "I know people who have a lot of money," he says, "and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you'll measure your success in life by how many of the people you want to have love you actually do love you. That's the ultimate test of how you've lived your life."
Tuesday, September 16, 2008
While I agree with your conclusion regarding opposition to the approval of SEC Rule 151A, I take exception to certain language in your explanation.
You indicate that you are frustrated with “the inappropriate ways in which many of these products are marketed.” That is the kind of broad-brush approach the securities industry and some in the media have adopted without considering the facts. It is not “many of these products.” The complaint ratio of index annuities is surprisingly low, and the majority of them relate to non-marketing issues.
You add a concern over the “suitability of certain indexed annuity sales and the methods used to market indexed annuity products” as if, again, this is a widespread epidemic, when, in fact, it is very isolated and not at all common. Further, there are far more problems and a larger complaint ratio in the securities industry.
The comments you have distributed seem to accept as valid many of the SEC’s unsubstantiated contentions that are not supported by the facts. We should be able to expect more from NAIFA.
Your response further cements my belief that NAIFA has lost touch with its insurance industry roots.
Bruce E. Dickes, CLU, ChFC
Financial Brokerage, Inc.
2238 S. 156th Circle
Omaha, NE 68130
From: Jeff Taggart
To: NAIFA Members
Date: September 3, 2008
Subject: NAIFA's Position on SEC Proposed Rule 151A
On August 21, the NAIFA Board voted to accept the recommendation of the Policy Formation Subcommittee and oppose SEC proposed Rule 151A, which would classify most indexed annuities as securities. If the SEC proposal is adopted, the SEC and FINRA would have regulatory authority over most indexed annuities, which have traditionally been viewed as insurance products regulated by state insurance regulators.
The SEC proposal and NAIFA's position with respect to the proposal have generated a great deal of interest among NAIFA members. Numerous members have sent us emails stating that they do not agree with NAIFA's position, and they believe that indexed annuities should be regulated by the SEC as securities. I thought it would be helpful if I tried to clarify and explain NAIFA's position, and hopefully address the concerns raised by these members.
First and foremost, let me state as clearly as possible that NAIFA strongly believes that people who engage in unscrupulous or misleading sales practices should be aggressively prosecuted and subject to appropriate and meaningful sanctions. There is no place for these people in our business. We understand and share the frustration of our members over the inappropriate ways in which many of these products are marketed, and NAIFA acknowledges the concerns that have been raised regarding the suitability of certain indexed annuity sales and the methods used to market indexed annuity products.
However valid these concerns and frustrations may be, the issues surrounding suitability, disclosure, product complexity and marketing practices are not the criteria that should determine whether a financial product is or is not a security. In NAIFA's view indexed annuities do not meet the test for determining whether a product is a 'security' because, among other reasons, the investment risk of a downturn in the related index rests with the issuer of the product, not the consumer, which is not the case with investment products such as mutual funds and individual stocks.
An insurance product that does not meet the test for being classified as a security should be regulated by state insurance departments and should not be under the jurisdiction of the SEC or FINRA. This is an important principle which must be preserved in order to protect the appropriate regulation of all insurance products. An additional concern that NAIFA has with the SEC proposal is that the application of proposed Rule 151A would not be limited to indexed annuities, and that other annuity and insurance products that fit the rule's criteria could be brought within the scope of the rule. In fact, the SEC has specifically asked for public comment on whether the proposal should apply to life insurance and/or health insurance.
NAIFA is committed to working with the NAIC and state insurance departments towards the goal of having every state adopt and vigorously enforce the NAIC's model regulations on annuity suitability and disclosure. In addition, existing state insurance laws and regulations addressing unfair trade practices and advertising are powerful weapons to use against inappropriate marketing practices. Some members have raised concerns about whether terms and provisions contained in some indexed annuity contracts make them inherently unsuitable for any purchaser. To address these concerns, NAIFA also recommends that a state regulatory body be designated to develop standards for indexed annuity product design that would be implemented by state insurance regulators and used to prevent inappropriate indexed annuity products from reaching the marketplace.
Thank you for taking the time to read and consider this message. NAIFA greatly values your involvement in and input on these important issues.
I am now part of the Carrier Coalition and have taken a role in organizing this fly-in.
Jeff Cassat shared some of the material we reviewed at the study group meeting with Dominic Cursio of Capitas who also is a National Ass'n for Fixed Annuities (NAFA) leader. He asked me to take a role onNAFA's Public Relations Committee and we are planning a multi-prong attack aimed at Congress, consumers, insurance producers and others.
The comment period expired, but there has been no word on an extension or a final decision re: the rule.
I will keep you posted.
Friday, September 12, 2008
By: Michael Reagan
Monday, September 8, 2008
cheerleaders, matthews and olberman off the anchor desk.
Feminism, Racism, Media Liberal Meltdown
stage. The sacred pillars of liberal orthodoxy are in the process of
losing their underpinnings and it is not a pretty sight.
With the nomination of Barack and Sarah, three major industries and
shibboleths of the left, feminism, racism and the media are losing their
clout, big time.
The feminists who have preached against the 'social construct' of male
patriarchy and female victimhood have achieved their stated goal, and
they're furious. After 40 years, the feminist mantra that a woman can
and should have it all, has come to fruition in Sarah Palin. There's
only one small problem. Palin doesn't buy into the feminist line. As
Peggy Noonan so aptly put it, "she is a feminist not in the Yale Gender
Studies sense but the How Do I Reload This Thang way." When feminists
see Sarah Palin, they see a woman. When conservatives see Palin, they
see a conservative. Who'se sexist? Feminists are furiously backtracking
on one of their core tenets, questioning whether Sarah Palin has the
ability to juggle home and job. Instead of applauding a woman who has it
all, they instead question whether she will have time to be VP, what
with her family and all. Liberal feminist Whoppi Goldberg got it right
when she described Sarah Palin as "a dangerous woman."
The Jacksons and Sharptons of the world who have spent their lives
preaching racism are also in melt down stage. With the nomination of
Obama, racism is in the process of becoming a hard sell, even the silent
'institutional racism' that has been in vogue these last few years. How
will the race hustlers raise funds without genuine victims? How will
blacks retain their hard won political power, which is based largely on
white guilt? Who will pay for black oppression if there isn't any? The
presidential race of 2008 will go down in history as a turning point
- as the pivotal event that exposed the shallowness of liberal policies,
institutions and people. A mere 5 months ago, the liberals were on the
brink of victory. And now…
Now, it appears that not only are the masses not buying what the left is
selling, but have instead shown their stubborn allegiance to traditional
values and God, as embodied so well by Gov. Palin. This, despite the
herculean efforts by another liberal institution, the media. The same
media, which a study showed to have been the decisive factor in Obama's
nomination, is now having to report that Palin is more popular than both
McCain and Obama.
Unable to believe they've been on the wrong side of history, the media
is lashing out in ever more frivolous and blatant attempts to smear Gov.
Palin and prop up Obama. Only this time, they're encountering a
US Weekly Magazine is losing subscribers due to the vicious smear piece
recently published about Palin. A new website has even been launched to
organize a boycott of US Weekly and their advertisers. Adding insult to
injury, Rasmussen reported a whopping 51% of American women believe the
media is trying to hurt Sarah Palin and 24% say those stories make them
more likely to vote for McCain.
More surprisingly, hundreds of small town residents in a small town
outside Milwaukee "taunted reporters and TV crews travelling with Sen.
John McCain on Friday, chanting "Be fair!" and pointing fingers at a
pack of journalists as they booed loudly." Even Oprah is experiencing a
backlash for refusing to have Palin on her show until after the
The media, like the rest of the liberal world, can't comprehend what is
happening. The conservative, traditional worldview they thought they had
thoroughly invalidated is rearing its ugly head and they can't
understand, much less control, it.
Obama's nomination goes a long way towards discrediting the racism
canard. And Gov. Sarah Palin shows that the American dream is available
without help from either government or the self-anointed elites. She
shows that faith in God is more powerful than faith in man. She shows
that sexism and racism are indeed constructs, but artificial constructs
designed not by old white men, but by liberal utopians - designed to
achieve money and power, not liberation. The times, they are a changin,
but not in the way the left envisioned. The rules are changing as we
speak. Because the liberal elites have consistently shown they are
incapable of adjusting their world-views to include conservatives, I
predict this will be the death of them. I'm smiling.
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Friday, September 5, 2008
The extra mile is the price we pay for excellence. It might mean making it a habit to arrive earlier and stay later. And it isn’t just extra time, it’s extra effort, extra teamwork, extra caring about the outcome and extra dedication to the Blue Chip activities.
It’s adopting an attitude of . . .
- Delivering more than you are required to do because you know it will make a difference.
- Making things happen sooner than you were asked to do them because your internal ambition tells you it is how to improve your results.
- Deciding to undertake a strategy to improve effectiveness before you are asked because the team benefits from it.
The Extra Mile is a lonely road sometimes, but it is the shortest path to long-term success.
Thursday, September 4, 2008
Wednesday, September 3, 2008
“There are only two options regarding commitment. You’re either in or you’re out. There is no in-between.”
The Kinder Brothers describe leadership careers as a type of contest-living positions. They think that successful leaders constantly compete, and there is an inescapable scoreboard that tallies up the results.
Jack Kinder believes there are two concepts that need to be understood and brought into alignment to make the most of any contest-living sales job:
§WIT – What it Takes – What are the factors and actions that lead to success in the role?
§ WIG – What I Got – What I am prepared and willing to do to influence the outcome?
One of the key WIG factors is a full understanding of what it takes to be successful and a full, unequivocal commitment to following that approach.
You’re either in or you’re out. Half-measures in the world of commitment are nearly the same as no commitment at all – the end result will be very much the same. On the other hand, the leader who knows what it takes and wholeheartedly does it will be handsomely rewarded in the long-run.
by Peggy Noonan
September 3, 2008
Notes from the convention:
Drafts of John McCain's acceptance speech have been bopping around the inside of the campaign for at least a few days, and a question is whether or how much it will be changed to account for the hurricane in New Orleans and the Gulf coast. An early draft is said to have been direct to the point of rambunctious in drawing contrasts between the policies of Obama and McCain. "Lotta biography, lotta foreign policy, taking Obama straight on," said a GOP strategist Tuesday afternoon. The final draft may be different, softer.
Advice? By Thursday night rambunctious will be fine, and a relief. Great political parties must show compassion, but they don't want to wilt with the weight of it.
And: Wit, wit, wit. Humor. "A maid laughing is half taken," said a randy old Elizabethan poet. A voter laughing is half yours, and just received a line he can repeat next weekend over a beer at the barbecue or online at Starbucks. Here is a fact of American politics: If you make us laugh we spread your line for free.
I do not understand the absence of humor, that powerful weapon, that rhetorical cannon, in this year's campaign. There are a lot of things to say here but let me tell you the first I think of. America is a huge and lonely country. We are vast, stretch coast to coast, live in self-sufficient pods; modern culture tends us toward the atomic, the fractured and broken up. When two people meet, as they come to know each other as neighbors or colleagues, one of the great easers, one of the great ways of making a simple small human connection is: shared laughter. We are a political nation. We talk politics. So fill that area with humor: sly humor, teasing humor, humor that speaks a great truth or makes a sharp point.
Obama talked to the audience; he talked TO America. McCain should talk with the audience. He should keep in mind that if his audience is laughing and chanting, it will help him with his delivery. As they cheer he can smile, while checking his next line. I am told alternately that he has given up on the teleprompter and will go straight from text, and that he will use a teleprompter. I assume the latter is true. If it is it will be interesting to see if he has mastered it. That will tell us if he practiced the speech. That will tell us if he knows what this speech IS, which is one big fat brilliant opportunity. If he's reading from text, well, it is not true that this is impossible in the media age. People didn't use teleprompters until 30 years ago. But when McCain reads straight from text we tend to see a lot of the top of his head, with the soft white hair and the pink brow glistening under the lights. Which tends to accentuate his age. So how he does the speech is of more than academic interest.
Watch for this: How does McCain differentiate himself from President Bush – or distance himself from him -- in front of Bush's party?
The choice of Sarah Palin IS a Hail Mary pass, the pass the guy who thinks he has a good arm makes to the receiver he hopes is gifted.
Most Hail Mary passes don't work.
But when they do they're a thing of beauty and a joy forever.
Gut: The Sarah Palin choice is really going to work, or really not going to work. It's not going to be a little successful or a little not; it's not going to be a wash. She is either going to be magic or one of history's accidents. She is either going to be brilliant and groundbreaking, or will soon be the target of unattributed quotes by bitter staffers shifting blame in all the Making of the President 2008 books. Of which there should be plenty, as we've never had a year like this, with the fabulous freak of a campaign.
More immediately and seriously on Palin:
Because she jumbles up so many cultural categories, because she is a feminist not in the Yale Gender Studies sense but the How Do I Reload This Thang way, because she is a woman who in style, history, moxie and femininity is exactly like a normal American feminist and not an Abstract Theory feminist; because she wears makeup and heels and eats mooseburgers and is Alaska Tough, as Time magazine put it; because she is conservative, and pro-2nd Amendment and pro-life; and because conservatives can smell this sort of thing -- who is really one of them and who is not -- and will fight to the death for one of their beleaguered own; because of all of this she is a real and present danger to the American left, and to the Obama candidacy.
She could become a transformative political presence.
So they are going to have to kill her, and kill her quick.
And it's going to be brutal. It's already getting there.
There are only two questions.
1. Can she take it?
Will she be rattled? Can she sail through high seas? Can she roll with most punches and deliver some jabs herself?
2. And while she's taking it, rolling with it and sailing through, can she put herself forward convincingly as serious enough, grounded enough, weighty enough that the American people can imagine her as vice president of the United States?
I suppose every candidate for vice president faces these questions to some degree, but because Palin is new, unknown, and a woman, it's all much more so.
I don't think the most powerful attack line will be, in the end, inexperience. Our nation appears to be in a cycle in which inexperience seems something of a lure. "He's fresh, he's new, he hasn't appalled me yet!" I don't think it's age. While Palin seems to me young, so does Obama. I freely concede this is a drawback of getting older: you keep upping your idea of what "old enough" is. But only because when you're 50 you know you're wiser and more seasoned than you were at 40, or should be.
America, even as it ages, loves youth and admires its strength.
I think the left will go hard on this: Fringe. Radical. What goes on in her church? Isn't she extreme? Does she really think God wants a pipeline? What does Sarah Barracuda really mean? They're going to try and make her strange, outré, oddball. And not in a good way.
In all this, and in its involvement in this week's ritual humiliation of a 17-year-old girl, the mainstream press may seriously overplay its hand, and court a backlash that impacts the election. More on that in a moment.
I'll tell you how powerful Mrs. Palin already is: she reignited the culture wars just by showing up. She scrambled the battle lines, too. The crustiest old Republican men are shouting "Sexism!" when she's slammed. Pro-woman Democrats are saying she must be a bad mother to be all ambitious with kids in the house. Great respect goes to Barack Obama not only for saying criticism of candidates' children is out of bounds in political campaigns, but for making it personal, and therefore believable. "My mother had me when she was eighteen…" That was the lovely sound of class in American politics.
Let me say of myself and almost everyone I know in the press, all the chattering classes and political strategists and inside dopesters of the Amtrak Acela Line: We live in a bubble and have around us bubble people. We are Bubbleheads. We know this and try to compensate for it by taking road trips through the continent -- we're on one now, in Minneapolis -- where we talk to normal people. But we soon forget the pithy, knowing thing the garage mechanic said in the diner, and anyway we weren't there long enough in the continent to KNOW, to absorb. We view through a prism of hyper-sophistication, and judge by the rules of Chevy Chase and Greenwich, of Cleveland Park and McLean, of Bronxville and Manhattan.
And again we know this, we know this is our limit, our lack.
But we also forget it.
And when you forget you're a Bubblehead you get in trouble, you misjudge things. For one thing, you assume evangelical Christians will be appalled and left agitated by the circumstances of Mrs. Palin's daughter. But modern American evangelicals are among the last people who'd judge her harshly. It is the left that is about to go crazy with Puritan judgments; it is the right that is about to show what mellow looks like. Religious conservatives know something's wrong with us, that man's a mess. They are not left dazed by the latest applications of this fact. "This just in – there's a lot of sinning going on out there" is not a headline they'd understand to be news.
So the media's going to wait for the Christian right to rise up and condemn Mrs. Palin, and they're not going to do it because it's not their way, and in any case her problems are their problems. Christians lived through the second half of the 20th century, and the first years of the 21st. They weren't immune from the culture, they just eventually broke from it, or came to hold themselves in some ways apart from it. I think the media will explain the lack of condemnation as "Republican loyalty" and "talking points." But that's not what it will be.
Another Bubblehead blind spot. I'm bumping into a lot of critics who do not buy the legitimacy of small town mayorship (Palin had two terms in Wasilla, Alaska, population 9,000 or so) and executive as opposed to legislative experience. But executives, even of small towns, run something. There are 262 cities in this country with a population of 100,000 or more. But there are close to a hundred thousand small towns with ten thousand people or less. "You do the math," the conservative pollster Kellyanne Conway told me. "We are a nation of Wasillas, not Chicagos."
The mainstream media, which has been holding endless symposia here on the future of media in the 21st century, is in danger of missing a central fact of that future: If they appear, once again, as they have in the past, to be people not reporting the battle but engaged in the battle, if they allow themselves to be tagged by that old tag, which so tarnished them in the past, they will do more to imperil their own future than the Internet has.
This is true: fact is king. Information is king. Great reporting is what every honest person wants now, it's the one ironic thing we have less of in journalism than we need. But reporting that carries an agenda, that carries Bubblehead assumptions and puts them forth as obvious truths? Well, some people want that. But if I were doing a business model for broadsheets and broadcast networks I'd say: Fact and data are our product, we're putting everything into reporting, that's what we're selling, interpretation is the reader's job, and think pieces are for the edit page where we put the hardy, blabby hacks.
That was a long way of saying: Dig deep into Sarah Palin, get all you can, talk to everybody, get every vote, every quote, tell us of her career and life, she may be the next vice president. But don't play games. And leave her kid alone, bitch.
Final point. Palin's friends should be less immediately worried about what the Obama campaign will do to her than what the McCain campaign will do. This is a woman who's tough enough to work her way up and through, and to say yes to a historic opportunity, but she will know little of, or rather have little experience in, the mischief inherent in national Republican politics. She will be mobbed up in the McCain campaign by people who care first about McCain and second about themselves. (Or, let's be honest, often themselves first and then McCain.) Palin will never be higher than number three in their daily considerations. They won't have enough interest in protecting her, advancing her, helping her play to her strengths, helping her kick away from danger. And – there is no nice way to say this, even though at this point I shouldn't worry about nice – some of them are that worst sort of aide, dim and insensitive past or present lobbyists with high self-confidence. She'll be a thing to them; they'll see the smile and the chignon and the glasses and think she's Truvi from Steel Magnolias. They'll run right over her, not because they're strong but because they're stupid. The McCain campaign better get straight on this. He should step in, knock heads, scare his own people and get Palin the help and high-level staff all but the most seasoned vice presidential candidates require.
Tuesday, September 2, 2008
X2 - Experience Exchange Study Group
August 14-15, 2008
The meeting was called to order in the plush Executive Board Room at Jeff’s office in Minneapolis. After the ritual bashing of each of the missing weasels, the group discussed various business topics.
4th Quarter, 2008 Meeting
Date: November 6-7, 2008
Location: Omaha (Mick will schedule the Colonial Conference Room if available)
Host: Bruce Dickes
Program: Jeff Cassat
Notes/Next Host: Kelly Bennett
Career Bio: Al Fering
1st Quarter, 2009 Meeting
Tentative Date: February 15-16, 2009
Location: Des Moines
Host: Kelly Bennett
Program: Bruce Dickes
Notes/Next Host: Al Fering
Career Bio: Mick Occhiuto
2nd Quarter, 2009 Meeting
Tentative Date: May 7-8, 2009
Location: Des Moines
Host: Al Fering
Program: Kelly Bennett
Notes/Next Host: Mick Occhiuto
Career Bio: Kelly Bennett
The members in attendance agreed that they are happy with the membership as it now stands. They also discussed key points to consider when and if we add new members and concluded:
Membership should be considered only for the RIGHT person. Potential new members must attend an X2 quarterly meeting AS A GUEST so that they can determine if they would want to join. X2 members would then determine if an invitation to join is warranted.
The group discussed how to best brand the group, create an identity and facilitate communications. Conclusions:
We need to have a group logo designed – Jeff will coordinate and send examples to the group before the next meeting. The group will review logos at the next meeting.
Mick has acquired web addresses for the group that all point to the same content:
It was agreed that we should use the new websites as a meeting place/blog. Communications and feedback should utilize the website blog features as opposed to e-mail and other means.
At the next meeting Mick will provide a “hands-on” intro to using the site for X2 blogging.
The Last Lecture – Randy Pausch
How to Sell a Lobster – Bill Bishop
The Logic of Failure – Dietrich Dörner
Leading at the Edge – Dennis Perkins
Miles Gone By – William F. Buckley
The Hands-Off Manager – Steve Chandler
100 Ways to Motivate Others – Steve Chandler
Work Like You’re Showing Off – Joe Calloway
A Leader’s Legacy – James Kouzes
One Red Paperclip – Kyle Macdonald
X2 SOB Stories:
§ Mick wants to be the catalyst to help build a culture/environment of true agency building at Colonial. Discussion ranged from the idea of pre-packaged “best-practices” containers, identifying and building champions for those best practices, piloting segments of the key components, incrementalizing the building of the environment, et. al.
§ Jeff is seeking good speakers for a number of Capitas events. A number of possibilities were offered up.
§ Bruce described the danger of the SEC’s proposed rule 151A and how it has the potential to address more products than just index annuities, e.g. index UL, par WL, fixed annuities, etc. He asked the group to help marshal comments to the SEC, Congress, etc.
§ Kelly asked for input re: managing field advisory groups. Ideas included dispersing their responsibilities across a number of sub-committees, establishing “rules of the road” in advance, describing in advance the content they are expected to address and the form the output should take, etc.
Mick discussed several interesting websites.
Bruce followed Jeff’s lead from the last meeting and presented his highly-checkered career bio. It was a real eye-opener, especially the part about the planet Krypton and traveling to Earth as a small child.
Mick provided a highly-informative (life-affirming? – stand-up-and-cheer-inspirational-true-life-story? – down-and-dirty-political-hatchet-job?) presentation about blogs, blogging, the blogosphere, etc. At our next meeting he will do a hands-on presentation on how to use the X2 blog to enhance our group communication efforts.
I oppose the adoption of proposed rule 151a by the SEC for several reasons which will be outlined below and generally find that the SEC is exceeding its authority in creating this rule.
The Executive Summary produced by the SEC contains patently inaccurate information that may lead many readers to come to an erroneous conclusion. It lacks factual integrity. Some of these inaccuracies include:
1. Market Risk. As an example, the SEC document states that individuals who purchase indexed annuities are exposed to a significant investment risk from the volatility of the underlying securities index. It is inaccurate to state that a purchaser of an index annuity may suffer investment risk. In fact, the design of fixed index annuities specifically allows individuals to avoid investment risk. The underlying guarantees in an index annuity are similar to those in a traditional declared rate fixed annuity. Excess interest is credited to an index annuity based on a guaranteed formula which is linked to an outside index. The consumer does not own shares in any security, nor does their account value fluctuate due to market volatility. The consumer’s funds are not held in a separate account. Instead premiums are place into the general account of the insurance carrier. The purchaser has no incident of ownership in any security when they purchase a Fixed Indexed Annuity.
Indexed annuities are attractive to purchasers because they promise the potential to exceed traditional fixed interest rates without exposing principal or past interest credits to market risk. Thus, these purchasers obtain Fixed Indexed Annuity contracts for many of the same reasons that individuals purchase non-securities products.
Unlike securities products, the purchaser is NOT directly impacted by market fluctuations. Negative investment risk fluctuation to the purchaser is eliminated entirely. Further, positive investment risk fluctuations are muted because of internal insurance company accounting processes and systems rather than being processed directly through security fund managers. Often these positive fluctuations are restricted by the interest crediting methods through caps and participation rates by the insurance company, not directly through a securities fund manager. This clearly demonstrates that any investment risk fluctuation is NOT borne by the purchaser. The insurer underwrites the effect of any underlying indices’ performance.
2. Risk and Rewards. The SEC document incorrectly states that individuals who purchase index annuities assume many of the same risks and rewards that investors assume when investing in mutual funds, variable annuities, and other securities.
The fact is that individuals who purchase Fixed Indexed Annuities do NOT assume any of the same risks and rewards that investors assume when investing in mutual funds, variable annuities and other securities. Buyers of index annuities receive benefits more consistent with those of a savings vehicle, and that is what a Fixed Indexed Annuity is.
Indexed Annuity purchasers do not experience a loss in value due to negative market fluctuations. Indexed Annuity owners do not experience a gain equal to the positive fluctuation in a market index. As an example, index annuities do not benefit from dividends paid. Rather, they receive an interest credit that is derived from a set portion of a positive market fluctuation. Once interest is credited to an index annuity, it cannot be reduced due to market volatility.
3. Disclosure and Complaint Resolution. The SEC document accurately states that most purchasers of indexed annuities have not received the benefits of federally mandated disclosure and sales practice protections. There is nothing to indicate that federal regulation is superior to that provided by individual states. As a matter of fact, consumers will lose a far superior complaint resolution process should this rule be adopted.
There are significant protections afforded all Indexed Annuity purchasers through state mandated disclosure and sales practices.
§ Sales materials produced by each insurer are filed with the state along with a complete review of any product before the state permits the sale of the product within their borders.
§ Consumers receive rapid responses from local state insurance departments when they file a complaint. In most cases, companies and agents must provide a written response within 10 business days of an insurance department inquiry. Purchaser complaints are routinely resolved in 30 days. This is largely due to the extensive and aggressive follow up provided by the insurance department in each state.
§ If necessary, a purchaser can meet personally with a department of insurance representative to help them resolve any complaint.
The process for complaint resolution within the SEC will be dramatically slower, more complex and more costly for the consumer. They may be subject to the cost of legal representation and the delays of litigation. All of this can be avoided completely through the state regulatory model within the department of insurance.
The SEC’s own website provides investors warnings about their lack of ability to help consumers resolve complaints and that a consumer may need to take legal action to resolve the issue. So, if a consumer complains and their broker denies wrongdoing, the consumer has no options other than costly litigation. The SEC site even provides advice on how to find a lawyer specializing in securities litigation.
This is the most important element in protecting the consumer complaint resolution leading to a full restoration of value for the consumer. The inherent safety of a Fixed Indexed Annuity combined with the authority of the state department of insurance to address allegations of violations provides a far superior platform for consumer protection. The SEC does not have such authority.
The SEC document continues,
“This growth has, unfortunately, been accompanied by growth in complaints of abusive sales practices. These include claims that the often-complex features of these annuities have not been adequately disclosed to purchasers, as well as claims that rapid sales growth has been fueled by the payment of outsize commissions that are funded by high surrender charges imposed over long periods, which can make these annuities particularly unsuitable for seniors and others who may need ready access to their assets (page 8).”
A change in the status of fixed index annuities will not address the issue of complaints. The fact is that the number of complaints linked to index annuities is a far smaller percentage of sales or transactions than the complaint rate for variable annuities which are considered a securities product. Unresolved complaints regarding index annuities is a tiny fraction of overall policies issued.
In response to the growth in complaints, the National Association of Insurance Commissioners (NAIC) created a model suitability regulation that has now been adopted in 35 states. All Indexed Annuity carriers have applied this regulation on all their sales, irrespective of states pending adoption or even if the state elected representatives have not enacted this legislation. This means that all Indexed Annuity purchasers not only receive full disclosure, each transaction is reviewed for its suitability to the individual purchaser. This is why the Indexed Annuity industry rate of complaint is relatively so low. According to Advantage Compendium, an annuity analysis firm, the Indexed Annuity industry experiences one complaint for every $109 million of premium received.
A professional insurance agent is well equipped to determine if a specific Indexed Annuity is suitable for a particular purchaser. This comes through regular training provided by the insurer and through many state mandated continuing education requirements. Both of which give an agent a better understanding of liquidity and income features available within this savings product. By properly planning and evaluating the purchaser’s needs, it is possible to provide a great deal of financial certainty through these products. Further, through the proper disclosure of surrender charges combined with the liquidity features, it is very likely that the purchaser will never unknowingly experience a surrender charge.
4. Commissions. Commissions earned by insurance agents are quite similar to those of an investment advisor or fund manager. For example, a typical annuity with a 10-year surrender period would pay approximately 8% commission to the agent. Under a managed account, an investment advisor or fund manager might charge as much as 2% per year. Over 10 years, that would be a 20% cost to the consumer. The fact is insurance agent commissions are not exorbitant in comparison to other financial service professionals. Unlike fees charged within the securities arena, insurance agent commissions are not paid by the consumer. Rather, they are paid by the insurance company from their surplus. This allows 100% of the purchaser’s money to go to work for them within their Fixed Indexed Annuity.
It should be noted that many insurance companies report that a substantial amount of Fixed Indexed Annuity sales are derived from Broker Dealer organizations. These same commission percentages are paid through the Broker Dealer channel of distribution. Are readers to believe that the SEC has not been supervising this activity over the last 10 years?
5. Judicial Precedent. The SEC document references,
“The only judicial decision that we are aware of regarding the status of indexed annuities under the federal securities laws... (Page 21 – 22)” but fails to share with the public the findings of the judge in this highly prescient case. One can only conclude that the SEC withholds this important information because the findings of the judge are contradicting the SEC’s proposed regulation. The judge found that the Indexed Annuity was exempt from registration under the Securities Act.The fact is that in Malone v. Addison Insurance Marketing (2002), the plaintiff attorney attempted to argue that the sale of index annuities was improper in that these products were securities and should have only been sold by a registered representative.
First, the judge noted that, per Sec 3(a) 8, Insurance Company (a defendant in the case) was subject to the supervision of an insurance regulator and that its index annuity was subject to the approval of an insurance commissioner per 3(a) 10.
Second, the district court also found that the plaintiff's effort to have her Fixed Indexed Annuity contracts declared as variable annuities failed for two reasons: (1) By guaranteeing the plaintiff a minimum return irrespective of the performance of the SP 500 index, the district court found that the Insurance Company took the investment risk and not the plaintiff who stood to be credited annually no matter how the market performed and (2) Annuitization payments were fixed in advance. Thus, both questions in the VALIC referenced by the SEC were answered properly.
Third, the district court found that the Insurance Company did promise the plaintiff a fixed amount of her savings plus interest (the return of premium plus annually credited interest less any surrender charges) and that her assets were not kept in a separate account - "the keystone characteristic of all variable annuity contracts" according to the judge. Thus, both key questions asked in the United Benefit Life case referenced by the SEC were answered in the affirmative.
Fourth, the plaintiff's argument that her return over and above the minimum guarantee was variable, and thus did involve an element of risk and uncertainty, was found to be inconclusive. The Insurance Company was found to bear substantially more risk as it can actually take a loss on the product if it was unable to surpass the minimum guaranteed crediting rate in its own investments. On the other hand, plaintiff's risk was not that she would lose the value of her initial investment, but rather the risk that had she chosen a different contract her money might have been worth more. Again, according to the judge, "That type of risk - that she could have gotten a better deal but for the pressure she encountered to enter into this particular contract - is not the type of risk central to determining whether a security exists.
Interestingly, the district court said it could end its deliberation there and find that the "plaintiff's Fixed Indexed Annuity contracts are more like 'fixed annuities' and therefore are excluded from the definition of 'security' under the Supreme Court's opinions in VALIC and United Benefit" without considering how the product was sold.
However, the district court did decide to continue and examine SEC Safe Harbor Rule 151 and found that the Fixed Indexed Annuity product had satisfied all three criteria necessary under Rule 151 and was also exempt from registration under this basis.
6. Competition. The SEC document includes important contradictions.
On page 69 and 72, the SEC document attempts to state that one of the benefits of this proposed regulation is enhanced competition. On page 75 and 79, the document reverses itself stating the cost as, diminished competition. Competition will surely be restricted if this rule is adopted. The distribution of the product will transfer from existing traditional insurance firms to Broker Dealers. In essence the regulation will be eliminating the competition to the benefit of the Broker Dealers. This will reduce access to Fixed Indexed Annuities so that they will only be available to individuals who open a brokerage account and only if the Broker Dealer they are with offers the product. Increased costs to the insurance companies as a result of this rule change will be passed onto the consumer further diminishing their value.
Tens of thousands of Small Entities will be dramatically impacted by this regulatory change. According to Indexed Annuity analyst, Advantage Compendium, there may well be 100,000 annuity agents that would be affected by the proposal Advantage Compendium estimates a total cost in economic impact to be in excess of $852 million to the insurance industry distribution channels. For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996, this constitutes:
§ A major effect on the economy of $100 million or more.
§ A major increase in costs or prices for consumers or individual industries
§ A significant adverse effect on competition, investment or innovation.
7. Regulation. The SEC document states,
“We have observed the development of indexed annuities for some time, and we have become persuaded that guidance is needed with respect to their status under the federal securities laws.”
The fact is that the SEC has already provided guidance with respect to the status of the federal securities laws and Fixed Indexed Annuities.
The SEC’s own website states,
“The typical equity-indexed annuity is not registered with the SEC.”
The SEC website also goes on to state that the regulatory authority on these products is “your state insurance commissioner.”
The SEC’s new position appears to be motivated by one thing: sales volume. Because the Fixed Indexed Annuity complaint rate is so low, as expressed earlier, this desire to change the definition of what is a security cannot be proposed to protect consumers. Because the Fixed Indexed Annuity sales practices all include a suitability process today, it cannot be for better sales practices. The fact is that the SEC only desires this product to be a security because of sales volume. By reaching into this market, the SEC can expand its control to include a product that is clearly a safe, secure, non-investment, insurance product. In addition, this move would transfer product distribution from traditional insurance product distribution firms to Broker Dealers.
It appears that the SEC desires to overreach its authority while being heavily persuaded by a group of securities marketing firms now known as the Financial Industry Regulatory Authority (FINRA). FINRA was formerly known under a much more accurate and truthful title, the National Association of Securities Dealers (NASD). The fact is that FINRA is a trade association exerting inappropriate influence over the SEC, an entity that is supposed to be in place to protect consumers, not promote a particular segment of the financial services industry.
8. Other Products. It is interesting to note that the SEC has completely failed to mention or include other financial products in this proposed regulation that use the same crediting methods as a Fixed Indexed Annuity, namely Indexed Universal Life and Indexed Certificates of Deposit. It is shamefully obvious that these were overlooked because of their lack of sales volume and therefore, lack of appeal to the securities dealers who work in concert to restrict product access to both financial professionals and consumers alike.
Sadly, the SEC has shown its true intent by drafting a document full of errors designed to give readers a false concern and an inaccurate picture of what a Fixed Indexed Annuity actually is. Further, the SEC is demonstrating it is only interested in defining financial products as securities if they are achieving a certain level of sales success.
As the demographic of American savers increases, the value proposition of registered securities diminishes. As millions of Americans approach retirement, it is perfectly reasonable for those same people to become more conservative with their resources and choose safe money options like a Fixed Indexed Annuity. The SEC and FINRA (NASD) are proposing this regulation not to protect American Consumers but rather, their own self interests.
Please reject this proposed rule 151a for the benefit of millions of Americans desiring a safe and guaranteed option for their money, for the tens of thousands of small entity insurance professionals who will be impaired if it is adopted, and for the purchasers of Fixed Indexed Annuities who deserve a robust local regulatory authority to rapidly resolve their complaints.
Bruce E. Dickes, CLU, ChFC
2238 S. 156th Circle
Omaha, NE 68130