Wednesday, April 2, 2014

Supreme Court Strikes Down Overall Limits On Campaign Contributions




The Supreme Court ruled in the case of McCutcheon v. Federal Election Commission Wednesday, striking down overall limits on campaign contributions.
According to Reuters and the AP, the court left in place a cap on donations to a single candidate.
The Supreme Court struck down limits Wednesday in federal law on the overall campaign contributions the biggest individual donors may make to candidates, political parties and political action committees.
The justices said in a 5-4 vote that Americans have a right to give the legal maximum to candidates for Congress and president, as well as to parties and PACs, without worrying that they will violate the law when they bump up against a limit on all contributions, set at $123,200 for 2013 and 2014. That includes a separate $48,600 cap on contributions to candidates.
But their decision does not undermine limits on individual contributions to candidates for president or Congress, now $2,600 an election.
Chief Justice John Roberts announced the decision, which split the court's liberal and conservative justices. Roberts said the aggregate limits do not act to prevent corruption, the rationale the court has upheld as justifying contribution limits.
The overall limits "intrude without justification on a citizen's ability to exercise `the most fundamental First Amendment activities,'" Roberts said, quoting from the court's seminal 1976 campaign finance ruling in Buckley v. Valeo.
Justice Clarence Thomas agreed with the outcome of the case, but wrote separately to say that he would have gone further and wiped away all contribution limits.



Justice Stephen Breyer, writing for the liberal dissenters, took the unusual step of reading a summary of his opinion from the bench.
Congress enacted the limits in the wake of Watergate-era abuses to discourage big contributors from trying to buy votes with their donations and to restore public confidence in the campaign finance system.
But in a series of rulings in recent years, the Roberts court has struck down provisions of federal law aimed at limiting the influence of big donors as unconstitutional curbs on free speech rights.
Most notably, in 2010, the court divided 5 to4 in the Citizens United case to free corporations and labor unions to spend as much as they wish on campaign advocacy, as long as it is independent of candidates and their campaigns. That decision did not affect contribution limits to individual candidates, political parties and political action committees.
Republican activist Shaun McCutcheon of Hoover, Ala., the national Republican party and Senate GOP leader Mitch McConnell of Kentucky challenged the overall limits on what contributors may give in a two-year federal election cycle. The total is $123,200, including a separate $48,600 cap on contributions to candidates, for 2013 and 2014.
Limits on individual contributions, currently $2,600 per election to candidates for Congress, are not at issue.
Relaxed campaign finance rules have reduced the influence of political parties, McConnell and the GOP argued.
McCutcheon gave the symbolically significant $1,776 to 15 candidates for Congress and wanted to give the same amount to 12 others. But doing so would have put him in violation of the cap.
Nearly 650 donors contributed the maximum amount to candidates, PACs and parties in the last election cycle, according to the Center for Responsive Politics.
The court did not heed warnings from Solicitor General Donald Verrilli Jr. and advocates of campaign finance limits that donors would be able to funnel large amounts of money to a favored candidate in the absence of the overall limit.
The Republicans also called on the court to abandon its practice over nearly 40 years of evaluating limits on contributions less skeptically than restrictions on spending.
The differing levels of scrutiny have allowed the court to uphold most contribution limits, because of the potential for corruption in large direct donations to candidates. At the same time, the court has found that independent spending does not pose the same risk of corruption and has applied a higher level of scrutiny to laws that seek to limit spending.
If the court were to drop the distinction between contributions and expenditures, even limits on contributions to individual candidates for Congress, currently $2,600 per election, would be threatened, said Fred Wertheimer, a longtime supporter of stringent campaign finance laws.
The case is McCutcheon v. FEC, 12-536.

Raising The Minimum Wage

Raising the minimum wage nationwide will increase earnings for millions of workers, and boost the bottom lines of businesses across the country.

Today, the real value of the minimum wage has fallen by nearly one-third since its peak in 1968. And right now, a full-time minimum wage worker makes $14,500 a year, which leaves too many families struggling to make ends meet.



Many businesses are already paying their workers higher wages, which they see as the right way to boost productivity, reduce turnover and increase profits.


A higher minimum wage can raise earnings and reduce poverty, which is why 21 states plus DC already have minimum wages above the current federal minimum wage of $7.25. Additionally, Delaware recently passed a law to raise its minimum wage that will go in to effect later in 2014.


It would be a much needed increase in wages to offset the amount of inflation that has been incurred over the last 30+ years. The real minimum wage should be in the high teens or low twenties.

Friday, December 27, 2013

Thinking of becoming an IT or Software Professional? Here’s a great list of the resources I’ve compiled thus far.

By: Marty Gold – BlogLinkedIN - Twitter – 07:57am – 27Dec2013

A Great Resource List for Individuals Looking Into the It or Software Development Field










Top Certifications for 2014+

18 Hot IT Certifications for 2014
Foote Partners just released the November update to their quarterly 2013 IT Skills Demand and Pay Trends Report in which they analyze pay and demand for 641 certified and non-certified IT skills that are tracked and reported in the firm's IT Skills and Certifications Pay Index. David Foote, co-founder and chief analyst of Foote Partners, indicates that 2,522 US and Canadian employers and 154,000 IT professionals were surveyed for this research.
There are some surprising changes to the market over the last two quarters. The certified skills that seem to be flourishing the most fall into the architecture, engineer, security and database categories.

#1 Certified in Risk and Information Systems Control (CRISC)
Premium pay for this ISACA certification has risen 9.1 percent in the last three- and six-month periods. In general, IT certifications from ISACA tend to center on IT governance. Originally offered in 2010, this certification focuses specifically on risk management. "The CRISC is awarded to those experienced in business and technology risk management, and the design, implementation, monitoring and maintenance of IS control," according to CRISC.
Vendor: ISACA
Prerequisites:
A minimum of three years of cumulative work experience executing the tasks of a CRISC pro across at least three CRISC domains.
Take and pass the CRISC exam
Adhere to the ISACA Code of Professional Ethics
Meet the terms of CRISC Continuing Education...

#2 CWNP Certified Wireless Security Professional
Wireless security is hot, according to Foote, who goes on to say, "CWNP is a really small company and for them to be on this list is a headline." This wireless security certification has been riding high. Premium pay is up 35 percent over the last 12 months, 28 percent in the last six months and 20 percent in the last three months, making it a marketable bullet point on your resume.
This advanced certification teaches individuals how to securely set up and run enterprise wireless LAN.
Vendor: CWNP
Prerequisite:
To earn the CWSP certification, you must pass two exams

#3CWNP/Certified Wireless Network Expert
Here is another CWNP certification that is seeing a huge spike in premium pay. Value/demand for this role is up 42 percent in the last 12 months, 37.3 percent in the last six months and 30 percent in the three months.
This is the highest level of certification offered by CWNP. Recipients should have a mastery of skills relating to the installation, configuration, troubleshooting of enterprise Wi-Fi networks.
Vendor: CWNP
Prerequisite:
Valid and current CWSP, CWAP and CWDP certifications (requires CWNA).
Three years of documented enterprise Wi-Fi implementation experience.
Three professional endorsements.
Two other current, valid professional networking certifications.
Documentation of three enterprise Wi-Fi (500 word essays.)
Re-certification every three years.

#4GIAC Certified Forensics Analyst (GCFA)
This intermediate forensics certification is targeting individuals in the information security, incident response and computer forensics field who focus on only Windows and Linux operating systems. Value/demand for this role has climbed an impressive 16.7 percent in the last 12 months.
Vendor: GIAC
Prerequisite:
One proctored exam
115 questions
Time limit of three hours
Minimum Passing Score of 69 percent

*No Specific training is required for any GIAC certification.

#5GIAC Certified Intrusion Analyst (GCIA)
Pay premiums for this IT certification have gone up more than 37.5 percent in the last 12 months and with the state of IT security demand for this certification is likely to increase, according to Foote Partners data.
Individuals who receive this certification should be familiar with intrusion detection systems, analysis of network traffic and log files.
Vendor: GIAC
Prerequisite:
*No Specific training is required for any GIAC certification.
One proctored exam
150 questions
Time limit of four hours
Minimum Passing Score of 67 percent

*No Specific training is required for any GIAC certification.

#6HP/Accredited Solutions Certification
Each of these HP certifications has seen gains of at least 9 percent over the last two quarters and Foote Partners is predicting that this trend will continue for at least the next three-six months. There are a number of different certifications offered.
Vendor: HP

#7Information Systems Security Engineering Professional (ISSEP/CISSP)
Developed with input from the NSA, this vendor-neutral security certification is about integrating security into all forms of information systems applications and projects. In a recent interview David Foote, the CEO mentioned that employers are paying less for security in a time where security is at the forefront, an interesting trend an keep an eye on.
Demand/pay premium has risen 8.3 percent in the last 12 months, 30 percent in the last six months and 18.2 percent in the last three months.
Vendor: ISC2
Prerequisite:
There are several prerequisites for these IT security certifications.

#8Microsoft Certified Architect (MCA)
Microsoft announced in late August that this certification and others would be retired as of December 31 with no clear replacements, angering many people who are current or on the path to Microsoft's highest level IT certifications. We reached out to Microsoft and was told that the program was too costly and time consuming for both MCSM candidates and Microsoft. They are now investigating future ways to make this program more scalable.
With that said, premium pay for this cert rose more than 10 percent in the last quarter and will likely continue to do so, according to Foote Partners.
Vendor: Microsoft

#9 Microsoft Certified Solutions Master (all)
This is another elite Microsoft certification that is being retired December 31st with no clear successor. However, employers are still willing to pay extra for these certifications. Individuals with this certification, according to Microsoft, have the deepest level of product expertise.
Here is Microsoft official statement on why the certifications are being retired: "The IT industry is changing rapidly and we will continue to evaluate the certification and training needs of the industry to determine what the right certification is for the pinnacle of our program."
Vendor: Microsoft

#10 Open Group Certified Architect (Open CA)
Currently, this vendor-neutral certification is focused squarely on IT architecture, but according to the Open Group website, the plan is to incorporate more business and enterprise architecture into the programs. Employers have paid a premium of 16.7 percent over the last 12 months to individuals with this certification under their belt.
Vendor: Open Group
Prerequisite:
The program is based upon four key documents:
The Certification Policy, which sets out the policies and processes by which an individual may achieve certification.
The Conformance Requirements, in which the skills and experience that a Certified Architect must possess are documented
The Accreditation Requirements

#11 Open Group Master Architect
Another vendor-neutral certification from the Open Group, this is the 2nd level of architect certification it offers. Business and enterprise architect certifications are in development but currently the focus is on IT architecture.
Premium pay for this architect certification is up 14.3 percent in the last 12 months and is forecasted to grow in the next three-six months.
Vendor: Open Group
Prerequisite:
Candidates must meet experience and skills requirements, Certification Policy, either from the Open Group or an ACP.
The Open Group Certified Architect (Open CA) program requires candidates to submit a comprehensive certification package detailing their skills and experience gained on working on architecture related projects, followed by a rigorous peer review process.

#12 Oracle Certified Expert MySQL 5.1 Cluster Database Administrator
This certification was formerly known as MySQL Cluster Database Administrator (SCMCDBA). IT pros with his certification are experts at administrating designing, deploying, configuring and maintaining databases that utilize MySQL cluster technology and they are in demand in the enterprise according to Foote Partners 2013 IT Skills Demand and Pay Trends Report. Premium pay for this certification is up a 37.5 percent over the last 12 months.
Vendor: Oracle
Prerequisite:
You must have one of the certifications below first:
Oracle Certified Professional, MySQL 5 Database Administrator

OR
Sun Certified MySQL Database Administrator (SCMDBA)
Then you need to pass the exam

#13 Oracle Certified Professional MySQL 5 Database Administrator
IT pros awarded this IT certification have mastered all Oracle server related issues. Premium pay/demand for this certification is up 12.5 percent over the last six months.
Vendor: Oracle
Prerequisite:
You must pass these two exams to get certified:
1Z0-873 MySQL 5 Database Administrator Certified Professional Exam, Part I
1Z0-874 MySQL 5 Database Administrator Certified Professional Exam, Part II

#14 Oracle Database Administrator Certified Master
Oracle's master level certification has risen 8.3 percent in value/demand over the last 12 months. Database certifications are another area that, according to Foote, is a headline. These certifications have been declining for years but recently the pay premium for them has risen. "What's driving this is not the relational database stuff but the non-relational database stuff. It's the NoSQL stuff. We're seeing a lot of spending in data analytics, but we don't see companies getting a lot out of it," says Foote.
Vendor: Oracle
Prerequisite:
There are several paths to this certification.

#15 PMI Risk Management Professional
The PMI-RMP certification ensures that the holders are capable risk management professionals schooled in international best practices for managing project and operational risks. Premium pay for this certification has risen 9.1 percent over the last year.
Vendor: PMI
Prerequisite:
A secondary degree (high school diploma, associate's degree or the global equivalent), with at least 4,500 hours of project risk management experience and 40 hours of project risk management education.

or
A four-year degree (bachelor's degree or the global equivalent), with at least 3,000 hours of project risk management experience and 30 hours of project risk management education.

#16 Program Management Professional (PgMP)
The vendor-neutral program management professional certification from PMI is a way to demonstrate your ability to oversee several projects and programs. Premium pay is up 7.7 percent in the last 12 months and is expected to continue upward, according to Foote Partners research.
Vendor: PMI
Prerequisite:
A secondary degree (high school diploma, associate's degree, or the global equivalent), with at least four years (6,000 hours) of project management experience and seven years (10,500 hours) of program management experience.

or
A four-year degree (bachelor's degree or the global equivalent), with at least four years (6,000 hours) of project management experience and four years (6,000 hours) of program management experience.

#17 Red Hat Certified Architect (RHCA)
The RHCA is Red Hat's highest level of certification and recipients must hold the RHCE as a prerequisite. From deployment to systems management in larger enterprise environments this is the top tier. This certification has grown 25 percent in the last three months and is expected to trend upward in the next 3 to 6 months according to Foote Partners.
Vendor: RedHat
Prerequisite:
RHCE certification must be current in order to be eligible.
Earn the following Red Hat Certificates of Expertise:
Deployment and Systems Management
Directory Services and Authentication or Red Hat Certified Virtualization Administrator
Clustering and Storage Management
Security: Network Services or Red Hat Certificate of Expertise in Server Hardening
Performance Tuning

#18 Teradata: Certified Enterprise Architect
Premium Pay for this architect certification is up 11.1 percent over the last 12 months. It's made gains in the last three quarters and is expected to continue to grow. IT pros with this advanced certification will have an advanced knowledge of Teradata fundamentals such as SQL, design and implementation. It's associated with data warehousing and big data.
Vendor: Teradata
Prerequisite:
Candidate must currently hold one of the certifications below.
Teradata 12 Certified Technical Specialist
Teradata 12 Certified Database Administrator
Teradata Certified Solutions Developer
Teradata 12 Certified Enterprise Architect

Candidate must be in good standing with the TCPP program and not have violated security policies and procedures on the previous certification track.


Saturday, December 14, 2013

The Great American Class War | Common Dreams

The Great American Class War | Common Dreams

The Great American Class War

Plutocracy Versus Democracy

by Bill Moyers | Published on Thursday, December 12, 2013 by TomDispatch.com
The promise of the Declaration of Independence still guides us, writes Moyers, even as the battles for true democracy and perils of inequality persist. (Wikimedia commons)I met Supreme Court Justice William Brennan in 1987 when I was creating a series for public television called In Search of the Constitution, celebrating the bicentennial of our founding document.  By then, he had served on the court longer than any of his colleagues and had written close to 500 majority opinions, many of them addressing fundamental questions of equality, voting rights, school segregation, and -- in New York Times v. Sullivan in particular -- the defense of a free press.
Those decisions brought a storm of protest from across the country.  He claimed that he never took personally the resentment and anger directed at him.  He did, however, subsequently reveal that his own mother told him she had always liked his opinions when he was on the New Jersey court, but wondered now that he was on the Supreme Court, “Why can’t you do it the same way?” His answer: “We have to discharge our responsibility to enforce the rights in favor of minorities, whatever the majority reaction may be.”  
"In one way or another, this is the oldest story in America: the struggle to determine whether “we, the people” is a moral compact embedded in a political contract or merely a charade masquerading as piety and manipulated by the powerful and privileged to sustain their own way of life at the expense of others."
Although a liberal, he worried about the looming size of government. When he mentioned that modern science might be creating “a Frankenstein,” I asked, “How so?”  He looked around his chambers and replied, “The very conversation we’re now having can be overheard. Science has done things that, as I understand it, makes it possible through these drapes and those windows to get something in here that takes down what we’re talking about.” 
That was long before the era of cyberspace and the maximum surveillance state that grows topsy-turvy with every administration.  How I wish he were here now -- and still on the Court!
My interview with him was one of 12 episodes in that series on the Constitution.  Another concerned a case he had heard back in 1967.  It involved a teacher named Harry Keyishian who had been fired because he would not sign a New York State loyalty oath.  Justice Brennan ruled that the loyalty oath and other anti-subversive state statutes of that era violated First Amendment protections of academic freedom. 
I tracked Keyishian down and interviewed him.  Justice Brennan watched that program and was fascinated to see the actual person behind the name on his decision.  The journalist Nat Hentoff, who followed Brennan’s work closely, wrote, “He may have seen hardly any of the litigants before him, but he searched for a sense of them in the cases that reached him.”  Watching the interview with Keyishian, he said, “It was the first time I had seen him.  Until then, I had no idea that he and the other teachers would have lost everything if the case had gone the other way.” 
Toward the end of his tenure, when he was writing an increasing number of dissents on the Rehnquist Court, Brennan was asked if he was getting discouraged. He smiled and said, “Look, pal, we’ve always known -- the Framers knew -- that liberty is a fragile thing.  You can’t give up.”  And he didn’t.
The Donor Class and Streams of Dark Money
The historian Plutarch warned us long ago of what happens when there is no brake on the power of great wealth to subvert the electorate.  “The abuse of buying and selling votes,” he wrote of Rome, “crept in and money began to play an important part in determining elections.  Later on, this process of corruption spread in the law courts and to the army, and finally, when even the sword became enslaved by the power of gold, the republic was subjected to the rule of emperors.”
We don’t have emperors yet, but we do have the Roberts Court that consistently privileges the donor class.  
We don’t have emperors yet, but we do have a Senate in which, as a study by the political scientist Larry Bartels reveals, “Senators appear to be considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators’ roll call votes.”
We don’t have emperors yet, but we have a House of Representatives controlled by the far right that is now nourished by streams of “dark money” unleashed thanks to the gift bestowed on the rich by the Supreme Court in the Citizens United case.
We don’t have emperors yet, but one of our two major parties is now dominated by radicals engaged in a crusade of voter suppression aimed at the elderly, the young, minorities, and the poor; while the other party, once the champion of everyday working people, has been so enfeebled by its own collaboration with the donor class that it offers only token resistance to the forces that have demoralized everyday Americans.
Writing in the Guardian recently, the social critic George Monbiot commented,
“So I don’t blame people for giving up on politics... When a state-corporate nexus of power has bypassed democracy and made a mockery of the voting process, when an unreformed political system ensures that parties can be bought and sold, when politicians [of the main parties] stand and watch as public services are divvied up by a grubby cabal of privateers, what is left of this system that inspires us to participate?”
Why are record numbers of Americans on food stamps? Because record numbers of Americans are in poverty. Why are people falling through the cracks? Because there are cracks to fall through. It is simply astonishing that in this rich nation more than 21 million Americans are still in need of full-time work, many of them running out of jobless benefits, while our financial class pockets record profits, spends lavishly on campaigns to secure a political order that serves its own interests, and demands that our political class push for further austerity. Meanwhile, roughly 46 million Americans live at or below the poverty line and, with the exception of Romania, no developed country has a higher percent of kids in poverty than we do.  Yet a study by scholars at Northwestern University and Vanderbilt finds little support among the wealthiest Americans for policy reforms to reduce income inequality.
Class Prerogatives
Listen!  That sound you hear is the shredding of the social contract.
Ten years ago the Economist magazine -- no friend of Marxism -- warned: “The United States risks calcifying into a European-style class-based society.”  And as a recent headline in theColumbia Journalism Review put it“The line between democracy and a darker social order is thinner than you think.”
We are this close -- this close! -- to losing our democracy to the mercenary class. So close it’s as if we’re leaning way over the rim of the Grand Canyon waiting for a swift kick in the pants.
When Justice Brennan and I talked privately in his chambers before that interview almost 20 years ago, I asked him how he had come to his liberal sentiments.  “It was my neighborhood,” he said.  Born to Irish immigrants in 1906, as the harsh indignities of the Gilded Age brought hardship and deprivation to his kinfolk and neighbors, he saw “all kinds of suffering -- people had to struggle.”  He never forgot those people or their struggles, and he believed it to be our collective responsibility to create a country where they would have a fair chance to a decent life.  “If you doubt it,” he said, “read the Preamble [to the Constitution].”
He then asked me how I had come to my philosophy about government (knowing that I had been in both the Kennedy and Johnson administrations).  I don’t remember my exact words, but I reminded him that I had been born in the midst of the Great Depression to parents, one of whom had to drop out of school in the fourth grade, the other in the eighth, because they were needed in the fields to pick cotton to help support their families. 
Franklin Roosevelt, I recalled, had been president during the first 11 years of my life.  My father had listened to his radio “fireside chats” as if they were gospel; my brother went to college on the G.I. Bill; and I had been the beneficiary of public schools, public libraries, public parks, public roads, and two public universities.  How could I not think that what had been so good for me would be good for others, too? 
That was the essence of what I told Justice Brennan.  Now, I wish that I could talk to him again, because I failed to mention perhaps the most important lesson about democracy I ever learned. 
On my 16th birthday in 1950, I went to work for the daily newspaper in the small East Texas town where I grew up.  It was a racially divided town -- about 20,000 people, half of them white, half of them black -- a place where you could grow up well-loved, well-taught, and well-churched, and still be unaware of the lives of others merely blocks away.  It was nonetheless a good place to be a cub reporter: small enough to navigate but big enough to keep me busy and learning something new every day.  I soon had a stroke of luck.  Some of the old-timers in the newsroom were on vacation or out sick, and I got assigned to report on what came to be known as the “Housewives’ Rebellion.”  Fifteen women in town (all white) decided not to pay the Social Security withholding tax for their domestic workers (all black). 
They argued that Social Security was unconstitutional, that imposing it was taxation without representation, and that -- here’s my favorite part -- “requiring us to collect [the tax] is no different from requiring us to collect the garbage.”  They hired themselves a lawyer -- none other than Martin Dies, Jr., the former congressman best known, or worst known, for his work as head of the House Committee on Un-American Activities in the witch-hunting days of the 1930s and 1940s.  They went to court -- and lost.  Social Security was constitutional, after all.  They held their noses and paid the tax.
The stories I helped report were picked up by the Associated Press and circulated nationwide.  One day, the managing editor, Spencer Jones, called me over and pointed to the AP ticker beside his desk.  Moving across the wire was a notice citing the reporters on our paper for the reporting we had done on the “rebellion.”  I spotted my name and was hooked.  In one way or another, after a detour through seminary and then into politics and government, I’ve been covering the class war ever since.
Those women in Marshall, Texas, were among its advance guard.  Not bad people, they were regulars at church, their children were my classmates, many of them were active in community affairs, and their husbands were pillars of the business and professional class in town.  They were respectable and upstanding citizens all, so it took me a while to figure out what had brought on that spasm of reactionary defiance.  It came to me one day, much later: they simply couldn’t see beyond their own prerogatives.  
Fiercely loyal to their families, to their clubs, charities, and congregations -- fiercely loyal, in other words, to their own kind -- they narrowly defined membership in democracy to include only people like themselves.  The black women who washed and ironed their laundry, cooked their families’ meals,  cleaned their bathrooms, wiped their children’s bottoms, and made their husbands’ beds, these women, too, would grow old and frail, sick and decrepit, lose their husbands and face the ravages of time alone, with nothing to show for their years of labor but the creases on their brows and the knots on their knuckles.  There would be nothing for them to live on but the modest return on their toil secured by the collaborative guarantee of a safety net.
The Unfinished Work of America
In one way or another, this is the oldest story in America: the struggle to determine whether “we, the people” is a moral compact embedded in a political contract or merely a charade masquerading as piety and manipulated by the powerful and privileged to sustain their own way of life at the expense of others.
I should make it clear that I don’t harbor any idealized notion of politics and democracy.  Remember, I worked for Lyndon Johnson.  Nor do I romanticize “the people.” You should read my mail and posts on right-wing websites.  I understand the politician in Texas who said of the state legislature, “If you think these guys are bad, you should see their constituents.”
But there is nothing idealized or romantic about the difference between a society whose arrangements roughly serve all its citizens (something otherwise known as social justice) and one whose institutions have been converted into a stupendous fraud.  That can be the difference between democracy and plutocracy.
Toward the end of Justice Brennan’s tenure on the Supreme Court, he made a speech that went to the heart of the matter.  He said:
“We do not yet have justice, equal and practical, for the poor, for the members of minority groups, for the criminally accused, for the displaced persons of the technological revolution, for alienated youth, for the urban masses... Ugly inequities continue to mar the face of the nation. We are surely nearer the beginning than the end of the struggle.”
And so we are. One hundred and fifty years ago, Abraham Lincoln stood on the blood-soaked battlefield of Gettysburg and called Americans to “the great task remaining.”  That “unfinished work,” as he named it, remained the same then as it was when America’s founding generation began it. And it remains the same today: to breathe new life into the promise of the Declaration of Independence and to assure that the Union so many have sacrificed to save is a union worth saving.


Saturday, September 14, 2013

Understanding Time Horizon

Understanding Time Horizon


The first half of the article made the case why benchmarking against the Dow 30 is a bad idea for several reasons which is well and good but in terms of true benchmarking, no one benchmarks to the Dow 30. People might compare to the Dow, the Dow was 10% and I was up 9% or I was up 11% or whatever but they don't benchmark to it.

Later in the article he offered the following bullet points of what investors should be focused on;


  • Capital preservation
  • A rate of return sufficient to keep pace with inflation
  • Expectations based on realistic objectives (the market does not compound at 8%, 6% or 4%)
  • Higher rates of return require an exponential increase in the underlying risk profile. This tends to not work out well
  • You can replace lost capital--but you cannot replace lost time. Time is a precious commodity you cannot afford to waste
  • Portfolios are time frame specific. If you have five years to retirement but build a portfolio with a 20 year time horizon (taking on more risk) the results will likely be disastrous 


These are good talking points although I don't agree with all of them.

Capital preservation is a big one because people seem to always forget how important it is when things are going well in the markets but then wish they'd paid more attention to this when the good times end. It takes a lot of self awareness to avoid complacency and not succumb to greed by meaningfully increase risk after a huge rally.


Exceeding inflation by a point or two may or may not be achievable but it is not an insanely heroic assumption. There will be decades like the 1980's and 1990's again and when that happens your returns will likely be well ahead of inflation. The next time there is a decade like the 2000's your returns will likely be below the rate of inflation. Most of this is beyond our control which is the crux of the argument for taking a long term approach and being disciplined to a strategy that has a reasonable basis for working long term.

The market not compounding at 8%, 6% or 4% is kind of an odd one. The market compounds at some rate over the time period you care about. Depending on how you cherry pick the dates I have no doubt you can find reasonably long periods where the market compounded at all three of those rates. The compounded rate of return for the period you care most about, like maybe age 40 to age 75, will be whatever it will be and be beyond your control. You might get lucky but if you don't want to leave it entirely to chance you could figure out how to increase your savings rate.


I disagree with his framing of the time horizon issue. Clearly having the correct time horizon for your assets is crucial but retiring in five years, to use his example, isn't quite as important as you might think. If you are in your 60's, healthy and your parents are alive (this describes my oldest brother) then chances are good you will be around for a while.

Someone who is right around where they need to be versus their financial plan is going to need growth in their portfolio after they retire. The building block rule of thumb for inflation is that our costs will increase by 50% in 15 years at 3% annualized inflation. From there you can plug in your own particulars.


A 68 year old who is healthy with longevity genes who has retired today and figured out how to live a $3000 monthly lifestyle in today's dollars will very likely be 83, healthy and needing to pay for a $4500 monthly lifestyle. I am not saying to take on more risk or more volatility--proper asset allocation is another crucial component to financial plan success-- but your true time horizon doesn't change from your last day of work to your first day of retirement.

Illogic In Fractional Reserve Banking | Zero Hedge

Illogic In Fractional Reserve Banking | Zero Hedge:

Submitted by Tyler Durden on 09/14/2013 11:12 -0400

Submitted by James E. Miller of the Ludwig von Mises Institue of Canada
Illogic in Fractional Reserve Banking

isocratesIf there was one business venture the leftist and forgotten “Occupy” movement was right to distrust, it was the banking industry. In the wake of the 2008 financial crisis and subsequent bailing out of the world’s financial system by fascist states, taxpayers – especially the progressive types – were correct to feel amiss. But rather than take a scrutinizing look into the privilege afforded to the banking class, the outraged took to political action in the callow hope of correcting a wrong.
Like any popular uprising, the goal was quickly smothered in favor of further rent-seeking. Instead of aiming consternation at the incestuous relationship between government and the money-changers, occupiers wanted the quick-fix of redistribution. The cries of “this is what democracy looks like” might as well have been “this is what panhandling looks like.” Centralized banking went unquestioned. The nature of fractional reserve practices was ignored – or likely not understood by the pea-brained philosophers. Still, the radical levellers who set-up camp in Zuccotti Park were on to something by asking why their precious public officials voted to shore up the balance sheets of a disproportionately small member caste.
Banking is, to put it bluntly, a strange and unique business. The industry is centuries-old, and the legality of its operations has been questionable since inception. I am referring specifically to the practice of bankers lending out claimed reserves – a contentious issue among libertarian theorists. If the larger public were to become privy to this business model, it may spark a troubling curiosity in the less-moneyed class. But then again, this author never ceases to be amazed by the bounds of common apathy.
In banking, certain legal doctrines have guided the trade since antiquity, including the nature of contracts. The violation of these distinct forms of lawful guarantees once carried the weight of justice. But no longer; as the deliberately obscuring practice of loaning out deposits meant to be available on-demand has created such instability in the banking system, the incessant teetering on the cliff of insolvency remains an ever viable threat to economic tranquility.
Libertarians – specifically those schooled in the Austrian, causal-realist tradition of economics – are intellectually miles ahead of the Occupy folks when it comes to the study of currency. And while the students of Mises and Hayek are fervently opposed to any central bank management, there remains a sharp divide on the ethics of fractional reserve banking. In a recent missive in the Freeman, economist Malavika Nair questions the Rothbardian ethic that finds the practice of banks creating credit out of thin air fraudulent. The piece, which deconstructs the dean of the Austrian school’s original argument, frames banking away from the supposed cut-and-dry thinking model of anti-fractionalists.
Nair begins with a false choice by asking: “Would fractional reserve banking exist in a world without a central bank? Put another way: Is fractional reserve banking inherently fraudulent?” These statements are not one in the same; they reference two separate conditions. Absent central banking, unbacked credit expansion could still exist. Back in mid-to-late 19th century America where the Federal Reserve was still a twinkle in the centralizers’ eyes, fractional reserve banking and pyramiding credit were common practice. The question at hand is whether such business is based on a fraudulent understanding of the nature of goods.
Nair finds issue with the essence of contracts and how they relate to the duty of those individuals entrusted with safeguarding money. The contract – an extension of humanity’s self-ownership and free will – has been a recognized covenant enforceable by compulsion for as long as man first conceived of himself as an autonomous being. It finds legitimacy in the human understanding of bonds and keeping one’s word. The evolution of common law has dictated that any activity stipulated in a compact cannot entail unlawful activity. To enforce an illegal activity would thereby be a crime in itself – an ipso facto contradiction in reason.
The contract is key for banking operations. Nair argues that bank functions, both deposit and lending, are plainly justifiable; the discrepancy arises in the manner that customer funds are utilized. Currently, bankers freely lend out money that is available on command by both the borrower and depositor. In practice, this is the creation of two goods from one ex nihilo. In a totally isolated instance where a bank were to service only two patrons, the act of creating what Mises called “fiduciary media” would appear as the very perversion of intuitive law it embodies. It would simply come off as no more than a violation of the known rules of the world.
Nair counters by asserting that a “claim to money is not the same thing as the money itself.” This is a confusing affirmation as antagonists to fractional reserve banking hardly make that claim. The point of contention is that promissory notes for bank deposits represent real money, though they may circulate as mediums of exchange and fulfill the role of currency. Should two or more of these “I owe you” certificates be created to represent one unit of bank reserves available on-demand, there is a direct and unquestionable inconsistency. It is certainly true, as Nair points out, that the fungible quality of money dictates it be treated differently than non-substitutable goods. However, the fact that cash is interchangeable does not dismiss its limited character.
If the principle of unbacked expansion of credit were applied to other industries such as automobiles or condominiums, titles to the same good could theoretically be multiplied, but not without controversy. Having two titles for one car is not based on logic or a firm understanding of universal law. You simply cannot create real, definite material by declaration. Nair asserts that this is not true when it comes to the market of money. In his words, the over-issuing of redeemable bank notes “does not mean one thing is in two places at the same time” but that “two different things are in two places at the same time.” This is only so much sophistry, as the claims to bank reserves are still representative of real goods. There may be multiple slips of paper representing one unit of money-proper floating around in the economy, but that does not dismiss the plain and true fact that there are more claims than what is available.
As economist JesĂșs Huerta de Soto documents in his tour de force Money, Bank Credit, and Economic Cycles, government has played a leading role in fostering this banking fraud for centuries. The state is forever on the search for more resources to carry out its bidding. Cooperation with the leading money-lending institutions was an obvious route for subverting the moral means to wealth creation. Since the days of classical Greece, it was well understood that transactions of present goods fundamentally differed from those involving future goods. In practical terms, deposits for safekeeping were of considerable difference to those made for the strict purpose of lending out and garnering a return. Bankers who misappropriated funds were often found guilty of fraud and forced to pay restitution. In one recorded episode, ancient Grecian legal scholar Isocrates lambasted Athenian banker Passio for reneging on a client’s depository claim. After being entrusted to hold a select amount of money, the sly banker loaned out a portion of the funds in the hopes of earning a profit. When asked to make due on the deposit, the timid Passio pleaded to his accuser to keep the transgression “a secret so it would not be discovered he had committed fraud.”
The underlying chicanery behind fractional reserve banking has existed since the days of Plato. Modern technology has not negated the rationale used to discover and affirm natural law. Binary codes on a computer screen do not create a new reality. The governing doctrines of humanity are, in de Soto’s words, “unchanging and inherent in the logic of human relationships.” While fractional reserve banking could exist in a free market environment and regulate itself through vigorous competition, that theoretical scenario does not prove the entire fulcrum of the business rests on solid ground.
The truth remains, and will always remain, that an organic product is not replicable through any kind of witch doctoring. A thing is a thing is a thing. Any money substitute that represents a real piece of fungible currency cannot pertain to that which is not in existence. Such is the lawful understanding that goes back to the time preceding the Hellenisitc period.
Malavika Nair offers an interesting argument by trying to justify the practice of creating something out of nothing; but it ultimately fails. The free lunch of artificial credit creation is nothing more than slipping out of the baker’s shop without paying. It would have served the Occupy crowd well to have recognized this shaky foundation upon which the modern financial system rests. Perhaps their message of widespread corruption would have been better received – at least more so than by creating shanty towns and defecating on the street. Instead, we were gifted with a muddled and confused political message made by an irate minority who hadn't a clue of the forces that govern their own lives.