A Broken Moral Compass

I had lunch with a friend of mine last week. He is a banker, and talked about how folks are walking away from their mortgages. They are walking away not because they have lost their jobs, or are having financial problems, but simply because their homes are “underwater.” That means the house is worth less than they paid for it, and most likely less than the mortgage.

Folks like this have a choice. They can do the right thing: keep paying their mortgage knowing they owe the money; that the value of the house will most likely return in better times; and it is the moral thing to do. Or they can do the wrong thing: walk away and stick the bank with the note and the property. Too many folks are choosing the latter instead of the former.

My friend said that years ago that wouldn’t have happened. People had respect for themselves and other people. People had honor, and did the right thing. “We have lost our moral compass,” he said. His statement gave me a moment of clarity. I think that sums up the problems of today in about a pithy a statement as one can make.

Whether it is the government or unions or big business or education or anything else, America has adopted a mentality of everyman for himself. I watched a movie the other night entitled “The Smartest Men in the Room.” It was the story of Enron. Talk about the lack of a moral compass. It should be required viewing for every business student. The scam these guys pulled off was breathtaking in its magnitude, and was void of any morality.

My wife was in Penney’s on Saturday and it was packed with teenagers being followed by herds of children. One of the clerks told here these young women were single mothers who were given a $175.00 JCP gift card for each one of their illegitimate kids. The program was part of Obama’s stimulus money, implemented through the county. The story was buried in the Vindicator under a headline relating to demolition contracts. 3400 single mothers participated. Given most of these folks have more than one illegitimate child, you can guess that it cost the taxpayer close to $100,000.00 in Mahoning County alone.

It’s not that I don’t have sympathy for these folks, but the spectacle was obscene. In light of all the sex education programs in the school and the accessibility of contraception, there is no reason for illegitimate children in this day and age other than the mothers may want them, or they have zero sense of responsibility at all. The “nobody is going to tell me what to do” entitlement mentality has to be learned. There are two ways to prevent an unwanted pregnancy: 1) use birth control, or 2) don’t have sex. Both are easy and cheap. But the moral compulsion, the moral compass, isn’t there to point in the right direction.

The lack of a moral compass is rooted in two things.

1) The elimination and degradation of religion in our society. In order to establish morality, there has to be some mechanism that establishes right and wrong. Historically, that has been in religion. It’s no coincidence that the basic moral fabric of the United States rooted in the Ten Commandments has frayed as the Ten Commandments have been moved from our public institutions. Right or wrong has to be the starting point…and the shades of gray should be the exception instead of the rule; be it stealing or sex.

2) Secular relativism has become the norm. Beginning in the 1960’s, the do it if it feels good philosophy took root and flowered in our schools, universities, and the media. It’s all about what makes me happy. I am entitled to be happy. There are no rules, just self satisfaction and feeling good. But to have aspirations and goals, one has to know the rules. Today, there are no rules. Look around. What do you see? Anger is growing in our society. People are becoming more antagonistic by the day as decency and common courtesy have given way to individual and selfish needs and desires. Walk away from the mortgage. Scam those stockholders. Have more babies out of wedlock. People are even losing the ability to talk to one another. It’s all shades of gray.

Nothing will get better in this country until boundaries of behavior are re-established based on higher moral principles other worship of the government. Until that time, we are in for a bumpy ride.

Cafaro v. Mahoning County

Once again Mahoning County leaps to the forefront of corruption. It seems that over the past 20 years, Mahoning County has been at the center of one corruption investigation after another. Just when you start think the pit has been cleaned out, here comes another wave.

Now we are at the center of another scandal as indictments were issued against a county commissioner, the county auditor, a local lawyer, a former county treasurer, and Anthony and Flora Cafaro, who are among the most prominent of families in the Mahoning Valley. The indictments center around the purchase of the Southside Hospital by Mahoning County. The primary goal was to do some consolidation of county offices, but mostly to move the Family Services Department from the McGuffey Mall, owned by the Cafaro Company, to the new facility.

At the center of the controversy was the lease between the county and Cafaro for the McGuffey Mall facility, requiring the county to repair the leased premises. My understanding was the lease was a triple net lease, requiring the county to do the repair work when they vacated the premises. A lawsuit followed, and the county ended up having to pay for the work required under the lease.

A political brouhaha developed around the purchase of the old hospital facility, renovated previously under a public/private partnership that went belly up. Sides were drawn up between those who wanted to purchase the facility, and those who wanted to continue to lease the existing premises at the McGuffey Mall. The Cafaro’s, over the years, made campaign donations to those opposing the move which tied into a political fight to control the local Democratic Party…somehow. I can’t figure it out.

Here is what I do know. The Cafaro family has been a prominent and an extremely philanthropic family in the area for as long as I can remember. We owe them a lot. The headquarters was kept within the City of Youngstown helping its tax base. Its real estate holdings in Mahoning and Trumbull County help support our schools and roads. They have been major backers and source of funds for Youngstown State University. The Cafaro family has always made political contributions to just about every candidate running for office at every level of government. There is nothing new here.

The indictment was non-specific…and it appears to me that something else is in play here. I just don’t know what…yet. I do know that on its face this appears to be an effort to criminalize normal political behavior. People can have differing opinions, even among our elected officials, as to the wisdom of various government financial decisions.

Was the original lease bad for the county? Yes...but the county signed it years ago, and it was reviewed and held up for public comment. Could the Cafaro’s have met with local public officials regarding continuing a $500,000.00/year lease for Family Services at the McGuffey Mall? Of course, they run a business! It is also possible the public officials involved could buy the Cafaro argument and conclude that the purchase of that monster building on Oak Hill would be a financial boondoggle, which it may turn out to be as the assumed figures of the purchase proponents are starting to look a tad iffy. Does that mean the Cafaro’s and the public officials broke any laws or the public trust? NO!

Unless they are able to prove that there was some quid pro quo between the Cafaro’s and public officials; unless they are able to prove the public officials did something illegal in support of the Cafaro position; unless they can show there was intentional fudging of proposal numbers and manipulation of county funds…what we really have here are two factions within the local Democratic Party fighting among themselves using the legal proceedings as a club.

I read the lease which was the seed of the dispute. Let’s just say I am willing to keep a very open mind on who is doing what to whom on this one. Time will tell.

2011 Tax Hikes

A friend of mine sent this to me. It was written six months ago. Some of what is included here has been resolved...but much of it has not. So much for no middle class tax hikes.

In just six months, the largest tax hikes in the history of America will take effect.

They will hit families and small business in three great waves on January 1, 2011.

First Waive:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These tax cuts are all scheduled to expire on January 1, 2011:

Personal income tax rates will rise.

The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).

Itemized deductions and personal exemptions will be phased out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%

Higher taxes on marriage and family.

The child tax credit will be cut in half from $1,000 to $500 per child.

The standard deduction will no longer be doubled for married couples relative to the single level.

The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax.

For those dying on or after January 1, 2011, there is a 55 percent top death tax rate.

Higher tax rates on RETIREES, Savers and Investors.

The capital gains tax on investment income will rise from 15 percent this year to 20 percent in 2011.

The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. A WHOPPING 260% INCREASE!
These rates will rise another 3.8 percent in 2013.

Second Wave:
Obamacare
There are over twenty new or higher taxes in Obamacare.

Several will first go into effect on January 1, 2011. They include:

The Medicine Cabinet Tax:
Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The Special Needs Kids Tax:

This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2,500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States and many of them use FSAs to pay for special needs education. Under tax rules, FSA dollars cannot be used to pay for this type of special needs education.

The HSA Withdrawal Tax Hike:
This provision of Obamacare increase the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent.

Third Wave:
The Alternative Minimum Tax and Employer Tax Hikes.

When Americans prepare to file their tax returns in January of 2011, they will be in for a nasty surprise: many AMT tax relief provisions will have expired. The major items include:

The AMT will not apply to over 28 million families, up from 4 million last year.
These families will have to pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or depreciate) equipment purchases up to $250,000.

This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be depreciated.


Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the research and experimentation tax credit, but there are many, many others. Combing high marginal tax rates with the loss of this tax relief will cost jobs.

Tax Benefits for Education and Teaching Reduced.
The deduction for tuition and fees will not be available.

Tax credits for education will be limited.

Teachers will no longer be able to deduct classroom expenses.

Education Savings Accounts will be cut.

Employer-provided educational assistance is curtailed.

The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs are no longer allowed.
Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual required minimum distribution. This ability will no longer be there.

PDF Version Read more: http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171##ixzz0sY8waPq1

Now your insurance is INCOME on your W2:
One of the surprises we will find come next year, is what follows - - - a little “surprise” that 99% of us had no idea was included in the “new and improved” healthcare legislation.

Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company.

You will now be required to pay taxes on a large sum of money that you have never seen.

Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your Tax debt. That’s what you’ll pay next year. For many, it also puts you into a new higher bracket so it’s even worse.

This is how the government is going to buy insurance for the 15% that don’t have insurance and it’s only part of the tax increases.

Two Proposals to Solve What Ails our Political System

It’s time to put an end to the madness that has become our election system. Americans shouldn't have to make Draconian decisions between an extreme candidate on the left and another extreme candidate on the right. As both parties become more and more polarized, that is exactly what is happening. The result is the mess that we have seen reaching epic proportions over the past 20 years. There are two solutions to the problem. Either would help…both would better.

1) Term limits for members of Congress. Six terms is enough for any member of the House of Representatives…that equals twelve years. As for the Senate, the time to go should clock out after three terms…that equals 18 years. I didn’t vote for Robert Byrd (they had to carry him out on a stretcher). I didn’t vote for Charlie Rangle (it will take the jaws of life to pull him out of there notwithstanding the massive corruption charges). I didn’t vote for Nancy Pelosi (this whackadoodle will be there until the Second Coming). These folks, and their conservative counterparts, yield almost limitless power not because of ideas or electoral will, but because they are elected from safe districts. Many of these districts are designed to promote their tenure. Look at Barney Frank! The nut was involved in a sex ring with male House pages, and he is still there. If two terms is enough for President of the United of States…term limits should apply to all members of Congress. The states would have to call for a Constitutional Convention to do this. Who wants to lead the fight?

2) Elimination of partisan primaries for members of Congress. This can be done from within the states. The concept is simple. The political parties have become excessively radicalized. Therefore, in the primaries, you can bet your bottom dollar (if you still have one) that the nominee will be reflect the most radical elements of the party because those are the ones who show up to vote in primaries. I am not calling for open primaries, where anyone can “crossover” to another party to vote in the other party’s primary. Rather all of the candidates should be lumped into a bunch, and the top two or three winners become the candidates in the general election. They can maintain their party affiliations, but the top two vote getters get to go on to the general election. If it is two Dems…or two Republicans…so be it. What it will do is force the radical elements to the center…and boy do we need the center.

Those with vested interests in the current system will make all sorts of arguments against the what I am proposing. My favorite is why should we be forced to change Congressman if he/she is doing a good job? My answer: find someone else who will do a good job. Or how about we will never attract good people if they know they have to quit after so many years. Really? Look who we’ve got now. I say move ‘em in, and move ‘em out!

Some states are already moving to Proposal Number 2, non-partisan primaries. The State of Washington has this sytem, and California just adopted it this past June. Louisiana has operated with a non-partisan primary system for years. Oregon is also considering it. While critics say that it hasn’t had the moderating affect it promised, it certainly broadens the field and makes the fringe a little less “fringy.” Surely it couldn't get any worse. Lawsuits to follow in California.

There is nothing in our Constitution that provides for a two party system, or for two party primary elections. In fact, only one of the two parties we have now goes clear back to the founders…that is the Democratic Party. The Republicans go back to Lincoln. But the horse and buggy has been left in the past…maybe it’s time to do the same thing with partisan primaries. I’m just sayin.

Let Them Eat Cake

Where did you go on vacation this year? I had enough money to get me to Sebring. Oh well, at least I can say I went south!!!

The nation continues to spin out of control. I never thought it was possible, but right now I am living in an alternative universe where black is white, hot is cold, and the truth is lost in maze of political speak, spin, and pundits. No wonder there is such discontent in the country.

Let’s start with Michelle Obama’s to Spain. Minimally, in a time of austerity, using taxpayer dollars for an extravagant personal vacation trip taking over half of a five star resort…what are these people thinking? That is 60 – 70 rooms upwards of $2500.00/room/night plus. Some of this is being funded personally by the Obama’s, who must be doing much better than you and me; but there are always public expenses. For example: the seventy secret agents that are accompanying her. Then we she gets back…she will go to her New England vacation after going to her Florida vacation. Might I suggest a weekend here in Youngstown, Ohio. Much to do and see…and a hell of a lot cheaper than Spain! What did you say she is doing there again?

Then we have the Obama administration suing Arizona over the illegal issue. Wouldn’t it be better to help the issue rather than waste government money suing “We, the People?” Do these folks purposely want to hurt us? Congressman Pete Stark answered the question this past week. He said the federal government can do anything it wants. Really?

In the first of many court skirmishes over health care, a Federal judge in Virginia, in an exquisite and detailed opinion, said the Virginia can sue the Feds over the mandatory purchase of health care provisions in the Obamacare bill. Remember…the Obama administration told you and me that this wasn’t a tax, until they got into court. The main defense being used by the Obama administration is that the mandatory purchase provisions are a tax. There is a reason they are arguing that…they and I and just about every constitutional law scholar knows the current Supreme Court will eventually rule the mandatory purchase provision does not fall under the Commerce Clause. So the government must say it is tax. Is it…or isn’t it? Only the Shadow knows.

Racial tensions like I haven’t seen in years are boiling just under the surface. Violence is increasing. Fear is increasing. Unemployment is increasing. Businesses are refusing to expand in light of draconian government regulations. The leftists are doing what they always do, in office our out, they are suing us. Unbelievable.

But the Obama’s party on! The New York Daily News compared Michelle to Marie Antoinette. Works for me! Let them eat cake! Vive La Revolution! Wait…do they have cake in Spain?