Why I Think Sanity Is Returning To The World

1. The Germans (and other European nations) are looking to enact an asset tax to balance their federal budget.

2. Research now shows that you become unemployable if you cannot find a job after 6 months of trying.
The article written about the research is titled:

The Terrifying Reality of Long-term Unemployment.

It is a Yahoo Finance article. Google it.

Everything NWP, and Dude have experienced is explained and supports their explanations of why they were not hired.
Sad, but true.

3.Iceland is now recognized as having handled things correctly in the financial crisis, and today voted for anti-EU candidates. So, it appears that they will stay out of the EU. Wise people, those Icelanders.

4. Senator Rand Paul has questioned the rules about drone strikes. Next step: Questioning everything.

5. On the Frontline documentary series (on PBS on last Monday- 4/22/2013), the corrupt 401K system was revealed In one mutual fund a person who saved/earned on investments $1,000,000, would only get out of the fund $330,000. The other $670,000 would go to fees, and expenses. This is legalized robbery.!!! Everyone here should watch this documentary, and also check your own 401K using a 401K calculator.
On the positive side: At least the truth is getting out about this corruption. That is something to be happy about.

11 thoughts on “Why I Think Sanity Is Returning To The World”

  1. I would favor a transaction tax, but not a “net worth” tax. We already pay a small transaction tax to the SEC on stock purchases. This could be tripled without anyone noticing, and might have the salutary effect of reducing program trading. The transaction tax should be set at a level that would reduce arbitrage, no more than 1% of the total cost of the transaction.

    Having been unemployed by choice in 1999-2001, I saw the very early part of the bias against the long-term unemployed. The mismatch between the skills required and the skills that people have has grown, but not in the way that most people think. As with many other things, jobs have been de-skilled to a point where people who hold college degrees find it difficult to be paid a salary commensurate with their education and experience, but if they try to move down the job market, they have little chance of being hired due to being “overqualified”.

    I believe that Norway nationalized its banks 20 years or so ago after a crash similar to Iceland’s, and then as they got sorted out, they went public again, with the government retaining an equity stake in the banks. They didn’t get the big bailouts that our banks did, and are still subject to much tighter regulation than our banks are. It is interesting to note that the amount of bailout money that banks got is almost equal to their profits over the last six years.

    I am interested in the Bank of North Dakota, which is owned by the state and which acts as transfer agent for busineses and issues student loans, and does it more cheaply than commercial banks. A lot of the profit has to be squeezed out of banking, which means a reduction in the amount of credit extended and making it more difficult to qualify for credit. Zero interest rate policy is a disaster for savers, but it’s what keeps the federal government able to borrow. Unfortunately, doing what I advocate would mean a multi-year depression.

    Much of what is said about retirement planning is old news that the cheerleaders at CNBC won’t tell you. Read “A Random Walk Down Wall Street” by Burton Malkiel, which was published about 30 years ago. He argues that it isn’t possible for actively managed funds to beat a stock index, such as the S&P 500, over the long term because transaction costs will eat up any excess return. If I took any lesson away from my time studying the financial literature, it is that transaction costs are a significant factor, and MUST be considered. Most of the time, they are not, and there are shelves of papaers in the literature that will point out this error.

    This can be seen by an example. Suppose that you own a hundred shares of any stock. The only ownership costs that you incur are the sales commissions when you buy it and when you sell it. You are not paying 1-2% per year for the privilege of holding the stock, as you do in a mutual fund. Even tools that are geared toward the small investor, such as optional stock purchase and dividend reinvestment plans, are not that great because many plans will charge $1-5 per transaction to buy and a small amount of money to reinvest your dividends. You also lack the ability to buy at a set price. You take the price that the company gives you, which is set by the transfer agent. It’s also worth noting that once you get above about 12 stocks, provided that they are in different industries, your level of diversification approaches that of an index.

    A benefit of index funds is that there are only two situations where the manager needs to make a transaction: when the assets of the plan require that they buy more of the stocks, which is at most weekly, and when they have to divest shares because a company is being removed from the index. This affects about half a dozen stocks annuually if you are considering the S&P 500. I am presuming that the fund manager maintains an adequate cash reserve to make redemptions without selling stocks. These factors reduce the churn that increase management expenses, and they should be a few tenths of a percentage point of asssets under management, not 1-2%.

    A factor that may reduce what people need in retirement is to eliminate what they are currently putting into retirement plans plus 7.65% to reflect the Social Security taxes that they pay on money that is tax-deferred when putting it in the 401(k) or other retirement account when they calculate how much money they will need. Of course, if they are not saving anything toward retirement, no reduction is possible. Only about 20% of people who are eligble to contribute to a 401(k) plan contribute the maximum allowed by law.

    When they started the Thirft Savings Plan back in 1987, I had the option of putting up to 10% of my pay into it, as well as putting up to 15% into it for six months to make up the three months of contributions that I missed because the plan didn’t start until April. At the time, I was making $33K per year. I was paying Philadelphia wage tax plus New Jersey income tax, plus I had student loans to pay. I made the choice to put in 15% for six months, after which it would be reduced to 10% of my pre-tax income. With a promotion in 1992, I wound up with a balance in the TSP of a little over three times my salary at the time in 1999.

    The problem with 401(k) plans is that a lot of people don’t put in even enough money to get the company match. There was a law passed in 2009 that forces people to opt out of employer-provided 401(k) plans, but it requires people to contribute a default amount of only 3% of pay, which might not be enough to get the employer match, nor does it automatically raise constributions over time. 401(k) plans benefit the company much more than the employee because a 401(k) plan makes the cost of retirement benefits known to the company, but not the employee because market risk (the risk of making a given return on the money) and longevity risk (i.e. outliving your money) is shifted to the employee. Under a defined benefit plan, the old-fashioned pension, the company shoulders both of those risks.

    401(k) plans were NEVER intended for retirement. They were intended to be a tax shelter for corpotrate officials to allow them to sheltter their bonus money, nothing more.

  2. If you’ve gotten very far in “The Great Deformation”, you may well have liked the part about how the Reagan military buildout had been turned down by Eisenhower as only marginally useful.

    From where I sit, the temptation of having a large standing military is to use it. Public opinion plays an important role in shaping military policy when people need to be drafted. SInce at least the first Gulf War, my rule of thumb for when things are getting serious is when they activate the graves registration specialists, all of whom are Reservists. They handle the remains and contact the families. They also have a higher than average rate of PTSD, as one might expect. It is interesting to note that the drone pilots are turning out to have more war-related psychological issues than pilots who fly planes large enough to sit in. Working in an office at Nellis Air Force Base will do that to you.

    When I first started in federal service, I was advised by one of the old timers to pick a weapon and build my career around it. His was the Squad Automatic Weapon (SAW), which looks like an M-16 with a really big drum-style magazine, 100 rounds or so, and a bipod on the barrel. I may well be wrong about the caliber of the SAW, but the description gives you a good idea of what it looked like.

    The military-industrial complex is a huge jobs program.

  3. A message ticker I saw about 6 weeks ago, on one of those piped in business video programs you see in building lobbies now:

    “College educated can expect to be hired for menial jobs.”

    We’re done.

    What I find scary: the deterioration of morals and the way people are treated by an interviewer. They do not care what they say or what they do and I just don’t mean “let you know either way.” I’m talking about lies so patent that they think you’re some kind of born yesterday fool or you are some dumb little kid who will swallow what they tell you.

    The bit with “my HR department in Israel will call you for an interview” is the best one evah.:( For love of GOD: why are you people doing this???

    The next runner up is the jerk who told me “Call me if you get a job.” Can you say “yo mama”? He just did. For love of GOD; why are you doing this to us?

    For your own sanity walk away from these creeps, if you can: find your own way to get by, if you can — if you can swing any of those suggestions I gave in another thread, by all means go for it. Even if this means working for your thousand year old Uncle Marcel at his one man show of a widget factory — get away from these mental cases in the job market and do it now.

    I googled the article and here is what one person replied:

    I have unemployed for nearly 2 years. I have a Masters degree, am a certified project manager, and have led organizations as large as 1,900 employees with 12 direct reports. When I was laid off due to company downsizing (15 of us went, including the president!) I thought that I job hunt would be like my others: submit my resume and wait for the phone to ring. Problem is, it didn’t ring. I have sent out more than 400 applications in the time I’ve been unemployed. What do I have to show for it? TWO calls.

    I have used headhunters, turned to “blast by fax,” even paid for the $100K and above job sites … to no avail. My phone hasn’t rung in 6 months. I have a folder full or reject emails. Zilch. Zero.

    I have been drawing the max unemployment the state allows (based on my last salary) for nearly 2 years – $1,600/month. I’m fortunate to have substantial savings and some rental properties that supplement that paltry sum. I wonder, however, if I will ever return to work again. I’m 60 and the clock is ticking.

    These people never knew I was out of work. I told them I was running my own company; what the heck; lots of people are self employed at home in a home office. Nothing to be ashamed of and the business is as legit as any other brick and mortar business.

    The trend now is also to telecommuting…and home offices.

    Another hint: don’t be so bleedin’ honest on yr resume. You think the rest of them are???

    1. I admit I lie on my resume because I have no choice. I lie through my teeth and tell employers that my freelance business is doing wonderful but really like their company and want to join it. Hasn’t helped but this lie is starting to get me second interviews (had two 2nd interviews this year alone).

      Some of the interviews I have gone on have been offensive, like the one radio station owner telling me I know radio (well duh I worked in it for years and my major was radio)but strictly based on age he couldn’t hire me because I apparently don’t know new artists. Instead he hired a recent grad who worked there 2 months, quit and now hiring again. Or the guy from India who bluntly told me he will only hire thin, nonsmoking childless women. Or the countless interviewers who ask me if I have kids or planning to, or those who bluntly ask my age. Or those who insult me because I am unemployed and there must be something wrong with me, and how dare I apply for this job. I’ve walked out of a few interviews in tears and wondering why people are this cruel.

      1. Dawn:

        What you tell them: “Things are fabulous but they are a little slow right now so I wish to get back into the corporate world.” Maybe throw in how you’ll sacrifice your business for the fantastic opportunity to work for them.

        The bigger the line of bull, the better.

        What you are experiencing: This is no class behavior and these are the kind of winners who have a lack of a better way of putting things. They need Emily Post shoved up their nether regions until these socially and emotionally retarded gits once and for all get it that what they are saying is crass and rude.

        Like they used to say in the day, didn’t your mama raise you better than that? Fooey.:(

        If that guy from the radio station was that on the level, he could have given you some type of skill set test to see if you indeed knew who the newer recording artists were. This is why I am saying it’s all a big come on, fraud and lost cause. He could have asked you a half hour’s worth of questions about whatever music genre it was! So this is just his way out. Go and hire somebody who knows rap, blues or whatever inside out and back again…but if they have NO real job experience, you’ll get what you pay for — you always do, sooner or later!

        And that guy from India is treading on very thin EEOC ice. Would he like somebody to sue him? It can happen.

        They usually hire their own. This is another reason why bringing that bunch into this country is a torrential disaster of an idea.

        This is also a cultural problem. Who needs to work with a pig like that?

        I am surprised you didn’t tell these people where to go.

        And I will bet that these were very small companies and nothing notable and well known. Monkeys run these places; they are not run by a real board of directors and the stock’s not publically traded. Usually these companies are owned by winners who shouldn’t own a pet rock — they usually take over running the company from a relative or a parent. Joy.

        The Result: not the smartest people run these little hole in the wall companies. As I said, they keep the status quo and hire only the same type of crap that’s in there as employees right now. Nobody smart with a personality or any type of WOW factor need apply.

        Everybody lies on a resume. It’s a given — and every HR department knows this.

        And this is why it is useless to depend on a potential employee’s references. We can be giving them the names of buddies, neighbors, relatives, etc — and these are NOT actually anybody who can vouch for our work.

        Besides, name a reference that’s a legit one who will say horrible things about YOU!

        Don’t depend on references, depend on your gut…but that’s too far above this bunch of shits.

        I know a guy who hired his assistant based on a 5 minute interview.

        She had no real experience but he trusted his gut. Said she was one of the best employees he ever had. (this man is no lightweight — he went to a top notch college and has 2 advanced degrees and is a math nerd like no other.)

        Clearly he had nothing to lose. And he went ahead and hired her.

        It is a very sad state of affairs out there. The fact that common courtesy is gone is what is frightening. What does it cost to be polite to an interviewee? You have to play silly games, give trite statements and do things to the interviewee that would make the skin of your sworn enemy crawl??? What a disgrace.

        I’d have not only taken that comment to the EEOC but I’d have had the press get in on the action.

        Patronize NO company that mistreats a job candidate. Do not buy their product, do not pay for their services, do not recommend them for what they offer. Get the word out to everyone; find something like an Angie’s List and take your story to the list and post every sordid detail of what happened to you at the interview.

        Suppose you told this clown “And you can go back to (#(#!! India!” Gee, I’ll bet you’d have seen a real ruckus happen then. Ha.

        1. I do tell them that (basically that I freelance but want to return to the corporate world)and sometimes it works, sometimes not. Yes I have had people tell me they want someone who has worked for an employer for ever and freelancers need not apply. I suspect because many think if one works for themselves (or it appears they do)then they are less likely to put up with the bs many companies want.

          The sad thing is about that radio station is that was the second time they called me for an interview. The first was years ago and apparently the owner knew who I was and called me in to meet me. Yes, very bizarre to say the least. I even told him in fact I do know modern artists and named a few but apparently not good enough. He did hire a recent grad and the person quit soon after. One day he will get someone who he will reject and that person will sue for this.

          Unfortunately I have come across that problem with big Indians and Middle Eastern people where they don’t hire women in management positions and often harass the women they do hire (always subordinate positions). This reminds me of a situation my brother had where he was hired by a Japanese company that had an Illinois branch. I remember him saying that none of the women were in management positions, including women that had been there years and when I asked why he said because they are Japanese. It didn’t apparently bother my brother at all and he would justify it by saying it’s their culture. Personally it would have bothered me if I was hired as a secretary or an assistant only to see a recent grad get a higher level job than me.

          1. Don’t tell them you freelance.

            Tell them you hve a bona fide COMPANY. Tell them you are an LLC.

            They will think you took the time off to fart around and do what you want, disguised as “freelance work.”

            Or say you work for a friend…turn this into a “Mandalay Industries” kind of thing. Have the friend say he or she is the company owner. There are lots of 2 person shops out there.

          2. I have thought of having someone else claim to own the business because I then can say I work for them.

  4. And here’s a thought, too:

    We have no assurance nor any guarantee that the job we interviewed for actually exists. Unless you know somebody who works there and that person can tell you if anybody was hired for the job.

    I myself have seen it many times, at companies I worked for.

    I was at one job for about a week when the boss said to us, “I am hiring more people. Tell your friends.”

    I called my former workplace (I was laid off from there the week before…so was the whole company; those who were remaining were cut to part time hours) and passed the word.

    One person came over and had an interview….

    And then he hired nobody.

    I called her and told her what happened. She couldn’t believe he made that kind of a fuss to interview and then decided not to hire anybody at all.

    This happened in 1997 when things were still good. Now it seems everybody has lost the script and gone loco.

    Another company I worked for had an ad in the paper for a welder. We got perhaps 4 calls. The boss took the messages and never called anybody back. There was also never anybody hired. I guess the boss changed his mind; I never asked.

    At a third company, they wanted sales personnel. The boss called in 3 gents and interviewed them all. One was called back for a second interview. He was requested to forward the names of his references.

    Nobody was ever hired. The guy who got the second interview called about 2 weeks after he was there, asking about the status of the job. The boss would not return his call. Nor did her assistant ever shoot the guy an email telling him that nobody was hired.

    1. There were two interviews where they NEVER hired anyone and the ads are both running 5 years later, no kidding. One was a local paper (as in this small town) and the second was for a marketing position in a town about 20 minutes away. Went for the interview only to hear nothing. The marketing job though was pretty ridiculous because they wanted the info on my 5 last bosses such as where they are. I have no idea where any of my bosses are and 5 bosses ago we are talking probably 15 years ago.

      1. Something is crazy when an ad appears more than once in a very short time span.

        A short list of what is wrong with that company:

        Don’t know what they are doing
        High turnover
        They are collecting data and this is NOT a real job ad
        They are looking for a needle in a haystack…the more ads they run, the better their chances of finding THe Perfect Employee

        I would have gone there in person and demanded an answer. Started a ruckus. Don’t go home like a good little midshipman and shut your mouth for good thereafter. I’d have told that person who wrote the letter that he or she was as blunt as an ass boil.

        Or sent the letter back by fax, to the company pres — and written a nice Nastygram at the bottom, stating that the letter writer needed to go back to fifth grade to learn how to write a correct business letter and back to fifth grade to learn courtesy and tact.

        Bullshit to these people and their damn rejection letters. As I said, this is what you get when a monkey writes the letters.

        Take back your job search. Tough darts on ’em.

        THe last 5 bosses and where they are??? Anything could have happened. Unless you were very close with that person, you won’t know the person’s whereabouts.

        People die, move away, lose touch — maybe the company was disbanded and you don’t know what happened to the person who was your immediate supervisor.

        And suppose you give the names of 5 friends, relatives, college mates, boyfriends, neighbors and say they were your bosses???? Asking for the names of bosses proves nothing.

        ANd there is also a pesky little thing called “being sued.” This request for names is nothing more than a list of references. They want to contact these people to ask about you and your work performance. Suppose the bosses do not want to give an opinion of you and your work habits? Or a lot of time has passed and they are fuzzy about the dates you were employed, or fuzzy about your job title and job duties? It happens.

        Meaningless to ask for “the names of the last 5 bosses.” This shows you how stupid the hiring process has gotten and it shows you how stupid the people are who are conducting the candidate search.

        And you gotta wonder about a company that wants that kind of info. It’s trite and not only that, kind of shifty and shady.

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