The Failure of America’s Political System – Understanding Hyper-Partisanship

govt shutdownIf you are frustrated, disgusted, and fed up with the failure of Congress and the President to address the primary issues facing the country, you’re not alone. According to a Pew Research Poll, more than 80% of citizens don’t trust the government to do what is right most of the time. The fiasco over raising the federal debt to maintain America’s unrivaled credit standing was just the latest example of a Federal Government so polarized that basic legislation and critical appointments are almost impossible.

International worries about our political dysfunction and its causes have echoed across the world in foreign newspaper headlines. On July 13, 2011, the UKs “Telegraph” published a story entitled “System Failure: U.S. Democracy is Nearing its Limits.” On October 17, 2013, Germany’s “Siegel Online International” led with “America’s political dysfunction threatens its global leadership.” Canada’s “Toronto Star” wrote on October 16, 2013 that “Adversaries turn into enemies in U.S. politics.” And, France’s “Le Monde” ran a story on May 16, 2013 titled “Billionaires unchained.”

The questions naturally arise: How did we get to this point? And can our system be fixed?

SOURCE: Gallup®Politics, June 13, 2013
SOURCE: Gallup®Politics, June 13, 2013

A System Designed for 1787

The Founding Fathers – the 55 delegates who drafted and signed the Constitution – intended to establish a government that was much more democratic than any the world had ever seen. Reacting to the monarchical system in England, they strove to define certain rights for American citizens that could not be taken away.Yet, a government ruled by a majority – and therefore susceptible to mob rule – scared them. As a consequence, they founded a constitutional republic where power is spread and counter-balanced among three branches of government: Congress, the president, and the courts. Passing laws is a slow, deliberate process that requires approval from all three of these branches.

This system of checks and balances enabled America to become a superpower economically, militarily, and morally by the 20th century. Unfortunately, our complicated and overly legalistic system can be a disadvantage in today’s fast-moving world with rapidly changing technology, open borders, dependent economies, and international competition.
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4 Strategies to Maximize Retirement Income

This article first appeared in on November 28, 2013.

Retirement Fund 3More than seven out of 10 Americans worry about outliving their income during retirement, according to a recent survey by Prudential PUK +1.57% Retirement. Decades of pension plan conversions to profit-sharing plans, combined with a stock market decline of more than 50% in 2008 and falling real estate values have devastated savings and retirement accounts nationwide. As a result, a combination of post-retirement work, Social Security benefits, and prudent portfolio management is going to be necessary for most baby boomers to retire during the next two decades. Implementing the following steps can help you maximize your post-retirement income so that you remain financially independent during your golden years.

1. Continue to Work

According to a recent Gallup Poll, almost three-quarters of U.S. workers intend to work past retirement age, 40% by choice and 35% due to necessity. Delaying retirement as long as possible makes economic and psychological sense due to the following reasons:

  • Increased Financial Security During Retirement. The last years of work are typically the highest income-earning years of employment. At the same time, most of life’s major expenses – buying a house, educating children, acquiring significant assets – are over, so that a greater proportion of income can be devoted to savings.
  • Improved Mental and Physical Health. According to Carol Dufouil, at a recent presentation at the Alzheimer’s Association International Conference, the risk of getting dementia drops by 3.2% for every year worked past retirement age. Study after study indicates that people who continue to work live longer and are in better health than those who retire at age 65 or earlier, and the benefits are present for those who worked full-time or part-time.

Unless your job is too physically demanding or stressful, seek to extend your employment, either full-time or part-time, as long as possible.

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Does the Bell Toil for Independent Mortgage Brokers?

This article first appeared on on November 18, 2013.

Bells.To paraphrase John Donne’s famous line, “Don’t ask whether you will be affected by the ongoing changes in the mortgage market—you will be.” The recovering but still nascent U.S. economy, the assault upon former industry practices and the uncertainty of the government’s future role in residential housing will severely challenge the capability of large wholesale correspondent lenders to adapt to the new market conditions.

According to the Mortgage Bankers Association’s (MBA) 2012 year-end forecast, overall mortgage volume is expected to drop from $1.7 trillion to $1.08 trillion in 2014. In addition, the ratio of refinance to purchase mortgages will essentially flip-flop, as refis decrease from 71 percent to less than 35 percent of total new mortgages in 2014. Since the bulk of refinancing occurs in the Big Four (Wells Fargo, Citibank, JPMorgan Chase, and Bank of America), they will be hurt to a greater degree by the product shift than their smaller competitors. In fact, the lower volume and the fundamental structural change provide extraordinary opportunities for independent local and regional mortgage competitors to prosper.

Pressures on the Big Four

According to a 2012 study by Harvard Business School professors Robin Greenwood and David Sharfstein, the growth of residential mortgages from 34 percent of the gross domestic product (GDP) in 1980 to 79 percent of GDP in 2007 was spurred by the tremendous profits in the financial industry from fees, as well as the growth of a “shadow banking” system with loose or non-existent regulations.

The subsequent failure of the sub-prime mortgage market and resulting loss of confidence in the larger financial entities to self-regulate have had several results:

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What Men & Women shoppers Can Learn From Each Other

men vs womenJohn Gray’s 1992 book Men Are From Mars, Women Are From Venus confirmed what men and women have always known: The two sexes differ in their perspectives, motives, rationales, and actions. Even though the reason for the differences (nature or nurture) continues to be debated, study after study reflects similar results, and sophisticated companies have adapted their customer outreach programs to account for these differences. Everything from advertising style, message, and media, to product design, store layout, sales training, and customer service policies are designed to appeal specifically to both sexes.

The goal of every retailer is to:

  • Lure shoppers
  • Make them stay in the store longer
  • Influence their buying decisions
  • Turn them into return customers

Failure to address the idiosyncrasies of gender can have real financial consequence for retailers. In a New York Times article published on February 16, 2012, Eric Siegel, a consultant and chairman of the Predictive Analytics World conference, stated, “We’re living through a golden age of behavioral research. It’s amazing how much we can figure out about how people think now.”
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