This blog is not going to debate the positives or negatives about the Health Care Reform Bill. I'm not going to give you my views either way (although I'm sure you can figure them out). Instead, this blog is to help educate people and take away their crutch so they have to think for themselves. Once we start thinking for ourselves, we will become a better society.

For the past few months we've heard non-stop news about the anger of people over our Health Care reform. They say that the reform is Socialist, Communist and even Marxist. Before someone just regurgitates what the talking heads on Fox News tell them, they should learn the meaning of the words. If they do, they might be able to articulate their issues and have a decent, civilized conversation about their views.

The big, overarching theme about the Health Care reform is that it's too much government. It's our government telling us what we can and can't do. It's them controlling our health care. Key phrases to remember for the rest of this blog: "too much government" and "controlling our health care."

Now, let's define Marxism, Socialism, and Communism; all of which are a different degree of Socialism.

Marxism is comprised of three main characteristics. First, it requires no government; no controlling body. If something needs to be done, someone or some group steps in (not directed by a controlling government) and does it for the greater good. Secondly, there is no private ownership of anything. If there is something needed, you just take it. Finally, there is no religion in Marxism. Marxists belie that religion was created by the uber rich to keep the masses happy about a meager existence.

Socialism is similar to Marxism for the masses but one big exception: government. There is a government that owns everything while the masses own nothing. Because the masses own nothing, they are expected to do whatever is necessary for the greater good. Socialism is a stepping stone to Marxism because after the masses have been "trained" to do everything for the greater good, the government dissolves and leaves the society in a Marxist state.

Communism was initially Marxism. However, Marxism was a Utopia that could never be achieved and Communism became known as a failed, corrupt, uber-socialist society.

Every Socialist society has some industries that the government has taken from the private sector. Every government (yes, even the US) has some degree of socialism because there are some things that the private sector just can't do.

This blog is not to look at why these societies ultimately fail (think: human nature, corruption and lazy people) but rather why the Health Care Reform cannot be labeled as any of these. Fist, people are saying there is "too much government" in the Bill. If that's the case, it cannot be Marxist because Marxism has no government. Secondly, people are saying that the government is taking over health Care with this Bill. This is false. The government is not controlling the industry, just requiring people to buy something controlled by the private sector. That takes out Socialism and Communism.  Finally, all forms of Socialism would make health care free.  This bill does not make health care free.  We will still be paying our own money to a private insurance company.  Want to know the real, dirty secret that the Republicans aren't telling you? The Health Care Bill is the best thing to happen to Capitalism! Capitalism is defined as a society where the private sector makes money without government interference. So you can't call the Bill Capitalism because government is interfering. But, what is the ultimate goal of a company in a Capitalist society? To have every man, woman and child as your customer so that you can make the most money possible. Isn't that what we've achieved here?

I'm not even aware of a term for a government supplying a private industry with every possible client they can have. But, I can assure you that throwing around terms like Socialism, Communism and Marxism to describe the Health Care Reform Bill will make you look stupid.

Lastly, let's not forget that the government is not taking over health care. They are not providing a "Public Option." Even if they were, that wouldn't be socialism because they aren't taking over the industry but instead, creating competition within the private sector. So please, don't walk around saying that you don't want your health care to be run like the DMV. If anything, read this article about why it would probably be more efficient if it were run like the DMV.


There are volumes of books that make up the definition of the three types of societies I have summurized above. If you are using them to describe the Health Care Reform Bill, you obviously don't read referrences or look up definitions. Instead, you will just take my word for it blindly. But, just in case you've made it this far and want to read more, here are some wikipedia links:
Marxism
Communism
Socialism

We've recently outgrown our 4 door sedan and decided it was time to upgrade to a SUV/Crossover.  We reserached and drove 5 of them before deciding on the Mazda CX-9.  Our insurance company offered a new car buying service through ZAG.  ZAG is a thrid party that negotiates pricing with dealerships and then offers you a "guaranteed, no-haggle price."  They email you a "Pricing Certificate" that you take to the dealership who then sells you the car at that price.  On ZAGs website (zag.com) it says "... allows us to guarantee upfront pricing and a sales experience that is fast, predicatble, and hassle-free."

 

We drank their cool-aid and built the car on their site that we wanted.  I researched the inventory at our local Tustin Mazda and found a 2009 CX-9 Sport Black with Black interior and power/heated seats.  ZAG's pricing showed that Tustin would give us $5,800 below invoice!  Not MSRP but, dealer invoice.  Our total price would be $22,971 for a car with a $31,000 sticker price.  I printed the Pricing Certificate and headed in to Tustin Mazda.  I sat down with the sales person, handed him the inventory for their website and the pricing certificate and said "I want this car at this price."  He went to talk with his manager and came back saying "I don't know where you got that inventory but we sold that car months ago.  We don't have any 2009's left but we can get close on a 2010 if you want."  I thought it was BS but said "fine, what's the price?"  I went outside with Cherish and Ainsley while he went to talk with a manager again.  While we were out there I spotted a Black, 2009 CX-9.  I checked the VIN and it was the exact one I had printed and asked to buy.  I went inside to see what they would come up with on the 2010 (just in case it was going to be really close in price) and wasn't going to mention the car out front right away.  They were $6,000 over what the $22,971 that we had intended to pay.  Not sure how they considered that "close" but, that's another story.  I then told him I saw the car outside so we went outside to verify the VIN and indeed, it was the exact car.  This is a perfect example of a bait and switch program; they have a car online for a certain price and when you get there, they try to sell you the newer model at more money while lying about their inventory.  Very disappointing from a dealership that has a good reputation.  

We went back inside while the salesperson asked about the car.  He came back about 10 minutes later to tell me that they couldn't sell it to me for my guaranteed, no-haggle price and that it was going to be $2,000 more.  I asked for his manager who came out and gave me some story about how ZAG messed up on the pricing.  I said, "I don't care who messed up.  This is a guarantee so, I want that car at that price."  I knew I was getting in to a losing battle so we walked out.

The next day I contacted ZAG and asked them if they were going to stand by their guarantee.  They said they would research the pricing and get back to me.  About an hour later they came back and said that the dealership was correct, there was an incentive that was being counted twice on ZAG's website and that the price was $1500 more, bringing it to $24,471.  I pushed them on the "guaranteed" price and they wouldn't do anything.  So, they say there is a guarantee but there is actually on guarantee.  They blamed the dealership for putting in the wrong price.  I searched and found that dealerships all across the country had the exact same price so it wasn't Tustin Mazda, it was ZAG's fault.

I ended up talking with Jim Feinstein, the owner of Tustin Mazda, and we talked through the issues.  He was a little upset when I told him I felt I had been a victim of bait and switch but, anyone reading this blog, tell me if you would have though anything different.  I provided a price (that they didn't want to honor) with a VIN number they looked up in their computer and then claimed it was sold months ago.  Only after I found the car myself did they cough up to the fact it was there and that they didn't want to honor the price.

Who is to blame?  Mazda USA?  Tustin Mazda?  ZAG?  I think ZAG.  I'm shocked that they wouldn't honor their guarantee!  How can you base your entire company on a simple guarantee and then not honor it?  I wonder what their investors would think if they knew that the single item that allows them to be in business is a lie.

I recommend staying away from ZAG.  It doesn't give you any guarantee and frankly, it added 3 extra days of headaches than if we had just went in to negotiate to begin with.

After all of our hassles, Jim and I came to an understanding and negotiated a good deal.  It wasn't the $22,971 but it was within a few hundres dollars.  We love our new car!

Starting in July, you can trade in your old "clunker" for a new car and receive a $3500 or even $4500 voucher. The purpose of this bill is to put more fuel efficient vehicles on the road and get rid of guzzlers. It sounds like a good idea but their oversites have failed to make it a great idea and therefore have failed completely.

What would have made it better?

• Why just improve gas mileage? Why not improve emissions too? A car from 1990 has a higher emissions standard than a 2010 model. Why not get rid of the 1990 car and get a cleaner burning car on the road?
• Why not use this as a time to help stimulate the economy and help the failing car manufactures? Since it’s the US tax dollars that are paying for the vouchers, why not have given an extra bonus for buying a GM, Ford or Chrysler?

 

There are so many problems with the implementation that the program is worthless. First, you have to trade in your old car for a new one that improves the combined fuel economy by at least 2 MPG for light duty trucks and 4 MPG for passenger cars. If you improve your truck or car by 5 or 10 MPG, respectively, you will get the full $4,500 voucher. Why is the 2/4/5/10 MPG a problem? Because, in 2008, they changed the way they rate MPGs of cars. Starting in 2008 the EPA changed the rating to be at a faster speed, faster acceleration, air conditioner on and colder outside temperatures. This means that the new car ratings are more accurate but what it really means is that the MPG rating for your "clunker" is going to be inflated and makes it almost impossible to achieve the improvements needed for the voucher.

My dad has a 1993 GMC Sonoma truck. It’s considered a light-duty truck and therefore requires a 2/5 MPG improvement for the vouchers. The best way to describe his 16 year old truck is to call it a clunker. The EPA says it gets a combined 18 MPG. In order for him to qualify for the $3,500 voucher, he will have to buy a vehicle that gets 20MPG or better. Good luck finding that in a truck. After calling the NHTSA, they recommended he buy a sedan or a hybrid truck. Get real! A GMC Sierra Hybrid starts at $39,365 and it’s rated at 21/22 MPG for a combined 21 MPG. The non-hybrid GMC Sierra starts at $20,350 and is rated at 15/21 MPG for a combined 18 MPG. That means a 3 MPG improvement costs $20,000. The improvement in emissions and gas mileage are virtually nil. The improvement over a 18 MPG GMC Sierra and his 1993 GMC Sonoma are a real 3 MPG improvement (real, not over inflated EPA ratings) and a huge improvement in emissions.

The government is not encouraging my dad to buy a new truck. Therefore they are not:

• Getting rid of a large polluting vehicle
• Improving real gas mileage
• Stimulating the economy.  For a bankrupt American car manufacture!

-FAIL-

 

 

AIG is going to pay out $165 million in bonus after 1) taking $170 billion tax payers dollars and 2) losing $61.7 billion in 2008 Q4, the largest in corporate history.  People should be angry about this!  It's appauling for a company to lose money and pay bonuses at the same time.  How do I get a contractual obligation that if my company loses $61.7 billion a quater that I get a bonus?  This is just another example of corporate greed putting themselves before anyone else.

I think the Obama administration should stop payment on the checks and put a retroactive law in place saying that any company talking bailout money is not allowed to pay cash bonuses to their employees or executives until over dollar is paid back.  Since tax payers as a whole own 80% of the company, we should all be allowed to cast a vote for the board and CEO to get rid of these crooks!

I got the email yesterday for a free Quizno's sub.  Apparently they are trying to give 1 million away for free.  I signed up, my friends signed up, and my family signed up.  I didn't bring lunch in to work today because I was looking forward to a free sub and (paid) chips and a drink.  Three of us guys at work went to Quizno's in Newport Beach at East Bluffs and were greeted by the manager saying he can't afford to honor the coupon.  He said he could give us a free drink but not a sub.  I've had Quizno's once in my life and didn't care for it because it was too salty - I figured a free sub would give them a second chance to redeem their food and it might have made a future customer out of me.  Instead, we walked next door to Carl's Jr.

I talked to a friend of mine, Scott (honorable mention here: Why Wikipedia is worthless), who took his family to get a free sub and the place turned him away because they had "hit their free sub quota."

Quizno's website has a tracker about how many free subs they have given away.  It should say how many email addresses they have collected with the false hopes of a free sandwhich.  I feel bad for the owners of the restaurants because their corporate office wouldn't subsidize their promotion and didn't think about their store owners going out of business to honor the free subs. 

To Quizno's marketing team: Please add back 8 to your counter because these "free subs" aren't worth the tree we've killed printing them or the carbon emissions our cars have emitted to get there!

 

Want to read another complaint about Quizno's Million Emails Collected And No Subs Given in perfect Iambic pentameter?  Check out Neil's Blog. - just kidding about Iambic pentamter, it's actually haiku.

You can read about my saga with the Wells Fargo Loan Modification department, and you you can read about how angy I am about my tax dollars going to bailout people while I continue to suffer over here.  But, how many of you are happy that you have a 30 year fixed mortgage?  I remember signing escrow papers on our current house and the lady had to do a quadruple take to see that we had a 30 year fixed.  She said she couldn't remember the last time she saw one.  That made me feel good that my parents taught me fiscal responsibility. 

I don't have to watch the news to see the financial crisis the country is in, I only have to turn to my friends that the mortgage companies have screwed.  Or the dozen people I have layed off in the last 12 months, or all my friends sending their resumes out.  I get angrier and angrier by the day about how everyone is hurting.  I feel bad that I still have a job and I have a fixed mortgage that I can afford (for now).  I'm not the one that got burned - or am I?  My last blog about my experience with the Wells Fargo Loan Modification department has generated quite a stir with at least 40 views a day and multiple emails from people in the same boat.  I started to write a new blog about the new economics and another rant about how I'm unable to take advantage of the low interest rates but was side tracked during my research.  I thought of an interesting situation: what if we had bought our current house and previous house with an interest only loan?  

Our first house was a modest 1000 sq. ft. in Southern California.  Interest rates were falling and prices of houses were climbing.  We looked at a house in a neigborhood we liked but decided to wait a few months and save more money for the down payment.  7 months later, the same houses had appreciated $70,000 - not even close to what we had saved (my losses started before I even bought a house!).  We quickly bought a great house in a great neighborhood while we could still afford one.  We had a 30 year fixed mortgage and refied after two years to bring our rate down to 5.325%, wow!  We lived there for about 4 years and then moved across town to a bigger house.  The previous house had appreciated by 100% so we had a good down payment for the new house.  Again, we went in to a 30 year fixed but interest rates were up and we locked in at 6.325%.  In the 7 years we've been paying a mortgage, I calculated that we have paid (hold on to your seat here) $208,000 in principal and interest!  Then I went back to look at the rates we could have got if we went interest only and calculated that we would have paid (only) $128,000!  This means that we have paid $80,000 more by paying principal at a higher rate than an interest only at a lower rate.  That $80,000 is real money, not paper money, not funny math but, actual money that came out of our checking account.

To add salt to the $80,000 wound, since our current house has depreciated enough that we are now upside down, we would have the EXACT same equity in our house if we had been paying interest only.  AND the banks and government would be trying to bail us out right now.  They would be helping us get a better interest rate.

I've never felt worse about my "fiscally responsible" 30 year mortgage until today.  How about the government help those who helped themselves?  All I want is to drop my interest rate to 5% and not have someone laugh at me when I say I have a high rate at 6.325%.  I'm not asking for the bank to lower my principal.

Tell me, why should I stay in my house?  The toughest choice is the right choice here.  If I were unemotional, I would walk away from my house and let the bank take it over.  In about 3 years my credit would be back up and I could buy something new at half of what they cost now.  That's the right move and I don't think I can do it.  We've poured too much time and work to make this house our home.  We're emotionally attached.  But, another year of our house declining and the government and banks pushing me aside and I will be pushed to walk away.  I won't be the only one doing it either.  Watch the economy collapse in to a dark abyss as the fiscally responsible people get fed up and walk away.

Update 8/4/2009:
Mortgage Modifications Moving At A Snails Pace. What a surprise! But, the real story isn't being reported... why isn't anyone reporting that Wells Fargo is hurting people's credit and taking away homes by telling everyone they won't help until they are late on payments? And then, after your credit has tanked, they deny a modification!

Interest rates are the lowest in four years, foreclosures continue to skyrocket, banks continue to crumple, taxes continue to go up and I want some help.  I have a fixed 30 year mortgage with Wells Fargo at 6.375%.  I have never missed or been late for a single payment in the 3 years we've had them.  Same story for the four years in our last house with a different loan.  I'm a wet dream for a bank in this economy.  With all the bad in their portfolio they need me.  Armed with that argument I called Wells Fargo this morning. 

 

After about 15 minutes on hold they took my information and a few hours later a local refinance specialist called me back.  I explained I was looking for a lower rate at with the same 30 year fixed and he told me he could get me a 0 point loan for 5.25%!  I was skeptical since he hadn't actually asked for my account number so I said: "Does that mean we qualify for a conforming loan".  He asked what my principal was and aftwerwards he said "oh, that changes it."  He did some quick looking up and came back with "It's the same rate with the special conforming (under 729k but over 417k), 0 points for 5.5%."  I nicely pointed out that that is actually a quarter point higher and he sort of shrugged it off.  Testing my luck I asked, "Do I have to have 20% equity in the house for that rate?" to which he replied "Yes."  Oops, another strike against him - as with everyone else, I don't have 20% equity anymore.  When we bought the house we put 26% down; zillow now says the house is worth $10,000 less than we owe on the house.  So, I personally have lost over $200,000 in the past 2.5 years and haven't asked the bank for anything.  Armed with yet another piece of this puzzle, I asked the salesman what my options are.  None, nada, zip.  Wells Fargo will not help me out.  He did give me another number to talk to the Loan Modification department.

Fast forward a few hours to the rude people in the Loan Modification department...

I talked with a lady there and started out saying that my interest rate was high and I wanted them to lower it.  She laughed at me and said "did you say it was 'high'".  Assuming she was high (in another sense) I said, "Yes, it's high.  Your bank offered me 5.25% this morning for 0 points but I don't qualify because I don't have enough equity in the house anymore."  She told me there was nothing they could do since I was a good customer.  Seriously!?  "There is nothing we can do because you are a good customer."  What the hell is wrong with the corporate world?  She said I would have to be deliquent on my payments in order to qualify for them to modify my interest rate.  She made it very clear that I have to continue to be a good customer and make my payments on time but that because of that, they can't help me out.

Wells Fargo would rather me walk away from them than help me with a lower payment.  And there isn't a person in the world that cares about my "plight."  Someone from Wells Fargo, please tell me why you want to get rid of a good loan on your sheets because you don't want to give me even a 6% loan?

Why is it that Government will pledge $200 billion to help Freddie Mac and Fanny Mae and another $700 billion to bail out financial institutions but they won't give $25 billion of that $700 billion to the Big Three? Also, why the hell does the government allow $700 billion to be used to help the economy and there is no clear picture of what they will be doing with it.  Everyday they are changing their strategy.  In fact, yesterday Treasury Secretary Henry Paulson said that he believes our major financial institutions have been stabalized so the money won't be going to them.  If they are stabilized then I think we should get our $700 Billion back!

Back to the Big Three bailout: the Democrats are pushing for the bailout while the Republicans are trying to stop it.  I think the reason can be summed up in one word: Union.  Democrats are very union friendly and Republicans see them as a hindrance on business.  The Republicans are saying they won't bailout an industry that isn't making any moves to help themselves.  How about giving them the money they want under the condition that the unions disappear?  Lower the salaries and the costs to build the vehicles will go down which you can pass on to the customers so your sales go up.  There was a time and place for unions but now there are Federal employeement laws that make a union unnecessary.  I bet if you added that stipulation in to the bailout the aisles would flip; Democrats would be calling foul (after all, who pays for their elections) and the Republicas would be in support.  This country isn't ready to get rid of unions so on a more realistic idea, force high MPG regulations on them.  I want to see 40 MPG gas burning cars (not unproven hybrids) by 2015.  If you can't have 50% of your cars meet that by 2015, the government loans come due in full and you will have to sell off your assets to pay it off.  No more long term loans, give them goals to meet.  If they meet the goals then everyone wins.  If they miss the goals then we aren't out of money for too long.

Frankly, I don't think we should be bailing anyone out.  We got to this place because of greed and businesses not being regulated enough.  Elected officials will never make the hard choices and never be firm enough to make this work.  Taking more of my tax dollars and giving to a car company for a car I won't buy (give me 40 MPG and we'll talk) will only delay our problems and will vaporize more money to get there.

In Sarah Palin's interview on Fox News (11/10/2008) she made mention about the bloggers in their parent's basement wearing pajamas.  Off topic: I guess it's only mamma's boys that can't get dressed or elite media in this world?  Back on topic: She said the book ban was a lie.  That "Harry Potter wasn't even published when [she] was the Mayor of Wasilla".  Unfortunately, that's not true.  She served two three year terms from 1996-2002.  The first Harry Potter book was released in the UK on 6/30/1997 and later in the US on 9/1/1998.  Clearly she was serving as Mayor during that time.

Maybe it was an oversight or maybe it's just another "fact" that she is trying to slip through us mamma's boys.  Either way, we need to keep her honest so we don't have to see her again in 2012.

 

I've blogged about the crisis before so I won't reopen my wounds here.  The problem with the government bailout is that it only helps the lenders and the people that took the bad loans.  It ultimately hurts all tax payers and it hurts us 30 year fixed people that put money into our house even more.  Here's why:

 

We put $300,000 down on our house.  It has depreciated about $100,000.  I have lost $100,000 and the bank hasn't lost anything.  I can't write down my loan for the depreciation because the loan is still less than the house.  The people the government is looking to bail out didn't put any money down and their house depreciated $100,000.  If they go to find a new loan, the bank will have to take the $100,000 hit and nothing happens to the home "owner". 

No one knows when the housing market will stop it's downward spiral so investors and the market have no idea how much they will actually lose.  The bailout is designed so that the government will buy these bad loans from the lenders.  The lenders will sale them at a loss but they will get rid of them so they can finally put a number to their loss and it will make the street a little less jittery.  The government is going to then work with the "owners" to lower the principal on the house and lower their rates.  Remember, the government is me and you; it's our tax dollars that are just being erased by dropping the principal of the mortgage.  The owners now owe less on their house and I still owe the same.  They get a better rate and mine stays the same.  This isn't fair to any tax payer and it sends the wrong message to our kids: if you screw up, the government will bail you out. 

The market is bad and people losing their houses is not acceptable so we have to do something.  Read my idea to help after the jump. More...