Tag Archives: politics

Politics explained

The other morning, my children asked me a question that launched me into a discussion of the political parties.  Although I felt that the discussion that ensued was balanced and fair as well as put both conservatives and liberals in their respective doghouses, I am sure that those on the opposite side of the isle would say that I was a conservative Republican wonk at best and a twit at worst.

Here is the jest of my conversation with my three inquisitive, budding historians and political scientists…


Instead of going through the long drawn out definitions, I will use some that an 11 year old will understand, which do not necessarily jive with what political parties in the U.S. would allow –

Liberals believe that we as a people should help our fellow man.  Conservatives believe that we need to help our fellow man.

Liberals care about people to the exclusion of all else.  Conservatives believe that we should help people within the confines of our ability.

Liberals ignore the Status Quo (also known as “the way things are“).  Conservatives believe that past and historical lessons can show us how to handle current issues.

Liberals have a heart.  Conservatives are heartless – they let their brains dictate how they help their fellow man.

Wikipedia has this definition of “Liberalism“:

Liberalism is a political philosophy or worldview founded on ideas of liberty and equality. The former principle is stressed in classical liberalism while the latter is more evident in social liberalism. Liberals espouse a wide array of views depending on their understanding of these principles, but generally they support ideas and programs such asfreedom of speech, freedom of the press, freedom of religion, free markets, civil rights, democratic societies, secular governments, and international cooperation

And this definition of “Conservatism“:

Conservatism as a political and social philosophy promotes retaining traditional social institutions in the context of the culture and civilization. Some conservatives seek to preserve things as they are, emphasizing stability and continuity, while others, called reactionaries, oppose modernism and seek a return to “the way things were”. The first established use of the term in a political context originated with François-René de Chateaubriand in 1818, during the period of Bourbon restoration that sought to roll back the policies of the French Revolution. The term, historically associated with right-wing politics, has since been used to describe a wide range of views. There is no single set of policies that are universally regarded as conservative, because the meaning of conservatism depends on what is considered traditional in a given place and time.

And this very interesting article on their contrasts from 2005 on Student News Daily.

An example

So here was my point with the kids, and I use my sister who I consider liberal and her friends consider conservative (thus illuminating the end of the conservative definition above in that no one definition of conservatism is shared), as my example.  I will use Obamacare as my example –

  1. True Liberals want everyone to have near universal access to healthcare.  Americans, who in general want to do good and help their fellow man, flock to the cause and elect someone with the slogan “Hope and Change” so that they can put this into action.
  2. Pseudo – Liberals who are interested in nothing else other than their own POWER co-op the liberal cause and enact the bill.  This enlarges their POWER.
  3. The American public elects True- and Pseudo- Liberals to CONGRESS.
  4. True Conservatives see the healthcare bill as unsustainable and that it will “break the bank” of the country.  They agitate for repeal of the bill and a return to modest changes to achieve the same aim.
  5. Pseudo – Conservatives who could care less about anything other than POWER accept the role of standards bearer for repeal of the bill.
  6. Obamacare shows some great aspects!  Liberals are overjoyed.  Conservatives secretly are optimistic that it will help but still voice opposition.  The Pseudo- versions of each are locked in ferocious battle, really over POWER.
  7. Obamacare costs spiral out of control (my viewpoint, a given), and overall the administration spends TRILLIONS of DOLLARS.  This debt is sold to, you guessed it, THE RICH.
  8. The public now feels like they were sold a bill of goods on the bill and elect more True- and Pseudo- Conservatives to CONGRESS who promise to repeal the bill.  They don’t have a good alternative though.
  9. Using the True- Conservatives’ battle cry of fiscal responsibility, the True- and Pseudo- Conservatives begin to dismantle the bill and cut taxes (the battle cry of Conservatives of all ilks since Reagan), which as you guessed it, causes the economy to swagger like a drunk man after a binge.
  10. Now, the POOR, who the True- Liberals wanted to help in the first place are hurt because of the Conservative approach to righting the ship.  Who reaps the early benefits of the changes put into the economy now – you guessed it, THE RICH.

And thus the cycle continues before the either of the changes could really take effect – either the original goal of near universal access to healthcare or doing that in a sustainable budgeted manner.

Who benefits?



So who are these Pseudo- guys?

As you can tell from my description above, I believe that there are large groups on both sides of the divide that really don’t care and would rather consolidate POWER than really focus on either agenda.  So who are these guys anyways?

Well, that is for each of you to choose.  I personally will not divulge my list of these Pseudo- Liberals and Conservatives, but i believe that most of us have a list.  I am sure there are some that most of us feel care nothing for us, THE ELECTORATE.

Mapping Liberals and Conservatives to our American political parties

Now this is the question – who is a Liberal and who is a Conservative?  In general, the following formula is assumed:

LIBERAL = Democrat


But that is a terribly out of date notion, at least I believe.  Many of my own views don’t fit into either party – wow, does that make me an INDEPENDENT?  Does that make me a LIBERTARIAN?  Tell me what you think, and next posting will delve into this notion.

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Posted by on May 22, 2015 in BLOG


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Heading for the cliff?


Tax (Photo credit: 401(K) 2012)

With the 2012 election just days away, one piece of news that seems to have slipped off of the front-page headlines is the “fiscal cliff” that is fast approaching.  Don’t feel bad if you’re not entirely sure what that term means, you are in good company.

It probably doesn’t surprise you that our lawmakers have avoided making hard fiscal decisions for years.  Hard decisions don’t make good sound bites.  Sooner or later though, if you don’t make the decision it gets made for you.  In a nutshell that is what has happened with the fiscal cliff.

Over the last few years whenever our legislators failed to agree on long-term solutions to our fiscal problems they punted the ball to just after the election. (Convenient, eh?)  The decisions they left unmade will result in the following in early 2013:

  • Expiration of Bush-era tax cuts
  • Across-the-board spending cuts (“sequestration”) to most discretionary Federal programs
  • Reversion of the Alternative Minimum Tax thresholds to their 2000 tax year levels
  • 2% Reduction in Medicare reimbursement rates
  • Expiration of the 2% Social Security payroll tax cut
  • Expiration of recent extensions to Federal unemployment benefits
  • New taxes imposed by Healthcare Reform

All of that adds up to about $500 billion in tax increases and $100-200 billion in spending cuts.  Even in an era with deficits runing into the trillions, that’s nothing to sneeze at.  The Congressional Budget Office estimates that all of these items put together would have a net drag of 4-5% on GDP next year, tipping the US economy back into recession.

I’m not Chicken Little, and I’m not saying the sky is falling (yet).  Most likely congress will take some action to mitigate the impact or at least “cushion the fall”.  But even if they do you should start thinking now about the long term implications for your business and personal finances, and you should probably be strategizing with your tax advisor.

H. Lee McFarlain, Jr.

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Posted by on November 3, 2012 in BLOG, Business


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The Wall Street Journal, gas taxes, and the fiscal cliff

Boehner Discusses GOP Jobs Plans

Boehner Discusses GOP Jobs Plans (Photo credit: Talk Radio News Service)

As many of you have heard, I have been on a quest to find a new outlet that is fairly centrist socially, lists the facts they reference and do good homework on them, and stick to a conservative fiscal policy.  Where did it land me – big surprise, The Wall Street Journal.  Who hasn’t read it?  What self respecting journal of news, whether online, on TV, on cable, or in print does not reference it?  So I broke down after 15 years with a print newspaper and subscribed to the print version (the online version comes for free when you do).  Now, I still read through the Houston Business Journal weekly (fairly centrist), CBS News online (as one of my clients called it, “Commie BS News online“), and listen to the ultra liberal National Public Radio (, yup, just about as liberal as you can get), but the majority of my news now comes from the WSJ.

I am interested in your take on the new outlet that provides the most centrist social and conservative fiscal view on world happenings?  Leave a comment on this post and let’s see what you think…

HBJ and Boehner ‘not at all confident’ about avoiding fiscal cliff…

The Houston Business Journal reported in this week’s edition ( that House Speaker Boehner thinks we’ll fall off the cliff.  Go online and see all the reporting done on this – on Bing.  Is this just politics or is this someone who thinks that the cliff is real and we’re heading right for it?

My take – the political winds are blowing in that direction, and unless Mr. Romney is elected to office, I think that the Republicans will let the U.S. fall over the brink to make a political statement.  Is that bad?  I actually believe that it will be a good thing.  Reality needs to set in and we need to stop spending like drunken sailors on their way to the wharf district’s “drink until you drop” party of the decade.  Tell me what you think…

The Gas Tax and what about it…

Here is an article that caught my eye – “The Gas Tax Is Running Low.  But What Should Replace It?” in the Wall Street Journal.  Please read the article, it is a great piece on something that is important to all of us in the United States (our roads).

In Texas, we have increasingly seen that toll roads are going in and that Toll Road Authorities are the way that counties, states, and other organizations are implementing road building policy.  In Houston, it is hard to not have a toll tag – I personally refuse to have one, even though I use the Houston Tollway almost daily, since having an information technology background, I know how these organizations track us.  What about all the taxes we pay?  Why is it increasingly important to build more, and more roads?  I would set forth that the highway grid put forth and built during Eisenhower’s administration for the safety and well being of the United States and for the use of the military is being over built!  Have you ever noticed that our neighborhoods are going back and redoing the roads at a fast pace.  Did you also know that each 4 way light set costs at minimum, $100,000+.  I mean that’s for a stripped down version hanging from wires and telephone poles.  The ones that are going in here in Sugar Land cost much, much, much more than that – sometimes up to $1M.  If that is the case, why do we need so many of them…

© 2012 by Rhodes Holdings LLC, all rights reserved.

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Posted by on September 17, 2012 in BLOG, Business


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I think that everyone should be familiar with this issue – it is one that we will be facing in 20 years (or tomorrow if the weather continues) without heavy investment and predicable regulatory environment in the U.S.’s infrastructure. In other words, politicians, don’t just talk about infrastructure investment:

  1. give private industry a reason to invest,
  2. get out of their way when they do,
  3. don’t retroactively change the laws after the fact, and finally
  4. act now and don’t just pontificate on the subject – Democrats and Republicans alike are guilty as charged.



Indian power outages

Media reports tell us that 620 million in India have no power, due to widespread failure of the country’s electricity grid.  That’s half the population of that country–and almost 10% of the world!  And we on the East Coast of the US think we have power problems!

For the twenty years or so that I’ve been following India, the south Asian giant has been touted as being the next big thing for emerging market investors.  But the dream has never become reality.

investment plusses…

The attractions are obvious:

–a mammoth domestic market,

–a significant number of entrepreneurs,

–a large pool of hard-working, well-educated workers, and

–the fabulous success of the IT outsourcing industry in Bangalore.

…and minuses

Three negatives, however, are just as prominent:

–the immense power wielded by a small number of industrial conglomerates that control much of Indian commerce, and which are not particularly interested…

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Posted by on August 1, 2012 in BLOG, Business


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Supreme Court rules on Healthcare Reform

[This was a newsletter that I received permission to reprint from Mr. Lee McFarlain of the McFarlain Group]

What does Healthcare Reform mean to me?

Last month the Supreme Court ruled on several challenges to the Patient Protection and Affordable Care Act (a.k.a. “Healthcare Reform”, “Obamacare” or PPACA).  While the details could fill volumes, in a nutshell it means implementation of the law will continue unless there is a repeal by Congress.  Given that many provisions will not phase in until 2014, repeal is still a possibility, but you still should start planning now for the implications of this law.

For Individuals

Health care reform?

Health care reform? (Photo credit: creatures of the earth)

On the positive side, the law provides a number of advantages to individuals.  These include better coverage for preventative care, coverage for dependents up to age 26 (student or not, married or single), elimination of annual and lifetime coverage limits, and gradual elimination of restrictions on pre-existing conditions.  The law also expands coverage for low income individuals and families, and provides tax credits to many households to make purchasing coverage more affordable.

For many the biggest bone of contention in the law is the “individual mandate”.  This provision was the most hotly contested, and ultimately the Supreme Court found it constitutional.  This means starting in 2014 most people will be required to participate in some form of health insurance program.  Those choosing not to participate will be subject to a fine (or tax as the Supreme Court ruled) based on their income.  Fines start at $95 or 1% of income (whichever is greater) in 2014, and increase to $695 or 2.5% of income by 2016.

Other issues to consider for your personal taxes are:

  • MSA and HSA Penalties: Tax penalties for using MSA or HSA money for non-medical expenses increased to 20% this year.

Starting in 2013:

  • Increased AGI Threshold for Medical Expenses: If you itemize, medical expenses will now have to exceed 10% of adjusted gross income (AGI) before you can start writing them off.  This is up from 7.5%.
  • Increased Hospital Insurance Tax: If you earn over $200,000 ($250,000 if married filing jointly) you will pay an extra 0.9%.  This tax also now applies to investment income under some circumstances.

For your Business:

If you average fewer than 50 full time employees then the PPACA may not have a dramatic affect on your business.  However, starting in 2014 companies with 50 or more full time employees will have to provide “minimum essential coverage” to employees and their dependents or face fines.  Although the exact mechanics of calculating these fines are as complex as you might expect them to be, for most businesses the fine will probably be less than the cost of providing coverage.  This means that many businesses that don’t currently provide coverage will probably opt to pay the fine instead.

The law also means that the cost of coverage will continue to rise since insurance companies are now required to provide broader coverage.  These rising costs could drive some businesses to drop existing plans and opt to pay penalties instead.

There are a number of additional provisions for small, medium and large businesses, including simplifying section 125 (cafeteria) plans for companies under 100 employees, new reporting requirements, other new taxes and penalties, and even some tax credits for smaller companies.  So many in fact, that if I tried to go into them I would break my promise to keep my update brief!


English: President Barack Obama, Vice Presiden...

President Barack Obama, Vice President Joe Biden, and senior staff, react in the Roosevelt Room of the White House, as the House passes the health care reform bill. (Photo credit: Wikipedia)

Many have been holding their breath wondering what the Supreme Court might do with the PPACA.  Now that we know that answer it is time to start preparing for the eventual implementation of this law.  While it is still conceivable that congress might overturn all or part of this, don’t count on it.  You should start working with your tax, legal, and benefits advisers to prepare for the changes this law brings.

If you need help deciphering the implications for your personal or business situation give me a shout!  I hope you found this helpful, and please feel free to pass it along to your friends and colleagues!

H. Lee McFarlain, Jr.

McFarlain Group is not a licensed CPA practice.  All CPA services are provided by H. Lee McFarlain, Jr., CPA.

© 2012 by H. Lee McFarlain, Jr. and the McFarlain Group, all rights reserved.


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When did “rich” become a four letter word…

Wealth in America

Wealth in America (Photo credit: uvw916a)

When did “Rich” become a four letter word?  Have you ever caught how many of the Liberal / Democratic candidates and politicians sneer when they say “Rich”?  And have you wondered why Republicans fall in line with anything that looks like it will help anyone with capital to invest [some say, invest in political campaigns]?  Let me shed some light on this situation from my point of view…

First, maybe we should look at the word “Rich”.  Here is a simple definition from

having wealth or great possessions; abundantly supplied with resources, means, or funds; wealthy.

It is very interesting to review the definition of the word “Weath” by Wikipedia (too long for this article, but a good read all the same).  I personally don’t see anything inherently wrong with having abundant resources.  What I do feel gets stuck in people’s view is the opulence that some glitterati show, almost mashing all of the world’s face in the fact that they aren’t as wealthy, pretty, etc. as they are (think about Paris Hilton here).

What even bothers me more is the hypocrisy with which the politicians of this day bandy these terms around.  First, most of the politicians are fabulously wealthy – think President Obama ($1,728,096 last year’s return), Mr. Romney ($20,901,075 estimate for last year), Nancy Pelosi (I didn’t want to add it up, but take a look).  Why are these politicians always bashing the “rich” – both Democrats and Republicans?  Because it is popular and the vast majority of Americans like to think that they are middle class.

THE TRUTH – Americans, one and all, are wealthy.  All of us.  So we should change our thinking.  Here are the steps I think that all of us in the USA should take:

  1. Start using the word “prosperous” and celebrate it – how could you be hateful or want others not to be “successful and flourishing” (part of the definition).  Semantics I know, but we all need to be careful with words.
  2. Don’t vote for anyone who spews garbage about the “rich” or ask to “sock it to the rich”, and that includes Republicans, Democrats, or Libertarians.
  3. Implement a flat tax – no deductions, no progressive tax implementation.  We all pay the same percentage of everything.
  4. Don’t favor the “rich” in anything (especially taxes) – they tend to take care of themselves, that’s why they have those abundant resources.  I tend to listen to Warren Buffet on this.

This article may seem like it favors Republicans, but let me tell you, I am personally as fed up with them as I am with Democrats.  I tend to vote Conservative, but I do not think either side is representing us well. (My opinion)…

SEC puts off implementing rules associated with the JOBS Act

[This information taken from an e-mail sent from PPM Logix]


Seal of the U.S. Securities and Exchange Commi...

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

Securities and Exchange Commission Chairman Mary Schapiro testified to Congress on Thursday, June 28th, regarding the general solicitation ban on Regulation D Private Offerings, saying “the 90-day deadline does not provide a realistic time frame for the drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the commission, and an opportunity for public input.” She went on to say “I expect that in the next two days we will publish time line for lifting the general solicitation ban and it will be done this summer.”

Read the blog at

Where have the blog entries been…

We have gotten a good amount of mail from our subscribers asking what happened to us.  First, I [Robert C. Rhodes] have been on a 13 day vacation with my kids in Washington State on Whidbey Island – what a beautiful couple weeks.  No rain, very unlike Washington, and lots of friends.  Secondly, we have signed up three new clients and are busy putting the initial consulting engagements in place.

Something struck me while I was there in Washington State – there were a lot of new cars on the road which wasn’t the case 30 years ago when I moved away, and the prosperity that is shining on Houston, Texas where I live now (actually Sugar land, but close enough) is not shining on Washington.  Many have dropped out of the work force and many, many stores are empty.


Posted by on July 13, 2012 in BLOG, Business, Public markets


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From the great white North (not so white)


Today was a traveling day – first, getting up at 4:45 AM CST was just eye opening (not), but then going through the airport security line was a jolt back into reality.  My trip brought me from Houston, TX to Toronto (Ontario), Canada and then onto Montreal (Quebec), Canada with my final destination Quebec City (Quebec), Canada.  I have to tell you, Canada is clean, the people are friendly, and the beer is great.  But onto my commentary…

English: Québec Province within Canada. Españo...

Québec Province within Canada. Source: Wikipedia.

The TSA security in the United States is ludicrous, but no more invasive than the Canadian version.  It is a perfect example of how bureaucracy leads to inefficiencies in the system – what sounds like a good idea to begin with, namely keeping the airlines safe from terrorists, blossoms into full blown idiocy.  Stripping to step through the scanner may make some feel safe, but when the TSA itself finds gaping wholes that allow their own agents to smuggle in guns and other dangerous materials, it’s time to start cutting.  I mean, get real, a shoe bomber got through, although the underwear bomber did get caught (kudos to those agents).

Mr. Obama has sought the power to eliminate government agencies from Congress, like the Commerce and Education Departments (see this article entitled “Obama seeks power to merge agencies” and the Roll Call article entitled “Consolidation Authority Would Empower Obama, Successors“). I am in no way supporting giving more power to The President, making note that I mean any President – I think President George W. Bush went way too far with the Patriot Act, trampling on our sacred [as far as I am concerned] Bill of Rights.  Here are my suggestions:

  • Mr. Obama should submit specific department consolidation(s) or elimination(s) to Congress and have it vote on that specific request. Republican legislators should play ball on at least eliminating one department.
  • Department of Homeland Security should review TSA practices to determine effectiveness and eliminate those deemed worthless (to determine this, a third party should be used).


If you are curious as to why I am in Quebec City, Quebec, Canada, I am here for a shareholders’ meeting for Corruven, Inc. – one of my clients that I am helping bring to the public markets in conjunction with Brad Bingham and others.  We were initially asked to do some work out consulting associated with a “Grey Sheet” public vehicle, but we recommended that Corruven do a Direct Public Offering, or “DPO”, instead.  We have helped put together the team that is taking them public in the United States, including:

  • Brad Bingham, SEC Counsel
  • MK CPA’s, PCOAB auditors
  • Phil Scott, CFA (for valuation services and make ready)
  • Jay Pigantello

Here is a little more about the company itself (from their website):

Corruven Inc. is a U.S. based development-stage company that intends to develop and market a lightweight wood panel, Corruven™, fabricated mainly from unrolled “veneer” providing numerous advantages for various applications in different construction sectors. The panels: (i) contain approximately 75% air making them extremely lightweight compared to any other conventional panel; (ii) utilize only 25% of the raw material required to produce traditional panels (e.g.: MDF, HDF, OSB, plywood, etc.); and (iii) use formaldehyde-free glues which increase our distinction in the “green product” market.

In addition, the company will be less dependent on the manufacturing sector’s fluctuations as our future business model focuses on selling the production equipment (franchising) into different sectors while generating revenue both on the sale of equipment and raw materials and ongoing royalties from the output of such franchised equipment.

A very innovative company that you will hear more about in the coming months as they complete their PCOAB audit and file a registration statement.


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