Monday, March 18, 2013

Minimum Wage and Maximum Earnings--Opposite Sides of the Same Coin

About ten years ago I attended a spring time regulatory conference for the National Association of Mortgage Brokers.  During these conferences, which were held in Washington DC and which always concluded with a grassroots lobby day on Capitol Hill, we heard various invited speakers.  During this particular conference, one of the speakers who had been invited to meet with our group was a consumer advocate attorney who decried the fact that some borrowers paid higher interest rates for credit than did others.

The attorney began by lecturing us softly, "Wouldn't it be great if everyone could have a 7% interest rate?"  At the time that this conference took place, the optimal rates for borrowers with good credit were probably between 5.8 and 6.5% so the consumer advocate assumed that she had padded the prime market interest rates enough to make them attainable to all.

Immediately, some of the men in our group stood up and took turns at the microphone which had been provided to facilitate audience interaction so that they could explain why it was not possible for everyone to have a 7% interest rate.  Interest rates are based on both credit history (demonstrated history of paying one's bills) and credit depth (length of time accounts have been opened, number of accounts, type of accounts, etc.) as well as ability to prove income, employment, consistency of employment, length of employment, debt ratios and other factors which make loans more or less risky.  Riskier loans have higher interest rates and less risky loans have lower interest rates.  (At the time this conference was held there were a lot of loan products on the market, including stated income and no income loans).

After listening to reasons that her proposal was ridiculous and unworkable, the attorney responded, "Okay, okay.  What if it were a 15% interest rate?  It doesn't matter what the interest rate is, so long as it is the same for everyone." 

The consumer advocate attorney was blissfully unaware that inherent in the "unfairness" of higher rates for some borrowers and lower rates for others is a system of built in rewards for desired behavior.  If her suggestion were to be implemented and everyone got the same rate regardless of their credit profile or work history or savings history, responsible borrowers would no longer see any benefit to carefully managing their finances and irresponsible consumers would have no incentive to improve their credit rating, or to try to hang on that job longer in order to get a better work history, or to save some money for a rainy day.  If everyone gets the same reward regardless of their level of effort or initiative, no one gets much of anything and no one has any motivation to try to improve their situation.

I was reminded of this today as I saw Elizabeth Warren's comments made last week in front a Senate Committee on Health, Education, Labor and Pension began circulating through conservative news sites and the Internet.  During the course of the hearing, Senator Warren wondered allowed why minimum wage isn't $22.00 an hour, adding that it would be if it had kept pace with the growth of the economy since 1960.

Since the State of the Union when President Obama called for raising the minimum wage to $9.00 an hour, I have read numerous commentaries about the problems that will be caused by increasing minimum wage.  Many of these have been well written and researched, and they make valid points that higher minimum wage cuts jobs for entry level workers, does nothing to substantially help those in poverty--many of whom actually do not work at all--and ultimately hurts the business that create jobs and provide the economic growth in this country.  Beyond these arguments, however, I believe that the push to increase minimum wage to higher and higher levels belies another huge issue that I have not heard anyone discuss--the desire for the government to determine and regulate how much everyone can make.

For that reason, I found it particularly interesting that Elizabeth Warren would propose that minimum wage should be $22.00 an hour.  Remember that before Warren was a freshman Senator from Massachusetts, she was the interim director for the Consumer Financial Protection Bureau, the massive new government agency created by Dodd Frank.  She was also one of the architects behind Dodd Frank, which created extensive new regulations for financial services and the mortgage industry, including regulating the maximum amount of compensation that mortgage loan originators can earn.  Over the past two years, experienced originators have left the mortgage industry as the government has limited compensation more and more.  Those restrictions began as regulations saying that originators cannot be paid by both the borrower and the lender, making it illegal for brokers to negotiate individual fees with borrowers.  Next year, in 2014, the provisions of the Dodd Frank bill that mandate a set cap on fees and points will be implemented.  As a result of these rules, many experienced originators have left and are continuing to leave the mortgage industry, leaving newer and less experienced originators in the marketplace. 

The problem with setting maximum compensation for a profession is that it accomplishes very much the same effect as saying that every person should get the same interest rate.  A free market system contains built in incentives for hard work, education, additional training, personal growth and long hours.  Professionals who are willing to apply themselves, to get the additional training they need and to work the additional hours do so in the hopes of reaping financial rewards for that extra labor.  But to liberals like Elizabeth Warren, being able to command higher fees for a greater level of expertise is not good business--it is cheating.  To Warren, a loan originator with 20 years experience, numerous certifications and a track record of closing thousands of loans is no more valuable to the consumer than a newly licensed originator working on her first loan.  They are the same and they should receive the same compensation.

Over the past three years that I have been writing this blog I have warned several times that the mortgage and real estate industries were a proving ground for policies that liberals plan to implement in industries across the board.  Now that Warren is a Senator, she can advocate for $22.00 an hour minimum wage just as she advocated for capping our compensation at levels so low that experienced originators cannot keep our doors open as independent business people.  By arguing that entry level employees should be making over $45,000 a year to flip hamburgers or answer the telephone, she is really saying that experience, hard work and education do not have any compensatory value. 

To the socialist mindset, this argument makes perfect sense.  To have a system where harder working, better educated, more competent people make more money than those who are less skilled or less well educated or less ambitious is inherently discriminatory.  (And when I speak of education here, I am not only referring to formal education through degrees--I am also referring to industry specific training which is often expensive to obtain.)  The solution to this discrimination is to raise the minimum wage and lower the maximum compensation--both through higher taxes and through regulations which set caps on compensation.  By narrowing the wage gap between the entry level and the experienced professional, liberals remove any incentive to work harder or to become better trained.  But, then again, to liberals the issue is not really how much anyone makes, so long as everyone makes the same amount.

Alexandra Swann is the author of No Regrets: How Homeschooling Earned me a Master's Degree at Age Sixteen and several other books. Her novel, The Planner, about an out of control, environmentally-driven federal government implementing Agenda 21, is available on Kindle and in paperback. For more information, visit her website at

Friday, March 15, 2013

Rejecting Big Government and Common Core Standards in Favor of Parental Rights

Last week Glenn Beck's pantomime of giving triage to a dying Lady Liberty while she lay bleeding and gasping on the floor of his studio went viral across the conservative internet.  Beck finished his pantomime by admonishing parents to get their kids out of government schools because the schools are turning the kids against the parents.

Beck is exactly right about this; one of the reasons that our country is sliding so far to the left is that progressive social engineering has been happening in this country for over 40 years. Now, however, social engineering is accelerating to a whole new level as the Common Core Standards are implemented across the country. 

In today's column, conservative blogger and bestselling author Michelle Malkin explains that Big Government wants to control not only what your children learn, but how they process it, respond to it and feel about it.  They also want to be able to track your children's behaviours, attitudes, likes and dislikes from infancy through high school graduation, and use that information both for research and for profit.  Malkin cites a Department of Education report which underscores that the true intention of Common Core Standards is not to make sure that all children learn, but that the Federal Government has a firm grip on exactly what attitudes, beliefs and concepts the children leave school with.  States Malkin,

"The DOE report exposes the big lie that Common Core is about raising academic standards by revealing its progressive designs to measure and track children’s “competencies” in “recognizing bias in sources,” “flexibility,” “cultural awareness and competence,” “appreciation for diversity,” “empathy,” “perspective taking, trust (and) service orientation.” 
Read Malkin's full article, which also contains a link to Glenn Beck's recent work on CCS, here.

In an era when our young people are graduating from school with minimal skills and competencies, but a strong foundation in liberalism, sex ed, and socialism, it is outrageous that politicians in both parties are pushing the Common Core Standards and this new federal tracking of students attitudes and behaviours.  The CCS, along with President Obama's new push for universal preschool, the folly of which has been explained in today's Morning Bell, are designed to ensure that the government can get fully inside the head of every kid in America starting at age 4 and lasting through high school.  Children who have been indoctrinated into this system are foundational to the liberal, socialist, godless society that our federal educational system has been building for the last generation. 

After the 2012 elections, I saw Charles Krauthammer interviewed on Fox News.  He was asked whether he believed that the young people who voted for Barack Obama the second time were a permanent block of reliable liberal voters.  He responded that normally people become more conservative as they get older--as they get married and get jobs and mortgages and have children of their own, the desire for universal welfare is commonly replaced by the desire for lower tax brackets.  Traditionally what Krauthammer says has been true; young radicals grow into middle aged accountants with values that more closely resemble their parents. But in the case of the new generation that is growing up, I think Krauthammer's formula no longer applies.  The 60's hippies were rebelling against a "plastic culture".  They understood the values of their parents--they just rejected them only to find out that liberal, leftist politics work better in theory than in practice.  Unlike the previous generations of young people who grew up, got married, got jobs and cut their hair, this new generation is actually not rebelling against anything.  They have been programmed and engineered into an odd conglomeration of Peter Pan, Fifty Shades of Grey and Karl Marx.  They have been taught that they should never have to work, be responsible, or grow up, that socialism is good and capitalism is bad, that intolerance is the only sin a person can commit and that traditional family structures are old-fashioned, boring, repressive, and no fun.  People so indoctrinated at such an early age cannot "grow up" to be conservative, responsible adults--they don't even have a concept of what that means.  Children who start out at age four in government daycare, spend their formative years in a completely socialist system, and then spend their college years enjoying "Sex week" at major universities are going to emerge so damaged ,that they will never rehabilitate into stable, productive, hard working Americans who support freedom and independence.  (This is the 21st century "Jedi Mind Meld" that Obama complained two weeks ago that he could not use on Congress and Senate.  Progessives know that they just have to be patient--they cannot change the attitudes of "set in our ways" freedom loving conservatives, but if they can get control of our children, they can make us as extinct as the dinosaur within one generation.)

And that takes me back to Beck's speech about getting kids out of the public school system.  I am a product of homeschooling--my mother homeschooled me and my nine younger brothers and sisters starting in 1975, before the word "homeschooling" had even been coined.  We did not meet another homeschooling family until I was fourteen years old.  We used accredited correspondence schools and skipped no grades whatsoever, but each of us had a master's degree from California State University before our seventeenth birthdays--completely educated by a very hard working woman with only a high school diploma whose previous work experience consisted of being a secretary.

Homeschooling provides students with a completely different world view than that held by people in public or private schools.  Today there are estimates of between 2 and 6 million homeschoolers in this country, including second generation homeschoolers such as my nieces and nephews.  This block represents a small but significant segment of people who have been taught to think outside of the system. Homeschooling by parents who really want to not only educate their children but shape their character and prevent their indoctrination into the "New World Order" is the best hope that this country has for salvaging its future.

Homeschoolers beware, however, because the federal government's Common Core Standards are coming to a textbook near you. Many companies that sell textbooks to homeschoolers have signed on to the Common Core Standards.  Last week, homeschooling mother and conservative advocate Tina Hollenbeck began contacting companies that sell textbooks to homeschoolers to find out whether their companies were not aligned with CCS, were coincidentally aligned, or were consciously aligned.  She has compiled three lists which are now available on her website which you can visit here.  Her website also contains a link to her Facebook group.

If you just simply cannot homeschool, you can still opt out of the Federal database tracking system being implemented through the Common Core System.  Malkin's blog references a form that parents can sign and submit to school districts to protect the privacy of their children and prevent the federal government and major corporations from tracking their kids through school. This will at least protect their privacy, though it won't do much to protect their minds. 

If you are interested in homeschooling, numerous resources are available to help you get started.  The time and the money you will spend are not just an investment in your children--it is an investment in America's future, which is currently hanging in the balance.

Alexandra Swann is the author of No Regrets: How Homeschooling Earned me a Master's Degree at Age Sixteen and several other books. Her newest novel, The Chosen, about one small group of Americans' fight to restore the Constitution and end indefinite detentions without trial, is available on Kindle and in paperback. For more information, visit her website at

Thursday, March 7, 2013

King John, the Bill of Rights, and Assassination by Drone

When I was in school, I read a poem entitled, "King John and the Abbot of Canterbury".  The poem relates how the Abbot of Canterbury was a kind and generous and loved man, who was well respected throughout England.  He was also one of the wealthiest men in England--wealthier than King John himself. The king became increasingly enraged by stories of the Abbot's goodness, kindness and generosity, and he coveted the Abbot's wealth, so one day he summoned the Abbot to appear before him in court. When the Abbot arrived, the king told him that he must return to court in three days' time to answer three questions for the king. If the Abbot failed to appear or if he were unable to correctly answer each question, he would immediately be executed and all of his wealth and property would be forfeited to the king.  Following were the three questions for which King John demanded answers:
  • Question 1:  How long, to the minute, will the king live? 
  • Question 2: How much, to the penny, is the king worth as he sits on the throne with the  royal crown on his head? 
  • Question 3: What was the king thinking while the Abbot was answering the first two questions?
In the poem, the Abbot leaves the court in dismay and immediately travels to England's greatest scholars to try to find the answers to the questions.  He goes to the universities--he travels to Cambridge and to Oxford, he asks the wise men of the church, but everywhere he goes, he hears only that no one can answer such questions for another person.  Finally, at the end of the second day, he arrives back at his estate grief-stricken because he knows he will die the following day, and he is greeted by a faithful servant who tells the Abbot that he can answer each question for the King, and persuades the Abbot to allow him to go in his place to face King John.

I have been reminded of that poem several times lately as our government has reauthorized indefinite detention of U.S. citizens under the NDAA and most recently when the Attorney-General announced last week that the Administration does have the authority to kill American ciitzens on U.S. soil using drones.  Yesterday, Senator Rand Paul spent more than 12 hours filibustering CIA nominee John Brennan's nomination simply to make the point that no Administration should have power to assassinate U.S. citizens without due process.  Paul made some excellent points, including the one that once we give up our rights and freedoms, we cannot expect to get them back. 

What amazes me about the filibuster is that any American cannot see clearly that drone attacks against U.S. citizens on U.S. soil are an egregious violation of our Constitutional rights.  Yet, this morning the Wall Street Journal attacked Paul for his "political stunt" saying that he had managed to rally "libertarian  college students in their dorm rooms."  How demeaning and insulting!  I stayed at work an extra hour last night to send #standwithrand tweets so that he would know that, like millions of Americans, I appreciate what he is doing on behalf of liberty.  I am certainly not a libertarian and I have not been a college student in over 20 years. The men and women with whom I interacted on Twitter last night were largely people like me--working professionals who care about the Constitution, freedom and the Bill of Rights.  Regardless of what the WSJ, Senator John McCain and Senator Lindsey Graham like to pretend, we are not a mindless army of anarchists.  We know that in a free society, the government must operate under the boundaries of its own laws.  No person can be above the rule of law--not the Attorney-General, not the president of the United States, not anyone.

Our founding fathers understood this principle all too well.  They had lived in a society where the king was above the law--his whims and wishes trumped any written legislation.  While the story of King John and the Abbot of Canterbury is almost definitely fiction, it highlights the real abuses committed by King John against his subjects--abuses so severe that finally his nobles forced him to sign the Magna Carta guaranteeing some rights and protections to some portions of society.  While the Magna Carta granted very limited protections, the document became the basis for the concept that the king is not above the law, and that concept became the basis for our Constitution and Bill of Rights.  Each right we are guaranteed in the Bill of Rights--the right to freedom of speech, of assembly, of religion, the right to freedom from unreasonable search and seizure, the right to trial by jury, the right of due process, the right to keep and bear arms--all were guaranteed to us by people who understood what it meant to have no rights.  They wrote down our freedoms for us so that we could learn them and live under them. 

Today we have a society that has been free for so long that we have lost sight of what it means not to be free.  When the current Administration tells the American people that a senior level official should have the right to examine the evidence and determine whether to assassinate a particular person, an alarming number of people in this country seem to think that this is acceptable.  Many leaders of both parties, and many in the press, seem to believe that this power of assassination or imprisonment without trial would never be abused or used to destroy a person who was not guilty of a serious crime against the country and who did not pose an imminent threat to its security.  History suggests the opposite.  From the Old Testament Story of King Ahab and Queen Jezebel, who murdered their neighbor Naboth and stole his vineyard because they coveted his property and he refused to sell it, to more modern examples of citizens living in the Soviet Union during the Stalin years who reported fellow citizens as traitors to the government and had them executed to get their apartments, history teaches that people are often motivated by greed, pride, envy, lust and a desire for personal gratification and that these are often the driving forces in their decisions to execute another person. What is to stop the "senior official" from killing the rival for his lover's attention, or executing the owner of a home he wants, or assassinating any person who stands between him and some desired goal. Perhaps, as in the case of King John and the Abbot, envy could be the sole basis for determining that a certain individual or group of individuals was a threat, or, as in the case of most tyrants, an honest disagreement with a certain policy or idea could target a particular individual for termination.  Due process and a trial by jury system is of paramount importance in a world where selfishness, greed and anger are basic human instincts.

Today, Jay Carney reluctantly read a statement from Eric Holder informing the American people that drone strikes are to be restrained under the guidelines of the Constitution and that the President does not have the power to assassinate non-combatant Americans on U.S. soil.  I applaud Rand Paul and the fourteen Senators who stood with him yesterday in getting this admission out of the White House.  As Paul said in his statement following Carney's announcement, "under duress and public humiliation" the White House decided to uphold the law.  I am just disappointed that it took a 12 hour filibuster to get the White House to admit that it has a legal obligation to uphold the Constitution, and I am saddened that on the day after the filibuster so many Americans do not seem to understand the importance of protecting and defending this document that was created to protect and defend each of us.

Alexandra Swann is the author of No Regrets: How Homeschooling Earned me a Master's Degree at Age Sixteen and several other books. Her newest novel, The Chosen, about one small group of Americans' fight to restore the Constitution and end indefinite detentions without trial, is available on Kindle and in paperback. For more information, visit her website at