THE FUTURE OF SELF-DRIVING CARS

Despite the injurious rules and regulations laid down by this nation’s most populous state, the self-driving car is here to stay.  A most recent attempt by Uber Technologies Inc. to conduct operational tests of 16 self-driving Volvos on the streets of San Francisco was halted by California’s Department of Motor Vehicles when, on December 21, they revoked their permit issued a week earlier on a pretext relating to the definition of “autonomous.”  However, within twenty-four hours the vehicles were en route to Arizona, where Governor Doug Ducey welcomed Uber’s planned testing program and criticized California for its “burdensome” laws.

It’s understandable why driverless vehicles incur government hostility in areas where they threaten politically powerful groups, in this case the Teamsters Union and lobbyists representing firms which profit from the employment of drivers.  A standard response to innovations of this sort has always been through regulatory machinations of one sort or another, which makes the planned enterprise technically or economically infeasible.  I recall seeing articles from the early twentieth century where local ordinances prohibited a motor vehicle from driving on a road unless it was preceded by a person walking ahead of it waving a red lantern.  As you might guess, these rules were instigated by the then influential horse industry which didn’t want competition.

Let me bring you up to date on the development and progress of what’s known as the autonomous car.  Thus far four states enacted laws permitting operation and testing of such vehicles on public roads.  Nevada’s went into effect in 2012, with the first license issued to a Toyota Prius.  Florida became second, California third, and finally Michigan in December 2013.  In May 2014, Google presented their concept for a fully functioning prototype, with neither steering wheels nor pedals, and plans to offer these cars to the public in 2020.  A spokesman announced in June 2015 their testing teams drove over one million miles, essentially driverless, with no serious hazardous events.

A final thought: Although I welcome the concept of the driverless car, I’m fearful America may find itself with a massive unemployment it cannot sustain.  I realize in the past that technology solved the problem of job loss; I’m not so confident our economy is capable of withstanding this particular “advancement.”

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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R 

ALL HAIL THE FEDERAL RESERVE

The article’s headline asks the pertinent question: “What does the Fed rate increase mean to you?”  From this point on it’s anyone’s guess as to its significance for each of us.  In case you’re not aware, on December 13, 2016, the Federal Reserve boosted the key interest rate by a modest 0.25%—the first increase since December 2015, which was itself the first in a full decade.  This 25-basis point hike now puts the federal funds target rate between 0.05% and 0.75%.  With the official U.S. unemployment rate toying at 5% for more than a year, the Fed held off hiking rates on the fear such action would spur an undesirable inflation.  But now, with Fed Chair Janet Yellen’s hint that several 2017 rate increases may be in the offing, it appears rising interest rates are off and running.

I’ll now repeat the question—what does it mean to you?  The answer is not an easy one; it depends upon who you are and where you fit into the economic structure.  Let’s presume you’re a typical consumer who makes purchases on your credit card and carries over a balance from month to month.  If the 2015 rate increase is any guide, you’ll soon find an additional quarter percent increase tacked onto your payments.  Before we leave this topic, let me suggest you pay the full unpaid balance on your credit card each month so you’re charged no interest.  That’s the way to go.

For you homeowners with a mortgage, if your loan has an adjustable rate, an increase in both rate and payments are in store for you.  And if Ms. Yellen’s avowed future increases come to pass, you might check in to see if a change to a fixed rate loan is possible while rates are still at near-historic lows.  I can only wish you good luck.

Finally, did I come across someone with an interest-bearing money market account, or—horrors!—a bank savings account?  To you I can only offer condolences.  Sorry, but a rate increase won’t help you.  The financial institutions discovered some years ago the average depositors needn’t be compensated in any way.  After all, where else can they put their dollar bills?  It’s for this reason your Chase Bank savings account pays one-hundredth of one percent per annum, with most of the others not much better.

A final thought: On average, things aren’t so bad for most of us.  With interest rates well below those of the past, we can live life a little more cheaply and a little less frantically.  So, enjoy while you can.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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A RETURN TO INVESTMENT BASICS

Over the past many years I’ve reviewed the articles and tuned into the presentations offered by the investment experts.  Though there was once a time when such advice by the professionals varied, those days are long behind us.  With few exceptions, the only recommendation you’ll now receive from the nation’s anointed financial planers is uniformly consistent.  The recommendation:  (1) Select a fiduciary as your advisor to whom you’ll deliver your assets.  (2) The advisor will select a portfolio of mutual and/or exchange traded funds into which your assets will be placed.  (3) You’ll take no active interest in your account, but rather count upon the rise in the market over time to guarantee a prosperous future.  (4) As your net worth rises and falls with the vagaries of the market, you will remain invested in this manner until your retirement.

Imagine my surprise this week when I stumbled upon an article suggesting a different method for long term investment.  The author is Arielle O’Shea, an investing writer for NerdWallet, who has been writing about personal finance for more than a decade.  In response to a query on how a $10,000 windfall might be profitably invested, she offered the following comments:  “Maybe you want to invest in stocks.  Go for it.  Set aside a small chunk of money to play the market.  Stock buying requires researching stocks—if you’re going to own a piece of a company, you want to know what you’re getting into.  So make sure you’re up to the task.”

I approve of Ms. O’Shea’s suggestion.  This is the method I chose some years ago when I took charge of a trust portfolio, which I then operated successfully for 21¾ years.  I selected companies in healthy industries with a history of stable or increasing earnings, a generous portion regularly passed on as dividends.  I preferred companies with reasonably low price-earnings (P-E) ratios, and reviewed the portfolio every several months so to dispose of those no longer meeting the criteria.  The system worked well, in that both dividend income and asset value increased handsomely over time.  Though aspects of the market have changed over the years, I believe specific stock choice is still the best approach.

A final thought: If you’re reasonably astute and organized, you’ll find no better handler of your financial affairs than yourself.  No one else will match your interest in your own well-being.  Investment concepts can be learned and with trial and error you’ll soon get the hang of it.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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GOOD HEALTH FOR THE TAKING

The full page presentation titled “refresh your memory,” with a striking view of a sliced pomegranate, looked so impressive, I didn’t realize at first glance it was an advertisement.  Even so, the opening sentence, emblazoned in red, couldn’t help but draw my attention: “Learn about this preliminary research on pomegranate polyphenol antioxidants and memory and cognition.”  The message thereafter referred to research suggesting the beneficial effects of “increased verbal memory performance and increased functional brain activity . . . on a group of older adults with age-related memory complaints.” 

Let’s change subjects a bit.  On the matter of beverages, I happen to enjoy the tart flavor of unsweetened cranberry juice and drink it regularly.  I admit being drawn to it when I learned, at least a half century ago, it could be beneficial in combating urinary tract infection.  It has only recently been revealed that cranberry juice has no such preventive qualities whatever.  Apparently the implication of its benefits can be credited to the cranberry industry and the wily advertising agency they employed.

I’ll now go back many decades to my birth state, Wisconsin, known as America’s Dairyland.  Not only did the billboards read “Every body should drink a quart of milk daily,” but the slogan became sponsored by the state  . . . thanks, presumably, to successful lobbying by the powerful dairy industry.  Though we’re now aware of the cardiovascular problems such a regimen causes, I suspect that line sold a lot of milk.

So where does this pomegranate ad fit into the picture?  I’ve reviewed it word for word to see if it makes any blatantly deceptive claims as to the implied curative powers.  Although it suggests the ingredients “are known to help combat unstable molecules that can cause damage to your body,” it follows up with “These are early scientific findings on cognitive health . . . not yet adequately studied.”  Evidently the pomegranate industry is making certain there are no representations which might lead to a successful lawsuit claiming fraudulent advertisement.  The words, chosen skillfully, should sell the fruit.

A final thought: You may expect to see more and more such craftily phrased pitches for any number of products.  Though the day of the snake oil salesman is long past, he’s been replaced by a far more convincing team of researchers and linguists.   To avoid being taken advantage of, you must investigate each offering closely.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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THE IRON HORSE THAT WILL NOT DIE

The headline caught my attention: “Bullet Train Back on U.S. Track.”  The paragraph which follows might have been predicted by anyone familiar with politics in America’s most populous state: “The California High Speed Rail Authority has reversed its plans to buy foreign parts for its trains, saying in a letter to federal regulators that it was withdrawing a request for a waiver from the Buy America Act.”

Why the Authority rescinded its intention, disclosed a week earlier, that purchases of such items as rail cars, wheels, axles and other parts would be from foreign sources, is obvious.  Opposition from the AFL-CIO, which represents the largest industrial unions in the nation, together with prominent lawmakers supported by union contributions, and who have spent their careers trying to force public agencies to buy goods made by American workers, cannot be ignored.  The following statement by Congresswoman Doris Matsui (D-Sacramento) makes this clear: “It is vitally important that these parts are produced and manufactured in America, so that we continue to maintain job growth and economic development.”

If we now put politics aside and zero in on reality, we see that the Authority’s stated intention to assemble and operate a high speed train with specific equipment is a matter of no consequence.  The reason for this is, despite the need to demonstrate economic accountability for the $64 billion project, there’s no sign the rail line will ever be constructed or placed into operation.  With the necessary funds nowhere in sight, any declarations as to where these parts will be manufactured are meaningless.

A logical question follows: If the high speed rail project will never be built, why is there so much consternation over details concerning it?  There’s an equally logical reason for this.  Although no one will ever profit from the tens of billions of dollars projected but not available, there’s still a good bit of money floating around to be gleaned in some fashion.  In addition to the $9.95 billion approved by the November 4, 2008, bond issue, there was $3.5 billion from a federal stimulus plan as well as $500 million per year from state carbon cap-and-trade revenue.  From the standpoint of profitability, as long as favored parties continue to receive payments for planning, design, studies, environmental reports and the myriad of other boondoggles inherent when government funds flow, a train need never be built.

If history is a guide—and it usually is—the controversy will continue.  As long as there are funds in the till to be passed around to politically connected contractors and construction unions, the efforts will continue.  Only when all the money is gone will the project end.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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WHAT'S FUNNY--AND WHAT'S NOT

I’ve just gotten a lesson in political correctness.  A book I recently wrote is now being reviewed by my publisher for any corrections required before publication, and by corrections this includes matters involving spelling, syntax, factual errors and other matters of indiscretion or inappropriateness.  In all my writings I welcome a second party review, as I certainly make my share of mistakes.  For those of you who think otherwise, your computer’s Spell Check can’t catch every misspelled word.  And, sad to say, the legendary The Elements of Style by Strunk and White, dating back to 1935, won’t guarantee a flawless sentence.  With this said, I’ll share my lesson with you.

In a chapter critical of gambling, I had included the following entry:

More than half the nation’s states together with several Canadian provinces host Indian casinos, where roulette wheels, blackjack tables, and slot machines operate around-the-clock to scalp the paleface—and whoever else strays onto the reservation.  I’m afraid it’s too late to circle the wagons, as most of them already have chattel mortgages attached.

My publisher’s comment: “This comes across as racist.”  My response:

Yes, I suppose by 21st Century pseudo-academic standards, this can be declared to be “racist.”  Fast forward another dozen years and it might possibly qualify as a hate crime, good for five years in the penitentiary.  Frankly, I put my lines into the Mel Brooks category of humor and would prefer to keep it exactly as I’ve composed it.  However, if you believe it will in any way adversely affect acceptance of the book, then we’ll eliminate it.  If that’s the case, simply place a period following the term “around-the-clock,” while deleting the rest of the paragraph—and humor be damned.

Over the years I’ve observed it, what’s funny has changed.  Whatever passes as humor now seems devoid of it.  Canned laughter punctuating insipid lines on a TV show does not constitute humor.  Neither does a standup “comedian,” whose only response from an audience is a few guffaws whenever he utters a string of four-letter expletives.  And as for political correctness, it seems to have preempted common sense—or perhaps it’s now uncommon sense.  If anyone can give me a good explanation as to why society has fallen to this level, I’m eager to know why.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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THE MAJESTY OF CLIMATE CHANGE

The headline is stark: “The climate denier-in-chief.”  The editorial which follows paints a picture of ecologic disaster, with the following criticism of the president-elect’s views on global warming: “Trump’s refusal to believe the broadly accepted scientific fact that human activity—primarily the burning of fossil fuels—is filling the atmosphere with carbon and other greenhouse gases could have lasting and devastating consequences for the entire world.”  The pointed charge: “Trump, however, believes it’s all a hoax.”

Whether or not global warming—renamed climate change after warming came into question—is the result of human activity and portends the hazards claimed, is questioned by many knowledgeable scientists.  Frankly, I doubt Mr. Trump has the scientific understanding to know, one way or the other.  However, whether the programs fostered by climate change promoters constitute a hoax is another matter.  When it comes to the design and operation of a grandiose project which functions in a deceptive manner, Donald Trump is truly an expert.  If he declares that climate change advocates are perpetrating a hoax on the American public, there’s a strong likelihood that’s exactly what they’re doing.

With the political changes soon to come, whereby Republicans will control the presidency as well as both houses of congress, it’s less likely huge sums of federal monies will continue to flow to those companies tied to the greening of America.  In all likelihood neither the solar nor electric car industries will receive the favored treatment they’ve come to enjoy, with tax credits being the first thing to be phased out.  But most significantly, those firms whose sole justification for existence is embracing the climate change concept currently in favor will actually have to begin showing a profit.  The first such outfit which comes to mind is Tesla Motors, a marketer of electric vehicles which, since its inception in 2003, consistently operates at a loss.  Despite the Class A hyperbole, which is its standard product, were it not for government giveaway programs, Tesla would not exist.

A final thought: Climate change has been a feature of earth since its creation.  Some 2.5 million years ago the island of Greenland resembled the green Alaskan tundra region.  Today it’s mostly a frozen wasteland covered by a massive ice sheet which has extended and retracted countless times—with no input from we Homo sapiens.  With this reality in mind, it appears our nation’s leadership is about to revise the rules in which vast fortunes were garnered by engaging in the climate change charade.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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BEWARE THE INVESTMENT SEMINAR

This repeating newspaper ad finally caught my attention: “Are You House Rich and Cash Poor?”  The investment program, offered at a seminar, seemed clear enough.  The homeowner incurs a mortgage loan through the featured Mortgage Consultant and then permits the pre-designated Wealth Strategist to invest that money.

As the ad explained, a justification for borrowing on your personal residence is that “You’re earning nothing on that equity.  You have all that money locked up and you get nothing for it.  It’s just sitting there, virtually unemployed.”

Let me offer a second opinion.  Home equity is not unproductive.  My residence, delightfully free and clear of mortgage, has a potential monthly rental value of, perhaps, $10,000.  I’d need to generate a pile of pre-tax income if I had to rent my own house.  Who sez I’m getting nothing by having it paid-off?

But economics aside, it’s the concept I reject.  It’s unwise to incur a loan on your home, which must be paid, to invest in something that may or may not produce the cash flow to make the payments.  Admittedly, it can be argued that if the investment is a surefire winner that you personally direct, with a return well in excess of the borrowing cost, it might warrant the risk.  In this particular offering, however, you’ll not be in control.  Rather, your fate will be in the hands of a mortgage consultant and a wealth strategist who will explain things as you enjoy a full complementary meal at their “free educational investment seminar.”

As implausible as it may seem, many persons select their investments no more judiciously than by response to mass solicitation advertising.  This is not a winning formula.  Rather, the route to financial independence requires that you scrupulously avoid questionable enterprises, that you know exactly what you’re doing, and that you at least oversee, if not directly control, the substance of your investments.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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DOES MARIJUANA CAUSE ILLNESS?

The pot wars go on as California voters must once again decide if recreational marijuana should be legalized.  One of the uncertainties being debated is whether or not smoking weed is dangerous.  Notably, those opposed to approval contend its use causes lung cancer, just as do cigarettes.  In rebuttal, proponents are sparing no effort, with selected experts weighing in on this particular health concern.  Their consensus: “The cancer link appears increasingly weak, though more research is needed.”

  The argument actually beats about the burning bush.  Although combustion of both pot and tobacco emit some of the same carcinogenic substances, the comparisons end there.  Of particular note is that the quantity of smoke inhaled by the typical cigarette smoker, often a pack or more daily, is infinitely greater than by the marijuana user.  This was one of the factors considered in a 2014 study published in the International Journal of Cancer, which found “little evidence for an increased risk of lung cancer, even among heavy or long-term cannabis smokers.”

There’s another, perhaps even more significant reason, why tobacco is the more potent lung cancer cause.  Because of the soil in which it’s grown, the tobacco leaf contains certain radioactive isotopes, in particular the beta particle emitter lead-210.  When the smoke containing this element—with its half-life of 22.3 years—settles on the lung alveoli, it bombards the nearby tissue with ionizing (cancer causing) radiation for the better part of a half-century.  It’s this, as much as chemical factors, which result in malignancy. 

As the lung cancer debate goes on, little concern is given to what is the far more pertinent health matter: What becomes of a mentality that’s regularly exposed to a brain-scrambling substance?  Just as schoolchildren once labeled ADD were, to their detriment, doped up day after day on Ritalin, might we see—or possibly be seeing—a similar effect with the cannabis users?  If so, voter-approved legalization will merely encourage more Americans to pump increasing quantities of the substance into their heads.  I see no benefit to a nation as its people grow less able to function rationally. 

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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THE VALUE OF IMPRISONMENT

A pair of provocatively related news articles aired today.  The first concerns a lawsuit filed by the daughter of a deceased California prison inmate, Hugo Pinell, incarcerated for the past 46 years, who was stabbed to death by another prisoner.  Pinell, a convicted killer, was one of the San Quentin 6 who participated in slitting the throats of San Quentin prison guards during a failed jailbreak attempt in 1971.  His daughter claims he should not have been permitted to associate with the general inmate population, but rather housed permanently in protective custody.

The other article reports on a ruling by Los Angeles County Superior Court Judge William Ryan, denying a request for parole of Leslie Van Houten, one of Charles Manson’s followers.  In 1978, Van Houten was convicted of first degree murder, in that for no particular reason, she put a pillowcase over the head of housewife Rosemary LaBianaca, wrapped a lamp cord around her neck and stabbed her 16 times.  As she later boasted, “stabbing was fun.”  She’s been in prison for nearly 47 years.

This then brings us to the subject of capital punishment, and the perennial question: “What purpose is served by housing incorrigible felons for a lifetime when their quick and unpretentious executions would eliminate any future miseries they may cause?  I’ve heard the arguments, pro and con, which long since passed the realm of rationality: Every life is precious vs. monsters have no place on earth; Everyone is redeemable vs. they’ll never change.  Even biblical enthusiasts are firmly embedded on both sides of the question.  You may endorse Exodus 21: 23 “And if any mischief follow, then thou shalt give life for life” . . . unless you prefer Exodus 20:13 “Thou shalt not kill.”

The law works in strange and mysterious ways.  Although California statute authorizes capital punishment for first degree murder, it’s so infrequently carried out as to be essentially meaningless.  As a one-time supporter of capital punishment, I cannot imagine who is benefited when those so sentenced remain on death row indefinitely, while their multiple appeals are heard and reheard over and over—except, of course, members of the bar who derive a living by processing these endless appeals.  It’s for this reason I now advocate an end to the death penalty.  Instead, those persons convicted of heinous crimes should be imprisoned and fully integrated into the general inmate population.  Only in this way will they most likely receive the punishment they so rightly deserve.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

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WELLS FARGO: BUSINESS AS USUAL

The banking business once functioned on the “Law of Threes.”  Depositors received three percent interest on their savings accounts; borrowers paid three plus three percent interest on their loans; bank officials made it to the golf course by three o’clock each day.  Banks generated modest but fair profits.

Times have changed, as the current Wells Fargo exposé demonstrates.  Dating from 2011, thousands of bank employees opened unauthorized accounts for millions of customers.  The holder of a checking account might become the recipient of a savings account, with funds transferred from the checking account without notice.  Additional accounts, many incurring fees for such items as credit cards or Social Security direct deposits, might also be created, often the result of authorization with the customer’s signature forged by the bank employee.  Despite the misfortune afflicting many unaware customers, the bank hierarchy profited nicely from these activities

Who’s to blame?  According to John Stumpf, Wells Fargo’s CEO, 5,300 low level bank employees contrived on their own to engage in these nefarious activities.  When he and executive management learned of this—after the fact, of course—these guilty parties were all fired.  That resolved the problem; no further action is required.

The banker’s official assurances are unlikely to wash.  With the massive sums involved, the illegalities committed and the many parties with vested interests, we may expect a donnybrook.  Mr. Stumpf’s hostile questioning by a U.S. Senate committee was merely the opening round.  Over the weeks and months to come we’ll see the institution of class action lawsuits, the filing of criminal indictments, and all sorts of activities prejudicial to Wells Fargo and its senior executives.  Whether or not the two primary beneficiaries of the illicit operation, Mr. Stumpf, as well as Carrie Tolstedt, the company’s former head of community banking, eventually find themselves behind bars is hard to predict.

I’ll conclude with this final thought: Banking has come to embrace the corporate culture, which leads me to inquire as to exactly why the public corporation exists.  I’ll offer a theory.  It’s my belief the principal reason is to enable its officers, directors and other favored insiders to draw financial benefits from it.  Everything else is incidental.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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PUMPING YOUR MONEY AWAY

My thanks to the American Automobile Association (AAA), though the gratitude can only be described as belated.  They just released a research study which found that American motorists are—and have been for decades—wasting over two billion dollars annually by buying premium gasoline for vehicles that don’t require it. 

Exactly who’s to blame for this thoughtlessness is hard to figure out.  A part goes to service station managers who, as I recall from the past, suggested that filling up with their higher priced gas was “better for my car.”  Add to the list of culprits whoever issues auto drivers’ handbooks.  My 2004 6-cylinder Jaguar instructions read: “The preferred fuel should have an octane rating of at least 95, though some countries have only 91 octane.”  Even my modest 2012 4-cylinder Nissan Altima booklet states: “Use unleaded gasoline with a Research octane number at least 91.”  And then, of course, whoever named the higher octane fuel “premium,”—probably a PR exec in the petroleum industry—kicked it off by making it sound as though it’s in some way superior.

Quite simply, premium gas is normally 91 octane, whereas midgrade is 89 and regular is 87.  The only difference relates to the combustion speed, with the higher the octane rating, the slower it burns.  As all are now unleaded, pollution is no longer a factor.  Base your decision on which to use solely by performance.  In the 1950s and 1960s, when auto engines carried higher compression ratios, slower burning helped prevent engine "knock."  Because of the lower compression ratios of today's cars, most function satisfactorily on the 87-octane fuel.  The test is simple to conduct.  With the lower octane gas in your tank, accelerate up a slight grade in drive gear.  If you experience no unrelenting "pinging" of the engine, then save yourself the cost of the more expensive fuel.  And just so you’ll know, my two vehicles function well on the cheaper 87 octane fuel.  I’ll bet for most of you it will be the same.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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CHARITABLE GIVING MISUNDERSTOOD

 

CHARITABLE GIVING MISUNDERSTOOD

There seems to be no shortage of articles depicting the uncharitable nature of our two major presidential nominees.  Here’s one critical of Hillary Clinton.

Mother Jones reports: Clinton’s tax filings show that she and Bill Clinton donated just over $1 million to charity last year, 96 percent of which went to their own foundation and four percent to fund a golf tournament.  This is pretty darned incestuous: taking a deduction for contributing to the employer of your daughter and expense payer of your husband.

Nor does Donald Trump escape unscathed.

Donald Trump, widely believed to be the wealthiest American ever to run for president, is nowhere among the ranks of the country's most generous citizens, according to an Associated Press review of his financial records.  Trump has said he donated $102 million worth of cash and land to philanthropic and conservation organizations over the past five years, but he has provided little documentation for these contributions, and tax filings show Trump has made no charitable contributions to his own name since 2008.  Trump has not released his tax records. Such documents would likely provide a clearer picture of his giving.

The real problem is that most persons reporting—or in most cases misreporting—on the charitable natures of the wealthy are sadly out of their element.  Should you want to know what sort of charities Bill Gates or Warren Buffett support, you’ll not find them on their personal tax returns.  Persons whose net worth is measured in eight or more figures generally conduct their giving through private foundations, as do both Mr. Trump and Mrs. Clinton.  It’s the tax returns of these foundations, which are filed annually and available for public scrutiny, that illustrate the charitable natures of their founders. 

There are many reasons you may find disfavor with both nominees, but the numbers which may or may not appear on the Schedule A of their Federal Tax Forms 1040 is not one such reason.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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PRESTIGE AT A PRICE

The title of the article, with the picture alongside, certainly attracts attention: “The hottest new plastic on market is metal.”  What is displayed is JPMorgan Chase’s most recently offered credit card, described as “The high-end, high-reward Chase Sapphire Reserve Card.”  Apparently the promotion is working, for the demand has been so overwhelming that the manufacturer ran out of its metallic alloy materials after just a few days.  As you might guess, its virtues are being extolled over the internet and the Millennial Generation seems to be clamoring for it.

This particular credit card is touted as a “high-end, high-fee, high-reward card with a satisfying heft and impressive thunk when you toss it onto the table to pick up the check.”  Apparently this description has enabled it to become the hottest card on the market just two weeks after being introduced, despite its equally hefty $450 annual fee.  Like so many of the crazes which feed on word of mouth and social media sites, this promotes the illusion you can enhance your public prominence and financial stature by the display of an overpriced commercial appendage.

What seems to be ignored by a large segment of the public is the actual justification for possessing a credit card.  My belief is that a credit card has a single purpose—a convenience when neither check nor cash is handy.  Ideally there should be no cost to the user.  This means no fee, annual or otherwise, should be assessed.  In addition, when the monthly statement arrives, the full cash balance due is paid before the date any interest is charged.  If there’s some sort of provision whereby a rebate is credited against charges incurred, that may be an enticing frosting on the cake, but it should in no way be a factor in deciding whether to obtain or retain the card.  Just so you’ll know, such rebate provisions are usually inserted for a single purpose: to encourage the user to run up charges they wouldn’t otherwise do.

A final thought: This offering by Chase is merely one more inflated status credit card.  American Express issues the Centurion Card, known as the “black card,” which is aggressively pushed to susceptible millionaires and celebrities.  It’s all part of the prestige game, where such items as Rolex watches and Tesla autos are hyped as being reserved for the superior citizen.  You need none of these.  In reality, a Timex keeps equally good time and a Nissan Altima provides similarly fine transportation. 

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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