Sunday, January 18, 2009
Friday, January 16, 2009
Monday, January 5, 2009
The Scary Side of Our National Debt Examined By Black Finance Professor
Dr. Boyce Watkins
www.BoyceWatkins.com
Brought to you by The Great Black Speakers Bureau - The #1 Speakers Bureau in the world.
Hey Peeps,
I thought you guys might want to hear Barack Obama's latest pitch as he works to solve one of the greatest economic crises since The Great Depression. It is here if you'd like to take a look. I agree with the President that bold moves by our government are necessary. Where we differ is that I do not believe it to be reasonable to think that our economy, stock market, economic growth or employment numbers are going to reach prior levels any time soon. That's because much of our economy one year ago was an illusion....a mirage created by easy access to credit sparked by a poorly regulated financial system. We are effectively the great athlete trying to compete after his steroids have been taken away: The athlete might be good, but his natural talent will likely never match his performance when it has been enhanced by doping.
More importantly, it is critical that each of us seriously considers the long-term financial damage that has been done to our economy. Even worse than our financial system, our political system is one that promotes the kind of short-sighted behavior that will surely cause serious financial problems for our children and grand children. I apologize for sounding like an alarmist, but I must be blunt: Get your money together RIGHT NOW, or there may be hell to pay in the long-term. The data from my research show that this is simply the beginning of very serious long-term financial problems in our great nation.
Our money advice email list is here, feel free to join. If there is a way that my training in Finance can help you or your family overcome financial challenges, I'd be happy to share what I know.
Be well,
Dr Boyce
www.BoyceWatkins.com
*************************************************************************************
The Scary Side of Our National Debt
By Dr. Boyce Watkins
www.BoyceWatkins.com
As a finance professor, I become nervous when listening to the numbers being tossed around by our federal government. I hear “700 billion for this and 800 billion for that” mentioned as casually as a man tossing dollar bills at a strip club. Our government officials have been wasteful, incompetent and incredibly myopic in the way they’ve managed our money. Even conservative Republicans are spending like financially illiterate rap stars, and the Obama-mania train doesn’t seem interested in taking a different track.
Added to the $400 - $700 Billion that President Elect Obama wishes to spend on a stimulus package (not to mention bail-outs for automakers and other parts of the economy), the total amount of money our government has seriously considered allocating to solve the financial crisis has approached the $2 Trillion dollar mark. In case you’re wondering, that is A LOT of money, even for government officials who think that money grows on trees.
The truth is that, like the star quarterback who thinks his money will never run out, our country is going to wake up one morning, only to realize that we are no longer financially secure. We are going to be alarmed by the prospect that our government securities are no longer considered risk-free investments. Like the worried mother who notices she is one paycheck away from being homeless, we will see that we are one terrorist attack away from being stripped of our vast economic power.
To put the $2 Trillion dollar problem into context, consider this:
- Our government’s annual income (IRS receipts coming from money you and I pay in taxes) is about $2.5 Trillion dollars.
- Our national debt has reached the $10 Trillion dollar mark. That is like a man earning $250,000 per year, and sitting on a million dollars in debt, with full intention of obtaining more debt because he believes he is too rich to go broke.
- Roughly 42% of the Federal budget goes toward entitlements: Medicare, Medicaid and Social Security. Another 20% goes to making sure we can arbitrarily “liberate” other countries who happen to have plenty of oil (the military), and another 9 – 10% goes toward paying the interest on the national debt.
- Our population is aging – this implies that our productivity as a nation is going to drop over the next 30 years, and our real Gross National Product is likely to drop with it. In conjunction with our decline in productivity, our obligations for the "Big Government 3" (Medicare, Medicaid and Social Security) are going to grow. So, the guy I mentioned above with a million dollars in debt is also going to see his income decline, while watching his expenses go up.
Translation: our country is in serious financial trouble. Trickle down economics (as proposed by these bailout plans) almost never works. I am amazed that we live in a country in which the same irresponsible men who caused the crisis are the first to be rewarded with a government bailout. The next time someone attempts to argue that Black males or young single mothers lack personal responsibility, I am going to point to the bankers on Wall Street and our government officials as being far more damaging to our nation. The real welfare recipients live on Wall Street, Capitol Hill and in executive suites, as they beg and plead for government assistance that is being granted at will. All the while, I hear politicians (even the great Black man in the White House) tell Black males with nearly 50% unemployment that they just “need to be more responsible”.
What are the solutions to this problem? There really are no quick solutions, but this might be where President Elect Obama can start:
First, stop declaring expensive wars that don’t make any sense. The Iraq War costs our nation roughly $340 million dollars per day and a combined total of half a trillion dollars. That’s enough to send over 10 million kids to college or to pay a year’s worth of health insurance for 100 million people. You could also provide $100,000 dollars worth of mortgage relief to 5 million American families.
Second, stop electing incompetent people to the most challenging office in the land. Choosing President Bush to run our country means that we deserve whatever consequences come from allowing arrogant Ivy League privilege to override the importance of competence, intelligence and solid leadership. With all the bogus and racist claims that Black youth are crippled by anti-intellectualism, it’s funny that nearly 50% of our nation planned to elect a Vice President who doesn’t know that Africa is a continent.
Third, stop throwing our children’s futures into the garbage. Millions of powerful minds are being wasted each year by a horrible inner city educational system. The money spent on the war in Iraq could have saved the lives of these youth and turned them into productive Americans. Instead, many of them are only going to be prepared to milk the economy for more costly entitlements.
Fourth, stop incarcerating many of our most productive citizens. We pay roughly $23,000 per year to incarcerate criminals, plus an average of $24,000 per year/per inmate for community corrections officers and other supervisory officials. Spending that money to educate and rehabilitate these individuals would not only increase our nation’s productivity, it would further reduce reliance on government support given to those who’ve been marginalized or had their families destroyed by our barbaric system of incarceration. This doesn’t count the impact on health effects that would come by simply stopping the prevalence of prison rape and transmission of disease within many communities across America. All chickens eventually come home to roost, even when they’ve been given 25 to life. The incarceration of productive Americans is an inter-generational loss, since their ill-nurtured children then become society’s worst nightmares.
Finally, our elected officials must stop thinking that they have a blank check. Sorry Senators, but you don’t. Money is finite, and when you keep piling up debt like MC Hammer, you’ll find yourself broke after your next album. Around the world, massive wealth appears and disappears in a flash, and by continuing our irresponsibility, we are setting the stage for the twilight of our great nation. Our officials must be more responsible and the American people must demand limitations on the use of federal debt.
Every great empire has a sunset. Many successful individuals and entities are brought down by a crippling vice, addiction or series of poor choices. America's love of debt, arrogance in leadership and unwillingness to plan for the future may be the poisons it has picked to undermine our global prominence. Protect yourself and your family, for there are bumpy times ahead.
Dr. Boyce Watkins is a Finance Professor at Syracuse University. He does regular commentary in national media, including CNN, ESPN, BET and CBS Sports. For more information, please visit www.BoyceWatkins.com.
Friday, January 2, 2009
New Year Tips From Black Scholar Boyce Watkins
Dr. Boyce Watkins
www.BoyceWatkins.com
Brought to you by the Great Black Speakers Bureau, the #1 Speakers Bureau in America.
Happy New Year Peeps!
OK, if you want to start the New Year off with a laugh, here is the video of Jesse Lee Peterson of Fox News thanking White people for slavery. What's really funny is that Jesse is being dead serious. I also want to share my support for the great Cynthia McKinney, whose boat was attacked as she worked hard to provide humanitarian support for suffering Palestinians during the unfortunate conflict in the Middle East. May this year bring peace to that region of the world.
I just wanted to reach out and inform the members of the YBW family that my wonderful publicist, Tarin Donatien, is now pushing me back out into the crazy New York media for a brief tour to start the year. Our goal is to make the world aware of our new financial fitness program at FinancialLipo.com, which will focus on helping people learn to manage their bill collectors, cut their debts legally, gain financial literacy and get their financial situation right for the New Year (the site will be launched on January 6). Sign up for our Money Advice Email list to get free money tips and to stay briefed on the issue. We are also going to discuss the new TV show I am working on with Dara Cook from BET/MTV called "Ying Yang", in which the goal is to discuss the Ying and the Yang of various controversial issues (i.e. is Hip Hop too sexist? Does a Black President necessarily help black people? Are men or women the primary cause for troubles in the Black family?). If you have ideas for good show topics, please fee
l free to share them with us.
Here's the break down:
On the morning of 1/8, I'll be on The Ed Lover Show in NYC. It's on Power 105.1, which I think is the #1 show in NYC. But Hot 97 is pretty strong, and so is WBLS. The New York Media market is pretty fierce.
I'll be on Hot 97 the following Sunday. Lisa Evers, the host of Street Soldiers, is one of my favorite people.
I'll be on The Morning Show with Mike and Juliet on the morning of the 9th at 9 am. The show is on National TV and probably comes on in your city. Here's a list of the affiliate cities.
Wendy Williams and I are going to be on the 9th at 4 pm. I love Wendy's show: she's crazy but professional. Our past appearances have always been pretty exciting.
Steve Harvey and I are going to talk money during the same week. The exact time has not been confirmed yet, but I'll let you know when that happens. I like Steve Harvey's show a lot. He is actually a funny dude in person.
Quick thoughts on the New Year and how to make it work for you:
1) There are 24 hours in a day, 168 hours in a week and 8,760 hours in a year. That is a lot of time to accomplish whatever goals you have for yourself. At the start of each year, I budget the 8,760 million "time dollars" I've been blessed with and figure out how I am going to make my life better. You'd be amazed at how much you can change your entire life in just one year of consistent focus. Most of us have so much BS around us that we lose our center and disconnect from our true purpose in life. Find your purpose right now, write it down and read that note every day.
2) No matter what your age, your life should ALWAYS be moving forward. You should always aim to get educated, pick up a new skill, overcome another weakness, etc. When a living thing stops growing, that is when the thing starts dying. The velocity and direction of an object means far more than its current position. In other words, where you are doesn't mean much of anything: it is where you are going that determines where you end up. We are all becoming SOMETHING, and it is our day to day actions that determine what that thing is. For example, someone who plays basketball every day is becoming a good basketball player, even if they are not very good right now. Someone who eats cupcakes all day is becoming overweight. Someone who studies every day is becoming a good student. Ask yourself honestly, "Based on my day to day actions, what am I becoming? Are my words in line with my activities or am I lying to myself?"
3) Remove the toxins from your life. Wasteful activities, negative people, bad relationships and ugly habits have no place in your existence. Start the process of extracting the negatives today to remove the weight that keeps you from being where you want to be. Either kill or redefine the relationships that stand as barriers between you and your destiny. It's scary and people might get angry, but you must do it right now. When people see that you are serious, they will move the hell out of your way.
4) Mistakes of our past can be the cancer that causes us to destroy our future. A young man at 28 years old told me that he was down on himself for never going to college. 10 years later, I saw the man and told him that if he'd started going to school the minute we'd had that conversation 10 years earlier, he would be a doctor by now. Mistakes of our past can be like a cancer in our foot. Rather than cutting off the foot and being healthy, we let that cancer spread to the rest of our body, killing us slowly. Sometimes, we are so angry at ourselves about the past that we throw away our future by remaining determined to drown in the depths of self-pity, laziness and low self-esteem. Learn to forgive yourself for mistakes and keep moving forward. Life is too short to waste time.
5) Only crazy people become Great Black Achievers. I say this because you must see the vision before anyone else does, and only crazy people see things that are not there. There was a time when a "nobody" named Barack Obama saw himself as President of the United States and people thought he was simply delusional. But had he not been able to see the vision clearly for himself, he would never have been able to paint the vision for the rest of the world and his confidence would have been swayed by those who truly felt that a Black man could not be President of the United States. See your vision, believe in that vision, craft that vision, have a strategy to live that vision. Then bust your butt to fulfill that vision with deliberate actions and daily activities that inch you closer to your objective. The bed called "Your Life" is made by your day to day actions and choices. Most of our existence is nothing more than a product of what we choose to do on a daily basis. Success DOES NOT happen by accident.
Here is a YBW Family Slogan we can use for this year: "Greatness is mine in 2009". Kill off the haters and give birth to your dreams. Always set goals. Inspire those around you with your courage. Set empowering examples for your children. When you shine your light the brightest, those around you find the light within themselves. Your destiny is to be outstanding.
God Bless,
Dr. Boyce
www.BoyceWatkins.com
Wednesday, November 26, 2008
Tips For Consumer Confidence - Dr. Boyce Watkins
Dr. Boyce Watkins
www.Boycewatkins.com
If you wish to see a video explaining consumer confidence, which is one of the driving issues behind the recent moves in the stock market, please click here.
This has been an interesting week, with auto execs showing up on private jets to request a bailout from the government and the Dow moving to below 8,000 points for the first time in 5 years. I still hold to the fact that this is a great time to get into the stock market if one has never done so before, especially if you are under the age of 50. By the way - please visit our sponsor, GreatBlackSpeakers.com if you are interested in hiring a top notch African American speaker or seeking to become one.
Take care!
Boyce Watkins
http://www.blogger.com/www.boycewatkins.com
Click here to join our money advice list.
=====================================================================================
If you listen carefully to the words of Treasury Secretary Henry “Hank” Paulson and Ben “Big Ben” Bernanke (chairman of the Federal Reserve) you might notice a trend in their language. The word “confidence” is used a lot when they speak. Many of their monetary proposals are not necessarily valuable for their financial power, but also for their psychological power.
Some of you may wonder what confidence has to do with anything. After all, if you’re broke, confidence doesn’t exactly put money in your pocket. If you’re 100 pounds overweight, confidence won’t help you win the Olympic 100 meter dash. When you are flying on a crashing plane, confidence doesn’t keep the plane from slamming into the ground. But confidence is important to an economy, and one of the most significant drivers of economic growth. In fact, over confidence has driven US economic growth for the past 10 years. Here are some reasons that confidence matters in the minds of Hank and Big Ben:
1) Confident consumers spend money
If you think you might lose your job next year, are you going to max out your credit cards? I certainly hope not. If you are worried about being able to make ends meet, are you going to buy that big screen TV? Not unless you want your wife to leave you. So, even if it doesn’t hold any truth, the mere forecast of a weak economy is enough to make many Americans hold off on consumer spending, one of the great driving forces of the American financial system.
2) Confident companies invest money and hire workers
Investments involve risk. Your hunch may work out, and it may not. If you don’t believe the economy is getting better, you are not going to consider taking that risk. No one plans to go to the beach if the weather man says that it’s going to rain. When economic rain is in the forecast, companies pull out their umbrellas and hold off on new projects. This reduces the number of jobs in the economy, because nearly every job created in America is the result of someone making an investment.
3) Confident Americans do not take their money out of banks
In case you didn’t know, your bank does not have your money. Your money is part of a large base of financial capital that is loaned out to individuals and consumers seeking to get a good return on their investment. So, without investing, your bank would have no interest in paying you any interest at all. So if, say, 30% of all customers of the same bank decide to get their money out at the same time, the bank would have serious financial problems. It is a lack of confidence that could cause customers to “run” on their bank and take out their money.
4) Confident investors keep their money in the stock market
The stock market is a place where fortunes are made and lost. Some part of that fortune is psychological, given that no asset can have a value which exceeds that which someone is willing to pay for it. When investors lose confidence, they take their money out of the stock market, and reductions in demand for stocks lead to massive paper losses in the market. Additionally, most Americans are “momentum traders”, meaning that when the market goes up, they tend to buy more, and when it goes down, they tend to sell. History shows that it is actually the opposite approach that tends to work best.
5) Confident banks make loans
Banks have to keep a certain portion of their funds on hand at all times to meet federal requirements. If they are fearful that their customers might come and demand their cash, they hold onto their capital to ensure that it is available. If they are afraid that their borrowing customers will not be able to repay loans due to a weak economy, they also hold back on issuing new loans. The truth is that when economic forecasts are grim, conservative bankers become even more fearful than the rest of us.
The bottom line of this article is that confidence matters. So, the next time you hear Ben Bernanke give a speech, you can be confident that he is going to use language that makes you feel more secure. Whether you choose to believe those words is up to you.
Dr. Boyce Watkins is a Finance Professor at Syracuse University. He does regular commentary in national media, including CNN, BET, ESPN and CBS. For more information, please visit http://www.blogger.com/www.boycewatkins.com. To join our money list, please click here.
