Thursday, November 29, 2007

The Joys and Perils of Christmas


Christmas is a time of year when we joyously celebrate the birth of Jesus the Christ and God’s giving of His son for us, and many people respond by giving gifts to loved ones, friends, and even to total strangers in need. It is always good that we extend acts of love and charity to others, and to do so seems especially appropriate this time of year.

Unfortunately, some merchants view the extraordinary goodwill and generosity shown by Christmas shoppers as an extraordinary opportunity to take advantage of their goodwill and generosity. In that regard, shoppers need to be aware of certain perils, namely in buying gifts cards and using credit cards, and should shop accordingly.

Gift cards can seem like a very practical way to ensure that those to whom we give get the perfect gift. Last year, U.S. sales of gift cards exceeded $80 billion. Unfortunately, consumers lose nearly $8 billion annually through such cards either by misplacing or forgetting to redeem them, through various hidden fees, or through expiration dates imposed by the merchant. It’s a point worth making that the legal tender used to buy a gift card has no expiration date.

It’s very important for both the giver and the receiver of gift cards to read and remember the fine print. Terms and conditions that accompany these cards can substantially decrease their face value. This fine print may include:

· a fee to be paid upon purchase of the card;

· a fee to be paid if the card is lost or stolen (and even then the lost card’s bar code and the receipt provided the gift-giver may be required before a replacement will be given);

· a monthly maintenance fee to be charged on inactive cards;

· a fee to be charged simply to check a card’s remaining balance;

· a restriction to limit the period of time that a card is valid.

Many retailers realize that a significant percentage of gift cards will be lost, forgotten and never used, or if partially used, a small balance may go unclaimed. Very few gift cards allow the recipient to redeem the card for cash, even if after a purchase there is only a small balance remaining on the card.

Both the giver and receiver of gift cards should learn about any expiration dates that apply and any fees that may be assessed against the cards. Furthermore, the gift card, a copy of its bar code, and the receipt for its purchase should all be kept in a safe place. But in the end, most losses could be avoided if those who get gift cards use them sooner rather than later.

A second peril for Christmas shoppers exists with using credit cards issued by merchants. Major retailers will frequently ask if you’d like to put your purchase on your store credit card, and if you don’t have one they’ll offer you the opportunity to apply for one on the spot. These offers often include a generous discount for the purchase if it is made with either your existing or a newly applied-for card. Retailers know they will make far more as your creditor than they could ever make by simply selling you merchandise. Some retailers even sell merchandise at a loss knowing that the real profits are made in their lending of money.

Offers for “no payments until next June” or “interest-free payments for six months” are designed to encourage you to carry unpaid balances on your account. Buyer beware. These offers all come with hefty, hidden price tags. One financial advisor illustrates the point with the following example:

The average credit card balance these days is pushing $8,000 and the typical interest rate is about 18 percent, with many folks paying even more. Doing the simple math, an 18 percent interest rate on an $8,000 balance is $1,440 a year.

If you need more convincing, what if rather than paying $1,440 a year to the credit card company, you invested $1,440 every year for the next 20 years and you earned an average return of 8% a year. In 20 years, you’d have accumulated a nest egg of $71,169!

That should make us all think twice when we’re offered credit or we’re tempted to reach for a credit card to make a purchase.

The Christmas season should be a holy and joyous time marked by generosity. It’s a time for giving. But we should be careful that as we give gifts, we give them with our heads as well as with our hearts.

Friday, November 16, 2007

A Politically Correct Thanksgiving?


As we prepare to celebrate Thanksgiving, it can be valuable to consider the roots of this uniquely American holiday because too often its history and meaning is ignored or distorted in our secular age. Some schools are even using textbooks that suggest that the first Thanksgiving feast was about nothing more than expressing thanks to Squanto and some of the Indians, instead of thanking God.

The pilgrims were English Puritans, poor farmers who were struggling to practice their “separatist” religion in their homeland in the face of government harassment and religious persecution. In 1608 they emigrated from England to Amsterdam, and a year later, they moved to Leiden, Holland, where they remained for 12 years. However, they eventually became concerned about the corrupting influences their children faced in that country and, spurred by economic difficulties, they negotiated with the London Company for passage and the right to settle in Virginia, which was the northern part of the company’s jurisdiction.

Eventually, fewer than half of their members agreed to leave Leiden. As part of their agreement with the London merchants financing the voyage, they would travel with a larger group of other passengers. The Mayflower began its historic journey on September 16, 1620, with 102 passengers, including 37 from the Leiden congregation.

The voyage took 65 days, during which two passengers died. A baby was born at sea, and another was born while the ship lay at anchor off the Massachusetts coast. Conditions in the dark, crowded ship were appalling. Most of the passengers were seasick almost from the beginning, there was little to eat, they suffered from bleeding gums, infection, bites from vermin, hunger, rotting food, and they were not able to bathe for the more than two month passage.

When at anchor it became obvious that they would not reach the land in Virginia for which they had contracted, there were threats of mutiny. To ward off the threat and establish a basis of government in an unsettled region, they drew up the Mayflower Compact. This legal framework, based on biblical principles, provided for just and equal laws for believers as well as for non-believers; significantly, it also called for a common store of goods with each person, providing an equal share of ownership and use.

In that first harsh winter more than half the suffering settlers died from cold and starvation, and for some years after settlement the community still failed to flourish. In his history of the Mayflower Company, Governor Bradford indicated that the inherent problem was the collectivist system established by the Mayflower Compact. He wrote:

“The experience that was had in this common course and condition, tried sundry years -- that by taking away property, and bringing community into common wealth, would make them happy and flourishing -- as if they were wiser than God. For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense … that was thought injustice.”
Bradford, recognizing the power of incentive, wisely remedied the problem by assigning each family their own plot of land to work and manage as they wished, thus turning loose for the first time on the American continent the powerful engine of free enterprise. Bradford wrote that his privatization reforms “had very good success, for it made all hands industrious, so as much more corn was planted than otherwise would have been.”

The resulting bounty allowed the settlers to trade and exchange goods with the Indians. It even allowed them to pay off their debts to the London merchants ahead of schedule.

Thus, when the practices of the settlers accorded with the laws of human nature, which laws their leaders recognized were authored by our Creator, the people prospered and were moved to give thanks to the Author of life and natural law.

As we study the lives of these first settlers and the history of their enormous struggle, the spiritual roots of our country are unmistakable and clear. When our textbooks and government schools distort that history or deny the powerful spiritual roots of our nation’s founding, we need to insist, with the same strength of conviction shown by those courageous settlers, that their story be told fully and truthfully. When socialist proposals are put forth for “comprehensive health care” and other collectivist ideas, our children need to know that these ideas were tried and have failed not only in the Soviet Union and Eastern Europe, but right here in America nearly four hundred years ago.

Since those first, difficult days our country has been richly blessed like no other on the face of the Earth. As we gather with our families and contemplate the extraordinary blessings of freedom and bounty we enjoy as Americans, let us resolve, like those first settlers who risked all for their faith, to thank God from whom all blessings flow.

In this spirit, my family and I wish you and yours a very happy and most blessed Thanksgiving. Let us all especially pray for the families and the safety of our troops overseas, remembering also to thank God for their success.

Friday, November 9, 2007

A Dangerous Mix of Money and Power

We’ve all heard politicians and candidates talking about the “ordinary” people they’ve recently run into, and telling teary-eyed stories to show that they feel our pain and really care about us little guys.

This week I heard a radio segment focusing on a personal story recently used by a presidential candidate in her campaign rhetoric while traveling around Iowa. The reporter following her campaign described how this Senator stopped at a local sandwich shop for lunch with her entourage. The Senator settled onto a stool at the counter, ate a sandwich, chatted with her waitress, and then was on her way. According to the reporter, this experience gave the presidential candidate “perfect fodder for her next few stump speeches.”

To be sure, it was glorious fodder. She talked about the working mom she had just met who is raising two boys, working two jobs at minimum wage, struggling to make ends meet, and how, when she becomes President, ordinary people like her waitress will have it much better. It must have all sounded so heartfelt coming from a famous candidate, and no doubt crowds were touched by this sort of profound compassion and concern for their less fortunate neighbors.

The reporter decided to return to the diner to get more background on the one whose life had gotten drawn into a famous candidate’s stump speech, thus becoming part the 2008 presidential election. Yes, it turns out that the waitress indeed has had a difficult life. She has often worked two and three jobs to support her boys. In addition to her job in the sandwich shop she also works at a nursing home to pay her own school loans and make ends meet.

The diner indeed had provided lunch for the candidate and her campaign entourage, but this poor waitress, who was the subject of the campaign rhetoric, insisted that she was not even left a tip for her services. Not five cents for the struggling mom by whom the candidate was so moved.

This story reminds me of an issue that came before the state Budget and Control Board last week. At its meeting, the Board approved major salary increases -- nearly 20 percent increases for some -- for a very small group of agency heads, despite no performance review for the raises, despite some of them being on the job for only a few months, and despite none of them asking for raises. The three most generous raises in the group were for $20,000, $23,000, and almost $36,000!

Governor Sanford and I voted against those hefty increases, particularly since state government is heading into what could be a $220 million deficit next year. Yet the three other members of the Board disagreed with our position, overrode our votes, and approved the raises.

Now these three are serious gentlemen of comfortable means who I assume have been successful in business. I simply can’t imagine they would ever grant an employee of theirs, who had been on the job only a few months, or who had not been given increased responsibilities, a 20% pay raise. But many elected officials think differently of spending taxpayers’ money than spending their own, and spending it generously. For some, politics is about power, and many have grown accustomed to letting the hard-working citizens of South Carolina buy that power for them.

Like the Senator who wouldn’t leave her own spare change for a working mother who had served her, too many of our politicians see taxpayers as merely useful props. Some will talk with great compassion about their concern for the poor. They’ll conceive great governmental programs to improve life for middle class families whose votes they covet. But it will be the very people they say they want to help -- the struggling mom raising two boys alone and waiting tables or the self-reliant middle class mom and dad who want to rear their children as their parents reared them -- who will ultimately pay the tab for the generous big government, big spending schemes of the politicians.

Someone once said that “giving money and power to government is like giving whiskey and car keys to teenage boys.” In the interest of protecting our financial safety, perhaps it’s time to insist upon more restrictive driving rules for those to whom we’ve given money and power.

Monday, November 5, 2007

It’s Wrong… Patently Wrong!


Even before many of our rights were codified in the U.S. Constitution, the right of an inventor to own all rights to the creations of his own genius was constitutionally protected. The patent system crafted by our founding fathers has been so successful that it has enabled America to produce more inventions than all the rest of the world’s nations combined.

Unlike many countries, America’s patent system has guarded intellectual property by protecting the confidential contents of a patent application until a patent was granted, or by returning an application to the inventor with his secrets intact, so that he could make modifications and possibly resubmit an application.

Unfortunately, foreign interests, multinational corporations, and American “globalists” who believe that people, products, and information ought to be able to cross national borders unfettered are attempting to “harmonize” America’s patent system with systems that exist elsewhere in the world. Based upon globalist ideology, a “Patent Reform Act” has already been passed in the U.S. House of Representatives and is under consideration in the Senate.

For the sake of “harmonizing” the American patent system with systems of foreign nations, foreign interests and multinational corporations are aggressively pressuring Congress to make these changes. After all, they are aware that the so called “reforms” would give them access to the research and development done by small inventors and businesses that account for 40% of America’s innovation, and would free them from having to pay for their inventions.

The proposal would change the rules for filing patents and would give property rights to the “first to file” rather than the first to invent. Obviously, large foreign interests are far better positioned than are most of our own small businesses and individual inventors to hire teams of powerful lobbyists and lawyers in Washington, D.C. to help them gain rights to an American invention they didn’t devise, simply by rushing to submit paperwork before it is submitted by the actual American inventor.

The proposal would require the U.S. Patent Office to open its files and publish all inventions 18 months after the date of application, even though the current application process for an American inventor takes much longer to successfully complete. This would mean that before American ideas and inventions are protected with a patent, confidential information would be published so that any country can pirate American ideas and inventions and put them into production.

The Patent Reform Act would also limit damages that can be awarded for patent infringement and outright theft. Again, the small American company or individual would be at a severe disadvantage in attempting to win just compensation from an unscrupulous multinational corporation or foreign nation.

Finally, the proposal would hurt our most creative and productive citizens while it would help those who pay no taxes in the United States and who have no loyalty whatsoever to our country. It would also reward and assist those countries that already are pirating the intellectual property of American citizens, manufacturing products based on ideas they have stolen from us, and selling those products back to us.

The American government should be working in the best interests of America’s small businesses that create new jobs and account for most of our productivity rather than penalizing them with the Patent Reform Act. If America’s inventors are not protected from foreign nations and multinational corporations, America will lose the foundation for its prosperity with innovation moving overseas just as manufacturing has done.

Because of the rapid changes that have come with the digital age, there indeed might be some updating and improvements needed to our patent system. But given that America still leads the world in technology and innovation, it seems odd that our lawmakers would feel the need to throw out our patent system and pattern it instead on the systems of far less creative countries. Perhaps we should remind our Senators of an old adage: “Don’t throw the baby out with the bath water.” To do that would be patently wrong.