Saturday, September 28, 2019

Across the Board Cuts Needed to Drain the Swamp

The President
The White House
1600 Pennsylvania Avenue
Washington, DC 20500

Dear Mr. President:

This is a letter of support in light of the unfair allegations that Democratic Party and fake media extremists have brought against you.  Fake journalists have made absurd claims about the significance of your conversation with Prime Minister Zelensky, including the fiction that you withheld aid or in some way functioned as a mafia boss.  Seeing the absurd spectacle of Neil Cavuto pretending to be an objective journalist while basing all of his questioning on false assumptions and outright lies isn’t surprising, but it is one more nail in the coffin of the credibility of television news.

The bigger question is how to move forward given that this series of events has revealed deep-seated corruption within the intelligence agencies.  When you were elected, I was skeptical of the expression “deep state.” As a libertarian, I was aware that the state is fundamentally corrupt.  However, I was unaware of the deep partisan infiltration of the intelligence agencies.

When you are elected to a second term, I urge you to follow the libertarian approach of across-the-board budget cuts to agencies.  This is an approach that will be a baby step toward curing the federal deficit but a leap toward draining the swamp.  The concept of corporate culture is that behavior patterns in organizations become ritualized. Cultures are collective mental programming that are next to impossible to change.  This insight was made in the 1950s by the sociologist Philip Selznick in his book Leadership in Administration.  Because you are primarily a real estate developer used to contractual relationships, you seem to have proceeded in your efforts to drain the swamp without addressing the deep cultural impediments.   

The solution that Selznick offers to change cultures is the same that libertarians have urged to cut costs:  sharply cut the staffing.  As well, shuffling personnel and hiring from without will be useful. Director Henry King’s 1949 film 12 O’Clock High depicts the reshuffling and firing approach to culture change.

As you know, the federal debt is at levels that may threaten economic growth in the short run and certainly will do so in the long run.  Across-the-board cuts in federal agencies of, say, 50% of staff in agencies like the CIA, NSA, DOL, and DOE along with reshuffling of assignments of existing staff will shake up the corrupt, deep-state culture if not end it entirely.  Adam Schiff, Nancy Pelosi, the Squad, and the radical steps they are taking may make such a radical approach possible after 2020 because they are losing credibilty.  


Mitchell Langbert, Ph.D.

Cc: Neil Cavuto Nancy Pelosi, Adam Schiff, Mitch McConnell

Mr. Joseph Maguire
Director, National Intelligence
Office of the Director of National Intelligence,
Washington, DC 20511

Dear Mr. Maguire:

I have written to the president suggesting that radical culture change is needed in the intelligence community. The leaking of a presidential conversation is neither heroic nor legal, and it is not the work of a whistleblower. Rather, it is reflective of an intelligence community that has run amok with partisanship and corruption.

As I mention in the attached letter to the president, the antidote for a corrupt culture is across-the-board firing.  I suggest that half of all intelligence personnel be terminated. They are no longer serving the public, and the culture in the agencies is rotten.  Once half have been fired, the remaining personnel should be reshuffled. New personnel without the taint of the rotten culture that has evolved can then be hired.

This kind of step is unknown in government bureaucracies, but it is evident that it has become necessary.


Mitchell Langbert, Ph.D.

Wednesday, September 25, 2019

How Judge Napolitano Got It Wrong

I was listening to Judge Napolitano on Shepard Smith on Wednesday, Sept. 25.  (I have been using Fox as background while I'm entering data.)

There seems to be a confusion on the part of Judge Napolitano and other commentators about the recent Ukrainian issue. This has been caused by a familiar left-wing tactic of taking control of nomenclature, and Mr. Napolitano falls prey to this tactic, for his analysis presumes that there was, in the president's mind, concern for Biden qua candidate and not Biden qua criminal.

The president may have been seeking a quid pro quo only if he was attempting to find information about a political candidate to oppose him. He would not have been seeking a quid pro quo if he was attempting to investigate Joe Biden as a criminal.  

There is plenty of evidence that Biden has behaved criminally, and there is no justification for claiming that the president cannot enforce the nation's laws. Judge Napolitano assumes that the president was campaigning merely because the left has defined the conversation in this way and not  because the president was seeking to drain the swamp, which he has repeatedly stated he aims to do.  

In discussing this issue, the Democrats have staked out the claim that the president was seeking information about a political candidate.  However, there is zero evidence that that is the case. In discussing this issue, it is disingenuous to say "political candidate." It is honest to say that it may be that he was seeking to obtain information about a criminal, Biden, and it may be that he was seeking to obtain information about a political candidate.  Neither is clear.  

Tuesday, September 24, 2019

The Mystery of Low Income REITS

My sister and I inherited an apartment in western Queens, and after almost 10 years of co-owning it, we are going to sell it to her daughter. As a result, I will have a chunk of investment capital, and I will put most of it into real estate investment trusts, military stocks, and hard metals.  Western Queens--Astoria, Long Island City, and Sunnyside--is apparently on a tear. While I was walking to the apartment to meet the appraiser, I noticed multiple construction projects involving new apartment and retail structures.  Broadway in Astoria, which is near where I grew up, is a different place from what it was 20 years ago.  Even the famous Greek restaurant, Uncle George's, is gone.

The kicker is that New York State has passed a law  mandating green energy, and New York City has passed a law mandating retrofitting.  The green energy law will double real electric costs over the coming twenty years, and the retrofitting will increase costs as well. Perhaps it is a good time to escape from New York.

Gold has been on a tear, and I suspect a pullback; hence, I am going to limit the purchase and overweight silver, which hasn't gone up as much as gold yet.

I like 3M and Unilever, and I would like to put a little into defense stocks.  After a couple of setbacks in recent years, 3M is in value territory, but Unilever is somewhat overpriced.  Something tells me that drones are the weapon of the future, and firms like AeroVironment (AVAV), Boeing (BA), and Northrop Grumman are likely suspects. None of these is priced at a value level, and Boeing has had problems with tariffs and a crash investigation. Northrop Grumman (NOC) has been on a tear, and is up 48% this year. I already hold some General Dynamics and Raytheon, and I think I will add a little GD as well as AVAV and NOC.

VNQ is the Vanguard REIT index, and it is up this year, and I'm expecting to put most of the money there.  However, I would like to overweight low-income real estate, and that is a tough nut to crack because few REITs specialize in low-income real estate. This is another case of the Federal Reserve Bank economy artificially creating credit to  subsidize wealthy rather than middle class or poor Americans.

I could find three REITs and funds that focus on lower-income housing: Sun Communities (SUI), NexPoint Residential Communities (NXRT), and the Community Development Fund (CDCDX).  I already own SUI, which makes prefab housing, and it's been priced at nosebleed levels.  It's been going up 28% a year.  CDCDX is a public-private partnership that invests in low-income projects. It is a bond fund and is correlated with the bond market. Since bonds are still at historically high levels, I'll pass. I have moral concerns about public-private partnerships as well.  NXRT is is somewhat overvalued. According to NXRT's website:

The company pursues investments in class A and B multifamily real estate property, typically with a value-add component, where we can invest significant amounts of capital to provide “life style” amenities to “work force” housing. Our value-add strategy seeks to provide a nicer home to our residents, while maximizing returns for our shareholders.

The moderate-income housing market seems to be a victim of the banking cartel, the Federal Reserve Bank, which favors high-end real estate and labor-substitution investments like robotics, plant relocations, and technology.  While there is no shortage of high-income-oriented apartment REITs, there is only a handful of moderate-income-oriented ones. This may explain the overvaluation of SUI and NXRT.  As with gold, I'll buy a small amount of NXRT.