Wednesday, June 30, 2010

McAfee "Secret Life of Teens" Survey Report, Part 3 - Risky Online Behavior

Part 3 of a 5-Part Series

Photo Credit Flickr Common
One of the first things parents teach their children as soon as they are able to understand is not to talk to strangers. As children become older, they would consider any strange adult trying to talk to them out of the blue “creepy” in person. They would get a “strange feeling in their gut” if some random person on the street started asking them personal questions like their age, their home address, their email, or their phone number. Teens would most certainly find it very odd to have a stranger on the street ask them for a picture of themselves. A teen would rightfully consider engaging in any of this type of communication situation “in person” weirdly inappropriate at best and alarmingly dangerous at worst.

Some of the most shocking elements of the McAfee “Secret Life of Teens” online behavior survey results confirmed teens talk to strangers and give up personal information quite easily often without thinking about it or feeling weird about it in their online behavior. Despite scary news headlines and concerned warnings from parents, teens are releasing more personal information than they should to random people they encounter on the Internet.

The risky online behavior of teens is highlighted in the McAfee survey result statistics:

* 69% of 13-17 year olds have updated their status on social networking sites to include their physical location.

* 28% of teens chat with people they don’t know in the offline world.

* 43% shared their first name.

* 24% shared their email address.

* 18% shared a personal photo of themselves.

* 12% shared their cell phone number.

* Girls are more likely than boys to chat with people online that they don’t know in the offline world, (32% versus 24%), and 13-15 year old girls (16%) are more likely than boys the same age (7%) to have given a description of what they look like.

Dave Marcus, Director of Research and Communication for McAfee Labs, provides the big picture view in his response to my question What threats are teens still facing online? - “I think it goes beyond the concept of threats that they are facing online, what they share online is the real problem. They are revealing photos and saying things that they may not realize can be posted elsewhere. Teens tend to be more trusting online, and may not have a concept of the scams/malware they could be harvesting just by clicking on an unknown link.”

Tracy Mooney, McAfee’s Chief Cyber Security Mom summarizes the point, “Kids know not to talk to strangers – it’s one of the first lessons you teach them. But online, there’s a sense of trust and anonymity, so kids let their guard down. Kids would never hand out their name and address to a stranger in the real world, so it’s alarming to see how many kids do that very thing online.”

The risky behavior detail in the study uncovers there are several red flags for parents, “Despite the fact that there is roughly the same level of online danger today as in 2008, most (95%) kids who participated in the survey are confident in their ability to stay safe online, yet our report shows that they still engage in risky behaviors.”

* Although teens are heavy Internet users, it’s still surprising that 27% say that they have accidentally infected their home computer with a virus or other malware, and 14% say that they shared their passwords with friends.

* Perhaps because girls tend to communicate more, they are more likely to engage in risky behaviors such as chatting with people they don’t know in the offline world (25% girls overall and 43% among 16- to 17-year-olds). Girls also report higher frequencies of being harassed and bullied online than boys.

* Almost a third (29%) of teens have downloaded a program without their parents’ knowledge and 16- to 17-year-old boys (45%) are most likely to download programs without parental knowledge, or those of x-rated content.

* While more than half (52%) of young people say they know someone who has experienced cyberbullying, only 29% say they have experienced it themselves.

* However, one in four kids (25%) report that they wouldn’t know what to do if they were bullied or harassed online.

The study affirms cyberbullying remains a risky online behavior problem, especially for girls. McAfee notes, “Cyberbullying has made media headlines several times this year, with tales of teens and tweens harassing each other online– with tragic consequences. One-in-three teens knows someone who has had mean or hurtful information posted about them online – like sending anonymous emails, spreading rumors online, forwarding private information without someone’s permission or purposely posting mean or hurtful information about someone online.” The conclusions drawn in the study around cyberbullying are not necessarily encouraging:

* Although cyberbullying statistics are flat (14% of teens admitted to engaging in cyberbullying in 2010, versus 15% in 2008), this data shows that despite current efforts, engagement in cyberbullying isn’t getting any better which may indicate that education efforts need to be increased or evaluated in order to decrease this behavior.

* Furthermore, incidents, such as cyberpranking (sending anonymous emails to someone at school) and spreading rumors online tend to increase as teens get older. This could mean that the large number of tweens that are online now could face more cyberbullying in coming years.

* The growing popularity of social networking could also open the door to further incidents of cyberbullying because kids have more ways to contact and harass each other and can find out more personal information about one another posted on social networking profiles and Twitter feeds.

* It is clear from the research that cyberbullying is not something that will go away anytime soon without increased education and prevention.

I asked McAfee’s Chief Cyber Security Mom Tracy Mooney for her opinion on teens and warnings:

BKH: Why do teens ignore online safety warnings?
TM: It’s not that teens ignore online safety warnings, rather that they feel more comfortable sharing personal information online. Kids seem to value the openness of sharing information online, whereas adults tend to be more cautious.

BKH: Do shock videos like the recent very graphic British made “car accident while texting video” have any impact on teens?
TM: I think kids think that they are the one kid in America who CAN text and drive. I try to set an example by handing my phone to my kids when I am driving. They can answer it for me if it is an emergency or check a text if it is important.

Tuesday, June 29, 2010

McAfee "Secret Life of Teens" Survey Report, Part 2 - The Difference Between Girls & Boys

Part 2 of a 5-Part Series

Photo Credit Flickr Common
It does not take a parent long to realize their teens are experts at digital technology. They are often more skillful and comfortable than their parents at incorporating the latest, greatest technology into their lives. Just like your parents probably could not get you off the telephone when you were in high school, you can not get your teens off their computer or cell phone – but now they are using the “telephone” to text their friends instead of verbally talking to them on it. Crazy, huh, using an instrument meant to “talk” more to “write” as the communication method? Teens today have not lived a day of their life without the Internet.

As McAfee’s 2010 “Secret Life of Teens” survey conclusions confirm, “Their high level of online participation also opens them up to potential dangers, such as cyberbullying, personal information sharing, and online threats. It’s important for you to understand the potential benefits and risks of your kids’ online lives, so we can nurture the positive aspects, such as increased communication skills and online learning, while minimizing risks.”

The McAfee survey report notes the changes since 2008 this way: “The main changes we’ve seen in teens’ online behavior over the last two years are a growth in social networking and sharing of information, as well as increased use of the Internet overall. When it comes to social networking, 73% of 13- to 17-year-olds today say they have an account on a social networking site, compared to 59% in 2008. This increase in social networking could be the cause behind the increase in personal information sharing (56% of 16- to 17-year-olds) since teens now have more platforms and opportunities to share details about their lives.”

As parents are well aware, there are differences in raising girls and in raising boys – whether politically correct to acknowledge these natural differences based on gender or not. The McAfee survey found girls are more likely than boys to chat with people they do not know online, and boys are more likely to have viewed or downloaded pornography online. Girls are more likely to have been cyberbullied. Most disturbing for parents may be “And, while almost all kids say that they knew how to be safe online, around half admit to giving out personal information to someone they do not know over the Internet.”

The differences between girls and boys are highlighted in these survey result statistics:

* Girls are more likely than boys to chat with people online that they don’t know in the offline world, (32% vs. 24%), and 13-15 year old girls (16%) are more likely than boys the same age (7 percent) to have given a description of what they look like.

* Girls seem to be more vulnerable online than boys, perhaps because communicating and sharing information are more typical behaviors for them. For instance, girls are more likely than boys to have a social networking account (72% versus 66%) and to say they always or often update their status (42% versus 29%).

* While girls’ openness may help them communicate better, it can also put them at higher risk. One quarter (25%) of girls—including 43% of girls ages 16 to 17—admit to chatting online with people they do not know. Girls are also more likely than boys to get harassed online, share their passwords with friends, give a description of what they look like to strangers, and share photos of themselves.

* Meanwhile, boys are more likely to download programs without their parents’ knowledge or those of “adult” content (35%), especially boys ages 16 to 17 (45%).

I asked McAfee’s Chief Cyber Security Mom Tracy Mooney a few questions regarding gender differences:

BKH: What is the one main difference between girls and boy’s online behavior?
TM: Girls are more likely than boys to chat with strangers online, and boys are more likely to search for adult content than girls.

BKH: Do parents tend to treat girls differently than boys online? If so, how?
TM: In some cases parents treat girls differently, but that varies from family to family.

BKH: Do parents worry less, and therefore watch less, when it comes to boys online?
TM: In some cases, perhaps. Boys and girls may be different in what they do online, but safety is still the goal.

BKH: With sexuality and discussions about it being much more open in our society today in advertising, on television, in movies, in school, and in most families, are teens less apt to freak-out when approached online with a sexual discussion?
TM: Wow, tough question! I asked my oldest son about this one. He thought that yes, sex is way more prevalent in society, but he felt that he and most of his friends avoided discussions about sex online. He felt some of his friends who had parents that didn't allow their kids to go online and have never had discussions about what to do when someone approaches you online and starts discussing personal topics, etc - they tend to freak out and not know what to do. This is one of those things that may be uncomfortable for parents to discuss with teens, but important. Give them the tools they need before something happens online, and they will know what to do to get out of potentially difficult situations.

BKH: Thanks Tracy.

When parents talk to their teens about safety online they will of course take into account their children’s specific personalities, for they know them best. Yet, as is the eye-opening conclusion throughout the McAfee “Secret Life of Teens” study, 42% of teens do not tell their parents what they do online, and 36% would change their online behavior if parents were watching. Parents should keep in mind the statistics reflect it is necessary to talk to their teens with an understanding of the different kinds of risks they may encounter online that may be gender based. It’s better safe than sorry – it’s better safe than politically correct in the moment.

Monday, June 28, 2010

McAfee “Secret Life of Teens” Survey Report, Part 1 - What do parents really know?

Part 1 of 5-Part Series.

Photo Credit Flickr Creative Commons
Admit it; we all went through it to lesser or greater degrees on our way to becoming adults. A right of passage of being a teenager for many is having a secret life away from parents, teachers, and other authority figures associated with standing in the way of what for many children is their first signs of becoming independent – their privacy. This need for independence, which is really just the first attempts at establishing who we are and will be in the world on our own, often comes with the rebellion of not listening to advice especially warnings. Many teenagers do not properly think through the consequences of their actions – most of us did not either when we were their age.

We all made mistakes as teenagers – some with bigger consequences than others. The sophistication of 21st century communication technology comes with sophisticated consequences. Having a “secret life” away from their parents’ view is nothing new for teenagers, yet the tools and ramifications of these private actions can be far reaching in new ways. The threats to a teenager’s safety are more complicated than ever before. Parents can minimize these threats more effectively and faster if they take into account the real world of this “secret life”.

McAfee, Inc. (NYSE: MFE), the world’s largest dedicated security company, commissioned and on June 22 released “The Secret Life of Teens,” a survey conducted online by Harris Interactive from May 4-May 17, 2010. The study surveyed 955 U.S. 13-17 year olds (including 593 teens ages 13-15 and 362 teens aged 16-17) and reveals the online behavior of American teens and areas of concern for parents. Results were weighted as needed for age, gender, race/ethnicity, and other key variables. Overall data in this report is representative of U.S. tweens and teens, ages 10-17.

The McAfee survey is a comprehensive and important glimpse into the “Secret Life of Teens” in today’s world of laptops, cell phones, iPad, and the Internet. It focuses in on what teens are thinking and doing often under the watchful eye of parents as well as away from them.  Some parents may be shocked by the dangerous teen behavior elements revealed in the survey report. What do parents really know about their teen’s secret life? The survey reveals:

* Despite warnings and instruction, teens talk to strangers and continue to give up personal information online – 69% have given their physical location, and 24% shared their email address.

* Despite recent tragic events, teens have not curbed acts of cyberbullying – 22% of teens do not know what to do if they are cyberbullied, and 33% know someone that has had hurtful things posted about them online.

* Despite monitored home computer usage, teens access the Internet away from home more than ever before – 87% of teens go online somewhere other than at home, and 30% access the Internet with their phone.

* Despite watchful parents, teens hide what they are doing online – 42% of teens do not tell their parents what they are doing online, and 36% would change their online behavior if parents were watching.

* Despite high tech savvy, teen page views and downloads, including porn, increase the chances of the family computer being infected with a virus – 62% of teens view or download some kind of online media, and 27% of teens have accidentally allowed a virus, spyware, or other software to infect the family computer.

Over the next 5 days we will present a 5-part series of survey results from the McAfee study. We will include insights from a McAfee security expert, also a parent, whom will talk about continued online threats and what surprised him about the study. We will include notes from Tracy Mooney, a mother of three and McAfee’s cybermom, whom can share real life examples of raising a teen online. We will conclude the series with easy tips parents can use now especially with their kids out for summer break. We will provide information on a new McAfee product for the iPhone that lets parents monitor their teen’s Internet usage even away from home.

McAfee “Secret Life of Teens” Survey Report 5-Part Series Overview:

Part 1 – Introduction to McAfee Survey Report – What do parents really know?

Part 2 – The Difference Between Girls & Boys

Part 3 – Risky Online Behavior

Part 4 – What Teens Hide & How

Part 5 – What Parents Can Do – Notes from McAfee’s Cyber Mom Tracy Mooney.

McAfee’s cybermom Tracy Mooney notes, “Like me, most parents think they have a handle on what kind of online content their children are exploring. This report makes it clear that we need to be much more involved with helping our kids make the right decisions online. Education is key.”

Friday, June 18, 2010

Will Innovative Education Technology Raise Scores & Balance Budgets?

An Interview with 3PlusLearning CEO, Michael Hehman

Bionicteaching, Flickr Creative Commons
Photo Credit: Flickr Creative Commons
Almost every state and major city in the U.S. is facing a shortfall in their overall budget. California is teetering on the brink of bankruptcy if the state does not get bailed out by the federal government or if its leadership doesn’t start taking decisive action on big spending cuts and probably raising taxes at least once more.

Whenever any state or local government mentions having to make the politically charged decision to cut spending, you immediately hear the outrage that if teachers or education programs are cut “it’s the children that will suffer”. NJ Governor Chris Christie has taken a hard line with teachers and their union displaying an amazing conviction to the reality of what is needed to balance a state budget billions in the red.

And dare I say it out loud – public service can be an honorable profession; yet the economic reality is public employee pay, benefits, and pension plans must be in line with the private sector, not in an unsustainable class of its own.

President Obama asked Congress just this week for $50B more federal bail-out money to send to states so teachers, and other public employees, won’t have to take pay-cuts or won’t have to be laid-off due to local government budget woes. Even federal help for local education expense is a hard sell to Congress right now, for they know Americans have deficit spending fatigue - especially after the huge deficit stimulus spending has not had any significant impact in creating actual wealth producing private sector jobs.

Private sector employees have seen pay-cuts and massive lay-offs as companies struggle in this economy to balance their budgets. Private companies cannot just deficit spend forever or just raise taxes to ensure no consequences for poor money, resource, and technology management. Americans have hit the wall on taxpayer funded government jobs, including teachers, being the only jobs Washington seems to care about saving or creating in this recession.

Of course states could make significant budget cuts in pork barrel special interest projects that would not involve cutting teachers, or police and firemen for that matter; yet that seems to be a long-shot for most politicians to consider let alone actually do. In regards to the education budget, the average taxpayer does see value in looking at cutting the duplication and failed programs that should have been eliminated years ago.

A good teacher is someone a child will remember for life, yet the unnecessary layers of expensive bureaucracy empire-building in education frustrates everyone. So does outdated and globally noncompetitive instruction methods.

Americans want more efficiency and effectiveness for their education dollar. There are 54M public school students in K-12 and half again as many in private, faith-based and home school. Throughout the U.S. there continues to be serious under achieving levels in all of the basic skills areas. The thing is the education system has shown for decades that spending more does not equate directly to raising student test scores in K-8 or lowering the high school drop-out rate in some districts.

According to a recent McKinsey & Co. report, “The United States has the smallest proportion of 15 year olds performing at the highest levels of proficiency in math.” Internationally, U.S. students ranked at a dismal 25 in math in a 30 country test score comparison – all while the U.S. spends more money on education than all but one of the 30 test countries.

The average cost per student continues to rise every year. The DOE’s 2010 Comparative Spending Guide  reveals - “The CSG comparative average cost per pupil is $13,835 for the 2009-2010 school year, up 4.3 percent from the average cost in the previous year. This is slightly more than the average increase in the previous year, which was 3.4%. ‘It is important to note that this is the cost per pupil based on the CSG elements, not the total cost per pupil,’ Commissioner Schundler said. (Actual cost-per-pupil numbers can be found in the State Report Card for each district.)”

Americans are clearly not getting their money’s worth in education spending evidenced by very poor results globally. Is the American education system, and taxpayers that pay for it, finally ready to do what the private sector has shown works in increasing competitiveness and lowering costs – updating with innovative technology? The current education delivery system has not changed significantly in 200 years.

In the last 18 months a paradigm shift has been slowly occurring. There has finally been openness to change and to innovative technology having a place in all levels of education. It is at last being acknowledged updating education technology may be the answer to raising student test scores and lowering cost in the classroom. Saving money and increased cost containment is good - thinking like this could go a long way in helping balance state and local budgets.

One promising sign is the $4.35B “Race to the Top” contest program sponsored by President Obama and supported by the U.S. Department of Education (DOE) in which states compete for millions of education dollars. In phases 1 and 2 of the program, 47 states and the District of Columbia applied. Delaware won $100M and Tennessee $500M in the program’s first phase.

According to the DOE, the program asks states to advance reforms around four specific areas:

1. Adopting standards and assessments that prepare students to succeed in college and the workplace and to compete in the global economy;
2. Building data systems that measure student growth and success, and inform teachers and principals about how they can improve instruction;
3. Recruiting, developing, rewarding, and retaining effective teachers and principals, especially where they are needed most; and
4. Turning around our lowest-achieving schools.

One of the ways innovation is getting high marks is in changing the delivery of education. Let’s face it; children of all ages, especially those in high-school, love the computer, instant feedback, and social networking. With state budgets tight, teachers could also use a helping hand with updated education technology that can create an E-portfolio for each student. The E-portfolio would include student specific information, past course scores, present test scores, pinpointed areas for improvement within tests, strength areas and more.

Teachers can create tests, surveys, evaluations, polling, blog study groups, chat live, and post photos in communities set up by them. Teachers can save time and money by having student work graded automatically with a few key strokes and observe comparison charts instantly. Education administration and management can develop custom online teacher development programs, webinars, and teacher evaluations.

3PlusLearning is a company leading the way in providing education technology that is changing the paradigm. Their system currently offers all of the above features and more. 3PlusLearning is a web based online practice testing service that provides a diagnostic and prescriptive solution for K-12 students. Teachers and parents are able to quickly see the strengths and weaknesses in the basic learning areas of concentration individualized to each student. Their standardized tests are aligned to the state standards, and the results are scored relative to the standards and remediation.

3PlusLearning isn’t resting on their laurels having just completed version 2.0 which they are installing now with their clients. 3PlusLearning systems ensure their client schools stay up with the technology curve. The 2.0 version has enhanced community function features that include social networking – something students already like using and highly value.

Ultimately, use of the 3PlusLearning system, or similar education technology, has the potential to fulfill all of the requirements set forth by President Obama and the DOE as top priorities for schools as noted above.

An Interview with Michael Hehman, CEO, 3PlusLearning:

BKH: Who are your clients and size of your market place?
MH: Our market is the K-12 students in public, private, faith based and home school networks in urban, suburban and rural areas. Our market for our formative and summative testing technology is schools, school districts, State Department of Education, and individuals who want to purchase as consumers such as parents, tutors and educators.

BKH: So you work with public and private schools as well as home schooling?
MH: Yes.

BKH: Has there been any push-back or resistance to change by administrators, teachers, or their union?
MH: There is far less resistance by the educational system now than ever before. We provide an accurate service to assist all who are involved in the future of educating our students. We give them student results using a diagnostic and prescriptive solution to find the deficits in their basic skills. Scores that are broken down by standards with remediation provides more time for student intervention. Everyone in education appreciates the effective solution this technology allows.

BKH: What do the school administrators, teachers and parents like most about using the system?
MH: Everyone wants to have the ability to measure the cumulative progress of each student’s strengths and improvement areas during the school year. Parents with computers are engaged via email and printouts of the formative diagnostic and prescriptive progress. Reports are also mailed to parents.

BKH: What do the students like most about using the system?
MH: Students like computers. They like to click "submit" and then to see immediate results. To receive instant remediation is fun and engaging for them as well as educating. Also, teachers can cluster students into communities to address the specific improvement areas, and they can work together and help each other while learning. The system has social networking attributes as well for studying and collaborating additional help.

BKH: Have test score comparisons been made before and after use of this new education delivery system? What were the results?
MH: By providing practice tests online throughout the school year, with time in between for remediation, achievement levels have increased dramatically. Research shows if you practice before a high stakes test, scores will increase. Students and teachers like practicing with the system.

BKH: What type of cost saving has been realized with use of the system?
MH: Cost savings come in the efficiencies of the system. The test scores rise when each student’s extra attention needed areas are targeted. Higher scores reflect better education results and create more federal dollars to the schools. There’s also more time to teach with less time spent preparing and scoring end-of-chapter quizzes, mid-terms, and final exams. The scores are pushed up into the teacher’s grade book automatically.

BKH: Does the system provide specifically for the needs of at risk children?
MH: We are working with politicians, advocacy groups, foundations, specialized interest groups, corporations, and educators in the inner cities aimed at the at-risk students. We have a system which specifically spirals back to find a student's reading ability and brings the students forward in reading and math. Some of our best successes come from these children.

BKH: Does the system provide specifically for the needs of “English as a second language” learning?
MH: Our computer adaptive service enables 3PlusLeanring to design and build a specific site for customized needs and demands of the districts, metropolitan areas and states in any number of languages.

BKH: Does the system provide specifically for the needs of special needs children?
MH: We have heard special needs students are much better suited to a key board response than a paper and pencil test. Using a computerized test system often results in higher scores for them. .Special needs students are accommodated by turning the timer off – there is a "stop and save" feature. They have the ability to come back at a later time and finish at their own pace.

BKH: I have heard 3PlusLearning is talking to the Big Shoulders Foundation in Chicago?
MH: Yes, we have discussed the benefits of online assessment, and Big Shoulders Foundation offered to share our unique services information with the 93 member primary and secondary schools they work with in their June ENews letter. The need is great in these schools to provide updated tools that can assist the students to work toward entering high school and college at a competitive level. We want to be an asset to their worthy cause by helping in every way we can to bring our technology to these schools.

BKH: How does online technology in education relate to other technologies in other areas?
MH: Online technologies and assessments are completely consistent with the current trends in social networking and information sharing between peers. Think about it, today’s children are completely wired in to their own social networks through online technologies. Online assessments associated with online curriculum are the next logical steps in self directed learning.

BKH: 3PlusLearning has grown very quickly in the last few years. What do you attribute this to especially in this competitive market?
MH: When we started the company 8 years ago, we made it our value proposition to be efficient and responsive to what our clients needed and wanted. We knew a system has value when it is incorporated into daily use by clients and when they see the results gained from its use. To achieve these goals with them, we knew our system must be easy to use and be flexible enough to have changes and customization be nimble. We have credibility with our clients by meeting their educational goals and funding realities.

BKH: Visit to learn more.

Bob Demish, a teacher with DuPage Country Schools (in the western suburbs of Chicagoland) notes, "3Plus' testing site is very easy to use and intuitive. The reporting really makes a difference."

Former Deputy Assistant Secretary U.S. Department of Education, a national expert on education technology, Ken Meyer explains it well, “There is a lot of confusion in the education marketplace about what assessments actually are and how they are used. Historically assessments and data have been used solely as a means to meet rules and laws of compliance about schools and school districts. 3PlusLearning has crossed the chasm into the realm of providing a powerful formative assessment tool which can be used to impact individual student performance. Compliance rarely leads to performance. Performance always leads to compliance. This is exactly the direction that education needs to head and is heading.”

The paradigm shift is gaining momentum. Oregon, Arizona, Kansas, and Virginia are already moving closer to being completely converted to online technology for low and high stakes assessments in grades in public schools. There are a dozen more states seriously considering doing the same. These early adopter schools have found significant gains in efficiency – accurate teacher evaluation and student accountability. Measuring results (data) by utilizing an online diagnostic and prescriptive method can only be accomplished with updating technology.

Education cost savings and containment, which is a large element in balancing state and local budgets, has a direct relationship to scalability which private companies have known and utilized for years. Scalability allows for testing of small, medium, and large amounts of students inexpensively. Taking advantage of innovative education technology allows for scaleable testing with many different permutations and variables including state standards, different curriculums, end of chapter quizzes, mid-terms, finals, state achievement tests, and more.

And most important of all – knowing “exactly” where a student needs help within a subject or skill set leads to addressing these needs specifically and directly. This better enables a child to have more meaningful instruction. This type of customized focus will go a long way in raising student test scores and enhancing a student’s ability for increased scholastic success. Using innovative technology for budget balancing cost cutting will in fact also ‘benefit children” by raising their scores and global competitiveness.

Wednesday, June 16, 2010

Current Real Estate Trends Housing Report - June/2010 - What do I know?

Leading Real Estate Data Trend Expert Tom Ruff''s Monthly Housing Report:

“Stability itself is nothing else than a more sluggish motion.”

Michel de Montaigne, a 16th century French philosopher is recognized as the father of Modern Skepticism, his catch phrase was, “Que sais-je?” “What do I know?” Wikipedia states he became famous for his effortless ability to merge serious intellectual speculation with casual anecdotes. I chose his quote simply because he used stability and sluggish in the same sentence. The fact that his portrait reveals a stiffly starched frilled collar of lace, the Ruff, was simply a bonus.

Falling Home Prices Spur Fear of New Bottom

The headline was taken from the link above. In May of this year the median priced home in Maricopa County was $140,000, we define homes as all single family residences and condos purchased, this number includes both new and resale properties. In May of 2009 the median priced home was $130,000; our current median home price shows a 7.7% increase year over year. If we extend our view and look at home prices throughout the past year, we will see that prices rose from June through September; in September of 2009 the median priced home in Maricopa County was $140,000. In the past 12 months we’ve seen 95,868 home sales in Maricopa County; with a median price of $138,500 this sets a fairly firm foundation.

We’ve heard talk of doom and gloom with forecasts of falling home prices throughout the past year, our numbers show something else, stability. I know prices are no where near the seller’s expectation and it is common angst for buyers to fear prices will drop after their purchase, but in reality, movement in home pricing has been quite boring this past year. The rapid ascents of home prices from 2003 through the summer of 2006 followed by rapid descents into April 2009 were exceptional times. Real estate is not supposed to behave like Lindsay Lohan without an ankle bracelet; it is supposed to be more like Andy Griffith; slow, steady, stable.

Ominous headlines attract readers and viewers, sorry to say, when it comes to home pricing, the last year has been quite dull, or as my new mon ami Montaigne might say, sluggish. As a steady flow of new foreclosures each month work their way back into the market, home prices are remaining flat. Am I turning bearish on real estate? Not at all, read on.

Phoenix Housing Undervalued

If you normally don’t read my links, you should read the link above by Michael Douville. A couple months ago I wrote a piece entitled “Blood in the Streets” as to why I thought Phoenix housing was undervalued. In a much more eloquent and detailed manner Douville drives my point home. His article is well written and well thought out, nonetheless, being the potato po-tah-toh guy I am, I must take exception with Mr. Douville’s statement, “The Housing Indexes of Case-Schiller and ECRI recognized a national bottom in April of 2009; locally in Phoenix, the Cromford Report confirmed the findings.”

Personally, I think it was the other way around, on April 6, 2009 the Cromford Report, in a highly criticized report at the time called a pricing bottom in the Phoenix housing market, when Mike Orr made his call, Case-Schiller was forecasting a June 2010 bottom. Months later, Case-Schiller recognized the April 2009 bottom and confirmed Mr. Orr’s findings. Tomato, to-mah-toh, the experts agree.

Our Esteemed Assessor

A couple of weeks ago I had the privilege of sitting on a panel for the Valley Citizen’s League with Keith Russell, our esteemed County Assessor. It was fun just having the opportunity to chat with Mr. Russell about his office and the process by which assessed values are determined. I must tell you that Mr. Russell and his staff are doing an exceptional job in a very challenging environment. In our conversation I learned valuations are based on an October through October cycle, and as I had assumed, the full cash value has a target of 80% of what the assessor believes the properties actual value to be.

I don’t mean to oversimplify a very complex valuation model, but for this illustration, the median price home for the fiscal year ending October 2009 was $141,900 leaving 80% or $113,520 for the median assessed full cash value. The first eight months of data for the 2012 assessment show a median price of $140,000 with 80% being $112,000. I know in my February opinion piece I guaranteed an increase in home valuations with the 2012 preliminary, I had done my calculations on a January to January cycle. I would like to hedge my bet and say there will be little or no change in our 2012 full cash values as compared to our 2011 values, again, stability.

Most Noticeable Trend

It seems like a lifetime, but two years ago at this time I was talking about a number that I thought was a key in forecasting our housing recovery, the number of active foreclosure notices in Maricopa County. The number of active notices in Maricopa County reached its peak on December 31st 2009, and since that time has shown a consistent downward trend. I believe and always have believed that when this number began heading downward, it would be the best indicator the worse was behind us; but then, “Que sais-je?” (Side note: in 16th century France, that would have brought down the house.)

In my opinion intervention on the part of the Federal government to stabilize the housing and mortgage markets pushed foreclosures back nearly a year allowing the number of active notices to swell to 51,466. Today, the total number of active notices of trustee’s sale sits at 44,526, a 13.5 % drop from the first of the year. As I review the foreclosure numbers each day I see a 50 to 100 property decline in the number of active notices. The chart below will clearly illustrate the current trend.

Figure 1. Refers to all active notices on all property types in Maricopa county.

May’s Numbers

New notices in May came in just below the 6500 we had forecast, actual notices filed were 6,471. Look for June numbers to be very similar as we’re seeing on average 300 notice of trustee sales filed each business day, 200 trustee’s deeds and 150 cancellation notices. There were 20 business days in May, and there will be 22 in June. Short sales are having a noticeable impact on the foreclosures numbers as we’re seeing approximately 1735 short sales each month in Maricopa County with 1100 having an active notice at the time they sell.

Articles and reports about rising numbers of bank owned properties just aren’t true, at least, not true in the Phoenix area. REO numbers have stayed steady at approximately 16,300. The number of bank held properties rises slowly each month as the month progresses, and then falls as the month end sales arrive. The month ending total of REO’s has remained constant the past three months, basically, 3,100 new bank foreclosures in the front door, 3,100 REO sales out the back door.

My Final Thought

After viewing the soccer game last Saturday between the United States and England I have concluded that if I ever field a football team, our resident alien Mike Orr will not be permitted to be my goalkeeper.

To contact Tom Ruff -
Tom is a graduate of the University of Nebraska.  He founded "The Information Store" in 1982 and quickly became known as “The Source” of publicly recorded real estate data in Maricopa County. In August 2005 he formed "The Information Market" specializing in foreclosure data and housing studies. Mr. Ruff is an expert on publicly recorded data and is known for his monthly housing opinion which shares an inside and sometimes irreverent look at the Phoenix Housing Market.  He is often quoted in local and national publications.

Friday, June 11, 2010

Why is $125M Healthcare Reform Law “Sales Pitch” Needed?

Voters are smarter than Washington thinks.
Photo by Flickr
Why is Washington now planning on spending millions to once again explain, which really only means sell, the healthcare reform law to voters? The same law Democrats were so giddy to pass they didn’t even read before voting yes to enact? They passed it with 65-70% of the American people not wanting it at the time. Did Obama, Pelosi, and Reid believe once passed Americans would feel the inevitable – big government knows better than you what is best for you? When this law was being drafted and tortured through the legislative process, the top priorities of the American people were high unemployment, record setting property foreclosures, spiraling deficit spending, unrealistically tight credit availability, plunging asset values, and a recession economy.

Today, these remain the top priorities of the American people – not legislation that will further kill job creation, further increase entitlements, further increase deficit spending, and further erode personal medical choices. Even with some news reports of things getting better, the average American knows nothing much has changed for them. Voters are smarter than Washington thinks. They know enacting the tax increases and over burden of government intrusion into the private sector within this law will do nothing but deepen the recession.

Hurting Americans are begging Washington to concentrate on their priorities and not political legacy and victories that will really just benefit politicians even if just in their own minds. Everyone knows the real unemployment and underemployment is closer to 20% than the 9.7% tracked and espoused by the federal government. Everyone knows temporary census jobs accounting for 90% of job creation is not meaningful job creation. The stimulus deficit spending has not worked and letting tax cuts expire and raising taxes are not going to grow our economy in any significant way.

Does any of our federal leadership live in the real world or have any common sense regarding the economy and what legislation supports job growth and what legislation kills job growth any more? No matter how Washington tries to spin it, the reason a healthcare law sales pitch may be needed, but won’t work no matter how much money you spend to do it, is simple. All of the polls reflect the same reality - over 50% of Americans still do not want “this” healthcare law as the reform they want. This law has been sold to them over and over since passage. Americans are not reluctant buyers to just keep selling to, and persistence will close the sale. Put the majority of the American public on the “wants to be contacted when version 2.0 is available” sales call list. Embed a note into the sales report document this potential buyer will be deciding on the purchase in November.

Americans were promised in the 2008 presidential campaign by both candidates, including the winner President Obama, there would not be mandated insurance coverage. They were also told by both candidates they would be offered the same plan offered to Congress as an option. In reality, the healthcare reform law does mandate insurance coverage with tough penalties for noncompliance. And, not only did ordinary Americans not receive an option for the same coverage as Congress; but Congress, in reality not wanting this "care-package" enacted in their own lives, exempted themselves from the healthcare law in its entirety. I guess the answer to the question above is no, the politicians that voted for this law made sure they would not be subject to the same real world they are imposing on their constitutions. The “of the people” part of our legacy is thrown out by Congress.

Most Americans do in fact have a global awareness and are actually smarter than most politicians think they are. Americans point to countries that already have what this new U.S. healthcare law is modeled after in place. They see that it does not provide better quality or more choice than the current U.S. system. We’ve all heard the joke – If Americans go to government run healthcare, where will the rest of the world go for healthcare when they really need it? They see that other government run care does not cost less, especially in the overall tax burden to its citizens, and does not provide equal quality in choice and care to what is available in the U.S. today.

Americans see this law is not in fact the best healthcare reform solution their political leadership could develop and implement. Americans used to provide leadership and solutions for the world to follow – now our leadership is the follower of broken systems. Americans don’t want the current U.S. healthcare system completely demolished as a whole to provide pre-existing condition coverage assurance. They don’t want the current system transformed by the invasion of over 150 new government agencies and numerous levels of bureaucracy into their lives. They do not want our current system wrecked for all to ensure coverage options for the 5-10% of the legal population that may not have it now.

Americans note the recent healthcare industry news coming out of Canada just this week – Canadians are choosing to go to private healthcare doctors and clinics being newly set-up or expanded to avoid the ineffective healthcare being provided to them “free” with their government’s universal care. Americans see the reality of long waiting lists and denied care in the healthcare system in the U.K.

In a bigger picture, Americans see what is happening today in Greece and other EU countries with entitlements undermining their economic solvency. Americans know the U.S. government has never come in at budget on any new program implemented let alone saw “cost-savings” from any new entitlement. Americans know this law will put us on the road to Greece and not for a lovely vacation. Greece provides the real life example it is better for everyone to not set up an unsustainable entitlement program to begin with than to have to cut it when forced to admit you couldn’t afford it by pending bankruptcy.

From a more domestic perspective, the majority of Americans simply do not support the federal government taking control of 1/6 of the US economy and more directly of their medical choices and care. They understand the law also provides for government to have a bigger and more personally intrusive role into their medical and financial privacy. Whether Washington believes it or not, the majority of Americans still value their capitalist system. They want free-enterprise innovation and solutions to problems.

A strong sales objection for most Americans is they are not buying the "cost savings" touted by Democrats. They are not buying they will have lower insurance cost; lower medical costs, no middle class tax increases, more choice, better care, no rationed care, and that illegal immigrants will not be covered. Smart Americans know you really don’t get something for nothing. You don’t spend trillions to save billions if a savings in a government program can ever be more than an unrealistic political selling point. Do Canadians or Brits have all the wonderful benefits listed above with their government run systems?

The actual full cost of the reform law was broken up into separate pieces of legislation as opposed to being honest and putting in all into one healthcare law. Add-on elements like the “$167B Dr. Fix” to the costs shown in the bill passed were purposefully left out of the numbers by the Democrats originally scored by the CBO. The trick of counting the "$500B Medicare Cost Savings" twice was employed to further decrease the true cost of the legislation. Lawmakers put the healthcare reform benefits on lay-away for Americans to further disguise the true cost impact to taxpayers. Payments for the healthcare reform "benefits" will be made for 4 years before benefits can be taken out of the backroom being held for you by Washington political shopkeepers.

And in accounting only Congress can get away with, payments will be made for 10 years for 6 years worth of benefits to further dilute the transparency of the cost reality. These were all less than transparent and honest number crunching dismissed by Democrats before passage.

President Obama continues to personally pledge to Americans that they can keep the same insurance they currently have if they like it and keep the same doctors they have now. Again, voters are smarter than you think. Many don’t see how with revelations already coming out that many companies will be forced to pay the lesser “no-coverage provided penalty” cost to the federal government than to continue paying higher cost in private insurance coverage for their employees as a matter of staying competitive. Americans realize they will be forced into government only insurance options when they are dropped by their employers.

Voters are smart enough to realize rationed care, and therefore the quality of current U.S. care, will be a necessity in the U.S. as it has been in Canada and the UK with their government controlled healthcare systems. Voters realize less care is inevitable when there are fewer doctors and hospitals available caused by doctors opting for early retirement in protest of the new law and by some opting out of taking government insurance patients due to lower reimbursement payments.

Many realistically wonder what students will want to go into medicine in the future to replenish leaving doctors if the reward does not equal the work and time required in getting a medical degree. Or will the U.S. just implement another “cost-saving” scheme and pay for all new medical students to complete undergraduate and medical school if they work for the government. Politicians always seem to forget anyone on a government payroll is an expense to the taxpayers not a savings to them.

The passage of this reform law turned out to be an extreme example of the worst of Washington politicians in that it was written mainly behind closed doors by industry lobbyists and union bosses. It was done in an atmosphere of hyper partisanship seemingly with the only purpose to get "something" passed to be able to claim a political victory whether it was good for the health and expenditures of ordinary citizens or the cost and financial stability to the country. It took political special deals and threats as well as calling any citizen or group that questioned or opposed the legislation names including racists to get it passed in Congress. It was passed by the majority of legislators without being read or understood. It could only get the needed votes to pass by using the reconciliation type 51 vote requirement instead of the normal 60 senate votes. The legislation required an “Executive Order” and "additional legislative fixes" after it was passed.

The problem with selling this law now is voters have not and will not forget the way in which it was passed. Americans asked tough questions about the health care reform bill before it was passed. No one could get a definitive, honest and straight answer; because the bill was written on the fly and by special interest looking out only for their interest. Voters protested the cost of this legislation. Lawmakers did not listen to them. Lawmakers hid and dismissed the factual complete cost. It had to come in under a trillion dollars was the only political objective. They knew anything over a trillion was dead on arrival – it still is.

Everyone remembers politicians being shocked at the anger of voters in town hall meetings and the mocking and minimizing of them afterwards by politicians meant to serve them and the media meant to inform them. Most politicians are so used to spending freely without any consequences, they don’t seem to understand voters actually are smarter than they think and do care about the national deficit. Democrats really don’t seem to understand the majority of Americans do not want a government that takes care of them at the expense of taking their liberty and privacy away.

Add huge tax increases, continued rising premiums, over 150 new government agencies, IRS enforcement, and Americans were actually better off without this healthcare reform. Add to the equation significant deficit increases with what will amount to more future unfunded liabilities (no matter what is touted and “sold” to the contrary); and America itself was better off without this healthcare reform law being passed. The reform Americans thought they were going to get, and were promised, did not come with a new IRS army to enforce it upon them and higher cost in both taxes and premiums. This law is not only useless, but harmful, for it does nothing at all to address the underlying cost of healthcare services.

These are all the reasons why a law that is already passed needs a strong "sales pitch" now to try to ensure it is not replaced or outright repealed before it is enacted. The Democrats need to sell this law to voters now to try to minimize losses in the November election. No matter how much this law is sold to the public, the real problem is the public remembers how they were treated during and after the process. No sales pitch will erase this. Politicians that voted to pass this law may come to know the old saying personally - It’s easier and cheaper to keep good customers than to find new ones

Wednesday, June 9, 2010

CA Set for Career Politicians vs. Executive Experience Face-Off in November

Will CA voters shape the focus for the presidential campaign content in 2012?

The primary elections June 8 handed Republicans Carly Fiorina and Meg Whitman big wins in California at 56% and 64% of the vote respectively. The general election is set to be a face-off between career politicians and former private sector technology CEOs. Former Hewlett-Packard CEO Carly Fiorina will face 28 year incumbent Senator Barbara Boxer (D-CA) for the California senate seat in November. Former eBay CEO Meg Whitman will face California’s current Attorney General, Former Governor and Former Secretary of State, Edmund Brown, Jr. (Jerry) for the governorship in the mid-term elections. Jerry Brown was the Governor of California from 1975-1983.

Photo by Flickr - MEG WHITMAN
Whitman and Fiorina made GOP history in California being the first time a woman has been the Republican candidate for governor or senator. Whitman also set a record for the most money spent in a primary in California at $80M with $70M coming from her own pocket. She has said she will spend up to another $150M on the general election. Brown is estimated to have $20M and is seeking additional support from independent groups including the powerful public employees union. Fiorina and Boxer are more evenly matched for money with approximately $7M and $10M respectively. All four candidates will continue to receive campaign contributions from all 50 states.

All the candidates came out swinging in their victory reflecting the career politician versus executive experience battleground set-up.

Whitman congratulated Fiorina in her victory speech and jabbed their career politician rivals: “Career politicians in Sacramento and Washington, D.C., be warned – You now face your worst nightmare – two businesswomen from the real world who know how to create jobs, balance budgets, and get things done.”
She threw several punches at Brown notably: “Jerry Brown has spent a lifetime in politics, and the results have not been good.” and “Here’s the really good news: I don’t owe anyone anything. My opponent cannot say that, can he? He has aligned nearly every single interest group in Sacramento against us. And that means favors will be owed to every power broker with a vested interest in keeping our state budget broken, our schools underperforming, and the state pension system spinning into  insolvency.”   

Photo by Flickr - JERRY BROWN
Brown invoked what he sees as the failure of current Republican Governor Arnold Schwarzenegger in his victory speech jab at Whitman with “It’s not enough for someone rich and restless to look in the mirror one morning and decide, ‘I want to be Governor of California.' We tried that. It didn’t work.”

Fiorina continued her anti-incumbent message strategy in her victory speech including “I have heard your message loud and clear: The people of California have had enough. In fact, I think they are hearing you all the way to Washington, D.C.". She continued: “In her 28 years as a career politician in Washington, D.C., Barbara Boxer is a bitter partisan who has said much but accomplished little. She may get an “A” for politics, but she gets an “F” for achievement. For three decades in Congress, Boxer has personified the entrenched, stale arrogance of someone who has long forgotten that here in America, the people rule — not the government. When she dressed down that General in front of the cameras, she displayed all of the destructive elitism so disquieting to the people of California.”

Boxer shot back at Fiorina with "She even opposed a bill that gave a tax break to companies who hire the long-term unemployed." and "When she was the CEO before she got fired, she laid off more than 30,000 workers and shipped jobs to China, to India. She's got a great record on job creation in China and India and Europe, but not in America." Boxer hammers Fiorina with her having fired thousands while running Hewlett-Packard and for being fired by Hewlett-Packard. She characterizes Fiorina as being out of step with mainstream California voters.

The California primary, as well as eleven other states, took place as President Obama and Congress’ approval ratings have been steadily going down due to continued high unemployment, spiraling national deficits, and continued voter disagreement with the recent health care reform. Politics as usual in Washington remains unchanged if not on steroids regarding cronyism, special interests, and living in a White Tower. Add to this the daily news photos of wild-life affected by the offshore oil rig disaster and Washington’s seeming inexperience, incompetence, and lack of urgency in managing BP’s response; and voters see great value in executive management experience in their political candidates more and more.

Whitman and Fiorina are poised to be the outsider candidates against the “politics as usual” candidates. They hope to tap into those that are against continuing the liberal Democratic agenda that many feel is not working for California in that it has created a state budget that is bloated, unsustainable, and billions in debt. They will both tout successful executive background and experience in running large enterprise, in balancing large budgets, in cutting cost when necessary, and in understanding how to create jobs. Boxer and Brown will both tout meaningful public service background and experience with an understanding of what is important for California residents and how to work within the political environment to get the job done for them.

Photo by Flickr - CARLY FIORINA
Even with the state budget deficits, Brown, Whitman, and Fiorina have indicated raising taxes is not their answer to balancing it. The three agree business growth in California is a priority and that state spending cuts are necessary. This sounds like the platform most appealing to moderate voters nationwide – especially the coveted Independents. Boxer sticks to her more liberal platform.

In reality, November will reflect what the California voters find more useful to their every day lives and for the state of California – political experience or private sector experience. Approximately 66% of voters in California are moderate independents and Democrats. Their decision may very well shape the focus for the presidential campaign content in 2012.

Monday, June 7, 2010

Former Gov Rod Blagojevich & Wife Patti Using Social Media Networks to Give Updates On Corruption Trial

Will primary defense be same as White House – “Just politics as usual.”?
Photo by Flickr
It’s good to have tweeple, especially when you could use a friend. Former Governor Rod Blagojevich and wife Patti are using their Twitter accounts @Governorrod and @pblagojevich to keep their followers updated on the proceedings and their feelings about the corruption trial now taking place in Chicago. They can also be friended on Facebook. Former Governor Blagojevich’s last post to his Facebook page June 2 was “Looking forward to the start of the trial tomorrow. We have the truth on our side.” There were 71 comments posted and 87 thumbs up “likes”. His tweet June 7 on Twitter was “looking forward to opening statements because that will unlock the truth... stay tuned.”

Since being arrested for federal corruption charges and removed as Governor of Illinois in 2009, Blagojevich has increased his media presence proclaiming his innocence in very public and creative ways. He became a host of a weekly talk radio program on WLS and was a cast member on Donald Trump’s popular Celebrity Apprentice television show on NBC recently. Donald Trump expressed he respected Blagojevich several times during the program. Many callers into the WLS program also asserted support for the former Governor. Most have found him to be eccentric, but many admire his fighting spirit. Just about everyone has found him to be entertaining under the strangest of circumstances.

Blagojevich has maintained he did nothing wrong and has always said he was railroaded by Democrats in Illinois who disagreed with him politically especially those wanting a large income tax increase in Illinois. He has expressed he looks forward to clearing his name every chance he has gotten to do so. His wife Patti has been a strong supporter of her husband. She has held on to her dignity and has tried to maintain a normal a life as possible for their children. Rod and Patti have two young daughters, 7 and 13; and they have done a wonderful job of protecting them from the media spotlight.

Blagojevich’s trial Judge Zagel completed juror questioning today, June 7. The defense attorney team led by Sam Adams, Jr. has 13 peremptory strikes possible and the prosecution team led by Reid Schar has 9. It is expected a jury of 12 jurors and up to 6 alternatives will be seated Tuesday, June 8, and opening statements will begin. The judge has not ruled yet on a request by Rod and Patti Blagojevich to attend their daughter’s graduation ceremony from grade school the afternoon of June 8 which could delay the trial start to Wednesday, April 9.

In some ways, the Democratic party and the infamous Chicago political machine will also be on trial. Among those Blagojevich has subpoenaed include Senate Majority Whip Dick Durbin (D-IL), White House Chief of Staff Rahm Emanuel (a former Democratic Chicago district congressman), and White House Advisor Valerie Jarrett (someone President Obama has called “like a sister”). It is rumored President Obama wanted Valerie Jarrett to fill his open senate seat. Blagojevich attorneys tried to subpoena President Obama.

Considering the recent revelations of the White House staff initiating talks with Democrat Senate incumbent challengers in Pennsylvania and Colorado, it will be note-worthy to see if some, if not most, of Former Governor Blagojevich’s defense will center around “nothing but politics as usual”. The White House has used this sentiment to justify there is no need for a formal investigation and nothing problematic in their political talks and offerings. There are differences in the level and type of communication between the Blagojevich and White House incidences of course. Blagojevich had been under federal phone taps for months while conversations by White House staff and surrogates relating to these “politics as usual” phone calls remain private and without formal investigation.

Some Americans believe President Obama has brought Chicago-style politics to Washington. It will be interesting to see if what Former Governor Blagojevich did was in fact just considered Chicago-style politics as usual by most politicians involved in talks with him. Blagojevich is charged with racketeering, bribery conspiracy, extortion, and wire fraud.

It is understood many Democrats in Illinois and Washington are concerned to see what approximately 500 hours of taped phone conversations may reveal publicly in the trial. Voters from across the nation may be given a front-row seat to what “politics as usual” really means in detail. Much of the current voter anger has been around political cronyism and corruption in both major parties.

President Obama’s use of social media changed politics. I have a feeling Former Governor Blagojevich just may too. And “politics as usual” may be changed forever.

Friday, June 4, 2010

Does Congress Remember Oath Includes “Support & Defend the Constitution”?

An Interview with Joe Miller, Challenger for US Senate Seat for Alaska

Recently I was discussing an earlier article I wrote about the passionate political debate going on in America in 2010, including debate on whether or not current and proposed federal legislation was constitutional, with a European friend from London. She was telling me her in-laws were moving back to London from Dallas, because they felt America is not what it used to be under President Obama – America was no longer living up to or cared about its Constitution. In fact, the majority of my European friends warn me about the US going down the path of socialism that they feel has ruined innovation, productivity, and prosperity in Europe. Are they correct in their feelings and warnings that in fact many Americans are expressing too?

These conversations got me thinking about the US Constitution, and the intent of our Founding Fathers who painstakingly composed it in 1787. They built the Constitution and our country on principles of free-enterprise and limited government especially limited federal power. They wanted to ensure liberty and the fruits of one’s labor to the individual citizen. The words of these men leave no doubt of their intent for future generations regarding the Constitution, and their words provide wisdom and warning for those that would come after them.

“Do not separate text from historical background. If you do, you will have perverted and subverted the Constitution, which can only end in a distorted, bastardized form of illegitimate government.” James Madison

"The Constitution is not an instrument for the government to restrain the people; it is an instrument for the people to restrain the government - lest it come to dominate our lives and interests."
Patrick Henry

“A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
Thomas Jefferson

“But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.”  John Adams

The US Constitution is the shortest and oldest written Constitution still in use by any nation in the world today. The handwritten original document penned by Jacob Shallus is on display at the National Archives and Records Administration in Washington, D.C. The US Constitution has been used as a model for their own Constitution by over 100 countries around the world. It is one of the most read and influencial documents ever written – if not the most influential and honored. Our courts and citizens debate its interpretation, yet it survives as one of the most studied and revered legal documents in existence. No one questions or minimizes the wisdom and eloquence of its underlying intent and principles. It stands as the beginning of what would become the most prosperous country in the world and a beacon for freedom worldwide. Even with the problems in the US today, the US remains the country most chosen by immigrants wanting the “American Dream” of freedom and prosperity for themselves and their family.

The US Constitution was written to create a federal government to serve the states by delegating limited and enumerated powers at a federal unified level. The US Constitution is meant to set the rules for and to manage the federal government in its service to the states. At times it seems Congress and the White House have willfully disregarded this or perhaps don’t understand this intended structure now.

It is vital to our individual liberty to hold our government to the intent that the founders considered “rights” to be “what you were born with” and not “given” to one by the government or even the Constitution. The laws set forth in the Constitution were to ensure protection of our natural rights. It seems at times Congress needs to be reminded there is no federal power without the US Constitution. And with this “service to the states” granted to the federal government by the US Constitution, the states and the people have all rights not specifically delegated to the federal government by the Constition. Without this intended and written limited federal power structure, the US Constitution would never have been ratified by the original states; and there would not have been a “United States” of America.

Did you know Article 6 of the US Constitution requires that all federal and state legislators, officers, and judges take oaths or affirmations to support the Constitution? Looking at what many Americans see as the recent overreaching legislation such as the Patriot Act under President Bush and the Healthcare Reform under President Obama, it is obvious the oath to “support and defend the Constitution” seems to be misunderstood by those in government at best, and “just words” to politicians at worst. When you add bailing out failing companies and nationalizing companies, even if difficult to admit for some, we all know our Founding Fathers would in fact be turning over in their graves at what most Americans see as a disregard for the actual powers given in the Constitution and most citizens do not support.

Americans are left to wonder why those in Washington would seek a position that requires they take an oath to support the Constitution and then exert there is no framework for Constitutional legislation or their own power to control the states and the people. Why would they vote for legislation they have not read or refuse to support and enforce laws simply because they don’t find them politically beneficial to re-election efforts? Why would they act as if those citizens and states questioning this behavior are the ones with the problem? It only takes one look at the YouTube video clip of Representative Alcee Hastings talking about Congress and rules to see how convoluted upholding the Constitution can be even after an oath to do so was taken.

I went looking for a senate candidate, from either political party, who seemed to embody the oath they would take as a Senator to “support and defend the US Constitution”. Considering the economic crisis in America, someone whom understood economics wouldn’t hurt either. Joe Miller, a challenger for the US Senate seat for Alaska, seemed to fit this bill perfectly. He currently lives in Fairbanks where he practices law. Rarely do I or anyone agree with any politician on their complete platform, yet I do agree with Joe Miller’s stand on restoring our founding principles, limited constitutional government, and reversing government growth. Whether you agree with someone or not politically, one of our strongest governing principles is the right of freedom of expression guaranteed in the 1st Amendment. Our Founding Fathers understood there would be passionate debate and differing opinions and prepared for this to be without censorship or reprisal.

Joe Miller is an Alaskan by choice. He grew up in a working class family in Kansas. He headed to the Last Frontier sixteen years ago because of his love for the outdoors. After graduating from law school, he accepted a position at a prestigious law firm in Anchorage. He quickly mastered the law and three years later, at the age of 30, he was appointed as a State Magistrate, the youngest then serving in Alaska, as well as a Superior Court Master for the Fourth Judicial District. Further honors followed four years later when Joe Miller was appointed an Acting State District Court Judge and, shortly thereafter, U.S. Magistrate Judge in Fairbanks. He again had the distinction of being the youngest then serving in that federal position, not only in the state, but also in the entire US. He was also the only judge in the US, at that time, serving at both the federal and state levels simultaneously.

In 2004, Joe Miller stepped down from the bench to run for State Representative. He overwhelmingly won the contested Republican primary and nearly pulled off an upset in the general election receiving over 48% of the vote against the Democratic incumbent in a traditionally Democratic district. This was the closest re-election campaign the officeholder has ever faced. He returned to the successful full time practice of law at his own firm. He has represented clients in a wide variety of cases, a number of which have gone all the way to the Alaska Supreme Court.

Prior to becoming an attorney and a judge, Joe Miller served as an officer in the US Army. He was awarded the Bronze Star for his leadership in combat during the First Gulf War. He received his commission from West Point, where he graduated with honors. He is also a graduate of Yale Law School and holds a master’s degree in economics from the University of Alaska.

An Interview with Joe Miller, Challenger for US Senate Seat for Alaska:

BKH: What made you decide to run for the US Senate especially against a powerful incumbent?
JM: I'm a concerned citizen, hard working taxpayer, father, and devoted husband who believes that our country is at a crossroads. Are we going to keep faith with the Founders and defend our Constitutional Republic? Or will we continue our headlong plunge into socialism and more government control? We already know what is at the end of that road: the decline of the dollar, further constriction of our economy,
sustained high unemployment, crippling government regulations, and a deeper dependency on hostile foreign powers. I'm running to turn that around, to stand up for individual freedoms, and to stand up for Alaska.

BKH: Why do believe you can win your primary challenge to Lisa Murkowski? What sets you most apart from her for voters?
JM: Murkowski has lost touch with the Alaskan voters on crucial issues, especially in the area of government growth and spending. This is a small state where conservative activism and volunteerism determine elections. I’ve received more endorsements from sitting and prior legislators than Sarah Palin did when she defeated Frank Murkowski for Governor. A number of former borough mayors have also endorsed me. Former Governor Palin gave my campaign a resounding endorsement. She shares the belief that our nation is at a crucial juncture. It is time for true change away from the long discredited notion that Big Government knows best and back towards our Constitutional moorings rooted in individual freedom and personal responsibility. Murkowski and I differ most markedly on the following issues:

ObamaCare: I want to repeal it and seek true cost saving reform. Murkowski wants to work within the framework of the existing 2000+ page healthcare law.

Pro-Life: I am unequivocally Pro‐Life. Murkowski is not and has voted multiple times to support taxpayer funded abortions and embryonic stem cell research. She endorses Roe vs. Wade as constitutionally sound.

Illegal Immigration: I oppose amnesty. Murkowski has voted for it. She has also refused to fund the fence. She has voted against photo ID requirements to prevent election fraud.

Cap and Trade: I oppose this job killing legislation. Murkowski believes in manmade global warming and is open to some form of Cap and Trade. In fact, she has stated that she would trade the opening of ANWR for Cap and Trade legislation.

Hate Crimes: I believe hate crime laws that abridge the freedom of speech and extend unequal protection under the law are not only misguided, they are dangerous. Murkowski voted for Obama’s hate crimes legislation this year and has supported such legislation in the past.

BKH: What do you think the majority of Alaskans and Americans care about most today?
JM: The state of the economy, national security, and the direction of the federal government are most important.

BKH: Why is Washington missing the mark in your opinion?
JM: Washington has forgotten the lessons of the 80s and 90s: that less, not more government, is better. When the government takes from one person’s hard work to give to another who has not worked for it, there is an overall negative effect on the economy. There is less money left in the hands of individuals and businesses to invest and grow and create jobs. Conversely, when the government starts wealth redistribution programs, whose benefits people do not have to pay for or pay full value for, it invariably leads to more people flocking to them and becoming more dependent on government. The government then has to turn around and raise taxes again leading to fewer jobs and more people dependent on government. The downward spiral continues. Where does this all lead? Margaret Thatcher said it best, “The problem with socialism [Big Government] is that eventually you run out of other people’s money.”

BKH: You have a Master's Degree in Economics. What do you think of the economic policies coming out of Washington the last 10 years?
JM: In addition to what I have said before, I would also note that such policies have created a debt load that is devastating the competiveness of the American economy and the ability of our nation to pursue its national interests. We are on the road to serfdom.

BKH: What is necessary to balance the federal budget and bring down the national deficit?
JM: Again, the 80s and 90s are instructive. We cannot increase taxes enough to balance our budget, particularly in our global economy, because we must remain competitive. The reason we had balanced budgets in the late 90s was primarily because our economy was growing and innovating. We attracted the world’s capital and some of its best talent. But also, we restrained the growth of federal spending. Under the Republican Congress, federal spending, including that for entitlements, grew at its slowest rate since World War II.

BKH: Former President George W. Bush increased federal spending, in deficit, to sustain the Iraq war and also largely increased entitlement spending with the Medicare prescription plan. Federal spending including entitlements increased to the largest deficit known in the US prior to President Obama’s deficit spending now.
JM: President Bush increased federal domestic spending 36% from 2001 to 2006, which included, as you mentioned, the prescription drug benefit. With the nation at war and already running a deficit, this decision was fiscally indefensible. Lisa Murkowski voted for that new benefit. She also voted to increase Schip - the children’s health insurance plan to include children from middle class families. President Bush vetoed this increase twice. One of President Obama’s first acts was to sign an expansion of Schip bill into law - funding for the program increased by $35 billion. Lisa Murkowski joined five other Republican Senators in voting for this bill.

In defense of President Bush and the Republican Congress, they did encourage a pro-growth economic climate by lowering income and capital gains taxes. The economy grew, federal revenues hit record levels, and the deficit shrank from its heights of just over $400 billion to $162 billion by fiscal 2007. If the Republicans had controlled spending, we could have had some budget surpluses.

The mortgage meltdown followed in 2008, and the deficit went up again to $455 billion that year. The Democrats took over both houses of Congress, and then federal deficit spending really took off. They tried to capitalize on the sense of crisis in the country by substantially growing government and adding the largest new entitlement program since the Great Society. For this year, we can expect a deficit of at least $1.6 trillion. The Congressional Budget Office estimates that the federal deficit for the next ten years will be at or near $1 trillion per year, if we stay on this path. That is unsustainable.

BKH: You have a judicial background and are a strict constitutionalist. Do you think those in Washington are upholding their oath to support and defend the US Constitution?
JM: Many are not. There are a few solid constitutionalists like Senators Jim DeMint and Tom Coburn, but most seem to buy into this mistaken notion of a “living Constitution.” Words, whether in the laws or our Constitution, must mean something. But our Representatives and Senators, along with the complicit courts, mold the Constitution into whatever form fits their purpose. Usually, Congress justifies its most egregious power grabs by misconstruing the Commerce Clause. The original purpose of the Commerce Clause was to ensure the free flow of goods and services between states. But Congress just misused this clause to force everyone to buy health insurance and pay higher taxes, in a bid to control our healthcare system. This is an unconstitutional power grab. The Commerce Clause has also been used to justify enactment of federal gun control laws. Yet the only constitutional provision relating to guns is the Second Amendment, protecting the individual’s right to keep and bear arms. If the proposed Cap and Trade law passes, the justification will again be the Commerce Clause. What gives the federal government the authority to force American manufacturers to buy carbon credits in order to conduct their business? The federal government has no such enumerated power, whether carbon is ever proven to cause global warming or not. Powers not enumerated in the Constitution are reserved to the states.

BKH: Specifically, do you believe the recent Arizona illegal immigration legislation is constitutional? Do you think it will withstand a court challenge?
JM: The borders must be secured. If the federal government refuses to act, the states have the responsibility and constitutional authority to protect their citizens.

BKH: Do you believe the healthcare reform legislation just passed is constitutional? Do you think it will withstand a court challenge?
JM: The new healthcare is not constitutional. Hopefully, it will be struck down both on 10th Amendment grounds and as an abuse of the Commerce Clause. In effect, the 2000+ page law forces individuals to purchase healthcare insurance or face fines or imprisonment. There is nothing in the Constitution requiring citizens to purchase a product from a private entity that they do not want. Under the 10th Amendment, those rights not granted under the Constitution to the federal government are reserved to the people and
the states. A similar line of reasoning holds regarding the Commerce Clause. This clause has never been expanded to force citizens to buy a product from private entity. Given the current membership of the Supreme Court, I have high hopes that ObamaCare will be struck down.

BKH: Do you believe Cap & Trade is constitutional? Do you think it will pass? If passed, do you think it will withstand a court challenge?
JM: No, as I noted before, I do not think it is constitutional. It probably will not pass the Senate since we’ve entered the election season.

BKH: Do you believe Former President Clinton offering a non-paid Board position to Congressman Sestak to not participate in the Pennsylvania Senate race against incumbent Senator Arlen Specter violates any rules in the constitution?
JM: I don’t have all the facts on this yet, so would rather wait to comment on this potentially explosive issue.

BKH: What do you believe are the most misunderstood or misinterpreted US Constitutional elements by Congress and the White House if any?
JM: The Commerce Clause, the 10th Amendment, and the whole notion of original intent.

BKH: Is federal, state, or local refusal to enforce any current law defendable? Is it constitutionally sound?
JM: We are a nation of laws. Of course there are limited scenarios where the right isn’t necessarily the legal. For example, those local officials, who knowingly allowed the Underground Railroad to operate in their towns, helping slaves escape north, or those who facilitated hiding Jewish people during World War II, not enforcing Nazi deportation laws did the right, though not the legal thing. They were actually obeying a higher natural or moral law. Similarly, it may be defendable where a law is clearly not constitutional. The norm, of course, is to uphold the law as written.

BKH: Some would use this argument to justify opposition to enforcing illegal immigration law. What are your thoughts on this?
JM: The western world has generally followed the precept that foreigners amongst us should be treated with respect; however, I believe that does not mean granting people who have broken our laws either citizenship rights or the benefits of citizenship. You do not reward the breaking of law through law. That just doesn’t make moral or legal sense. Those wishing to become Americans must follow our immigration laws. Those who feel we need to allow more immigrants into this country must work through the Congress to change the law.

BKH: Are there ever legitimate reasons to not follow the intent of the US Constitution?
JM: Never.

BKH: What are the main steps that must be taken in Washington to "support and defend the US Constitution" once again?
JM: We must elect officials who will uphold the Constitution’s original intent and stand against the whole notion of statism: the erroneous belief that government is all powerful and responsible for granting our rights. Our rights come from God, and the Constitution is the means of securing those rights to life, liberty and the pursuit of happiness. Additionally, judges must be held accountable to their oath to uphold the Constitution

BKH: Do you believe this will be done?
JM: Yes, I believe we’re heading in that direction. The American public is awakening to the solvency crisis brought on by statism and the failure to follow the Constitution. Primary election results in the lower-48 suggest that Congress will have a dramatically different look in January 2011.

BKH: If you are elected to the position of US Senator for Alaska, what are the most important things Alaskans and all Americans can expect from you on their behalf in Washington?
JM: I will keep my oath to the Constitution. I will work tirelessly to avoid the impending insolvency crisis, repeal ObamaCare, oppose Cap and Trade, and reverse the growth of government. It is time for true change away from the long discredited notion that “big government” knows best and back towards our Constitutional moorings, rooted in individual freedom and personal responsibility. Americans can expect me to act with honesty and candor. I look forward to getting this message out to the people of Alaska and, with their support, taking these values to Washington.

You can learn more about Joe Miller at

Everyone knows George Washington is considered the Father of our Country and the first President of the United States. Did you know Washington’s Farewell Address is considered so important that it is read in its entirety every year in the Senate, and beginning in 1862 has been read in one or both chambers of Congress every year? I was struck by the relevancy of his words as we look at our federal government today, especially these paragraphs.

Contained in Washington’s Farewell Speech of 1796:

All obstructions to the execution of the laws, all combinations and associations, under whatever plausible character, with the real design to direct, control, counteract, or awe the regular deliberation and action of the constituted authorities, are destructive of this fundamental principle, and of fatal tendency. They serve to organize faction, to give it an artificial and extraordinary force; to put, in the place of the delegated will of the nation the will of a party, often a small but artful and enterprising minority of the community; and, according to the alternate triumphs of different parties, to make the public administration the mirror of the ill-concerted and incongruous projects of faction, rather than the organ of consistent and wholesome plans digested by common counsels and modified by mutual interests.

However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.

Towards the preservation of your government, and the permanency of your present happy state, it is requisite, not only that you steadily discountenance irregular oppositions to its acknowledged authority, but also that you resist with care the spirit of innovation upon its principles, however specious the pretexts. One method of assault may be to effect, in the forms of the Constitution.

As Americans, we must honor our US Constitution or lose our way as a country, a culture, and a people. We must insist our political leadership live up to their responsibilities to the Constitution and their oath in support and defense of it. As voters we must live up to our responsibilities in our governing as intended in our constitutional legacy. We must continue to challenge the constitutionality of legislation within our judicial system. The US Constitution is meant to serve our states and to protect our people. We must vote for politicians that understand the intent of the Founding Fathers, respect the sacredness of our Constitution, will uphold the true purpose of the Constitution on our behalf, and will uphold the integrity of their oath of office. We must accept no less. The federal government is not meant to hold power over our liberty. We declared our independence against this type of governing in 1776. We must vote for federal leadership that does not see their oath to “support and defend the US Constitution” as mere words to toss aside as soon as they have pledged them as a part of their swearing-in ceremony.