One of the many blessings of running my own accounting firm are the relationships that I build with people I would have never met otherwise. After running in the Republican primary for my congressional district last spring, I had yet another group of incredible new friends and partners. Through some of those new friends, I was put in touch with an American businessman living in Japan who had an absolutely incredible story of how the recent tsunami had affected his life and the lives of those closest to him.

Phil Foxwell grew up and has since raised his family in Japan, maintaining a summer home in the rolling hills of a sleepy Japanese fishing town called Shichigahama, which lies northeast of Sendai, the city hardest hit by the tsunami. Set in an idyllic, pine wooded valley surrounded by hills on three sides, it was a refuge for harried Tokyo-ites wishing to escape the summer heat. For Phil, a trip to Shichigahama is more than just a getaway, it’s a family reunion. For years, he has invested in the aging community, many of whom he has known since his childhood and grown up alongside. They are his friends, and his family. His first-hand account of a journey to find what he was certain would be more death and desolation ended as something very different indeed.

This is an incredible story of God’s provision and protection in a time when people question how God could let such a thing happen. This is a story that has motivated me to go above and beyond the ordinary in supporting those who have lost their home and livelihood, or even a loved one. I want to encourage you to get involved in the rebuilding of Japan as they suffer through what is described as the most devastating natural disaster in the modern era, upwards of 20,000 lives lost and $250 billion in damages. In addition, please pray for the survivors and their families, and also the rescue workers who are doing what they can with scarce resources and constant threat of radiation exposure. Japan is in dire need of a miracle. Read this incredible story by Phil Foxwell to see one that already happened.

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The hopes and dreams of conservatives around the nation came to fruition, at least partially, on Monday as President Obama’s healthcare bill finally found resistance from the judicial branch. With another lawsuit backed by twenty states hitting the docket, Obamacare is no longer looking unstoppable. It will ultimately be heading to the Supreme Court where conservative appointees outnumber liberals by a slim 5-4 margin.

Does this mean that we can expect to see Obamacare on the trash heap of failed legislation in the near future? I believe it does. The political groundswell that has been growing in the conservative ranks has Democrats running for the bipartisan cooperation, they abandoned when Obama came into office.

If Obama’s reach across the aisle last week to strike a deal with Republicans on tax cuts is any indication, the next two years could be very interesting indeed. Obama now seems to understand what is at stake: he is fighting not only for political capital and his (failed) platform, but also for his legacy. If his presidency ended today, he would be remembered for failing to live up to his outlandish campaign promises, while burdening us, the American taxpayers, with trillions of dollars of debt, faster and greater than all presidents before him….combined!

Many conservatives are doing one of two things right now: gloating about the possible repeal of Obamacare or calling Obama weak for reaching across the aisle. I will do neither; instead I’m concerned about what this means for the next two years.

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As we are about to enter year 5 of this ‘Great Recession’, I have been trying to remember how things were before 2007 and over the last few years, take an inventory of what I have seen and heard in my daily and professional life. Pearl Buck famously said, “If you want to understand today, you have to search yesterday.”

So, here is what I’ve found:

Surprisingly, it seems that almost everywhere I look jobs are being offered. ‘Help Wanted’ signs are creeping up both in store fronts and on internet websites. If you know where to look and you have the skills needed for this new economy, there is a job for the taking. I don’t know if unemployment checks are keeping potential workers at home, but there are opportunities out there.

Construction has been virtually nonexistent, while remodeling is certainly in vogue. Just about the only place I see construction anymore, is in very close proximity to one of those American Recovery and Reinvestment Act signs. Infrastructure spending has been the lifeblood of this industry but that can’t continue indefinitely.
What about the consumer? When the market tanked in 2007 and a lot of folks began losing their homes, jobs, and investment accounts, something happened to the American consumer: they stopped spending on things they didn’t need and they started to save.

People are now more conscious than ever about saving money. Clients in my CPA office generally say one of two things to me (or both): How can I make my money work harder for me and how can I keep more of my paycheck every month? I’ve heard these questions a lot over the years, and in good times it was followed with, ‘…because I want to buy a boat/vacation home/etc’. Now, people simply want to keep their homes and hopefully put their kids through college.

Is this a welcome development for the consumer-driven America? Not likely, but it probably should be. Last week I talked about how the Fed is hoping to use propaganda to trick Americans into spending more money in hopes that it will stimulate the economy.

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Now that elections are over many people are going to jump straight into analyzing the races, who did what right/wrong and what we can expect from this new House and Senate. There will be plenty of time for that in the next weeks and months, but I want to take a quick time-out to talk about something very close to my heart.

Last weekend at the UCLA-Arizona football game, I had the opportunity as a sponsor to speak to 600 children in the Lift Up America program. For those of you not familiar with LUA, it is a non-profit humanitarian organization that encourages and educates underprivileged youth while providing them opportunities with leading corporations, sports teams, media groups and other non-profits. The whole idea behind LUA is turning these amazing kids into ‘ambassadors of compassion,’ who go back into their neighborhoods and share the things that they have learned with their peers.

The kids were at the game to celebrate their completion of the first level of training, during which they helped clean up city parks, remove graffiti, created a recreation center out of an abandoned building and some of them even returned to school after dropping out. To celebrate their accomplishments, as Ambassadors of Compassion, they were awarded diplomas at pre-game tailgate party and got to run across the field before taking their seats and enjoying the game.

I was personally so encouraged to see so many people going out of their way to help others and it just reinforced in my mind what a great country we live in. After the last few months of political wrangling, I am exhausted from the negativity that surrounds us at election time. I know for some, the result of these elections will bring great joy; for others, dismay. I think we can all agree that regardless of how we lean politically, we can certainly do better as human beings.

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Many Californians live in California because they love the natural beauty that surrounds them at every turn. The beaches, the mountains and the desert are, in my mind, some of California’s greatest assets. There is nothing quite as satisfying as waking up on a morning like today and seeing the crisp outline of the San Bernardino mountain range capped in snow while enjoying 70 degree weather.

If we are being honest, the weather and natural beauty are probably some of the only things keeping many Californians from fleeing the state because of high taxes, unemployment, an inept state government and an oppressive business environment. It would make sense then, that we should try to protect those natural resources at all costs. This is the garbage that the opponents of Prop 23 would have you believe, where in today’s world everything not “green” might as well be labeled “poison”.

Take a look at just what Prop 23 is up against. In 2006, the California legislature passed AB 32, also known as the Global Warming Solutions Act. The mere name of the bill should give you the idea that they were trying to compensate for something with that lofty title, namely- common sense. What AB 32 did was create a government entity with incredible power not only to levy regulations on businesses that emit greenhouse gasses but also to create cap-and-trade laws to slow CO2 emissions.

The grand plan for AB 32 is to return California to 1990 levels of emissions over the course of 14 years, making 2020 the target year to achieve environmental nirvana. Obviously, reducing emissions isn’t a terrible idea… in a vacuum. But we don’t live in a vacuum and other factors have to be taken into account, mainly the economic cost and the loss of freedom that would come from turning over something so arbitrary as ‘the right to emit’ to the jurisdiction of the government.

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As a professional scholar, Ben Bernanke devoted much of his academic life to studying the Great Depression. It is no surprise then, that the cause of the Depression was of particular interest to the current Fed chairman. In the end, Bernanke surmised that it wasn’t so much a particular action that caused the greatest economic downturn the world has ever seen, but a period of inaction, specifically, the time between the crash of 1929 and the beginning of FDR’s New Deal in 1933. He proposed that government was far too slow in taking steps to stabilize the economy and as a result, it took a massive public works program and World War to eventually jump-start the country.

Convinced as he was, when faced with a similar situation he was determined not to make the same mistake as his predecessors. In short, he was determined to stop the markets from failing. Together with Henry Paulson, they provided the framework for the $700 billion bailout of American banks, designed to infuse the market with fresh capital while making the US government a shareholder in the biggest financial institutions in the country.

Fast forward two years and a few things have changed. The majority of the $700 billion has been paid back but the spending hasn’t stopped, nor does Bernanke expect it to. In fact, he expects the United States to enter an extended period of recession, ala Japan since the 1990’s. Coincidentally, Bernanke is an expert of the Japanese economy as well, having studied the rise and fall of the Asian superpower and even lectured at their central bank about how they should have handled the bursting of their real estate bubble.

For a man who wields such an incredible power over the economy, much is expected and demanded. Without getting into my overall opinion of the Federal Bank, I want to talk about what the Fed is doing today to bring an end to this recession. Let me warn you, it is has little to do with real reform and everything to do with regulation and mind games.

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In a hail-mary attempt to garner main street support for Democrats before the elections put an end to the legislative season, President Obama finally was able to push the small business lending bill through the Senate, thanks to two retiring Republicans who crossed the aisle to vote for the stimulus package.

While I don’t believe that this bill is the right way to grow small businesses, and by extension, jobs, I want to let you know some ways that you can take advantage of this bill. Most importantly, keep in mind that much of the money behind this bill is designed to relax credit- reminiscent of banks loosening credit limits leading up to the real estate bubble. Trying to entice businesses into a loan just because it is available is just as bad as having tight credit. Keep that in mind as you consider these options.

Government created incentives for small banks to lend
Financially secure small banks will have access to $30 billion in funds to loan to small businesses. What’s in it for the banks? If they can increase their small business lending by ten percent over the previous year, they will have access to the funds at interest rates near one percent.

Write-offs for startups, long-term investors
The amount that new businesses can invest and consequently write-off will quadruple from $5000 to $20000. Companies who make eligible investments will pay nothing in capital gains taxes on those investments for five years. Businesses can also write-off qualifying business location improvements, property acquisitions, and health care costs for themselves and their families.

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“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
Thomas Jefferson

As you probably know, a budget crisis has stymied California legislators for nearly three months. In case you missed it, California is $19 billion (and growing) in the hole and no one seems to have a real solution to the problem. For the Democrats who control the Senate and State Assembly, the way out lies in canceling tax breaks to increase revenue. For the minority Republicans and Governor Schwarzenegger, it means making cuts to state funded programs to decrease spending. Both suggestions are short-sighted and lacking real reform- only temporary measures that will leave us no better off next year.

On the ballot this November in California are two propositions that are worth mentioning in the discussion about the condition of California’s finances: Prop 25 and 26. On the surface, Prop 25 seems like the perfect way to end the budget stalemates that have become so common in California and so devastating to the economy. Scratch through the shiny gloss about increasing government accountability and you will find a bill that is designed to give legislators more power to pass a budget filled with gimmicks and pet projects.

Proponents point to the provision that legislators won’t get paid if a budget doesn’t pass, which hardly matters. Eliminating the super-majority provision means lawmakers will be able to pass any budget they want- even if they know it has no chance of getting past the governor’s office. This proposition does nothing more than put a mask over the real problem facing the budget: we don’t have any money left to spend.

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The recent law passed in Arizona raises some tough questions.  How does one respond to a state law that enforces federal law?  Our President said it was “misguided.” Many state and city politicians in California have said it is time to boycott Arizona for its “harsh” immigration policy.  One Los Angeles Councilmen said that Arizona is acting like it is its own country.  One Texas Congressman said that the law is something he wants in his state.  A city councilman in Costa Mesa, CA said that the city is going to copy it and make it an ordinance.  Many activist groups have now filed legal suits against Arizona’s newest law, but many experts say that the law will stand.

Having grown up the son of an immigrant, I know firsthand the hardship of having no roots and being in a strange place.  I was born in New York and moved to the San Fernando Valley.  My father struggled to put food on the table, and I had to work as a young man.  I had my own paper route and worked hard.  When I graduated high school, I received a scholarship to USC.  This is the dream that most immigrants have for their children.

California became the place where dreams came true for my parents and me.  My father taught me that to be a good citizen you have to follow the laws.  I believe that still today.  I am successful because I have followed the laws of this great nation.  I believe, to find success in this country it must first start there.  I have driven past Home Depots, like many of you.  I think about the lives those men are living and my heart hurts for them.  I know they struggle to put food on the table just like my father did.  I know they came here seeking a better life for their children.  I understand their plight, but their method in achieving that goal is what I cannot understand.

Our current system has moved beyond common sense.  Our President has failed to uphold the laws set out by Congress and states are not allowed to enforce the federal laws.  Immigration and Customs Enforcement lack funding and staff to handle the current situation.  We have judges and district attorneys that are more dedicated to sentencing ICE agents then to enforcing our immigration laws.

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