Jim Bunning, the lone vote against Bernanke

Jim Bunning, the lone vote against Bernanke

“You play a pretty good fiddle boy but give the devil his due.”

-Charlie Daniels

It would be easy for me to avoid saying something positive about Kentucky Senator Jim Bunning. We differ on many issues. We rarely support the same candidates. His prickly personality does not make him a media darling.

Having said that, I would be remiss if I did not give Senator Bunning his due.

On one of the important decisions facing the country, Bunning was right and every other United States Senator was wrong.

In 2006, Bunning was the only Senator to vote against Ben Bernanke as Chairman of the Federal Reserve Board.

There were 20 members of the Senate Banking committee. Only Bunning said no. Bernanke then breezed through the full Senate on a voice vote.

Bunning took some serious heat. He was voted one of the nation’s “Five Worst Senators” by Time Magazine.

I wonder if Time Magazine will allow a recount.

If other Senators had listened to Bunning, we might have avoided a recession.

An economic downturn is the result of many events but the Federal Reserve Board can make it less painful.

The Federal Reserve Board is a risk manager for the nation’s economy.

A fire fighter puts out a fire but a risk manager keeps a fire from starting.

Bernanke hasn’t been a risk manager, he’s been an arsonist.

My high school history teacher said that the Federal Reserve Chairman was more important than the President.

My teacher grasped something that 99 United States Senators did not.

Before entrusting our economy to a Federal Reserve Chairman, the Senate needed to perform due diligence. They needed to make sure we had the best person for the job.

Bernanke’s confirmation “hearings” were a love fest with a minimum of vetting.

Only Bunning noticed that Bernanke had never worked in the private sector. Ben had never met a payroll or earned a return for stockholders. Bernanke only accomplishment had been hanging out at the Princeton faculty club.

Real world economics differ from the textbook models. A great Federal Reserve Chair, Paul Volcker, understood both.

I’m not sure Bernanke understands either.

Bernanke breezed through confirmation hearings and people hooted at Bunning.

I doubt Time Magazine’s editors are laughing at Bunning now. If they are in good spirits, they haven’t checked their stock portfolio lately.

There are hoards of people calling for Bernanke’s head. Even those who suck up to Ben admit that “he made a few mistakes.”

Those “few mistakes” put us in a recession.

If Bernanke had dealt with sub prime mortgages before they became a crisis, we would have avoided a recession.

If Ben had been aggressive in cutting interest rates before the stock market went into free fall, we would have avoided a recession.

If Bernanke had not appeared completely clueless, he would have given the business community confidence. Instead, we got a recession.

Bunning’s fellow Senators don’t want to admit they screwed up. They want to cover their tracks by handing out $150 billion in tax rebates.

Our grandchildren and great grandchildren will be paying for the ill advised rebates. We are currently paying for Bernanke’s mistakes.

Since the United States Senate gave Bernanke a 14 year term, we can’t get rid of Ben until 2020. I wonder what the economy will look like then?

Going against the crowd is a lonely position.

In 1964, Oregon Senator Wayne Morse was one of two Senators who voted against the Gulf of Tonkin resolution that authorized America’s further involvement in the Vietnam War.

I don’t know if Time listed its “five worst senators” in 1964 but Morse would have been on their list. Four years later, the people of Oregon voted him out of office.

It took awhile but history has given Wayne Morse his due.

I’m giving Senator Jim Bunning his due now.

Don McNay is Chairman of the Board for McNay Settlement Group and author of Winner, Losers and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com

Notes from Don McNay

My first nationally syndicated radio appearance happens on Thursday, when I appear on the Mike McConnell show at 10 a.m. eastern time. Mike is based at WLW (700) in Cincinnati but broadcast all over the United States. You can also download the podcast on ITunes. Also on Thursday, I am a guest on Pat Crowley's television show on Insight Cable in Northern Kentucky. It repeats 16 times so everyone in my home town should be able to catch it several times. With my book and the economy in flux, I've been keeping doing a slew of media appearances while keeping on the road with the structured settlement business. Anyone trying to find me can reach me at 888 676-2629 (888 Mr. McNay) or at don@donmcnay.com I have a structured settlement and Kentucky Press Association items below. Don Structured Settlements and Medical Malpractice article Enclosed is a link to an article entitled Structured Settlements and Medical Malpractice. It links to a great article in Trial Magazine by Dov Apfel, titled, Settling the cerebral palsy case. Dov is a great trial lawyer and great human being. He is based outside of Washington DC in Greenbelt, Maryland and is one of the nation's leading authorities of birth injury litigation. I was thrilled to see that Dov cited an article that Bill Garmer (w and I wrote for Trial Magazine called, Is a Qualified Settlement Fund right for your client?. I've written a lot of things for a lot of publications but I am particularly proud of the Qualified Settlement Fund article. It was the first QSF article in a major publication like Trial Magazine. It made McNay Settlement Group one of the nation's leaders in Qualified Settlement Funds, a position we have never lost. I have links to the Structured Settlements and Medical Malpractice article and the original article that Bill Garmer and I wrote. (Please note that Garmer, is also a great trial lawyer, great human being and great author.) Structured Settlements and Medical Malpractice article Trial Magazine: Is a Qualified Settlement Fund right for your client? by Don McNay & Bill Garmer
KENTUCKY PRESS ASSOCIATION AWARDS The Kentucky Press Association handed out their 2007 awards last week I was given a second place award in the best column category. To paraphase Governor Williard "Mitt" Romney, I've gottten two silvers and a gold in the past three years. Even better was that my home newspaper, The Richmond Register, was named best newspaper in its size category for the second time in three years. Jim Todd has done an incredible job in his three years as editor. I am very proud of him. I'm also proud of associate editor Lorie Love, who came in third in the best column category and diplomatically deals with my demands on a weekly basis. Richmond tied with the Corbin Times Tribune for first place and the Corbin editor, Samnatha Swindler, was named best columnist. Sam is a rising star in the journalism field and a talented and insightful writer.

Addicted to Spending

Addicted to Spending

They tried to make me go to rehab
I said no, no, no.

-Amy Winehouse

I don’t know if they have rehab for spending addicts. If not, someone ought to start one.

I was flipping though the news channels when I heard a guest demand that we give tax rebates to poor people.

“Rich people accumulate wealth. Poor people accumulate things,” he said.

He had a trickle up theory of economics. His believed that poor people will go a wild spending spree. The money will burn a hole in a poor person’s pocket while wealthy people would sock it away.

Most poor people need their income just to survive but there are many who are broke because they don’t handle money well.

There is a financial dividing line that separates savers and spenders.

The savers wind up with wealth and the spenders wind up with debt.

The line between affluence and broke is getting bigger. If a poor people want to go a go on a spending spree, there are plenty of credit card companies, payday lenders, “buy here, pay here” car lots and subprime lenders to help them along.

The economy is in recession because some avenues of credit are drying up. Too many people got in over their heads and can’t make payments. Companies like Citigroup bet that the fun would never stop. The bet cost their shareholders billions.

Giving rebate checks to the poor won’t bail Citigroup out.

If I get a rebate check, I’ll send it back to the government. They will eventually want it back to someday pay for the giveaway.

People on their way to wealth have good savings habits. People living beyond their means blow money on stuff they don’t need.

Spending is instant gratification, like snorting cocaine. One shopper told me that she got a high from shopping like a high from drugs.

Shopping doesn’t work for me. When I walk into a store, the hatred of shopping contorts my face to resemble a mass murderer or a professional wrestler. People run out of the aisles when they see me. I buy what I came to find and get out as quick as possible.

My goal is to accumulate wealth, not things.

When I was growing up, I used to think some people didn’t have good jobs. They lived in run down houses and often had their cars repossessed I found out that they made as much money as my parents. The people who lived in run down houses spent money on gadgets they didn’t use and motorboats that never made it in the water.

They lent money to “family and friends” even though they should have paying their own bills first. They had no sense of long term planning and ultimately had no money.

Spending beyond your means is an addiction. A spending addiction is probably as hard to cure as a drug addiction. It requires changing your lifestyle.

Money is a leading cause of divorce. The stress of debt pushes people to escape reality with booze or drugs.

When the economy slows downs, the addiction become a crisis. People who were keeping the balls in the air suddenly can’t. They have no back up systems.

I’ve frequently hired a casual laborer. He is good at his craft and for 20 years, made really good money. None of which he saved. Whenever I saw him, he talked about skiing trips, his bass boat or his brand new trucks.

Now the economy has turned. His house is being foreclosed on and they repossessed his trucks. He has no savings or credit.

His focus was on accumulating possessions. Now he doesn’t have those possessions. Or any money either.

The nation’s economic system has also gotten addicted to shopping.

America’s ebb and flow depends on citizens who accumulate things. If those people stopped buying and running up their credit card at the same time, the banks and stock markets would collapse.

That won’t happen soon. Shopping addiction is not going away.

There is going to be a day when it all hits the fan. Americans are competing against workers in countries like China who have great savings habits.

To turn the economy around, Americans need to find a spender’s version of rehab.

Don McNay is the Chairman of McNay Settlement Group. He is the author of Winners, Losers, and What to Do When You Win the Lottery. You can write to him at don@donmcnay.com or read what he has written at www.donmcnay.com

College Students Need to Learn About Money

Hello, is there anybody in there? Just nod if you can hear me.

Pink Floyd or the Scissor Sisters

I had a college business major ask me suggested classes. I told him to learn about personal finance.

He told me that personal finance classes didn’t count towards his major.

If a college business major isn’t required to know about personal finance, what chance do art and music students have?

Very little.

They will graduate from college as I did, knowing absolutely nothing about handling money.

I got lucky. A financial services company hired me and paid for me to get three professional designations and two masters degrees. I’ve spent the last 25 years immersed in the world of personal finance.

Simple financial steps are the things that matter.

I can show someone how to calculate internal rates of return. I would be much happier if I could get that same person to rip up their credit cards.

Internal rates of return calculations require knowledge. Getting rid of credit cards means altering how you live.

Lifestyle changes are a lot harder.

You can have all the knowledge in the world but if you are paying 24% interest on credit cards, you are never going to get ahead.

Until I got out of college, my formal education in personal finance was zilch. I learned from my parents and from the school of hard knocks.

30 years ago, no one gave college students credit cards. You lived on what you had in the bank.

I was lured by other college temptations. Girls, beer, fast food. If credit cards have been available, you could have added them to the list.

My lifestyle was dictated by lack of funds. Since all of my friends had the same limitations, I never felt social pressures to keep up.

I worked during summer vacation and spring breaks. My car cost $700. College was fun, even if I didn’t wear designer clothes.

Now, it seems that an expensive spring break vacation is mandatory for college students and high school students too. Skipping spring break automatically brands you as a loser.

To paraphrase Tom Petty, (a singer from my college era) it could be that the “losers” are the ones getting lucky. They aren’t coming out of college with a ton of credit card debt.

Some people are paying for that week in Panama City 15 years later.

I live in a college town and interact with lots of college students. Most are loaded with credit card debt and have monster student loans to boot.

They are going to be enslaved by debt for years.

There are two solutions. One is not issue credit cards to students who don’t have income. The second is to teach people about money so they know to avoid easy credit in the first place.

Neither are simple solutions.

Legislating against credit card companies seems futile. The credit card companies have their arms around congress. That was evidenced by the “bankruptcy reform act” of 2005 that was really a welfare bill for credit card companies.

Even though there has been insurmountable evidence that the “bankruptcy reform” hurts consumers, there has been no call to repeal it.

The credit card companies have better lobbyists than consumers could ever dream of.

Educating college students is the second battle. Sending students into the world to make stupid financial decisions seems like a waste of a college education but I don’t see any movement towards making personal finance a requirement.

Colleges ought to think about requiring personal finance, if only to protect their long term interests. Alumni overwhelmed by debt are never going to drop big dollars in the endowment fund.

Colleges need to train people to think about money the way Warren Buffet thinks about money. They might be in line when someone gives a vast fortune to charity like Buffett did.

Graduates will be coming out to face the worst economy in recent memory. While in school, I hope they can say no to credit cards and easy credit. It will be the best graduation present they ever give themselves.

Don McNay will be signing his new book, Son of a Son of a Gambler, at the Perkins Building on Eastern Kentucky University’s campus, on Wednesday, January 23^rd at 7 pm. All proceeds will go the Society of Professional Journalists. You can write to don@donmcnay.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it or read other things he has written at www.donmcnay.com

McNay to sign his new book at Eastern Kentucky University to benefit Society of Professional Journalists.

McNay to sign his new book at Eastern Kentucky University to benefit Society of Professional Journalists.

Author and syndicated columnist Don McNay will sign and present his new book, Winners, Losers, and What to Do When You Win the Lottery, on Wednesday, January 23rd^th at 7 pm.

The presentation will take place in the Perkins Building on the campus of Eastern Kentucky University in Conference Room A.

All proceeds of the book signing will be donated to the Bluegrass and EKU Chapters of the Society of Professional Journalists. McNay is Secretary of the Bluegrass Chapter.

In his second book, McNay gives practical financial advice including what to do if you win the lottery. He also reflects on the worlds of gambling, addiction, celebrities and business.

He chronicles the saga of several Powerball winners who have lost their money or had bizarre things happen to them.

McNay’s previous book, The Unbridled World of Ernie Fletcher, sold well and was critically acclaimed.

Also on the 23^rd, McNay will appear on The Pulse with Leland Conway on WLAP-AM in Lexington. On January 31, McNay will appear on Mike McConnell’s nationally syndicated radio program.

For more information about Don McNay go to www.donmcnay.com

For more information about Winner and Losers, go to www.sonofagambler.com

Lottery Winner Outed

Lottery Winner Outed

Gonna Take your mama out all night.

Yeah, we’ll show her what it’s all about.

Scissor Sisters

Babydaddy

Linville Lee Huff of Bullitt County Ky. was outed.

The outing had nothing to do with his personal life. He wanted to be a closet Powerball winner but is now a public figure.

Huff was the winner of the December 12, Powerball Jackpot. He claimed the cash option of $16.8 million.

Mr. Huff had requested to the Kentucky Lottery that his winning ticket remain anonymous. Instead, Huff’s name was obtained by the Louisville Courier Journal and published after the Courier Journal made an open records request.

Linville Lee Huff will be forever be known as Linville Huff, Powerball winner.

Mr. Huff had good intentions about keeping his winnings quiet. He implemented those intentions poorly.

When the initial story broke about a Powerball winner asking to stay anonymous, people contacted me and said, “whoever won the lottery must have read your book.”

I just published a book called: Son of a Son of a Gambler: Winners, Losers and What To When You Win the Lottery.

I tell people to protect to use trusts and corporations to protect their privacy.

Mr. Huff didn’t make it to my book signings.

I wish Mr. Huff had read my book. He would be enjoying his new fortune in private. He needed to find an advisor and attorney before rushing to cash the winning ticket.

A man who just got $16.8 million should have spent some of that cash on good advice. Any sudden millionaire, Powerball winner or not, needs to bring in expert consultants.

Huff could have avoided the mad rush of friends, strangers, charities and freeloaders looking for a piece of his money.

After the Courier Journal disclosed Huff’s name, some readers took umbrage with the newspaper. It was not the Courier Journal’s duty to help Mr. Huff protect his identity. They are not in the business of providing free advice to lottery millionaires.

The Courier Journal is a news gathering organization. Mr. Huff’s identity was news. Huff did not take proper steps to protect himself.

I wish all lottery winners wanted to stay out of the newspapers. Too many preen for the cameras, waving the check like they won a game show.

Mr. Huff needed to do more than to orally state his preference. He needed to set up a trust or corporation.

A lottery winner, who purchased a 2006 ticket near Cincinnati, won a $148.1 Powerball. The winner (or winners) set up a trust and a bank trust officer cashed the ticket. We don’t know who received the money.

As a test, I went to extensive lengths to see if I could identify the winner. I couldn’t. The trust officers did their job.

I wish Mr. Huff had found an attorney to plan and draft the proper documents.

Legal instruments and legal documents are important. That is why we have them.

If someone wants to give their third cousin their car at their death, they need to have a will. If they die without a will, state law will dictate how assets are divided.

Third cousins don’t make the list.

Families often battle when a family member die without a will. When I die, I have a will, trust and definite intentions for who gets what.

If my third cousin wants my car, he had better start sucking up now.

I’ve always offer lottery winners three tips: 1. Never let anyone know you have won. 2. Seek advisors before you cash a ticket. 3. Take the payments annually instead of the lump sum option. .

Huff did not follow any of the three rules. Powerball winners like Jack Whittaker and David Edwards have life stories that that make Britney Spears’s life look normal They have blown through millions and lived shattered lives.

It has been said that over 90% of lottery winners blow through their money. I hope that Mr. Huff is not one of them.

It wasn’t his mama that took Mr. Huff into the limelight. It was Huff’s failure to seek proper advice.

Don McNay is the author of Son of Son of a Gambler: Winners, Losers and What To Do When You Win the Lottery. He will be signing his book at Joseph Beth Booksellers in Lexington, Kentucky on Wednesday, January 16^th at 7 pm. You can write to him at don@donmcnay.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it or read other things he has written at www.donmcnay.com

Where I'm going to live when I get home?

Where I'm going to live when I get home?

-Billy Ray Cyrus (known forever as Hanna Montana's dad)

It's 2 am on New Year Eve (actually New Years Day) and I am watching a man frantically move out of his rental house.

It is the end of the month, on a cold, windy and miserable night. The guy is loading a truck as fast as he possibly can load.

I suspect that the landlord's New Year's will start finding that the tenant skipped out.

I wonder how many times that the scenario will play out around the country this year.

We have heard a lot about people who can't pay their "sub-prime" mortgage and can't afford their home. We don't hear much about renters.

Sub-prime borrowers make up a small part of the housing market. Some homeowners are hurting but the people crying the loudest are big Wall Street financial firms who got greedy and stupid.

Companies like Citi and Merrill Lynch made dim-witted decisions. Those decisions only effected the sub prime marketplace. It has no correlation to the man doing the 2 am furniture run in a snowstorm.

When you skip out on your rent, it usually means you are out of money.

A big portion of the country lives in rental housing. With gasoline, food and heating prices rising, they are feeling pinched. If they work in housing or construction, they are really hurting.

I've owned or rented a home for 30 years. I've never been late on a rent or house payment. It is the only type of payment I have never been late on.

When I was in graduate school in 1981, I had $10 a week to spend on food. I ate one meal a day, used lots of coupons (I didn't know how to cook) but made the rent each month.

When I started my business, times were very tough and I maxed out every form of credit I could find. They turned off the gas in my apartment. For 3 months, I had to take cold showers and use paper plates. I didn't have heat (it was summer) or hot water but I paid the rent on time.

I knew where I was going to live when I got home. I was never going to take a chance on losing it.

Not everyone stresses the importance of paying their rent like I do.

I briefly owned an upscale rental home and got burned on the deal. The renter was a corporate executive with nice furniture and a brand new (leased) Audi. He gave me a sad story the first month. The second month he skipped town in the middle of the night.

I got a judgment against him for the balance of the lease and spent the next 15 years trying to collect. He moved in an underground world. I got his wages garnished for a week in Nashville so he moved to another state. I lost touch for a few years until he made national headlines for jumping in a lake and saving a child's life.

Good for the child. Not so good for the deadbeat hero. I was able to attach another paycheck before he moved again.

The guy had nicer furniture than I did. He wanted to live in nice places. He just didn't want to pay for them.

When I watch someone moving in the middle of the night, I don't know the real story. I don't know if it is someone who is unemployed or at the end of their financial rope. I don't know if it someone who can't handle money or in a house too expensive for them.

It could be the man is moving to a nicer place and chose 2 am on New Year's Eve as the best time to make it happen.

He could be a sign of economic blight or just be a guy with strange moving habits.

Whatever his motivation, where he is going to live when he gets home will be different this year.

Don McNay is Chairman of McNay Settlement Group and author of Son of Son of A Gambler: Winners, Losers and What to Do When You Win The Lottery. You can write to him at don@donmcnay.com and read his award winning column at www.donmcnay.com