Thanks to his acquaintance, Renaldo, Jose was able to hire some illegal Mexicans to work for his construction firm (See Sunday, June 4, 2006 “The Gonzales’ Dilemma”). This was a last resort for Jose and Angela, as they couldn’t find workers to complete the many projects that Gonzales Construction Company had backlogged over the summer of 2006. Since hiring these additional workers, Gonzales Construction Company has continued to grow and Jose has built a reputation of completing quality buildings on time and within budget.

For Jose, the hiring of the illegal workers was a gut-wrenching decision. On the one hand, the workers are illegal without proper documentation. On the other hand, if he hadn’t hired them his firm would probably have gone out of business for not completing pending construction contracts on time. All of the illegals he employs are making between $15 and $20 per hour; hardly an exploitive wage. Income taxes are withheld from their pay, along with social security taxes. Due to the fact that the workers have bogus identification papers they will never see an income tax refund and the money deducted from their wages that is sent into the Social Security System will never have to be paid out because the recipients don’t officially exist. Despite the fact that they won’t collect a dime of Social Security, Jose’s workers appreciate the work and send a large amount of their take home pay back to Mexico to assist their families.

One of Jose’s workers, Ernesto, is a supervisor of finish carpenters. These are the highest skilled of the carpentry trade, specializing in custom cutting of moldings, trim, and cabinets. Ernesto is one of the finest workers that Jose has ever met, and he’s met a lot of skilled craftsmen in his day. In his mid 40’s Ernesto’s wife and three children live in Mexico. His goal is to work in the US for five years and take his savings back home to build a nice house for his family. This is a significant sacrifice due to the fact that Ernesto’s children are in their formative years and miss him dearly.

Like most illegal workers, Ernesto’s false documentation is good enough for his employer, but it won’t pass muster if presented at a bank to open a savings account. Therefore, Ernesto must hide his cash in his rented apartment. He’s chosen to put the cash, a little over $12,000, into a small metal box, which he has placed above a suspended ceiling in his bedroom. This is his stash, savings from almost two year’s work. It’s the stuff from which new houses are built!

Last Tuesday Ernesto was awakened in the middle of the night. Standing over him was a masked man with a pistol. He demanded that Earnesto give him money. Ernesto handed over his wallet with about forty bucks inside. The man was furious and said, “You fucking taco son of a bitch! Everyone knows that you bastards keep your savings in cash. You’ve been working in this town for over a year; give me the money, dammit, I know it’s here in the house! Ernesto hesitated and acted like he didn’t know what the robber was talking about. At this point he was repeatedly pistol-whipped until his eye sockets were black and blue and his face was bruised and bleeding. Finally, for fear of losing his life, Ernesto relented. The thug walked out with Ernesto’s metal box containing all $12,000 of his hard earned savings. His dream was over. He had gone without the love of his wife and children for nearly two years and had received nothing but heartache in return.

The next day Ernesto went into Jose’s office to tell him what had happened. Jose offered to replace all of Earnesto’s $12,000 and put it into his own bank account to make sure that this didn’t happen again. Ernesto left in tears, saying he’d think about it. Later that afternoon one of Jose’s workers saw Earnesto board the bus south to Chicago, from where he presumably returned to his family in Mexico. A week passed and Ernesto never returned. Jose and Angela figured that Earnesto had too much pride to accept charity from them. Because of the loss of this kind and gentle craftsman, who had become their employee and friend, both Jose and Angela shed tears at the dinner table for several days.

Two weeks after Ernesto departed, agents visited Gonzales Construction Company from the US Immigration Service. Reacting to an “anonymous phone tip”, they demanded documentation for all of Jose’s workers. After their investigation 28 of Jose’s workers were arrested and deported back to Mexico. Jose and Angela faced fines of over $150,000. The possibility that the “anonymous tip” was phoned in by the same worthless creep that beat Ernesto infuriates Jose. Like Ernesto, for the first time in their lives, Jose and Angela now have second thoughts about their American Dream.

Over the past five years I’ve been in and out of Chicago looking for investment property. I’m a radio freak and I can distinctly remember lender radio commercials touting low interest Adjustable Rate Mortgages (ARM’s). Five years ago the lenders were saying, “Come to us and we’ll get you a mortgage. You won’t believe how much house you can buy at these low ARM rates.” Today the same lenders’ radio commercials are saying, “Come to us and we’ll get you out of that high interest rate ARM and convert you to an affordable fixed rate mortgage.”

As I’m sure you’re aware, thousands of people purchased homes a few years ago with an adjustable rate mortgage. Instead of opting for a fixed rate mortgage around 6%, they got a three-year ARM, which was locked in at around 4.5 % for the first three years. The kicker is that after three years the rate may adjust upward if interest rates rise. Some buyers getting 4.5% for the first three years found themselves paying 8% or higher by the end of the fifth year. This almost doubles the monthly house payment, putting many mortgages into foreclosure. Many buyers who signed up for sub-prime mortgages did so because they couldn’t afford the house payment at 6%; the sub-prime loan was their ticket to purchasing a home. They knew the risks of higher interest rates at a later date, but somehow thought they could get through it. Families whose financial prospects and incomes increased during the five years after purchase could later re-finance at a lower rate. Those with flat incomes and poor credit ratings couldn’t refinance and many of them lost their homes.

Now Congress is attempting to “solve” the subprime loan crisis by increasing regulations for mortgage lenders, including mandatory licensing of all mortgage brokers. This is the same Congress that 20 years ago scolded mortgage companies in capital hill hearings for not finding ways to make housing affordable to the poor. The mortgage industry responded by coming up with new financial products (like the Adjustable Rate Mortgage) to make homes more affordable for lower income families. The problem with these loans is that the poor don’t have much disposable income; hence sub-prime mortgages are very risky. Now the same Congress that urged mortgage companies to provide more credit to lower income people is accusing mortgage companies of exploiting the poor! What’s a poor lender to do?

The free market has an answer to this subprime mess. It is a just and fair answer. First of all, the lenders (mortgage companies and large financial institutions to whom he loans were sold) will lose millions of dollars. That’s their penalty for being stupid and making “bad” loans to non-credit worthy borrowers. Second, the homebuyers who go into foreclosure will have to sacrifice any equity they have in the mortgage (which is usually negligible) and will have to move their families to less desirable housing. It may take two or three more years, but if Congress keeps its hands out of this, everything will work itself out. When all is said and done, both borrowers and lenders will have learned a valuable lesson; consumers will be far less likely to take the bait of an ARM and lenders will be less likely to offer them; especially to financially “marginal” buyers.

Unfortunately, Congress will probably not let the market solve this problem. Politicians will kick into “crisis mode” and try to “help” the unfortunate people who have lost their homes. This sentiment was recently expressed by US Representative Carolyn Maloney, a New York Democrat when she said, “What is important now is for those who are in a position of power to help protect homeowners and stabilize the system. Congress should lessen collateral damage.” If Congress takes Maloney’s advice it will create a lot of perverse incentives in the economy. Some examples will suffice.

The Bailout . Congress may make taxpayers “bail out” the homebuyers, but this is simply a disguised way to bail out the financial institutions that made bad loans. If Congress passes a bailout package, homebuyers will believe that no matter how stupid they are in the future, the government will help them. Moreover, big banks like Citigroup and UBS will be spared the financial beating that they deserve and will be more likely to engage in “marginal” loans in the future.

Increased Lender Regulation. Anyone who has completed mortgage documents has signed page after page of forms required by the Federal and State regulators to warn homebuyers of their rights. Interest rates are disclosed, terms of the loan are disclosed, and all kinds of buyer rights are explained. The last thing we need is more regulations in the mortgage industry. More regulations will increase costs of loan processing which will be passed on to consumers. Does anyone really think that adding twelve more forms to loan closing documents is going to make a difference?

Broker Licensing. Some states require mortgage brokers to be licensed. This is supposed to insure consumer protection. It doesn’t work. Occupational licensing only increases barriers to entry in the mortgage business, which limits the supply of brokers and increases the price of loans. Occupational licensing increases the wages of practitioners without offering any meaningful increase in consumer protection. We’re not talking about heart surgery here; this is the mortgage business!

As long as consumers want houses and lenders want to make money, loans will be made. Sometimes companies make risky loans and get burned. Likewise, homebuyers that sign up for mortgage obligations that they cannot possibly meet will have to find cheaper housing. This is the way of the world and the last thing we need is more governmental intervention. Republican representative John Campbell of California was correct when he said, “Before we rush into any action here in Washington, we need to see how well the industry and the markets are able to adapt to the contraction that’s going on. There’s a risk that if you overreact that you’ll actually dry up available resources to make sub prime loans.”

China is a paradox. Politically it is a communistic state, but economically it thrives because of its capitalist economy. A generation ago (1978) when Deng Xiaoping ended collective farming and encouraged foreign investment through joint ventures, China made the decisive and non-reversing turn toward free-market capitalism. While the old Communist Party bosses try to maintain some semblance of control, they are fighting a losing battle. There is a vast pro-democracy insurgency that penetrates the Chinese border every day to spread liberty and democracy, and the Chinese government permits this to happen.

Who are these pro-democracy insurgents? While there are many, I’ll concentrate on three.

Chinese College Students: Twenty years ago, there were few students from the People’s Republic of China who had the income to study in the United States. Today, largely due to higher incomes in China, there are thousands of Chinese studying in our universities. They study not only in the United States, but also in Japan, the United Kingdom, Germany, and other democratic nations. Once they spend a few years witnessing freedom of assembly and observing people openly criticizing their governments without fear of reprisal or retribution, they are never happy with the political oppression they experience when they return to China.

Upon returning to China their friends are anxious to know what it has been like in the United States. The story is almost always the same; they are told about a country where the water is drinkable, smog doesn’t block out the sun, and how people are free to pursue their private objectives. They are told of a people who are not ashamed to follow their personal dreams, and marvel at a country where collective thought is considered the antithesis of personal freedom. These conversations spread like wildfire among Chinese young people and indelibly serve to undo the grip that China’s Communist party has on its people.

The Internet: If you ask a college student from China where they get their news when they are home, they will tell you that the Internet is their main source of information. The state controls the newspapers and television stations in China, but despite their efforts to censor the Internet there is just too much information out there to squash. Any Chinese student will tell you that the Internet is the place they find the truth, and both computers and Internet access in China are accessible to at least 400 million middle class people. Using the Internet, China’s people can ascertain the difference between the “Official Communist Party Line” and reality. To the extent that an information gap exists, people are aware and not fooled. Exposure by “Internet transparency” has often resulted in improved accountability by the Chinese government.

The 2008 Olympic Games in Beijing: For the Chinese, the 2008 Olympics is a huge deal. In the minds of the Chinese, it catapults their country upon the world stage as a legitimate nation. I, for one, don’t think the rest of the world needs to be reminded that China is a legitimate nation, but for the Chinese people, after suffering a century-long inferiority complex, the 2008 Olympics is a source of immense national pride. As we run up to the start of the Games, China’s Communist leaders, fearing an Olympic boycott by Western nations, have been very tolerant of dissidents within China who have been emboldened in their criticisms of China’s human rights abuses. While the Chinese government might crack down on these dissidents after the games, there exists now a “window of free speech opportunity” in China, which may encourage even more dissident behavior after the Olympics have concluded in Beijing.

Ironically, the Chinese Communist Party, like the Olympic torch, will eventually be extinguished in Beijing. It will take a few more years, but I believe that within my lifetime we’ll see a thriving democracy in China. This will be a good thing for over 1.3 billion Chinese as well as the other 5 billion inhabitants of planet earth

Last February a study was completed by Professor Jean Twenge of San Diego State University along with four other Psychologists. The study examined responses of 16,475 college students nationwide who completed an evaluation called the Narcissistic Personality Inventory. The study concluded that today’s college students are more narcissistic and self-centered than their predecessors.

What is Nacrissism? The term was coined by Sigmund Freud from Greek mythology. You may remember from your schooling that Narcissus was the one who fell in love with his own reflection in a pool of water. While Narcissism can be diagnosed as a severe personality disorder, I’m referring to a milder form of narcissist as someone who honestly believes that, “It’s all about me.”

According to the website narcissism101.com a narcissist may exhibit at least five of the following behaviors:

1. Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements)
2. Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love
3. Believes that he or she is “special” and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)
4. Requires excessive admiration
5. Has a sense of entitlement, i.e., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations
6. Is interpersonally exploitative, i.e., takes advantage of others to achieve his or her own ends
7. Lacks empathy: is unwilling to recognize or identify with the feelings and needs of others
8. Is often envious of others or believes that others are envious of him or her
9. Shows arrogant, haughty behaviors or attitudes

While all research is controversial, it is my anecdotal opinion that today’s eighteen to twenty-eight year-olds are indeed more narcissistic than those who came before them. I’ve noticed that email correspondence from this group of people is sometimes stingingly harsh and unkind. This is not a “respect your elders” issue; the emails would be unkind even if written to a person in their twenties. When I confront these rude e-mailers in person and mention the tone of their emails, often reading them back to the authors, they are often sheepish and apologetic. It is apparently a heck of a lot easier to insult someone by typing on a keyboard than to face him or her in person.

I’ve noticed that today’s young people are often impatient and want immediate results. Sometimes their expectations are so outrageous and unrealistic that they are laughable. One time I was remodeling a bedroom for a tenant. It was a major job and I told her it would take perhaps five days. After only one day, she told me her boyfriend was coming over. She demanded that I get ten people into the room at once so that it could be finished within 5 hours! I told her that the bedroom couldn’t even hold ten workers, and that plaster and joint compound require several coats to dry. Then it would have to be painted. She didn’t buy it for a minute; if she wanted it done in 5 hours it was going to be done in five hours! Of course, the laws of nature prevailed and the job took three more days. She still hasn’t forgiven me and is convinced that I “dragged out the job to be mean.” This is another characteristic of the narcissist. They are never wrong.

I suspect that narcissism is largely the product of over-praise by parents and teachers. After all, we wouldn’t want to mess up the self-esteem of these “little pretties” lest they become depressed. My son tells me that in corporate America it is now taboo to talk about a “problem.” In today’s politically correct world this is far too negative; problems are now called “opportunities”. I guess I’m old fashioned, but in my businesses we encounter problems continually. We even call them problems. All of us are held equally accountable for the success of our firm, and we know that it is our job to solve problems. In my company when a person messes up a $50,000 project we don’t go up to him and discuss his “opportunities”.

Please understand that the vast majority of the young people I know are fine men and women whom I admire and appreciate, but I think the narcissists among them are getting more “hard core” each year. I’ve been tempted to get some “It’s Not All About Me” buttons made for the growing number of narcissists I meet!

Just when I think that our culture has dropped to rock bottom, I encounter something that convinces me that the bar defining personal integrity and responsibility is being set lower and lower. Take, for example, a new website called www.myexcusedabsence.com. Yep, folks, this baby clearly establishes that we’re headed straight to hell in a hand basket!

For the low price of $19.95 you can receive access to several phony excuse notes to use in getting out of work. Occasions for these customized phony absence notes include:

1. The Doctor/Dentist Visit
2. The Emergency Room Visit
3. Jury Duty
4. Funeral Attendance
5. Medical Evaluation Visits

Using the website you can download bogus excuse notes as word documents. They look real official and you can insert your name and the names of your physician, funeral director, county clerk, etc. and print them out on your home computer. The cost to snooker your employer is only $19.95. There is even a free vacation contest that you can enter on this website. Wow, cool! After you win the free vacation you can use one of the website’s fake notes to get the days off!

Of course, my excused absence.com has a written and verbal disclaimer stating that the site is “for entertainment purposes only.” I suppose one of the slick lawyers they’ve hired has figured it will get them off the hook if any of their customers try to sue them when they get caught and fired. By the way, if you shell out your $19.95 in the next few days you will get two bonus notes. One bonus note is for taking an extra long weekend without charging your personal leave. The other one is a “just can’t be bothered to get out of bed” note! Gosh, I wonder how that works?

I’m going to make a premature New Year’s wish; that a year from now when I enter myexcusedabsence.com in my web browser, they’ll be out of business!