Shenandoah Vortex

Post Constitutional Rule Making- A Conspiracy Against The Majority?

2012-02-13T08:52:00.000-08:00

This Congress has proven one thing-the system as it is now being implemented doesn’t work. Congress, with a public approval of only 11%, has become useless in solving the nation’s problems. Further, the problem is not with the Constitution but the post constitutional rulemaking of Congress. To understand the situation you must consider that there are really two sets of rules running our country. This article gives some useful details.

The Federal Constitution contains first of all a set of rules that are the constitutional law behind congressional procedure. These are rules that regulate the operations of the government as directly specified in the document. To change these rules requires an amendment of the Constitution in the manner specified in the document itself. The second sets are procedures also necessary for governance but which are too voluminous to be specifically written into the Constitution by the Founders themselves. Ideally these procedures should provide the detailed follow-up required to implement the Constitution. They are established by subsequent legislatures and should follow the general intent of the founders. Establishing this boundary is difficult and was worked on diligently by the Founders. Unfortunately subsequent Congresses have created a management nightmare that has had a terrible effect on how we are operating our government. It is not the constitutional rules set by the Founders but the inept post-constitutional rule making that has brought our Congress down to a 11%approval rating.

We need only look at a few examples. One set of rules which has brought the organization to a halt is the requirement for a supermajority for too many actions. The Founders after long discussion decided on a 2/3 majority in overriding a veto and expelling a member and 3/4 of states in a constitution amendment. None of these requirements are affecting the management of Congress. Unfortunately future legislatures set an excessive number of actions requiring a supermajority in subsequent operating rules and procedures. This has created major operating problems where nothing can be passed.

If you look into the Constitution you find nothing about committee rules with chairman being appointed by political party; nothing about 60% required to override a filibuster; or of Congress taking all of the special privileges it has granted to itself. There are no provisions for the senatorial courtesy feature such as a single senator holding up an appointment. All of these anti-democratic actions that grant excessive power to a few over the majority are purely the work of post Constitution legislators-and far from the very democratic nature of the Constitution.

With such a terrible legacy of inefficient and bad management that has allowed a few to paralyze the majority Congress has become useless. There is indeed a necessity for an audit and review of the post-constitutional rules and procedures that have destroyed the Congress as a legislative body. That report should then be presented to the citizens for action.

The Nations Problems-Now Listed For Action

2012-01-29T12:20:00.000-08:00

One of the most discouraging items of this problem ridden recession has been the feebleness of the Government’s low energy attempt at fixing the problems. There is a characteristic dance. Democrats propose a greatly lobbied-down correction. This is criticized by a bloc of Republicans. The democratic response to the criticism is to then forget the whole idea and disappear. In spite of the seriousness of the times essentially no action has been taken by Congress.

The nation therefore essentially has given up on the Washington elected government. Neither the Democrats nor Republicans seem to have any driving concern for the citizen welfare. We have been left alone with a large and unanswered need to restore the economy and prepare our country for future global competition.

There is a long list of critical tasks. Some examples are:

Restore a weakened manufacturing sector and balance our trade

Regain control of the financial sector and return it to its proper role

Resolve the paradox of a deteriorating infrastructure with the large unemployment of construction workers

Provide all citizens with an education opportunity suitable for future global competition

Develop an immigration policy that will strengthen the US

Control corporate special interest influences on legislation

Adjust the Department of Defense to reflect changes in threats and warfare.

Establish an equitable trade agreement with China

Somehow gain a functional Congress.

The State of the Union address was a pleasant surprise. Finally the President identified the problems and explicitly recognized actions aimed at addressing them. He pleaded for congressional cooperation and promised to take the issue directly to the people of the country if no cooperation was forthcoming. Let us hope.

A CBS poll taken at the completion of the presentation showed unheard of approval Ninety one percent (91%) of the citizens that heard the speech favored taking the actions discussed.

A Gallup poll analyzed the proposed actions item by item and also showed how strongly the public favored the proposed actions.

The suffering and disillusioned public is begging for action. So far this Congress has taken none. It is doubtful that the current Congress will change its useless ways. Hopefully the items will be brought up item by item so the voters can observe the votes and take appropriate action on Election Day.

Then perhaps the restoration of a great country can begin

Simple Missions That Morphed Into Monsters

2012-01-13T07:46:00.000-08:00

An income greedy financial sector, corrupt political parties, and bean counter corporations are all having lethal effects on the countries welfare.

All three areas once had a specific limited service to contribute to the country. Over the years, however, they have been allowed to expand their activities and boundaries to the point where they have become self serving and are now harmful to the economy, our democracy and our welfare They have done this by abandoning service to the country and its citizens and focusing instead on creating in-house benefits. This has been accomplished with the full complicity of our elected government. All of these activities have been gained through expansion of their activities outside of constitutional requirements.

The Constitution granted Congress responsibility for the fiscal activities of the country. The Congress utilized private sources to assist it to perform specific functions and to assist in ensuring that funding was available to companies and citizens for productive use. Because they are managing national funds their focus should not be maximizing their own profits. This situation has reversed itself and these functions are now managed by central banks that are corporations focused on creating revenue for themselves, not for the productive sectors of our economy. Combine this with lax overview by the Government and we have hugh misallocation of funds misdirection of national goals, and financial disasters.

The Constitution does not mention political parties. Their potential for doing harm was warned by several founding fathers, including Thomas Jefferson, Geoge Washington, and John Adams. This was done on the fear that it would create primary loyalties to the party instead of the general welfare. This has proven to be true. There is a natural tendency of citizens to start groups that would organize to jointly advocate their position for pending legislation. Now, however we have only two parties that have been jointly untouchable in power for over 150 years. They have become a major anti-democracy factor by their tight control of the selection process that determines the candidates that are finally presented to the citizens. Their control of the elected government has allowed them to define an election process that greatly favors the current system. The result is that our election process is governed by two private organizations that have their primary loyalty to themselves rather than the nation

Reflecting the feelings that English corporations had been exploiting the colonies in the days before independence corporations in early America were rare, They were treated as unique organizations formed for a special business activity, such as building a canal. They are not mentioned in the Constitution and were initially solely a state responsibility. They were forbidden to become involved in politics. Over 200 years of mainly Supreme Court decisions have reversed this to give them all rights of a natural person and the right to use their profits `to exert enormous power over our legislative and electoral processes. To restore our democracy all three institutions must be put back into their proper position in relation to national governance.

The financial sector must be put back in the position of a service to the productive elements of the economy and not focused on non productive attempts to increase its own revenues.

Political parties must be reduced to equality as one of many organizations promoting candites and have no special advantages over unaffiliated candidates.

Corporations likewise must be focused on producing useful services and products, not on government and electoral process manipulation for special privileges.

These corrections will be difficult and take time. All three institutions will fight strongly to preserve their positions. It will only happen with an overwhelming demand from the citizens. It will require a drastic reduction of the funds that can be applied to influencing the government and elections.

Super PACS- Another Tool for the Governing Elite

2011-12-28T09:08:00.000-08:00

Here is the situation. We have a worthless Congress choking on its self made problems. It has an all time low 12% positive rating by the citizens. We are saddled with an ineffective executive branch which is baffled and outmaneuvered by the worthless Congress. The entire mess is managed by two self serving, and corrupt political parties whose primary interest is to stay in power with the status quo. The national ruling elite have no answers to this status and little inclination to try to find any. They are awash with tired ideologies that have been proven not to work 20 years ago. Our great country is being wasted and unable to serve its citizens. It is so serious that the citizens are beginning to occupy the streets in serious protest.

We need productive change to our governance. We will only get it when we elect effective governments. For that we need truthful and useful information on the candidates.

Working against truth and balanced discussion is a 2010 decision by the Supreme Court that allowed corporations to make unlimited contributions to Political Action Committees (PACS) directly from their treasuries. They cannot make these contributions directly to a candidate so they make them through “super PACs” that are formed especially to create large political expenditures for political purposes. This allows corporations to provide then with unlimited funds. With these resources they can instantly create floods of negative media against reform candidates.

For an example of the role super PACS can play consider the Republican Party primary elections. Of the six potential candidates there are two that are proposing several anti statist solutions for consideration. In view of the shortage of productive ideas with which the part y has been plagued you would hope that the party would welcome an informed discussion of these ideas. No so. When polling showed that the citizens were swinging strongly toward both of the candidates it caused a panic throughout the Republican establishment. Gingrich took a commanding lead over the statist Romney, while Paul also climbed rapidly in the polls.

The statists immediately released a barrage of super PAC funded negative media directed at the two unflavored candidate. Those shown in Iowa are loaded with ignorance, misquotes and half truths related to events going back over 20 years.

They were effective. Gingrich admitted the difficulty of countering the cash rich super PACS media supporting Romney. NPR reports that the attempt to counter with positive ads is not working. Within a week the Gingrich large leads in the polls have disappeared.

We have just put another powerful tool in the hands of the governing elite. They are apparently anxious to use it to further muddy up our already weakened election process. Regardless of your candidate this is bad for democracy.

Two Important Events Last Week

2011-12-14T07:43:00.000-08:00

Occupy Comes to DC

The 99% have come to challenge what many people feel is the primary obstacle to reform. The corrupt Congress of the United State and the special interest lobbyists that feed them. The lead organization is Occupy DC which is a solidarity partner with OccupyWallStreet.
Their intent is to call attention to all of the Washington landmark institutions that are favoring the 1% to the detriment of the 99%. First actions were marches to the lobbyist’s offices on K Street, the Capitol Building, the White House, and the Supreme Court. There are additional actions on many more Washington landmarks.

They have been tightly controlled by police. A temporary building installed near K Street was forced to be dismantled by the police. Lots of arrests but the occupiers have been peaceful-no violence. The effort to shut them down seems to be underway.

They say they will stay until the government responds. It will probably be a long visit. We wish them luck.

Newt Gingrich Takes a Commanding Lead in the Republican Presidential Race

This really has the leading elite and their media confused

Newt has a distinguished list of enemies. He is hated by the party elite, the media, and those who were his colleagues in Congress. Considering the job this bunch have been doing Newt may be just the person we need.

Remembering his activities in the 90’s It is hard to imagine that once elected he would follow the irrational do nothing policies of the current Republican party. Surely with his pride he will be looking for aggressive and radical solutions to our problems. Backed up by his intelligence he could apply some major reforms to the party and our whole corrupt system. But there is a predictability problem. At this point we don’t know his real intentions because they are masked by the stupidities he must spout to win the primary.

Those 90’s years when he was leading the House do look pretty good in comparison to today. Granted, he used a lot of hypocrisy to reach his goals. Working with a Democratic President he brought us a balanced budget, got rampart welfare under control, and is a rare Republican that favors cutting the oil company subsidies. The House of Representative that he led with Clinton as President makes the current Congress look feeble. He certainly is not a run-of-the-mill politician.

The Democrats say they would love to run against him, but they had better be careful.

His 20 yr old personal baggage that they hope to use against him seems pretty mild when compared to our current embedded government corruption. You can review his personal history in Wikipedia and reach your own conclusions.

Both important events to watch.

Disastrous Elected Government Causing Strong Remedies

2011-11-26T10:36:00.000-08:00

Background on Occupy Wall Street/99 %(OWS)
The OWS/99% movement is described more completely in the October 22, 2011 and November 22, 2011 posts on this blog.

The core conflict has occurred because those who call themselves the “99%” of the population refuse to accept the broken economy and dysfunctional society that the current system has brought us. The elected government shows no capability of correcting the problems.

The OWS/99% has chosen the First Amendment as the primary mechanism to call for reform. The First Amendment clearly establishes freedom of religion, speech, and the press, along with the rights of peaceable assembly and ability to petition the government for redress of grievances.
The standard method of protest is the “occupying” outside of an institution by hundreds to thousands of protesters at a symbolic site. Signs and activities at the sight outline the reasons for the protest. The “occupy” is to be non violent so as to meet the protection granted “peaceable assembly” by the First Amendment.

Responsibility for the mismanagement is placed on a 1% component of the population that holds the positions of power. The goal is to shift power from the 1% to the 99%.
It is impossible for the hard core 1% to deny the economic and social problems that are not being addressed by the governance. Sadly, we have elected a Congress which is doing nothing to address the protests. In fact many of the hard-core members of the 1% were deeply involved in the creation of the problems and continue to benefit from them. They have chosen a counter strategy that ignores the problems but instead relies upon attacking the 99% as socialistic, left wing, and un-American and the real source of the problems. In short, they are substituting public relations for reform. In so doing they have committed the country to a clash of philosophies that could have very dangerous consequences.

Recent Events
November 17 marked the 2nd month anniversary of the Occupy Wall Street (“OWS/99 %”) invasion of Soccotti Square in New York. They have established solidarity with hundreds of additional organizations that are also protesting the actions of the government and financial sectors. The November 17 Day of Action created “occupies” of hundreds of institutions and facilities that were felt to being wrongly managed by the 1%.

This date is also marked as the first large scale coordinated counterattack by the hard core governing 1% of the population. On this date numerous cities, including New York, moved to remove the 99% from their protest camping areas. Although this was generally done peaceably there was the use of excess force. Thousand of arrests were made. The claim by those cities and other institutions were that the protesters were not being “peaceful” and that the First Amendment did not therefore apply.

One series of damaging videos of the police spraying pepper spray on sitting non violent students is circulated widely on the internet and has added to tensions. A damaging proposal by a Washington public relations firm to the American Bankers Association (ABA) was also leaked. The proposal offered to initiate a program that would warn politicians of future penalties if they sided with the protesters and to initiate research to present negative information on the protesters. Although the ABA reported that they had refused the proposal it represents a discouraging attempt to substitute public relations for real reform.

State of the 99%
The OWS/99% movement has become large, global and distributed. It is being very aggressive in pursuing its protests. The question is whether it can withstand the forthcoming public relations firestorm when the 1% fully unleashes its vast financial and media resources. There is also the difficult task of converting public sentiment to legislative action with an ineffective Congress that has only a 13% approval rate.

Of special interest is a plan by OWS/99% to soon “occupy” Congress. Here they will address their most inept and fault ridden institution and hopefully have the entire nation cheering them on.
OWS has prepared a proposed vision statement with supporting goals. They propose major changes to some current financial policies.

State of the Hard Core1%
It is impossible to deny the existence of serious problems that were largely created by many of the hard line members of the 1% themselves. The obvious way to defuse the situation would be to correct the reasons for the protests. However this is not being done by either the government or responsible institutions.

Polls show that only about one half the population currently understands the situation and its seriousness. That uninformed half will be a prime target for their PR campaign.

The Near Term
In the near term we will continue to see major “occupy” efforts by OSW99% and strong public relation counter measures by the hard core 1%. It is unknown how far the hard-core ideologue members of the 1% will go to attempt to preserve the current status. Nor do we know how the 99% will be able respond to their attacks. There is a real danger of losing public support if the “occupies” are unwisely overused.

The 1% does have powerful control of the financial sector and elected government, along with almost unlimited financial resources. A little attention to the internal traffic of the competing groups, however, shows that there is considerable overlap between the 99% and the 1%. Many people who fall in the upper 1% in a financial test recognize the problems being cause by the current environment and would support many of the reforms proposed by the 99%. It is hoped that this group can eventually contribute to a reasonable, non violent , and just middle ground. As of now, however, there are no indications that either side will accept a compromise.

Stand by for Round 2 and hope for a peaceful and just constitutional resolution

The OWS and 99/1 Movements-A Quick Update

2011-11-08T10:46:00.000-08:00

On the Oct 22 post we described how the one- sided self serving actions of the current governing elite finally aroused the population into forming a fast growing organization dedicated to shifting governance responsibility away from the 1% elite to the 99% middle class citizenry. The movement started with the Occupy Wall Street (“OWS”) actions to occupy Succotti Square near Wall Street. This immediately let to similar organizations being formed in US cities and towns and spread throughout the world into a global network. This post brings you more information on the progress and environment they have created. There is so much action it only touches on high points.

Positioning

After 6 weeks the total movement is beginning to take form as hundreds of local organizations outside of New York establish “solidarity” with OWS on the global network. The movement has continued to establish itself as the center of the 99% who are demanding corrective action after a bungling Government and allied institutions have proven to be disastrous to the nation. Wisely, the movement has been extremely careful to avoid being co-opted by other movements, agendas. or political labels. It is clearly described as a pro-democracy movement to correct major deficiencies in the nation’s governance by moving to a more democratic middle class environment.

Organization

Each local organization in the network is self managed but must be non violent and democratic. The local governing body in each node is a General Assembly that must approve all actions. They use a decision support system called “People’s Assembly” that focuses on distributed consensus decision making across a group environment. All members can participate. A methodology of hand signals express positive and negative positions and keeps discussions moving and on topic. Communications is open between nodes to all members via Twitter or other social systems. This system continuously maintains real time communications with hundreds of local organizations through the world and allows instantaneous coordination of activities. There is a tremendous volume of information flowing. You can follow much of it through Twitter. The information system plus the large number of people involved is impressive. This is an advantage over the many layered hierarchy of the 1%.

Competition

Significant portions of the 1% are not hardened ideologues and recognize the disaster that the remainder of the 1% has dealt the nation. They are supportive of reform and could eventually be a basis for reasonable compromise. But there remains the hard core ideologues and the plain greedy that are profiting from the current situation and viciously resist any change. Unfortunately they are deeply embedded in positions of wealth and power in Congress, the media, and the corporate and financial sectors. It was in those positions that they created the very situations which are the point of contention with the 99/1 % movement..

This hard core 1%seems to feel that with their power they can eventually make OWS/99/1% meaningless. They do not yet seem to understand the scope and intensity of the OWS/99/1% movement. They are going to find it difficult to hire the energy and intelligent dedication which is standard within the 99/1% movement. Their only hope for survival is to turn the general public against the OWS /99/1% movement.

They have embarked on an extensive misinformation and infiltration program to try to create in the public mind an image of a left wing, communist, violent, and unlawful agenda made up of drug addicts and sexual predators which must be brought under control. If the movement stays true to its current path, however, the public will surely recognize the falseness of these accusations. This site gives you a better perspective of the typical 99% membership.

Summary

The 99% have made a good start by gaining worldwide exposure and in identifying the critical issues that need reform. The strong infra structure of the 99% is already showing its ability to call broad attention to the thoughtlessness of different government policies by holding thousand person plus “occupations” of the offending institutions.

The movement is an intelligent core being applied to financial and governance issues that the public recognizes. Because it has no legislative authority, however, it must face the next critical step. That is to elect a new Congress that will provide the required legal actions.

This is setting up to be a very competitive and important contest for the mind of the American citizen. It is encouraging to find a force that is still fighting hard for the American Dream.

OWS-The Citizens Finally Run Out of Patience

2011-10-22T07:26:00.000-07:00

The greed of the financial sector, the ignorance of the ideologues, and the unimaginable incompetence of the 111th and 112th Congress has been causing excruciating pain to American citizens for almost three years. We could not be expected to quietly accept this situation indefinitely. A common sense Congress could have defused the situation by correcting obvious errors and sincerely addressing the underlying problems. Unfortunately the guilty parties have refused to offer serious solutions.

The nearest opportunity for citizens to replace many of the current non performing members of Congress through elections is over 12 months away. Continuance of the current ineffectiveness by Congress is longer than the citizens could wait. Thus a far reaching global protest movement has become activated. The movement is serious, and growing at an explosive rate around the world. It has been joined by numerous additional organizations. Initiated by the Occupy Wall Street (OWS) protest movement it has as its battle cry the taking away financial and political power from the self serving portion of 1% of the population and returning democratic control to the 99%. Polls show that this concept is strongly supported by the majority of middle class citizens.

No one knows where these protests will lead. At this time they are wisely adamant about remaining independent of political parties. The organization has not been in place long enough to present a code of demands but one is being prepared. I saw a listing of eight demands that were being suggested for inclusion by one protester. All were legitimate, practical, and addressed needed actions. Some were addressed to laws already passed that were nullified through congress cutting funds to the intended enforcing agency. One demand dictated that all laws passed by Congress would apply equally to them as to the citizens. Reducing the influence of unlimited money and special interests on the democratic process was an important theme.

The protests are definitely legitimate and aimed at correcting the overreach practices by the established institutions that is damaging our country and our democracy. They should have been corrected long ago by Congress. It is extremely important that real progress on the major issues happens while the protests are controlled by citizens strongly motivated by patriotism and democracy. This will require the elimination of many practices of the financial and political systems.

I suggest you follow the protests closely. Read and understand the demands when they are presented. Offer advice and criticism. Be prepared to resist the forthcoming propaganda assault by those who brought us down to the current state.

American Jobs Act Update

2011-10-04T07:55:00.000-07:00

On September 5, 2011, after over 2 yr years of recession and 14 million citizens still unemployed the President announced a $447 billion American Jobs bill which included $140 billion in infrastructure construction work. On September 13 this blog applauded the bills’ focus for finally providing direct help to the middle class. We concluded, however, that it could only pass the current Congress if forced to by strong public support.

On September 20, 2011 Gallup released the results of a detailed public opinion poll on the citizen’s response to the bill. It was overwhelmingly favorable for the bill. The infrastructure element was favored by 72% of the citizens polled. A blow-out 80% favored an accompanying tax deduction for small businesses. The reference covers the results by element and political party affiliation.

It is now October 5 and in spite of numerous presentations by the President the bill has not been submitted to either house by party leaders. No target dates have been set. (Of course, the Congress did have a week of vacation to get in). On Sept 28 the Democrats announced that they don’t have the votes for passage in the Senate and won’t bring the issue to a vote until they do. Republican leaders in the house have called the bill “campaigning” and have not announced a date when they would bring it up for debate,--if they do it at all. Today they announced it DOA.

With trillions of dollars worth of infrastructure work to be done and 14 million American citizens out of work you would think that leaders of both parties would be all over each other to work out a plan. They should want to flood the country with projects that would get the citizens off unemployment and back to value-added work. But you would be wrong.

The question is why would the US Congress prefer to write unemployment checks and watch our infrastructure crumble than provide productive value-added work to its citizens? My only observation is that this is the expected behavior of our current Congress. This is exactly why the latest Gallup poll shows citizen approval of Congressional job performance is down to13% and 9% with Independents.

There are many studies which point to the benefits of an immediate national infrastructure plan. On March 5, 2011 the New America Foundation released a widely distributed evaluation estimating that our inadequate infrastructure was costing the nation more than $192 billion a year in wasted fuel consumption, lost time, additional handling and other delays. As a specific example, this article by USA Today discusses the waste and additional costs that inadequate infrastructure is causing the grain export business.

It is apparent that there are ideologues and special interests that do not want the act to pass, but in view of the public support are afraid to be seen voting against it. Hence every delaying trick available will be pulled to avoid a vote.

What can the citizens do to force a vote when Congress refuses to even consider an issue that is so important to the citizens? Although national referendums are common in municipalities and states there is no mention of them in the constitution. (The Founding Fathers apparently never considered the possibility of incompetence at the level we now have.) In the short term we have only the advisory force of public opinion as determined by the countless political polls. In the longer term we have our 2012 election where we have the opportunity to replace all of the Representatives and one third of the Senators.

Keep up the pressure. What are your representatives doing?

The American Jobs Act-A Critical Decision

2011-09-13T08:43:00.000-07:00

The American Jobs Act presents an important choice for America. We will have to determine if we want to give up and join the bean counters in their rush to the economic bottom or fight to regain a booming American economy. This decision is so important that a wrong choice could portend the concluding stages of the American dream.

It is not that the proposed Act is the final solution. There is much more to do and this Act is over two years late. But at last there is an aggressive middle class oriented plan put before the nation. It shines when compared to the special interest actions of the ineffective congress with which we have been living. We need it to pass now, however, not in fourteen months with a new congress. Sadly, the only way we will see significant action with the current congress is through such overwhelming public support that each congressman decides that to oppose it would be political suicide.

Your understanding is very important. You will need to educate yourself on its’ contents to withstand the misrepresentations, half truths and delaying tactics that are on their way from the ideologues and their politicians. You can move toward an independent and knowledgeable judgment by reviewing the American Jobs Act Fact Sheet.

The Act addresses four major areas, all focused on middle class issues.

Tax Cuts to Help America’s Small Businesses Hire and Grow ($70 billion)

Putting Workers Back on the Job While Rebuilding and Modernizing America ($140 billion)

Pathways Back to Work for Americans Looking for Jobs ($62 billion)

More Money in the Pockets of Every American Worker and Family ($175 billion)

The items in each area are explained in detail in the fact sheet. There is also a detailed cost table in the fact sheet. The fact sheet further claims that it is fully paid for as part of the president’s long-term deficit reduction plan.

As the proposed Act is further understood we should begin to see the results of legitimate public polls as opposed to the unscientific self serving ones starting to be published now.

Understand it and you will support it.

.

Americas Economic Problems are Political - Not Resource Limited

2011-09-05T11:40:00.000-07:00

The founding fathers were not bean counters. So they must be confused when they hear the ideologues and bean counters tell us that we can no longer afford to do the good things for our citizens that are described in the Preamble of the Constitution.

What exactly are they saying? That we don’t have enough science and talent to support a health care system for our citizens? We don’t have enough engineers and skilled tradesmen to manufacture everything we need? Are we short on farming and the land needed to grow our food? Are there not enough engineers and construction workers to fix our infra structure?

They talk nonsense. We have an ample supply of all of these assets. The country is filled with everything we need to satisfy the material and creative requirements of all our citizens.

There is one thing that we don’t have--a thoughtful and honest Congress. One that will make sure everything that should happen on the national level does happen, regardless of party ideology. It is the absence of a willful elected leadership that is pulling us down.

With a thoughtful and honest Congress we would not be in the current mess. They would have recognized that having everyone together in productive work is the only way to financial and social stability. We would by now have an all out program focused on that. Instead the two parties have wasted over two years bickering with each other over unproven ideologies while the confidence of the nation is destroyed. They have yet to provide the citizens with a substantial plan for economic recovery.

The current Congress has had its’ chance and failed miserably. Remember this. Be very careful how you spend your vote in 2012.

Congressional Cost Cutting Obsession is the Tail Wagging the Dog.

2011-08-29T07:40:00.000-07:00

When will the bean counters acknowledge that deficit reduction should only be one element of a national economic plan? Nothing would be more slipshod than to create a cost reduction plan without careful attention to how it affects a national economic recovery plan. The trouble is, after over two years of recession, the US has never built a national economic recovery plan. What our congress is doing with this single minded devotion to cost cutting is similar to only studying seat covers while trying to build an automobile.

We do need a comprehensive plan but it should be for economic recovery. It should address all sectors that impinge on the economy such as citizen employment, expanding the manufacturing sector, correcting the trade imbalance, protecting our science leadership, restoring financial integrity and a general return of the principles of the American dream. Obsessive bean counter concentration on cost cutting without understanding the consequences on the rest of the economy will lead to disaster. It is discouraging that this nation is being managed by leaders who do not seem to grasp such a simple principle.

The lack of basic management skills had created a Congress that is badly failing the country. Americans realize this. The current Congress has no creditability with the citizens. The latest Gallup poll shows that only 9% of independent voters support the way Congress is handling its job while 84% of all voters disapprove. These are disastrous results.

What can the citizens do? What can be done to restore the citizens’ faith in its governing institutions? In spite of these failing ratings I have not heard of a serious proposal for extensive reform of Congress from either party. If these polls haven’t energized them what will?

The Constitution makes no allowance for the early termination of an existing Congress. We will have to wait until 2012 to exert our voting power. Unfortunately, unless the situation changes, our choice of candidates in 2012 will come from the same process that created the current gene pool.

The known solutions of letters, emails, and calls don’t seem to be providing the driving force for the level of reform we need. We definitely must open the election process to have more choice in candidates. In fact it may be time for that risky street-driven movement that says “Don’t vote for an incumbent.”

Starbucks CEO Loses Patience-Withholds Political Party Contributions

2011-08-19T08:58:00.000-07:00

Howard Schultz ,The CEO of Starbucks. has called for corporations to boycott contributions to political parties until Congress and the Administration agree to work together to address the real problems of the country. CBS News presents the elements of his proposal and contains a link to his letter. A Forbes article “Washington Losing Credibility Among US Business” offers more detailed analysis. The New York Stock Exchange and NASDAQ have mailed his letter to all of their listed CEOs.

This is a big time effort to compensate for the lack of confidence in Washington that is retarding our economy. The citizen’s approval of the job by Congress by citizens has dropped off the chart to only 13% . Congress went on vacation at that point and does not intend to return until September.

The two articles and his letter present a realistic analysis of the actions to counter our inept elective government. The conclusion is that current Washington will not create a solution to the sluggish economy. They cannot be counted on to set aside their ideologies and special relations for a solution that is best for America. For the long term good of the country American corporations must actively step up on a bipartisan basis and demand confidence- building results. This is true even if it will sometimes means a hit to short term profits. The boycott of contributions is until decent reform is reached.

In contrast to the hot air politicians who have unproven ideologies they would like to try on us Starbucks has created over 135,000 jobs in the US alone.

It will be interesting to see how many companies join in. Shultz was very careful to say that he is making no comments or influence on policy. He asks only that the parties have their elected members working hard on solving America’s problems and stop viewing election at the national level as a personal and party-based business opportunity.

This is a distressed attempt for reform of our political parties by a practical American business. There is always the possibility that other companies benefitting from today’s confusion and ineptness will increase their contributions to maintain this situation. Good investigative reporting and close attention to those companies by well informed voters is the only counter to these actions.

Performance of Congress Reaches Point of Complete Breakdown

2011-08-07T13:24:00.000-07:00

After months of self induced wasted time on the deficit while ignoring the crucial need for energizing the national economy Congress ended up on Tuesday with a bean counter solution for the national credit ceiling. The market immediately gave us its analysis of the legislation by going into free fall, with the Dow losing over 512 points on Thursday.

On Friday, for the first time in its history, the credit rating of the United States was lowered form AAA to AA+ by Standard and Poor. An explanation of the reasoning shows that the primary basis was the deteriorating legislative performance by the Congress, which after months of pathetic effort came very close to causing a default in the country’s’ credit.

Meanwhile Congress left town and won’t be back until early September!

Thus ended several months of record setting self afflicted elected government incompetency, while millions of Americans remain unemployed, our infrastructure crumbles, and our economy remains broken.

Naturally the citizens are irate at this performance. The latest NY Times/CBS poll shows that 82% of the US population disapproves of the performance of Congress. Everyone I know double disapproves. I have yet to meet someone who is a member of the approving 18%. No company would consider a management team as incompetent as the ones we have picked to run our country. I maintain that the root cause of the current pathetic level of performance is closely related to the undeserved power we have given our two political parties.

I specially blame the Democrats because they claim to be the party protecting the average American and have failed. The Republicans openly favor wealth and privilege interests and aggressively protects them with all its political power. In spite of their vast resources the Democrats, by contrast, show only weakness as they fail to confront the Republicans and the bean counters destructive and one sided policies. These policies have been very destructive to middle America. There is no third party to pick up the fallen flag of the American citizen.

Although our Founding Fathers did strongly warn us of the harm they could do, political parties are not mentioned in the Constitution. The current two parties have had over 150 years to legislate themselves into a very powerful position. We have let them capture both our electoral and legislative processes. They have established laws and procedures that make them very difficult to replace. We have only the election process established by the Constitution as a tool. We must very carefully use it in the 2012 election.

Our theoretical limit for Congress is to replace the entire House of Representatives and one third of the senate each national election. We must be careful, however, that the replacements are an improvement over the incumbents. This will require having real research about the candidates.

To get my vote the candidate will have to survive the following evaluation:

Be fully aware of the disaster to the American dream caused by the special interests driven government elite -- and be dedicated to correcting it

Have absolute loyalty to the United States and its people, not to a political party

Not be a one solution-solves-all ideologue.

Advocate revising congressional rules and privileges to be closely aligned with those of the average citizen.

Move the US toward a productive and creative economy by preparing and implementing a comprehensive national plan to restore our economy at all fronts.

Insist that we aggressively use all means available and eliminate the negative trade balance.

Runs a campaign that is faithful to truth and reason. Rejects the usual dodge and lie techniques.

Will treat being elected to congress as an honor and responsibility, not a position to be exploited

There are a few in congress that could pass these requirements, We must support them and drastically increase their numbers in 2012. Then we may have enough for real reform.

A National Economic Restoration Plan Versus a ”Grand Deal” for Deficit Reduction

2011-07-27T13:32:00.000-07:00

What was the Administration thinking when it asked congress to present a “grand deal” for controlling the deficit in return for the increase in the national debt ceiling? The plan had Medicare, Medicaid and Social Security as “on the table”. What a morale killer for an already demoralized population!. They learn that their leader wants a plan for full retreat that threatens what little support they have left. They certainly don’t need a bean counter driven plan of retreat that discounts the national potential we would have if the system would only let us work.

Does the administration think the current special interest controlled congress is even capable of developing such a “grand deal” of retreat for the country? No one else in the country does.

In any event I am tired of listening to the Republicans and Democrats talking right past the citizens. They then negotiate with each other for final results that always seem to satisfy the special interests and shortchange the citizens.

Addressing a real problem, the “grand deal” we need is one directly with the citizens to develop and really implement a comprehensive road map for Americas’ economic restoration. The plan would assemble our total talent pool and make both the economy and the American spirit soar again. Its progress would be completely transparent to the citizens.

Nothing of this nature will come from the bean counters. Retreat is in their DNA. Not only will the bean counters say we can’t do it-they will say we shouldn’t even try. They support the sure path to mediocrity.

This is America. Our greatness is not due to bean counters. Don’t let them set “the things that need to be done”.

Restoring our economy is the only acceptable way to cut into the deficit-but more importantly it is also the only way we can remain true to the American Dream.

Unfortunately we have voted in a Congress that is pitifully inadequate, both organizationally and talent-wise, to lead us down this path. They are proving this every day. Somehow we must identify the few competent and honest members of congress and vote the rest out.

It is critical that the plan make use of the extensive citizen talent pool that has blessed this country. The sections of the plan must be explained in understandable English to the citizens and progress completely transparent. Congress has to be prevented from injecting special interests at the expense of the country. All elements of the US economy must become dedicated to its success.

Elements to be resolved are: trade balance, manufacturing deficit, constructive employment of our citizens, an honest and stable financial system, energy policy, and an efficient political system.

Sound impossible? Not as complicated as going to the moon. And extremely important.

When Your Leadership Causes the Problems

2011-07-17T11:47:00.000-07:00

If you are looking for a perfect example of a society that makes its own problems look no further. You are living in one. Being blessed with abundant natural resources, an innovative population, and a tradition of freedom you could expect our success in the basics of life. We have a booming agriculture that feeds other parts of the world as well as ourselves. We have a defense so strong that no other country dare threaten us, and a historical gift of basic principles of governing from our founders. Yet somehow, here in the early 21st century we find ourselves in a shameful and innocent mess of national governance. It has robbed our citizens of their national pride and disgraced the American dream. This situation was not brought on by nature or military invasion, but by the efforts of our elected leadership.

So what happened? If you take a broad view, and don’t get bogged down by all the hot air, it is a pretty clear picture.

The national debt was not caused by the American working population unable to directly supply the services and materials from their own work. The farmers continue to plant crops and the factory workers continue to work and generate real wealth wherever allowed. Over the last 25 years, however, the elite ruling class and their bean counters have focused on moving large amounts of that wealth to themselves through worthless financial ploys. They have now greatly overplayed their hand and killed the golden goose by selling much of the nations real wealth creation capabilities overseas.

So the producing members of the economy, who are the only force that can create new wealth along with the basics of living, are now faced with not only fixing the productivity machine but also with addressing the debt that was carelessly accumulated while they were stealing from us.

What have we got to work with? First we have to understand that the “government” is really two organizations. There is the political half which consists of elected leadership plus the special interests that finance them. Their only qualifications are the ability to sell the voting public that they should be elected. Then there is the operational half which carries out the policies and legislative actions set by the political half. This is made up of workers who are a typical cross section of Americans. Their positions have technical qualifications which must be met by the employee. These people are faced with implementing the changing and inconsistent requirements of the elected and their appointees who are election winners of our two party election process.

It is easy to pinpoint which group is to blame for our sorry state. The elected representatives have severely failed in their obligations to the citizens. Their corruption and incompetence have created the serious problems that we now face. Although the operational workers do sometimes make mistakes they do not have the embedded corruption of the elected elite. It is the elected elite that must be decisively improved. People who rail against “the government” without understanding this distinction are misguided.

The only tools we have for correction are the election process, our numbers, and our thoughtfulness. As we have posted many times we must somehow reintroduce ethics, truth and intelligence into our elections. These traits are not common in either party. It will require much closer attention to the quality of political candidates. The citizen voter must make the difficult effort to sort ethical behavior from dishonesty, truth from lies, and intelligence from stupidity. There is no single ideology to substitute for these basics.

Our Two Political Parties Need Real Competition

2011-07-08T10:31:00.000-07:00

One very important subject that is well understood but rarely mentioned in the media is the fact that the two party political system as now practiced is a disaster that is destroying our nation.

Permanent political parties did not play a significant role at the time of the formation of our country. They are not even mentioned in the Constitution. As pointed out in a previous post, however, (June 13, 2011) we were warned against the concept, by several Founding Fathers. Unfortunately, we foolishly disregarded their warnings and are now attempting to live with the results.

The two parties have:

Created a ruling elite that have loyalty to their party beyond that toward our nation.

Exhibited typical elitist behavior by creating many special privileges for themselves that are not available to the citizen.

Limited the voters’ choice of candidates almost entirely to loyal party members.

Done a disastrous job of managing our economy

Allowed their servitude to the special interests that fiancé them to create a warped tax and economic environment that is severely harming American citizens.

Because their only competition is the other party they operate under a very low bar for competency. The parties struggle to accomplish even the simplest of legislative tasks and fail to address serious issues. The latest poll shows Congress with a favorable rating of only 17%.

In a truly competitive situation the parties would either reform or be replaced. Both parties are so entrenched, however, that they can ignore the citizens and still survive. It is unbelievable that we have turned the governing process of our democracy over to two self-serving organizations that focus almost solely on their own power.

These multiple defects are now deeply embedded in current practices. Although the failings have become even more obvious during the recession there is no evidence that the parties are seriously attempting correction. With over 150 years to rig the system in their favor there is not much hope for significant change in the near term.

There is always the fantasy that a new party standing for all the right things will somehow be formed and have sufficient funds to give the competition needed to spur reform. Unfortunately, because of the organization and funding requirements third parties have not had long term success. Our best hope is a conscience epidemic that results in serious reform in one of the existing parties.

If we don’t set a course for correction of the problems of the current system we can expect to silently watch the American dream disappear. We must have a major improvement in our Congress.. This could be done if we could somehow open up the selecting of Senators and Congressmen to match the quality and dedication that was present at our founding. This is difficult because the only new candidates we see are products of the current parties.

The country now has 300 million citizens. We can surely come up with a better mix of candidates and leaders than the current population of career politicians and lawyers that characterize the two parties. We have to increase the talent pool available to give the major parties competition.

One step in this direction would be to greatly simplify how qualified citizens who are not affiliated with a political party could more easily seek office. If the voters could judge and vote between better qualified candidates the quality of congress should improve. This would be possible if there was a third set of primaries to select candidates from a talent pool that is not affiliated with a party. We need a state registered non profit organization, similar to the League of Woman Voters, dedicated to supporting the administrative overhead of the electoral process for unaffiliated candidates. This would not be a third political party but an advocate for equal and fair treatment of all unaffiliated candidates by the system. There would be no promotion of a specific candidate. That would be the job of the candidates themselves.

The parties could continue as now, except they would have real competition. The competition should force them to move in the direction of reform and offer better candidates. Unaffiliated voters would have the same input level on candidates that members of a political party now have. In the general election voters could choose from Democrat, Republican, or Unaffiliated candidates on an equal footing.

Could this happen? Not likely. But we must continue to push for major reform at every opportunity. It will not happen naturally.

Crude Oil Release from Strategic Petroleum Reserve (SPR) Sticks It to Speculators

2011-06-25T16:24:00.000-07:00

At last, a real effort to bring the oil speculators to heel.

Here is the background on the SPR and a story from US News on the release of 30 million galleons of petroleum to the commercial market from our current pool of 727 million gallons. Other countries also released another 30 Million gallons from their reserves.

The US release amounts to only 4.1% of our current government owned petroleum pool. What it portends has created a storm among the financial speculators and others profiting from high oil prices. This is finally an aggressive first step toward bringing stable and reasonably predictable prices to the petroleum market. It is great news for the preponderance of businesses for which petroleum products are important costs. It could be a God send for small businesses, manufacturers, the transportation sector, and the economy in general. All of these industries have been hurt badly by the volatility of petroleum prices. The release is bad news for the financial institutions that make hugh profits by speculation in petroleum prices. It reduces the influence of OPEC and is hated by the American Petroleum Institute. .

The puppet media, bought congressmen, and the financial speculators that gain by making the market volatile are screaming about government interferences with their game. Somehow it is fine for government bailed out members of the financial sector to buy and hold tankers filled with petroleum for a higher price but it is terrible for the government to do something to lower the price to the economy and the citizens.

This release was done by Presidential memo. If congressional approval was required it would not have had a chance against the special interest lobbying.

Operated carefully we can begin to get value from our 80 billion dollar investment that is now sitting idle in salt domes. If the price of petroleum would surge to a high price for reasons other than pure supply and demand a small amount of petroleum will be injected into the market to bring it down. That petroleum would be replaced in the reserve when the market returns to a lower price. The average amount in the reserve for emergency use would stay the same while the volatility of the market would be checked. There would be room for true business based hedging but no profit in wild speculation on price. This will remove a major financial risk to businesses. It is a good thing and if not derailed its’ effects will reverberate though the economy.

You can expect a major effort by the special interests to derail this. As I finish this post CNN is reporting on my TV on the decision to release the 30 million gallons. The newscaster claims that “the business community” complains that we should not release this small amount oil because it was “there for an emergency”. What a red herring! Who is this “business community?” Obviously a very select group of petroleum sellers and financial speculators. The newscaster did admit that other countries were also doing releases from their reserves.

You will be hearing lots of twisted logic from these self interests. Don’t believe them. They are not friends of the American citizens and definitely not trying to help with the recovery.

American Dream vs. Bean Counters

2011-06-18T08:31:00.000-07:00

The cerebral cortex (i.e. problem solving) component of the Government has shut down. The conversion of our nations’ management from a producing to a corrupt financial society has left millions unemployed, and losing their homes. As our infrastructure decays the two party government that is suppose to protect us from such mistakes continues to fail. The focus on loyalty to the party instead of to the citizens is obvious. The latest poll shows that Congress in total has a favorable rating of only 17%. We have no current means of correction. At the next election in 2012 we will be given choices between candites selected by the same two parties that have led us here. There seems nowhere to turn.

Bob Lutz, a long time executive in the automobile industry who returned from retirement to help GM through its’ recovery has written a book “Car Guys vs. Bean Counters”, The book describes the difference between product people and bean counters. Car guys love cars and take pride in the manufacturing of automobiles that are creative and give the customer pride in their ownership. Bean counters view the automobile as an object of finance that has value only by the short term money that can be extracted from it.

Although the subprime financial meltdown and high price of oil were major hits to the industry, the rise to power of the bean counters was the killing event for General Motors. The book is a detailed description of how the bean counters coming to power brought associated actions that almost destroyed General Motors. The bean counters business plan emphasized making the minimum car that extracted the most money from the customers. The car guys’ goal was to make automobiles that gave the customers maximum value for the price. As the customers were exposed to automobiles built under the bean counter philosophy they moved to other companies that gave them better value. Taking design, manufacturing, quality control and company philosophy back from the bean counters was a major milestone toward survival.

It is a great read for those who have followed the automobile industry. As I read it I was struck by how closely this story describes what we need to accomplish to manage our country. If only congress was controlled by those who love and really care about America and its citizens. This is in contrast to the current environment where decision making is under control of those who view the citizen as a financial object for exploitation. It would be great if someday we could write a book with the title “The America Dream vs. Bean Counters” that described how the US was turned around.

A key event in the resurgence of GM was the creation of an energized work force that was dedicated to creating products that please the customer. Our governance is failing miserably in this area.

It is encouraging that once the “car guys” attitude began to be established in GM the employees became re-energized and creative. There was actually plenty of talent available but it was being hobbled by the bean counter management. Perhaps this is true for congress. An approval of only 17% would certainly seem to be a legitimate reason for a change of leadership.

In discussing the tough competitive environment that the American auto industry must meet in the future Bob Lutz begins his conclusion with the following statement.

In a sense the decline, failure, and rebirth of General Motors is simply a metaphor for what is happening in the whole United States

I certainly agree.

Major Political Parties Underestimating the Nations Anger

2011-06-13T06:27:00.000-07:00

History

Political parties were just on the horizon when our country was formed. They are not mentioned in the Constitution. Our founders however, gave us due warning that it allowed to develop they could prove disastrous to the nation. One example is the special warning George Washington gave in his farewell address

The common and continual mischiefs of the spirit of party are sufficient to make it the interest of a wise people to discourage and restrain it. It serves always to distract the public counsels and enfeeble the public administration. It agitates the community with ill founded jealousies and false alarms; kindles the animosity of one part against another, foments occasional riot and insurrection. It opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passions.

Similar warnings were given by the other founders. Sadly, we did not listen. By allowing only two political parties to control the nations election process we have seen all of the warnings become true. In effect, over the last 150 years, we have turned our democracy over to two self-serving organizations that focus on their own power. They have taken over every important step of the electoral process. for their own gain.

Every citizen sees firsthand the results of this situation

We have corrupt and weak candidate from both parties that are financed and controlled by special interests. There is more loyalty shown to party and to these financiers than to the citizens. Our choice in elections is limited to two sets of weak candidates that have been filtered through party only primary elections. These electionst favor extreme ideologues from both the left and right, with no choice available for moderate citizens.

The leadership of our country has been transferred from a productive to a financial elite. These financial elite, in turn, have mismanaged our economy and caused trillions of dollars of damage. This hardship for this is being placed on the American citizen.

The list goes on. We all watch as our elected government brings down our great country.

So what can we do?

Our two party system has almost 150 years of steady evolution and solidification of its position. Because their only competition in performance is the opposing party they have a very low bar for competency. Our rocking back and forth between two inept organizations each election will not fix the problem. Both parties are doing a terrible job but we are helpless to adequately punish them. Somehow we need to confront them with real competition from the many leaders that thrive in this country but are outside of the two party system. We must open up our governance to a broader talent pool.

Election Primaries for Unaffiliated Candidates

One scenario that could go a long way to accomplishing this is states running a third set of primary elections for unaffiliated candidates and voters. This would be in parallel with the two party’s primaries and have similar procedures. It would be funded by public contributions.

To participate in this primary the candidates must not be affiliated with one of the major political parties. The winners of the national unaffiliated primaries would be given slots on the election ballots as are the winners of the party primaries. This is not another political party, but an organization to get unaffiliated candidates before the voters. Voting would be for an individual candidate, not a political party.

Technically the unaffiliated primary campaign would appear very similar to that of the major parties. Only there would be a third track of candidates. You would have debates, a limited amount of promotion, and rules and fees to register as unaffiliated.

On primary day, depending on your affiliation, you would be given a Republican, Democrat, or Unaffiliated ballot to cast your votes’. On election day you would be selecting from individuals with Republican, Democrats, and Unaffiliated beside their names.

Is this radical change?

Giving unaffiliated voters the same election level of choice as party members? Is that such a radical idea? This effort would shake up and be fought vigorously by the major parties and the other special interests.

Only large numbers of angry citizen voters and continued poor performance by the two parties can make this happen. But it would really open up the talent pool and maybe even light a fire under the two underperforming parties.

And we would be getting back in sync with the Founders

Apply Compensation Recovered from Financial Sector to Rebuilding Our Infrastructure

2011-06-05T08:18:00.000-07:00

The purpose of the financial sector is to manage and encourage the nation’s flow of capital for beneficial uses. To obtain this service the nation has dedicated trillions of dollars to the industry. The sector, however, has lost or wasted a significant portion of these funds in a constant search for its own profits. This mismanagement has resulted in a major catastrophe for the nation and great harm to the lives of millions of citizens. Minimum operation was only partially returned to the completely disgraced system by the Government providing large injections of funds and guaranteeing the solvency of the major banks.

If the principles of capitalism had been applied at least six major banks would have been allowed to fail. The Government, in a tough decision to make, concluded that such widespread failure would present such a shock to the economy that we would enter a full fledged depression equal to or worse than any every experienced. They were in a position where they had to support incompetence to prevent a greater negative.

I cannot judge the wisdom of this decision. A complete breakdown was avoided. The banks are now making profits as usual but the nation still struggles with massive unemployment and lack of investment. Because of the recession and the associated loss of revenue we cannot even find the political courage for essential investing in the nation’s infrastructure.

In July 2110 the Dodd-Frank bill was passed to correct many of the financial sector operations which lead to this catastrophe. Having been saved by the Government intervention you would think that the industry would be despite to make amends and correct its’ errors. Instead it is spending large sums with lobbyists to prevent the laws effective implementation and to allow continuing with their operations and profit motivations unchanged.

There is no business sector that is held in less regard by the public than financials. The financial sector morally owes the country serious compensation to even allow it to continue to exist as currently structured. This is compensation that could be directly applied to infrastructure improvements and the associated employment.

The country needs it now.

Republican Goals and Medicare: NY District 26 is Right

2011-05-31T06:26:00.000-07:00

As a former Republican who once thought the GOP had something to offer I felt obligated to personally check on the Medicare treatment in the Republican budget plan. Was it as bad as the voters in New York District 26 decided? Bad enough for a strong Republtican district to go Democratic in protest?

I hate reviewing legislation but decided I could manage to focus just on the Medicare issue. So I downloaded the summary as presented in “A Roadmap for America's Future"

It took discipline to only skim the first one third of the roadmap. This part was dedicated to criticizing all efforts to get out of the financial industry caused recession. Items like saving the millions of jobs related to the American auto industry, the economic stimulus, TARP, and attempt to regulate banks and the financial sector, etc. were all viewed as destroying America. Strangely it didn’t mention the recession, the banks role in it, or what they would do to prevent a reoccurrence. In fact, they seem determined to learn nothing and take no preventive actions. They were strongly against any additional regulation of central banks, saying it would decrease the ability of institutions to raise capital. They were against consumer protection saying it would also reduce the types of credit that would be available.

It continued with quotes on about how Americans have become too dependent on their government and were losing their initiative. They also dwelled on fantasies about the good results that their unproven budget would bring. (But that is not part of this post.)

Finally at about 60% deep into the document I found the following statement as part of the Medicare discussion.

In place of the current Federal tax law creating the market distortion – the individual income tax exclusion for employer-sponsored health insurance – every American (except those enrolled in Medicare or a military health plan) will have the option to receive a refundable tax credit – $2,300 for individuals and $5,700 for families – to pay for health coverage. The tax credit is available solely for the purchase of health care

This is the replacement for Medicare. It is indeed a voucher system via tax credits. You will receive a health care tax credit with which you can, if you wish, directly buy a health insurance policy for yourself or your family. Payment will be made directly from your credit account to the supplier. If health costs are above the stated “voucher” amount or that of the new policy that you “negotiated” with an insurer then you are directly responsible for the difference. It is essentially all you have. There is no other pay or sharing cost with the government above that credit amount. The states are to set up exchanges to provide information to you and help you with enrollment. This is very different from Medicare where the government makes payments directly to the doctor for everyone under Medicare and provides protection against large bills.

The document claims it will reduce costs because the individual patients will negotiate the best policy for themselves rather than be subject to the current Medicare negotiations with suppliers. The patient will have the very doubtful “opportunity” of negotiating directly with the insurance companies and the doctor. Can individual patients negotiate better rates than Medicare does now with its’ millions of patients? This is very doubtful. Remember AIG, the self regulated central banks, and what they brought us.

The benefits to the insurance companies are easily identified. In fact I believe this part is so one sided that it must have been written by the insurance companies themselves. The Medicare infrastructure for processing claims and controlling costs will be destroyed. It will be individual patient against individual insurance company. The insurance companies will gain millions of new applicants with the only controls set by the industry. A standards group composed of a commission of five private commissioners will decide the standards for care (government is strictly forbidden to participate). No government overview is available.

What to conclude? What kind of policy would you get for $2300 annually from a self regulated insurance industry that sets its own rules? That information is just not available.

My conclusion is that this healthcare plan is definitely not to the benefit of the American citizen. The current so called “market distortion”they call Medicare is much better. Thank you voters of New York District 26 for realizing this.

What is both scary and disappointing are the 235 congressmen and the 40 senators who voted for it. Why are they not protecting us? Did they not understand the plan, are they bought out by the industry, or is it party loyally over citizens?

Or all three.

Deficit Hawks Sound More Like Parrots

2011-05-22T08:30:00.000-07:00

It may take some effort but they really should broaden their vision of life and of America. We know we need to control the deficit but they should keep it within perspective of other issues. And while they are at it how about some new clichés?

It is really disappointing to turn on C-Span and see our congressmen standing there, bathed in imagined virtue, repeating the same old empty lines. Very proud of the “new” wisdom being passed on to us. Some examples:

1. The people want the government to balance its’ budget like they do theirs.

2. The United States is “broke” and out of money

3. We must cut taxes on the wealthy so they will create more jobs for us

4. We don’t have a revenue problem, we have a spending problem.

5. A corporations’ only loyalty should be to its’ stockholders

Of course, there is never any legitimate supporting evidence. My personal experience tells me that none of it is true. It is merely part of the scare protocol the elite always seem to use to exert further control over us.

Let’s just take a short look.

1. After countless barbeques and happy hour beer sessions I have yet to meet someone who doesn’t see the difference between managing finances of a three hundred million population country and their home budget. They may be out there but sure don’t deserve the inclusive title of “the people.”

2. What would you expect when the financial sector goes unpunished after stealing trillions from the economy? At the same time you have two unfunded wars, have exported million of manufacturing jobs overseas and caused a major recession. Focus on fixing those problems that you and your “experts” caused! If they were fixed our future cash flows would be more than enough to cut deeply into the deficit.

3. This is so unproven by history that it shouldn’t even be mentioned.

4. Where is the evidence for this? Simple math and history shows that these are linked. We obviously have revenue and spending problems.

What would I like to see on C-Span? How about something like this:

As a member of Congress I would like to confess that I have erroneously worked for the special interests and my political party rather than that of my country and its citizens. During the remainder of my term I will devote myself to correcting this terrible mistake.

As a CEO of a United States corporation I admit that the protection, support and free enterprise environment of my country and its people has been a major factor in our success. We owe loyalty and responsibility to the United States, our stockholders, our employees, and the locations where we have facilities.

What a day that would be! Wouldn’t we all feel better?

Ethics, Truth and Intelligence: Three Characteristics We Must Have in Those Who Wish to Govern Us

2011-05-16T10:53:00.000-07:00

To be specific here are working definitions from the dictionary:

Ethics: the discipline dealing with what is good and bad and with moral duty and obligation.

Truth: the property of being in accord with fact or reality.

Intelligence: the ability to learn or understand or to deal with new or trying situations

That these characteristics in no way describe much of our current governing elite is to our shame. The founding fathers closely fit this representation but over the 250 years we have allowed its’ deterioration. Some pessimists claim that this is the inevitable progression of a democracy.

It is undeniable that ethics, a respect for truth, and a little intelligence would have prevented a majority of the problems that are haunting us now.

The sub prime financial meltdown and associated recession had the lack of ethics in the financial industry and elected government as its very core. Truth was not even present. To say that intelligence was weak would be an understatement.

Uncontrolled export of manufacturing jobs and associated unemployment and trade deficits shows an inability to deal with new situations, a shortage of practical intelligence plus a lack of ethical behavior toward the American worker.

Transfer of undue government power away from the productive sector to the financial sector has been a disaster based on lack of both ethics and intelligence.

An expensive war based on non existing weapons of mass destruction was a massive mistake based on lack of respect for truth.

Unfortunately it is apparent that if ethics, truth, and intelligence are to become a larger part of the governance of the nation it will have to be forced on new governing elite by the citizens. The existing elite benefit too much from the current confusion. The voters have a very dense fog to cut through.

The two party system we now have makes this is a very difficult task The only ethic of either party is to get elected and keep their goodies. They are therefore very loose with the truth. Their intelligence is focused on manipulating the voters and satisfying their financial supporters. Actions that may be good for the citizens but interfere with winning an election or are against the wishes of their financial supporters are given little attention. We are seeing that this is not a formula for the American dream.

We must vote in a leadership that embodies the three critical characteristics. This will require every voter to put in an extra effort before voting.

If there is any concern about ethics, withhold your vote. Do not vote for an unethical candidate who has a record of favoring special interests in opposition to those of the citizen. A candidate or his/her followers who blatantly lie in the campaign should be rejected regardless of the issue. Attend face to face town hall meeting and ask questions to judge the candidates’ intelligence and ability to think past one minute sound bites.

Hopefully, there will still be some candidates standing.

Banks and their Lobbyists Continue Assault Against Consumer Financial Protection Bureau

2011-05-09T07:37:00.000-07:00

You would think that when the big banks, their lobbyists and their puppet senators look back on the damage and hardships their greed and incompetence has brought to millions of Americans they would be ashamed to show their faces in public. Not so. Proving once again that lack of ethics is often accompanied by lack of shame they are using every conceivable tool to weaken the financial reform bill passed in July 2010. As we posted on Feb 17 a Business Week article ( “Starving the Regulators”) disclosed that the budgets of the regulatory agencies responsible for enforcement of the already anemic new Dodd Frank bill ( aka the financial reform bill) are being kept impossibly low to ensure that the bill will be ineffective. Business Week noted that the only agency on schedule was the new Consumer Financial Protection Bureau (CFPB).

For background, a major contributing factor to the subprime financial disaster was widespread use of fraudulent and deceptive terms placed on the borrowers by the mortgage originators. This resulted in mortgages that the borrower could not meet, triggering failures across the entire banking community. The CFPB was formed to protect consumers from fraudulent or misleading practices by the financial community. To keep it away from special interest politics it is an independent agency funded out of the Federal Reserve and not subject to a Congressional budget. It is highly favored by private consumer protection organizations. It is hated by the large banks.

The preferred director of the agency is Elisabeth Warren, who became publically well known when she chaired the Congressional overview panel for TARP. She is organizing the agency as a special assistant to the President. MS Warren is independent of the banking industry. The banks want one of their own in that position.

On May 5, the New York Times published the article “Foes Revise Plan to Curb New Agency” that summarizes the current status of the industries attempts to make the agency ineffective. Read it and some of the links to get a good idea of your government in action. The public pressure was too great to have the agency killed. The current plan seems to be to never confirm a director and instead form a commission of five. Forty four of forty seven Republican senators pledge to vote against any director until the bureau is restructured.

If there is anything that makes me pessimistic about our country it is when our elected representatives show their complete disdain for us by openly working for special interests and against the citizens. The discouraging part is the large number of Republican senators involved. The only way the bureau will happen if through continued intense pressure from the public.

If you have a Republican Senator and are not a banking industry lobbyist give him a call for a little independent support of CFPB. He might find it feels good to actually serve us.

Deficits Being Used by Politicians to Chip Away at Democracy

2011-05-01T07:48:00.000-07:00

Our country has many financial meltdown induced problems that are greatly changing our lives. The meltdown was created by mismanagement and greed in the financial private sector and the failure of our elected national government to exert obvious controls. It was not caused by workers, their unions, or our retired citizens. In a sad and cruel action, the elected governments in several states are passing drastic laws that require these innocent people to pay the price. This is an in-your-face violation of the “establish justice, promote the domestic tranquility, promote the general welfare and blessings of liberty” provisions of the preamble to the Constitution.

Wisconsin, Ohio, Indiana, and Michigan are active in this area. In these states large numbers of public workers, such as teachers, firemen, and police are being terminated. Drastic changes to the school system are made. Public owned property is going up for sale. Every issue that binds citizens to their local government is up for destruction.

Michigan goes even further by giving the governor the authority to displace mayors, councilmen, and other elected officials with what can only be described as a finance dictator. Originally discussed in our March 31 post the May 2 issue of Business Week updates the effects of the Michigan law. The governor can force the citizens to trade democracy for the mythical “benevolent dictator”. He has done just that in Benton Harbor. As in all actions against democracy claims are made that it will be more efficient. This is a very dangerous precedent.

It is a strange feeling to see states take such aggressive behavior toward American middle class citizens rather that those who caused the problem. Especially so because many of the actions are directed at goals other than the deficit. For example, taxes are lowered for the wealthy and corporations, creating a larger deficit, while working citizens must absorb these costs also.

There are other ways to handle the financial sector induced shortfall that would place more of the burden on those that caused the problem. This article gives a true cost of the recession and those institutions and people who were major players.

These actions by the new state governments have lead to serious cases of buyers’ remorse by voters. Opponents claim there was no mention of implementing these drastic actions during the campaigns. The sponsoring governments have dropped sharply in the polls. Recall campaigns have been filed against six state senators in Wisconsin. The Wisconsin law is now held up in court. But the fact remains that legislators and governors who are sponsoring these actions were legally elected. The only correction for deceit in a campaign is through a complicated and expensive process --- recalls that have requirements that vary between states.

This is a real life experience showing how carefully we must protect our votes against power grabs by the governing elite, either in the states or federal systems. The fact that four states came out with similar programs is probably not a coincidence.

Deficit Reduction Panic Follows the Traditional Government Fear Protocol

2011-04-21T09:23:00.000-07:00

Have you noticed that the politicians have a specific protocol for inducing worry about the country to the citizens? It is something like this:

Create or discover a potential problem for the country (new or ancient).

With the help of the media create the impression that if the problem is not solved immediately the US is doomed.

Then create the impression that you (and only you) have the solution to this extremely difficult problem.

Use the fear created to move the problem to the top of the nations’ worry list.

Take advantage of the power you gain to further your position, wealth, and control over the citizens

This protocol is one of the most powerful tools the elected government uses. It is used time and time again to start wars, destroy our economy, take actions that favor special interests, and divert attention from other problems. We seem to fall for it every time.

Pardon me, elected government, but you have fooled me too many times. This time I have a few questions about panic mode deficit reduction that I would like you to address before I panic

We are in a recession. Why does it have to be done in immediate panic mode where we wildly slash services without thought of the consequences for the citizens? How about a 20 year program of accelerated reduction in strong economies and less in downturns.

It appears that the deficit discussions have completely blanked out action on the economy and serious financial reform. Is panic mode deficit reduction really a diversion to take attention away from the terrible job the government is doing in these areas?

Many of the actions being taken under the deficit cloak are really special interests oriented. Examples are cutting corporate taxes, killing safety net actions, and favoring the wealthy. There seems to be no action in helping the middle class through the crisis or improving our planning for the future. Why is this?

I have heard many politicians assert that the US is “broke” financially. Considering our total resources and the position as #1 economy and military in the world this is of course ridiculous. Who is going to close down on a country with our military? But I do agree that we are “broke” ethically as long as the financial sector and special interests run the country.

The media has made a lot of noise about Standard & Poors saying they may downgrade our credit from AAA if we don’t take action on our deficit in two years. This is the same S&P that gave AAA ratings to thousands of subprime securities and played a major role in the financial meltdown. Why are they even in business, let alone making credit threats to the US?

There is a strong effort to create a fear that China will soon not grant us any credit. Therefore we won’t be able to buy anything from them. Excuse me, but China would not have a decent economy without selling to the US. But even if they would stop selling we could gladly manufacture more ourselves. Although Wal-Mart would need a new supplier this does not sound like something we couldn’t gladly handle.

We do need to get our debt under control but it shouldn’t be used as a reason to destroy the American Dream. If you fix the economy and use common sense rather than special interests as a guide in spending I have a strong feeling we will have it under control. Please shut down your fear machine.

Beware of Unbending Ideologues

2011-04-18T10:38:00.000-07:00

Merriam- Webster has two definitions under Ideologue

An impractical idealist
An often blindly partisan advocate or adherent of a particular ideology

The dictionary has three definitions of ideology, The one most appropriate to us is:

The integrated assertions, theories and aims that constitute a sociopolitical program

For our purposes an ideologue is a citizen who has bought into a concept of how American society should work and is relentless in efforts to make the concept real. Our Constitution was formulated to encourage people of different opinions to work together. Unfortunately we are currently in the midst of a bitter no - compromise battle between right wing and left wing ideologues. Because of our two party system we are forced to pick only one package. There is no middle road offered. There is little compromise.

Ideologues are not friends of democracy. In the US, because of our Constitution, they are forced to compete in elections. They will use any deception that gains votes. Once elected, they try to enforce their ideology in the most extreme form upon the citizens.

History has shown that ideologues are not good leaders. We desperately need flexible leadership that uses every possible tool to help all citizens. Here are reasons why we should be very careful about giving ideologues power over us.

The dedication to their ideology causes them to only consider supporting information. They ignore essential contradictory facts. This leaves them vulnerable to believing half truths and lies. A trait often used by experts in manipulation to control them. This leads to delusional decision making and disastrous results. The invasion of Iraq is an example of such a decision.

Their problem solving ability is limited to solutions found within their ideology. This leads them to support programs of no logical or moral element in application. Cutting important services to the middle class while lowering taxes on the wealthy is an example. Another is the insistence that further gun control on lawful citizens will deter criminals.

They spend more time trying to gain power for their specific ideology than serving the United States. This been almost no recent congressional action toward improving the economy.

Many elements of their ideologies are speculative and untested, and risk causing great damage. Destroying unions as some advocate would leave the working person with no options for protection against large institutions. Major cuts in government spending in the midst of a recession are another example.

The appalling failure of our elected government to serve the citizens has created a situation where support for major changes is definitely needed. Ideologues with a sincere interest in the good of the country can make major contributions, but should not be given control. That is the responsibility of the citizens. Above all, we must retain our rights. We must make changes that address failures, not create new ones.

Are You As Discouraged As I Am?

2011-04-09T08:06:00.000-07:00

Five months have passed since the election and I can’t think of a single job creation action by the elected government. I am discouraged by the complete inattention to the “promote the general Welfare, and secure the Blessing of Liberty to ourselves” portion of the Constitution.

It is discouraging to find that the newly elected government is more ideologically bound and less analytical in thought than the previous one. It is now apparently under deep control of the bean counting ideologues. My experiences have firmly convinced me that rule by such people is not a path to success. They are uninspired leaders whose one trick pony of cuts regardless of the consequences leads downward into ruin. We need driven leadership that will use every tool that we have to bring our country back.

The 2011 budget negotiations which came within a hairs’ breadth of shutting down the federal government is a prime example of an ideologue engagement. Their scope of vision is so limited that they are willing to risk the recovery, cause financial problems for millions of citizens, damage the morale of 800,000 government workers, close all national parks and stop all other services and actions over comparatively small issues in a budget which only has a few months left to run.

Our two party system continues to pathetically underperform. Where is our comprehensive plan that the parties should have been developing. We desperately need some mutually agreed positive actions for action while negotiating the controversial ideology issues.

What is happening with creating jobs and fixing infrastructure? Budget arguments are stopping job creation actions In fact bean counter arguments are stopping almost everything.

Reform of the financial sector seems to be off the media radar. Speculation on critical commodities continues as usual, bringing us ridiculously high prices on oil and agriculture products. Any effort to help the citizens through their problems is followed by a media blitz blaming the citizens for thinking like “socialists”. The special interests of the financial sector certainly seem to be prevailing.

We continue to pay several billion dollars in subsidies to the oil industry while they lobby hard against any help for alternate forms of energy.

A skyrocketing income disparity combined with a policy of absolutely no sharing of new burdens by the upper bracket portends a tragic conclusion to the American Dream unless fixed.

I could go on and on. You know the litany of problems where we require real action.

We need bean counters to crunch the numbers for comparing alternatives but determining the nature of our country must be reserved for the citizens. We had better begin to exert that right immediately

Media Reporting on International Science and Math Test Gives Wrong Impression

2011-03-30T14:25:00.000-07:00

The media periodically hits us will damning reports on how low American students are in international rankings of science and math skills. You are given the impression that there is some global super bowl exam taking place where an accurate sample of our best students is pitted against those from other countries. The media is then filled with quotes from “experts” with vested interests blaming some facet of US life for the poor showing. Recent headlines shouted that “China students were number one”. Previous years had placed Finland as first.

Sweeping conclusions such as this certainly deserve the next level of examination. Especially since there were 258,950 foreign college science students enrolled in the US in 2009 and the number has grown consistently.

They must know something that the test doesn’t show. What criteria were used to establish the number one position? How did other western countries do? What criteria were used to select the students being tested? These are important criteria if we are to understand the meaning of these rankings. To gain a better understanding we went to the web site the *Programme for International Student Assessment (PISA). PISA is the organization that is responsible for the studies. This site explains the basics of the testing with some comments.

The methodology is complex and only covered at a very high level at the site. PISA has examined the results and provides an overview of the selection of the population taking the tests and expresses concerns that the results are being reported uncritically.

Each country submits 5000 participants to take tests in reading, math and science in a two hour written exam. The questions are said to test the use of a science education to solve problems rather than a rote memory of formula. The completed tests are subject to detailed and complicated analysis. Countries can also submit other national tests they have conducted for inclusion in the analysis. Only a band of ages around 15 year old students in schools are considered. Home schooled students are not eligible.

The mystery was solved when an analysis showed that demographics of the area within the country from which the sample of students is taken can greatly influence the test results. The actual sampling methodology for the US is not explained on the site. To explain the surprising low results for the US PISA made the following important statements.

”Critics say that low performance in the United States is closely related to American Poverty. It's also shown that when adjusted for poverty, the richest areas in the US outperform every other country's average scores, especially areas with less than 10% poverty (and even areas with 10% to 25% poverty outperform countries with similar rates)”.

PSIA is also critical about those that selectively and uncritically demagogue the results of the studies for their own special interest. They comment further:

“In essence, the criticism isn't so much directly against the Programme for International Student Assessment itself, but against people who use PISA data uncritically to justify measures such as Charter Schools.”

The powerful demographic effect occurs because high poverty areas as a group have low average scores. If the US students chosen are selected to be a representative sample of the entire country of 15 year olds there will be low achievers from the poverty area pulling down the results of the high achievers. Conversely, if the US students are chosen from a low poverty area the resulting group will have a much higher score. Apparently the US contestants had significant representative from low achieving areas and the US results were not representative of the future pool of US engineers and scientists. To be dominant a country only needs a portion of its population to be outstanding in science and engineering. `.

Each country’s published results will be similarly highly influenced by the area from which they pick their participating students. This was apparently left up to the country. In 2009 the headlines shouted that China was now number one in science and math. But the students tested were only from China-Shanghai which is a select group.

The studies that were publicized by the media were not valid as a comparison between countries. Without a consistency of the domains chosen for sampling by each country no conclusions regarding competitive positions can be made.

This is not to say that the studies are not informative. Studies of this type could be valuable for measuring progress of a specific domain over time. However, these specific studies have not yet been conducted long enough to reach conclusions. Determining where we currently stand globally in educating the15 year old students that will eventually make up our pool of active mathematicians and scientists is a more complex problem. With the right selection of exam takers we are likely to be judged number one.

Our problems are not with our advanced education in science and mathematics. It is with the standards of our finance sector

Why Does Our Supposedly Great Economic System Tolerate High Unemployment While There is Work to be Done?

2011-03-28T07:22:00.000-07:00

The country has trillions of dollars of infrastructure and other development work desperately needed. There are millions of willing workers unemployed, and the factories which make the materials are running at low capacity. You would think that a country of 300 million people working under an economic system that claims to be innovative would be able to develop a financing scheme that matches up these needs. Our banking leaders can come up with a scam that causes a global recession but seem helpless when given the chance to finance something innovative that would help get the country out of reverse.

One example of innovative financing for a targeted problem was War Bonds. You can read about them here. They raised $185.7 billion for WWII. Another gift of “can do” to us from the Greatest Generation. Their desirable characteristics were:

They were voluntary investments by the citizens, not a tax or contribution.

Backed by the US Government

Aimed at the general public (half of total population participated)

From $25 dollars to $10,000. (They had a card for spare quarters until $18.75 was reached and they could be traded for a $25 bond)

Ten years to maternity at face value.

Simple and straightforward, everyone could understand

Lets call a modern version “Recovery Bonds”. They would be targeted at specific national goals (i.e. highway/ bridge/rail/ air control upgrades etc.)The national government would certify the prospectus and participate under same terms as citizens.

The citizens will have an energized attitude toward projects and government. They are voting with their investments.

I am convinced that the only way we will fix the cozy government/special financial interest relationship is to have more direct citizen participation in national projects. This is just an example of one approach. How about some others from our "innovative” financial sector?

Emergency Finance Bills Substitute Dictators for Democracy in Troubled Local Governments

2011-03-19T12:31:00.000-07:00

As the lost revenue from the recession hits state treasuries there is a rush by several states for new legislation that makes major changes in who will actually control financially troubled local governments. It is not the citizens but an Emergency Financial Manager (EFM) that is being given unheard of power. The EFM is appointed by the Governor.

The new rules give the EFM the power to overturn negotiated contracts between unions and local units, remove elected officials from office, sell community assets, eliminate the salary and benefits of elected officials and request local millage votes to increase revenue. An EFM could dissolve a school district or local unit of government and merge it with neighboring ones. The EFM can also sell community assets.

More detailed comments on the EFM from the Detroit Free Press can be found here. The system is currently said to be applied only to communities which have repeatedly failed to solve their finance problems. It seems made to be abused. Revenue sharing is being cut drastically in many states and many communities will have problems.

Detroit has run a deficit since 2003 and is a prime target. Can substituting a dictator for a democratic process improve the situation? We will see. The economic cards for Detroit are so dire that it is doubtful. Taking the right to solve their problems through democratic procedures away from the population is a dangerous step which requires very close watching.

A nightmare scenario: Hey, Mr. Mayor, don’t worry; Even though we have drastically cut the state revenue sharing the Governor will assign an EFM to tell you what to do. Well, it’s not really a person; it’s a corporation from New York. They specialize in putting together packages of local government debt into securities that they sell on the market. Everyone is doing it.

Be very careful with the power you give an Emergency Financial Manager

Nation’s Outrage Explodes as the Secondary Effects of the Financial Meltdown Hit a Stressed Middle Class

2011-03-15T07:36:00.000-07:00

The turmoil and suffering due to the recession still has a long way to run. We are just reaching the states revenue shortfalls. There are still those millions of bad mortgages that are cleverly hidden in the bank books. Many states have decided that the trouble will be placed on teachers, other public workers and unions. It is ridiculous to assign the burden of the state’s shortfalls to an already stressed middle class while those who caused the problem remain untouched. There is not even a veneer of justice in this approach.

Pass a law which places all of the financial burden on the middle class workers, allows state assets to be sold without competition, cancel essentially all collective bargaining rights for teachers or other state workers , and finally add a number of additional insults to the people who do the states work - and you have Wisconsin. You also have one heck of a state protest which has exploded into a nationwide movement. You can be brought up-to-date on the 4 week struggle here.

The Wisconsin protests that initially shocked so many because of their size were driven by the lack of justice and the obvious attempt at union busting. The newly elected Wisconsin senate and governor were blatant in their disrespect to those whom they were supposed to manage through a difficult year. It was insulting to watch the attempts of the new Wisconsin government to place the burdens for revenue shortfall to the teachers, firemen, and police, and other government workers rather than on the poorly managed national financial institutions where it belongs.

The protests continue to grow. A recent protest on March 12 in Madison was estimated by the police at 85,00o to 100,000. This is more that the largest Tea Party event.

There is a call for a new party that would correct the current situation. Robert Reich would call it the “Peoples Party”. Another solution that has been brought up has the shortfalls being mitigated by fines on those institutions responsible for the meltdown. Michael Moore calls for stricter measures in that many of those who caused the recession are thieves and should be arrested.

Although so far the protests have been very peaceful, you can sense that the patience is getting thin. Recalls are being prepared for many of the state senators who voted for the bill. As a constantly lied to class there is no confidence in a federal government that cannot pass a basic budget and is living off a two week fiscal extension. The middle class needs to see proof that the cozy government /special interests relationships at both the state and federal level will be either radically changed or replaced by just and honest organizations.

Let’s hope that this assurance will be forthcoming and/or everything is settled at the ballot box in 2012.

Republicans “Jump the Shark” in Wisconsin

2011-03-06T17:29:00.000-08:00

Jumping the shark is an expression used to denote when a particular production effort has surpassed its relevance and reached a point of decline in quality that it is incapable of recovering from. (From Wikipedia)

That pretty much describes the Republicans in Wisconsin

Lucky for the Democrats that after winning the election the Republicans approached their opportunity for governing Wisconsin with the finesse of a T Rex on crack. Now we have thousands of unhappy employees and a national confrontation with the unions that is escalating to the complete middle class. And then there are the pending recalls from the voters who feel they were deceived.

Advice to Wisconsin voters -Be more careful when you vote next time!

But the protest was bound to happen sometime. Lies and half truths by ideologues during campaigns have reached outrageous size. People vote not on the issues but based on the TV channel they watch. When the actual implementation is much different than expected you have serious buyer’s remorse.

Truth, transparency, and honest intent could have gone a long way to solving the Wisconsin dispute fairly without conflict. Some truths I would appreciate to see to resolve the truth of negatives put forth against the unions are:

What is the total amount spent by the unions in influencing the federal government compared to that of corporations? Publish it each year.

Why is the education system criticized and cut while the financial sector who brought us the multi-trillion dollar financial meltdown are receiving bailouts?

After cutting the fat couldn’t the states remaining shortfall for critical areas like safety and education be amortized and paid back over time in an improved economy with less shock.to the citizens?

Why not publish teachers and government employees compensation compared with financial sectors compensation each year?

For some reason we have had a relatively smooth transition here in Virginia, and with a Republican Governor

Union Busting-Another Slice and Dice of the Middle Class

2011-02-25T08:45:00.000-08:00

The financial sector screws up and throws the whole world into a recession. The middle class loses millions of job and picks up a multi-trillion dollar tab to save our incompetent economic infrastructure. What should we do next? Let’s use our financial screw-ups as an excuse to bust the unions. We can call them communists or socialists- that always seems to work. Let’s blame the teachers and government workers for the financial shortfall the states are experiencing. And let’s do it now while they are really down and out and desperate for jobs.

I have often wondered just how much abuse the middle class is capable of absorbing from the governing elite. With unjustified wars, an active special interest auction in congress, and the unpunished stealing of trillions from our economy we should have already reached the limit. Because of our numbers and the fact that we do the real productive work of society you would think there would be some caution about overreaching against us. But they seem to have such confidence in their mind control infrastructure they continue to push. Good leadership would be pulling the nation together to resolve our problems. Vilifying teachers and, government workers while attacking unions has the exact opposite effect.

It should be clear by now that the current financial problems are due to national financial sector mismanagement and fraud, not unions. In fact, unions and government worker pension plans suffer the same way that we all have. In hard times they can be expected to make the same sacrifices as all workers.

The union is an important element in our economy. They were strongly pro-America as administrations shipped millions of jobs overseas. Without their influence the individual workers would be on their own against the many billions of corporate dollars dedicated to short term profits. Union workers have the detailed knowledge of facility operations that can be turned into process improvements. When management and the union work cooperatively in trust and professional pride there is potential for many economic benefits. Many facilities miss this opportunity because of an ingrained attitude of confrontation between management and the union.

You have to wonder about the management capabilities of the new Wisconsin government. By picking now as the time for union busting they have transformed a straightforward budget balancing event into a national confrontation. You would expect that they would first try to gain the trust and support of the employees. Instead they now have a demoralized work force of thousands in a trying financial environment.

No matter who wins the battle the nation will be weakened and further divided. In a time when we need to pull the disillusioned middle class back into a national consensus another sector is being split off. There were many ways to cut costs that did not attack collective bargaining.

Is Washington Serious About Financial Reform?

2011-02-17T05:45:00.000-08:00

On December 31, 2010 we reviewed an article in BusinessWeek that discussed the progress on the financial reform bill (aka Dodd Frank) As you remember, the bill passed in July 2010 and was our country’s effort to bring our financial sector under control. The bill as passed had very little clout. Developing the actual standards was passed on to the government regulatory agencies such as the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission ( CFTC). The report confirmed that in the face of the banks and lobbyists very little were happening. The bill was very weak leaving many loopholes still in place.

BusinessWeek seems to be one major media that is following up on this very serious issue. They have just released another update "Starving the Regulators". This article reports the astonishing fact that cost cutting is going to reduce the staffs of the regulatory agencies charged with finalizing the rules. Progress will be further slowed and actually stop in several critical areas. The governing elite create an 11 trillion problem, and then reduce the resources charged with preventing another. The situation is summarized in this quote from BusinessWeek.

The reform of financial regulations has slowed down because of the underfunding of the SEC and CFTC. The Dodd-Frank reform requires 243 new rules, 67 one-time studies, and 22 recurring studies. Yet in the face of these requirements, the CFTC is considering laying off staff. The SEC has had to delay establishing an office to oversee the credit-rating agencies. On the other hand, the Consumer Financial Protection Bureau has hired staff and is focused on making credit cards more consumer-friendly and eliminating 80 percent of the mortgage paperwork needed to purchase a home.

It should be noted that the one agency meeting its schedule is the new consumer protection agency whose establishment was bitterly fought by the financial sector.

The encouraging experience is that BusinessWeek is devoting resources to following this issue. In doing so they are performing a great service to the productive sections of the economy, who are their primary customers. Unlike the financial sector the rest of the economy would greatly benefit from a reformed financial system.

We must remember that the financial sector is different from the general business community. The primary products are basically funded and guaranteed by the government. It was meant to be a service to the productive business areas. Once they began to focus on their individual profits they have become a real liability for the rest of the economy. The current lobbying blitz against reform is aimed at protecting their own profits.

Tea Party, this is really important. Why isn’t the rest of the media active about this situation?

Egyptian Events Should Give US Governing Elite Great Pause

2011-02-06T08:50:00.000-08:00

Just one if the three TV‘s above the bar was showing the Egyptian protests in Cairo. About half of the customers were casually watching. One person finally asked the obvious question.Could this happen in the US?

The answer certainly depends on where you are when you ask the question. The immediate consensus at that time was that our Constitution will act to prevent it. But let’s look a little deeper.

The First Amendment gives “the right of the people to peaceful assembly and to petition the Government for a redress of grievances.” This happens all the time in the US. No problem! But there are more complex questions to be answered.

What happens when the assembly isn’t peaceful?
What happens when the Government won’t address the grievances?

There is general agreement that those who disturb the peace are subject to all the local and national laws they break. But it is difficult to arrest thousands of people out of millions of protestors. A non- peaceful assembly must be avoided.

A Government that will not address a just grievance is a special and very dangerous case. If non-peaceful assembly becomes a practice in the US, this will be the reason. When the suffering is by the many and the benefits are reserved for the few we are outside the intent of the Constitution. The preamble to the Constitution bears repeating:

We, the people of the United States, in order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the blessing of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America

The events in the Mid-East should give the ruling elite spending millions to fight common sense reform in the US government great pause. It is much better to reform early before the protestors are in the streets. This warning is especially appropriate for those active in the financial sector. You definitely fall in the category of “few”. And the “many “are not inclined to defend you. You should be honestly helping us to establish an efficient and reliable system that will return fair profits to the entire productive environment. If we have another financial induced failure you will not skate as easily as you did the first time. By overreaching you are setting both us and your system up for another disaster.

We must show that we can reform now through peaceful constitutional procedures. We don’t want to see citizens forced into the non-peaceful assembly route.

Report of the Financial Crisis Inquiry Commission (FCIC) is Very Critical of Financial Sector

2011-01-31T08:51:00.000-08:00

In Nov 6 of 2009 we made a post reporting what we felt was the action needed for the citizen to begin to restore the trust in our financial system. They basically needed proof that the cozy financial sector/ government relationship was over.

They wanted a strong reform action that will guarantee that the psychology and ethics that led to the current betrayal is completely disgraced and placed outside the American system forever. It is critical that those in the sector who were responsible for the meltdown are publically identified and punished. There must be significant retribution with large sums recovered for the people who innocently suffered. The public consequences to those that caused the situation must be adequate to prevent any thoughts of ever returning to similar behavior.

An important first step to this goal was the formation of a non-government investigative commission, the Financial Crisis Inquiry Commission (FCIC) .

The task, as described in the preface of the report was:

Our task was first to determine what happened and how it happened so that we could understand why it happened. Here we present our conclusions. We encourage the American people to join us in making their own assessments based on the evidence gathered in our inquiry.

In addition they were directed to identify any violations of Federal or State laws and turn them over for the appropriate legal action. Although no names are given in the report the commission head Phil Angelides said in a TV interview that they had turned several instance over for investigation of illegal actions.

In my opinion it is a through report, well written, and easy to understand. We now have an extensive document that can serve as a check on the Dodd-Frank Bill (aka Financial Reform Bill). The report. is extremely damaging to the entire financial system that allowed the failure and shows the inadequacy of the Dodd-Frank bill.

Three important points we should never forget:

This mismanagement has been very expensive to the country. Nearly 11 trillion dollars in household wealth has vanished, with retirement accounts and life savings swept away.

The additional power we have foolishly given the financial sector caused a shift from productive investments to non-productive financial activities. On the eve of the crisis in 2006, financial sector profits constituted 27% of all corporate profits in the United States; In 1980 it was 15%. Understanding this transformation has been critical to the Commission’s analysis.

Industry testimony has claimed the event was unpredictable. These reports, as well as many other analyses completely disagree.

You can obtain a full copy from the FCIC. I recommend you download it for a full understanding of what needs to be done. I will list the leading conclusions and two interesting quotes. The report has a full discussion of each conclusion.. They are very damaging to the entire sector and call for a serious review of the companies and institutions which we have given power over our financial system

Here are the conclusions:

This financial crisis was avoidable.

The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble

Dramatic failures of corporate governance and risk management at many systemically important financial institutions were a key cause of this crisis.

A combination of excessive borrowing, risky investments, and lack of transparency put the financial system on a collision course with crisis.

The government was ill prepared for the crisis, and it’s inconsistent
response added to the uncertainty and panic in the financial markets.

We do place special responsibility with the public leaders charged with protecting our financial system, those entrusted to run our regulatory agencies, and the chief executives of companies whose failures drove us to crisis. These individuals sought and accepted positions of significant responsibility and obligation. Tone at the top does matter and, in this instance, we were let down

There was a systemic breakdown in accountability and ethics

Collapsing mortgage-lending standards and the mortgage securitization
pipeline lit and spread the flame of contagion and crisis

Over-the-counter derivatives contributed significantly to this crisis.

The failures of credit rating agencies were essential cogs in the wheel of financial destruction.

The current Dodd-Frank bill does not come close to providing the required fixes. The FCIC has identified the causes. Our political leaders now have ample information to be sure that the heavily lobbied Dodd-Frank bill is corrected and rigorously implemented.

The regulators are being heavily lobbied. The citizens need to see a comprehensive checklist of the causes identified in this report versus the response in the Dodd-Frank bill.

For this to really happen will require extreme citizen pressure.

Americans Are Not Getting the Information They Need to Vote Intelligently

2011-01-24T09:09:00.000-08:00

So far this year the media has covered the following accomplishments of the new Congress

Reading the constitution aloud in session
Holding a symbolic vote in the House to completely repeal the health care bill
Discussing mixed party seating during the state of union address
Arguing about lifting the debt ceiling in March

News at this low level of complexity and usefulness is adequately handled by the sound byte practice used by the modern media. However it breaks down quickly when applied to the more complex issues. This is where it is important that the citizens have the information required to make the right decisions. Bad national decisions are almost always based upon faulty information.

For complex issues we need a much higher quality of information than we are receiving. This is exactly the way many special interests want it. Here are just a few examples of issues where the information supplied to the public needs a major upgrade.

Jobs for Americans
Reducing the trade deficit to zero
Specific fixes to the health care plan
Developing an investment plan for the future of America
A reasonable immigration policy
Real ethic standards in Congress

These subjects have been given the same media treatment that is applied to lighter information content news. We have statements from both the right and the left that are so ideologically slanted that the information is essentially useless. We really don’t know where progress stands. In fact, we aren’t sure many of these projects are even being seriously worked on This should not be a public relations contest. If we are to act wisely toward supporting important national policies and projects we need to generate more information with high truth content.

Wise decision making by the citizens is fundamental for the long term survival of a constitutional democracy. It is worth a large investment. The forces that have in the past obtained power from a democracy have achieved it by directing the citizens into poor decisions that lead to horrific results. As reflected in our Constitution the Founding Fathers were dedicated to preventing this from happening to the United States.

Good decision making is especially critical when joined with the rights to free speech and freedom of the press guaranteed by our First Amendment. These rights are critical tools for the pursuit of truth but can also be used to present sham information.

Considering the importance of good national decision making, why are our national issues so embedded with issues and controversies that pay such little attention to truth? Our casual acceptance of lies and misrepresentation is mind boggling. We are drowning in so many self serving lies and half truths that you would think the citizens would rebel. Speculation and damaging accusations are given with no concern for backup and logic. We waste billions of hours addressing and readdressing useless and false issues that unbiased facts and truth seeking should have resolved.

What can we do? .

The media must acknowledge that simply presenting two biased sides of an issue does not lead to truth. They just create two incompatible and probably erroneous conclusions There must be more media attention to the factual content the citizens need for decision making.

The citizens have to take responsibility for applying analytical thinking to the facts. Watch closely the reasoning of those special interests that will be happy to do this for you.

We must withdraw support for candidates who lie or resort to misrepresentations. Integrity should be a prime characteristic of our leaders. Don’t vote for anyone without it.

A factual media, analytical citizens, and leaders with integrity will take this democracy a long way.

An American Loss to China in Global Economics Could Deprive Billions of the Opportunity to Live Under Democracy

2011-01-13T07:23:00.000-08:00

For over 250 years America has been the proof that a free people can successfully govern themselves. A critical contributor to this success has been our choice of democratic capitalism as our economic system. Democratic capitalism works well with the freedoms that have characterized America.

Our constitution gives us the power to choose the representatives that are to set and guard the economic rules. Although there have been missteps the government generally guided capitalization toward activities that benefited the nation. The system steadfastly outperformed all other competing systems in the ability to deliver economic benefits to its citizens. We were without serious challenge as the leading economic force in the world.

This ended during the later years of the 20th century. We allowed our government to make terrible mistakes that have completely changed the game. We now face the results-financial, trade and investment deficits. excessive special interests influence, loss of manufacturing jobs, too much control by the financial sector-and the list goes on.

These self-inflicted wounds have allowed another form of capitalism to emerge. One that gives little freedom to its citizens but shows great skill in supporting the state. It is best described as state capitalism. China is currently its most successful user.

State capitalism uses the aggressive tools of capitalism but does not grant its citizens the participation and freedom they would enjoy under a democracy The goal is not the general welfare of the citizens but to increase the power of the state. It is a tenacious competitor in the global economy and is currently outperforming our damaged system. It definitely threatens the dominant position of democratic capitalism.

If it prevails and our system continue its current degradation the American vision will eventually collapse and the dream of free people governing themselves will fade. We must not let this happen.

The seriousness of the situation requires strong and immediate action. We must admit mistakes on past policies that have had bad results for the country and make the fixes. We must stop giving away economic opportunities that we need to other countries.

An encouraging example of what must become our standard practice is covered in a recent article in the Washington Post. It reports on an event where the US Export-Import Bank discarded past policy and helped the US vendor fight back. The result was the sale of 150 locomotives by GE. This was against aggressive bidding tactics of China that would normally get them the business.

As the article reports

“The political resistance to brash tactics which would imperil the delicate management of the China relationship has collapsed," said Rosen.

Way to go-US EX-IN Bank and GE!!. We need more of these “brash tactics.” Now let’s fix those other problems. The billions of people may still get the chance to live under a US style democracy.

Remember Wall Street Reform?

2010-12-31T10:02:00.000-08:00

Ever wonder what happened to the Dodd-Frank Wall Street Reform Bill? Remember when It became effective on July 21? The Democrats hailed it as landmark legislation that was really tough on the big banks and would prevent a repeat of an economic meltdown. The Republicans said it was anti- business and the meltdown was the governments fault anyway. The banks were against it as it would keep them from “providing their creative services to the public and employers.”

In short, all parties put out pure BS. The issues were apparently too complicated for the daily media to be helpful. So it has remained a mystery to most of the public.

Finally on Dec 28, 2010 Business Week has released an article that attempts to put in understandable format what has happened in the bill. It also discusses the politics and lobbying behind the results. A total of 9 journalists from New York and Washington are listed as contributing to the report. We have to be grateful to Business Week for this difficult but very useful task.

The phase “Wall Street Gets Pretty Much What It Wants” is included in the article headline and portends the sinking feeling citizens will feel as they read the article. The Wall Street victory is confirmed by looking at the record profits at the major banks only two years after their mismanagement led to the economic meltdown and to a comment by an ex-Citibank executive.

“We continue to listen to the same people whose errors in judgment were central to the problem,” said John Reed, 71, a former co-chief executive officer of Citigroup Inc., who estimated only 25 percent of needed changes have been enacted.

The article covers almost all the issues that congress talked about but sadly did little when it came time to write the laws. Like the boy that murdered his parents and then asked for mercy because he was an orphan the banks destroyed the economy with bad management and now fight any regulation on the grounds that it would hurt the recovery.

The biggest laugh of all (if it weren’t so pitiful) is that the banks seem to have convinced many congressmen that they are adding value to the economy with their “innovative” instruments.

Read the article and learn what happened to all that big talk after the lobbyists worked over congress. Remember too big to fail, the revolving door, bringing bonuses into line, banning certain derivatives, and walling off risky ventures from government guaranteed funds? The article discusses the politics and final inaction on all of these.

The only pro-citizen event was the establishment of the Consumer Protection Agency as designed by Elizabeth Warren. The banks fought that desperately but seem to have lost.(as of now). I remember a talk show where the banking representative, fresh from helping the industry set a world record for dumb management, said he was worried about her because she didn’t have enough bank management experience.

Please, surely we aren’t so dumb we will let them do it to us again.

The report is certainly discouraging and confirms that we need a complete rethink on the nature of the organizations that this nation uses to manage its financial infra-structure,

Once again, thank you Business Week.

Our Ideology Regardless of the Problem

2010-12-27T06:52:00.000-08:00

Recent polls show that approval of congress has hit a new low of only 13%. I had hoped that this would cause the political party elites to show some humility and give us at least a few ideas on how they were going to correct the situation. Not so.

Last week a group of senators, congressmen, and citizens (about 1000) met in New York to launch an organization dedicated to reducing the party ideologue-based bickering and drive both parties to cooperatively focus on the nations’ problems. It is named "No Labels”. Although they apparently didn’t have time to spend on the low 13% ratings both the Republican and Democratic media attacked the No Labels concept, giving various reasons to reject it.

There were scores of negative posts from both the right and left, They went from insistence that the two party system was critical for debate, to noting that there already were 63 parties in the US, that working together was useless because our current leadership is incompetent, and that No Labels is just plain left wing.

The scariest of all were several writers who contended that No Labels was being set up to be a platform for Bloomberg to run for president. Thankfully No Labels says that they had taken no money from Bloomberg and that he spoke at the launching in New York because he was the mayor. Bloomberg himself has said that in no way would he run for president. Some evidence please.

It is pathetic when citizens feel they must form another party to try to force the two major parties to act reasonably. It is even worse that the self serving ideological media focuses its guns on them before they can even begin. Very typical of the way they are addressing problems. Fred Brown of the Denver Post sums this situation up very nicely.

Regardless of its final accomplishments No Labels is an encouraging example of American citizens starting to recognize and rebel against the bad decisions our leadership has put us through. If No Labels could cause a fracture in the “my ideology for everything” attitude that is smothering individual analytical thought it would be very valuable. The Tea Party, No Labels, and many other small organizations that are being formed are coming from different directions but pointing to the same objective. We all want a constitutional government that is focused on passing opportunity and freedom to the American people rather than power to itself.

That is what the Founding Fathers intended and is what we are honor bound to support.

The More You Know the Worse it Gets…

2010-12-16T10:28:00.000-08:00

While finance has never been my favorite area I became determined to gain a much better understanding of exactly what happened to cause the subprime waterfall of economic disaster that has fallen on our country.

Of the multitude of post meltdown books on the market I chose three: The Big Short by Michael Lewis, Gristopia by Matt Taibbi, and All the Devils are Here by Bethany Mclean and Joe Nocera. All authors have extensive experience as financial journalists during the 20 years of life in the subprime era. They tell their stories from different perspectives. The Big Short is from the viewpoint of a few low level hedge fund managers who discovered (to their surprise) glaring weaknesses in the execution of the sub primes business model. No one would listen to them but they initiated very successful hedge funds that played the subprime system short. Gristopia addresses in anger the outright foolishness behind the 20 years of government and private decisions that allowed the subprime business model to develop. He discusses the events, people and the bad decisions that allowed it to grow to the final catastrophic breakdown. All the Devils are Here presents a thoroughly documented historical approach of the last 20 years of bad management that lead to the meltdown. All three books cover the meltdown and the emergency effort by the government to save the financial sector.

This post only touches on a few of the items and at the thousand foot level. Read one of the books to get really incensed.

The subprime business developed during the Clinton administration, and was protected and grew under Bush. Then it fell completely apart. The naïve belief was that the industry would regulate itself. Greenspan was a powerful figure in furthering this philosophy.

The elements of the business plan are easy to understand. The goal was to drastically increase profits by tapping the revenue from the citizen’s multi trillion dollar housing market. This required transforming the normal low risk one lender to one borrower relationship into multi-mortgage securities which could be sold in the financial market with much greater profits. Thousand of mortgages were combined to create derivative securities, the most popular being called a collateralized debt obligation, or CDO. These were then sold on the open market at high yields.

A notable characteristic of the business model is the interconnected nature of the risks between the business units. A failure of due diligence or risk analysis in one business area could spread bankruptcy throughout the entire system. This is exactly what happened at the meltdown and explains the desperate and extremely expensive effort by the government to save the entire financial system.

Here are a few highlights of the role of the key participants and their contribution to the meltdown.

1.0 The mortgage originators that received revenue for finding the borrower

This is where the extraction of wealth from the American citizens began.

The demand for mortgages to bundle into securities was so great that several billion dollar plus public companies were created in this sector. To pay for the high fees the mortgage originators added closing costs that in some instances increased the mortgage cost by as much as 20%. Qualifications for a mortgage were lowered drastically to ensure a steady flow of applicants. Financial positions of borrowers were falsified and teaser rates with 2 year automatic resets to high rates were used to lure unsophisticated buyers into loans that they would never be able to repay.

Because the originators sold the mortgages to others they had little interest in their likelihood for later default. The mortgages they passed into the system were loaded with default potential.

2.0 The large banks and other institutions that assembled the thousands of mortgages into complex high yield securities.

These were the key drivers behind the business. They took the thousands of mortgages from the originators and chopped and structured them into levels of risk that determined the yields and levels of payback priority bundled into the securities. They were then sold to investors who received revenue from the mortgage payments. This was done to the tune of hundreds of billions of dollars. Because of the high yields the sub prime securities were very popular with investors and became the greatest source of profits for many of the banks

The banks did very little due diligence on mortgages being bundled into this essentially unregulated business. They packaged many bad loans into the securities. They placed pressure on the ratings companies for the necessary triple A rating for each security.

The amount of reserves held against failure of the loans of their own securities was left to the banks and proved to be ridiculously low.

3.0 The investors--consisting of institutions, retirement funds, insurance companies, hedge funds, and banks.

The investors received high yield revenue proportional to their ownership in the mortgage security. They also gained profits by trading their securities into the financial market. Obsessed by the high yields being offered they did little due diligence before investing billions of dollars-relying solely on the erroneous triple A ratings.

4.0 The rating companies

Default of a significant number of the mortgages in a CDO could drive its value to zero with complete loss to the investors. The probability of this happening was supposed to be indicated by the rating given by independent rating companies such as Moody’s A triple A rating means that the probability of default is small.

The rating companies did not accurately evaluate the risks of default of the mortgages making up the securities. Each security was complex with a very large number of embedded high risk mortgages. The rating companies could not adequately evaluate the securities and apparently yielded to the pressure to give undeserved triple A ratings. A few hedge funds did the necessary due diligence of the securities and discovered the rating companies error. They made large profits by short selling.

5.0 The companies that sold default insurance on the securities

Investors could buy insurance against the failure of the securities. These were called credit default swaps because they moved the credit risk from the investor to the insuring company. A leading company providing this insurance (AIG) took the insurance premiums but did not reserve capital to meet the amounts that became due on failure. This spread throughout the system and left many of the investors facing bankruptcy. The government eventually took over AIG and made the payments out of public funds.

General

When the mortgages in the securities began failing in very large numbers the whole system disintegrated. This left almost all of the investors with worthless (toxic) securities and mortgages on their books for which they had paid hundreds of billions. The failure of one business would cause failure in others as the securities became further devalued. None of the players had the reserves to meet their obligations and most were facing bankruptcy until the government and the Federal Reserve intervened with over a 3 trillion dollar injection of funds- announced so far. This does not include the toxic assets of Fannie Mae that are not yet publically announced.

The magnitude of the greed and sloppy business practices described by these three books certainly gives the lie to the fallacy that this industry is made up of the brightest of people who deserve the ridiculous bonuses paid.

There were many warnings of future problems by government regulatory agencies and other experts. Proposals of regulatory control were met by angry rejections of the concept from banks lobbyists, trade organizations and congress. This included threats of firings and loss of appropriations to government officials. While self regulation results were clearly becoming catastrophic the concept of self regulation was slow to die. In fact it still lives with many diehards.

The short term focus on immediate profits, sloppy business practices and the lack of executive foresight illustrates how poorly the financial sector is managed. There is really no concern for the American citizens who have paid a very high price for the incompetent practices. It also illustrates how ineffective the elected government is in protecting the citizen. The elected government and the financial sector mutually thrive on the basis of political power bought with our tax money.

Millions of Americans lives have been very badly affected because of the false values and incompetency of this sector. The sector has forgotten that its basic mission is to organize financial support for the productive enterprises of the country. They are now focused only on their own profits. This last gambit for their specific profits has caused terrible problems to the nation. Do we want to continue with them in their current position of power? This seems to be happening by default.

We need a complete review of the nation’s financial model with the goal of a new citizen oriented structure.

Our Moral Obligation and a Total National Restoration Plan

2010-11-29T11:21:00.000-08:00

The bean counters correctly complain about the financial deficit we are creating while attempting to end the recession. But because they are bean counters they have only one solution—maniacal cost cutting. It is driven by their DNA. Bean counters never lead to growth and expansion.

Cost cutting of wasteful spending is a valuable activity but it should not be done as an isolated task. Cost cutting alone, without wise investment of the savings; will only further shrink the already starved economy. It belongs as an element of an integrated national program where savings can be immediately put back into the productive work of our economy. The problem is that after all the time, suffering, and damage to our nations global position our two party elected government has still not developed such a plan.

The American vision contends that free people can productively govern themselves for the common good. No despots needed. This was a unique basis for a nation when the US was formed and the vision has been kept intact in America for 230 years. Sadly it is now at risk. We must not let the vision end with us. Like the Founders we must pledge our sacred honor to passing an intact America on to future generations. To fail would be a terrible legacy to leave our children.

We will never succeed with the existing approach of one by one attempts at underpowered solutions-followed by years of the parties blaming each other for failure. The citizens need to see an integrated program that reverses the self inflicted damage that was done to our interconnected financial, manufacturing, job creation,and trading systems. We have the talent to do this if we can free the process from interference by self serving special interests and the political parties. It will be an honest national restoration plan that the citizens can evaluate and support.

This is a complex undertaking because of the special interest opposition it will generate. Many of those who led us into the disasters are still in power and have benefited from our difficulties. They will fight against openness on past mistakes and the continual transparency of the plan’s execution to citizens.

It can succeed, however, if the majority of Americans feel strongly enough about the moral obligation to actively and honestly participate.

We must first gain an elected government, business sector, and population that agrees strongly with the moral obligation and the need for an integrated plan as a basis for action. Lots of details to work out but a primary characteristic is that it is citizen, not government, run.

This sounds like a job for that non-party, the Tea Party.

Harmful Developments Not Covered by the Constitution

2010-11-22T06:26:00.000-08:00

One of the inspiring thoughts that drove the framers of America was that after thousands of years of governments by despotism the United States experience would prove that free men can govern themselves. They carefully crafted the Constitution to guide America through a life expectancy of many years. It was hoped that with continual improvements made through a careful process the vision would be protected and passed forward from generation to generation.

While the Constitution was being drafted neither political parties or corporations were of major significance. They therefore were not mentioned in the Constitution.

We were, however, given vocal warnings against a future controlled by political parties from many of the Founding Fathers. Washington even included a warning in his farewell address. Jefferson also warned against corporations assuming power (see earlier post “Founding Father Warnings on Current Issues, Oct 3, 2010).

Each generation of Americans has been a critical link in preserving the vision of a government that is controlled by its free citizens. Although some may disagree, I believe that in general we have performed well in that part of the vision protected explicitly by the Constitution.

But time has taken its toll in areas not specifically covered by the Constitution. We have allowed a two party system to gain control of our electoral process. In addition we have given corporations many of the rights previously reserved for citizens. This has allowed them to use their vast financial resources to influence our political processes. Both of these events have reduced the ability of the citizens to govern themselves.

The Democrats claim roots back to early post revolutionary war, while the Republicans emerged just prior to the civil war. Since then, although competitors for specific offices, they have jointly beaten down any attempts for a third party. This has greatly limited the choices in candidates and policies available to the citizens.

The two parties now essentially limit our choice of candidates to those from either one party or the other, meaning either a far left or far right agenda. There is no moderate agenda available. Further, as predicted by many of the Founding Fathers the party members have developed stronger loyalties to their party than to the country. Thus each party spends most of its energy sabotaging the other. Finally, the two parties have legislated themselves elite rights and privileges to a level that would really have distressed the Founders. The record of the Congress has been so bad that a recent Gallop poll showed that only 17% of the voters approve of its performance.

The direct solution rests on the efforts of the citizens to take advantage of the ability given by the Constitution to replace a large portion of the Congress. There is some evidence from the mid-term elections that this is starting to happen.

The solution to excessive corporate political power is more difficult. Corporations have become irreplaceable engines in the global economic system. The legal shield that allows investors in a corporation to only risk their corporate investment as opposed to risking their total owned assets is the most powerful incentive for capitalization of companies. An overwhelming portion of the countries economic and technical strength rests with corporations.

In their formative years corporations were engines of commerce only and forbidden to participate in politics. Over the last 100 years this has evolved to the point that corporations now enjoy rights previously reserved for citizens. This has been generally affirmed by the courts. Vast sums are now spent by corporations and their organizations to influence legislatures. The critical task ahead is to formulate an industrial program which strengthens American corporations competing in the global economy while preventing them from acquiring such strength in the political process that they harm the creativity or well being of the citizens.

These are both fixable issues. They do require an aware and determined citizenry to keep the parties and the corporations from taking over ownership of our vision.

The Tea Party - Forerunner of a New American Political Architecture?

2010-11-14T13:56:00.000-08:00

A No-Party Election Structure

With public approval of Congress at 17% it is unreasonable to think the current two-party system is serving us well. It has brought us very limited choice in candidates or philosophy and created inefficient and inept legislative houses. Worst of all, it has created leaders who have loyalty to their party that exceeds that to the country. Adams, Jefferson, and Washington were all strongly against the establishment of political parties. Very few citizens think that the parties operate for the general good of the citizens.

The country should give serious consideration to moving from the two party system to an architecture that is much more open to all citizens and that provides more choice. Forgetting for the moment the political agenda of the Tea Party we can use it as useful glimpse of how a no-party system might perform.

The Tea Party is not a political party in the conventional sense. It is a loose relationship of independent local organizations consisting of citizens from all walks of life. The local citizens support individual candidates that fall closest to their choice. This gives a very distributed architecture that has shown impressive power in the mid-terms for supporting new candidates in the primaries and opening the process to more citizens. It is taking a strong toll on the centralized power of the GOP.

How would it be if the entire American political system were organized on this basis, as opposed to the existing two party system? On the surface, not all that different. The all-controlling two parties would be replaced by many more advocacy groups. These organizations, many of whom would be national, could be more flexible in policies and indivdual candidates. They would replace the existing campaign headquarters of the two parties. Each center would normally present a slate of candidates and policies to support during the campaign. The multiple advocation oraganizations would offer a much broader political spectrum than the current two party system. The balloting would be the same as now but only vote on the position and candidates, not an organizational affiliation.

In the mid-terms the Tea Party used the GOP primaries to sort out the candidates which were to run in the finals. This would not be availabele in the no-party system. A new primary system would have to be designed, perhaps using state primary centers.

The advocate groups, of course, would have to be licensed and subject to qualifying rules.

Just a starting discussion, but worth exploring. It would be much closer to what our founders had in mind.

Wise Investment Versus Wasted Spending: Congress Better Learn the Difference

2010-11-11T10:39:00.000-08:00

In the long term any successful business must eventually acquire good management of its resources-both financial and people. This requires spending in areas which return good value and cutting costs in areas that do not. A company with an especially strong product can avoid this requirement for a period but eventually the competitive forces of the marketplace take hold. Thus, there are hundreds of once imposing companies that became mediocre or bankrupt because of their management failures.

The analogy fits the US in the current global environment. We have enjoyed a powerful product made up of strong protection of individual freedom, intelligent aggressive citizens, and bountiful natural resources. This has allowed us to excel in providing advantages to our citizens and the world in spite of many missteps. The good treatment has made American citizenship a treasure valued around the world.

Unfortunately, we have allowed weak leaders and special interests to degrade our ability to serve the citizens. They have also created an investment deficit that if not corrected will override any other efforts at resurgence. To be effective we need to implement a wise investment plan of equal importance to any spending control program.

We have many reforms ahead, but one of the most important is to revitalize manufacturing. It is unconscionable that the Government and citizens allowed international trade to get so far out of hand. We are now in the position of asking other countries to agree to controlled trade balances between countries. This is an embarrassing attempt to correct a situation that our government should never have allowed to take root. With no real industrial plan and the only political talk directed at cutting spending rather than investing, the US is in a very weak negotiating position. China and Germany, through aggressive and wise industrial policies, have established large trade surpluses. They are not about to agree to give them up.

The result is that the new balances for the US can only be reached through the hard work of re-establishing a commanding industrial trade position. It requires investments for the future in research, development, education, and incentives for manufacturing in the US. The goal would be to allow our manufacturers to compete directly in the free global market. Faced with that strength by the US the other countries will be anxious to talk.

We desperately need our industrial leaders and the government to cooperatively attack this well known problem aggressively head on with a realistic and thoughtful plan.

But remember that this will require knowing the difference between wise investments and wasteful spending.

The Reform of the Senate: Enough Honest New Faces to Begin?

2010-11-07T11:54:00.000-08:00

The constitution allows each House in Congress freedom in determining the rules of its proceedings. Over the years members of the Senate have abused this freedom to give themselves outrageous powers and self serving privileges. This has created a pathetically inept and corrupt body that exists to serve the two political parties and their members rather than the country. This has become clear to most citizens.

It is difficult to find an American citizen that does not believe that each member of congress puts their own interests and that of their political party ahead of the country and the citizens. The congress is sadly in need of radical reform,

The current situation is much too attractive to the current members for them to initiate significant reform. In fact, much of the need for reform is related to our monopolistic two party system. Until the majority of existing office holders are replaced with honest and dedicated candidates that place the higher value on the country and it citizens reform is not going to happen.

The constitution allows for elections to replace one third of the Senate every two years. Anti-incumbency as a step toward “taking back the country” was a major battle cry for the recent mid-term elections and won the new senators their jobs. The mid-term results reflect how the citizens took advantage of this opportunity.

Of the 33 positions open for seats in the Senate the recent mid-terms elected 16 candidates who were new to the Senate. Thus, when the new Senate convenes almost half of those who were up for election will have been replaced. Thirteen of the new senators are Republicans and three are Democrats. A short resume of each of the new senators is provided by Salon in this reference. Seven of the new senators have served in the House of Representatives. We therefore have nine new senators with no vested background in the federal machine. Three are small businessmen who have had no elected experience until this election. Four have held only state government positions. Two have been state governors.

Depending upon the position for reform of the seven from the House this mix could be a reasonable group to lead a series of reforms. It will take many more similar elections and very careful watching over the next years to return our Senate into the organization the Founders intended. But we have begun.

Rally for Sanity a Very Pleasant Surprise

2010-11-02T11:15:00.000-07:00

When my two daughters asked me if I would like to go to the upcoming Stewart and Colbert Rally for Sanity it was an easy answer. No way was I going to travel the 65 miles to DC to hear Jon Stewart make jokes about the Tea Party and Sarah Palin. I hate listening to all that self-congratulating laughing and applause that comes with every lame joke told to a mass liberal audience.

But early Saturday afternoon I decided to turn on C-Span so I could intelligently criticize later. To my surprise there was a very large and lively crowd. It appeared to be larger than the Beck rally. The rally was publicized as aimed at calming the anger and fear that has taken control in today’s politics. The rally was true to that goal. There was music, singing, and Stewart and Colbert comedy skits directed specifically at that objective. The selections and speakers were patriotic. No ranting and partisan accusations. It was truly apolitical and filled with patriotism.

The media coverage has focused on the theatrics and essentially ignored the underlying principles of the rally. In this post I will focus on the values they were presenting without trying to reproduce the theatrics. You can find a summary of the show aspects in this reference. A full copy of the important closing remarks by Jon Stewart are here.

The basic principle is that we are all loyal Americans who must put aside irrational anger and fear and calmly face our real problems.

We must resist manipulated by the irresponsible media. To feed a 24hour news cycle it is saturating us with warnings of an infinite number of possible bad events which are very divisive and unlikely,and will probably never occur. Some will happen but they are solvable if we focus on those that are reasonable problems.

The anger and fear is further exaggerated by expanding the causes for problems from specifically identified individuals to much larger groups. This is being done without the required accompanying analysis.

It is important to realize that we are now one big mixed country of almost 300 million. We can expect many diverse opinions and consequences on issues that affect many groups differently. We must eschew one line insults to each other and try to reach reasonable solutions while showing respect for other's views. This does not mean we cannot aggressively address the causes of our problems. We should show strong aggression to the specific individuals behind the problem but be careful about extensions to a generalized congregate that will extend and magnify the problem.

If you have the chance, watch the video that shows media clips of both liberals and conservatives violating these very simple and common sense rules. You will recognize the faces.

Of course,calm discussion isn't "in" with the media so they have given the rally a big thumbs down.

Founding Fathers Warnings on Current Issues

2010-10-03T05:34:00.000-07:00

There is a common nightmare where you are faced with approaching danger but when you try to escape your legs are frozen in place. This seems to be the perfect metaphor for the United States as we struggle to recover the American vision after allowing decades of terrible decision-making by our elected government and their ruling class partners. We see the dangers but are so entangled that we are slow to respond. We must break free.

With all the pro-citizen tools embedded in the Constitution and the words of the Founding Fathers to guide us how did we lose control of the country-and to the very kind of people the Founders warned about? Here are a few of their warnings that we have sadly ignored. They are so timely that they could have been given this very day.

Political Parties

George Washington, John Adams and Thomas Jefferson were all dead set against political parties on the basis that members would develop loyalty to the party rather than the country. They discussed the subject often. Here are a few quotes from George Washington’s Farewell Address, on September 19, 1796 and one of John Adams statements.

"Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the Spirit of Party generally. The common and continual mischief of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it." – George Washington

"I have already intimated to you the danger of parties in the state, with particular reference to the founding of them on geographical discriminations." – George Washington

“There is nothing which I dread so much as a division of the republic into two great parties, each arranged under its leader, and concerting measures in opposition to each other. This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution. “– John Adams

Conclusion: They were 100% correct. Our two party system remains a major factor in enabling the damage being suffered by our country. Note how Adams exactly describes our current situation. We must minimize the role of the two political parties.

On Banks Gaining Too Much Power

“I believe that banking institutions are more dangerous to our liberties than standing armies.” - George Washington

"If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” - Thomas Jefferson

Conclusion: Oh boy, were they ever right on this. We have let the financial industry become the master of the economy and it is ruining us. We must return them to their proper position of providing a simple administration service to the productive units of the economy.

Foreign Policy

“Great is the guilt of an unnecessary war.” - John Adams

Term Limits

“Nothing so strongly impels a man to regard the interest of his constituents, as the certainty of returning to the general mass of the people, from whence he was taken, where he must participate in their burdens” - George Mason

“Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.” - Thomas Jefferson

Characteristic of Politics

“Here comes the orator! With his flood of words, and his drop of reason. “ - Benjamin Franklin

“Those gentlemen, who will be elected senators, will fix themselves in the federal town, and become citizens of that town more than of your state.” - George Mason

“Half a truth is often a great lie.”- Benjamin Franklin

“No man will ever carry out of the Presidency the reputation which carried him into it.” - Thomas Jefferson

On Government in General

“While all other sciences have advanced, that of government is at a standstill little better understood, little better practiced now than three or four thousand years ago.” – John Adams

“Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories.” – Thomas Jefferson

“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.” – Thomas Jefferson

“It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.” - Thomas Jefferson

Concern That Their Work be Continued by Future Americans

The Americans suffered terribly through death, bankruptcy and deprivation during the years of the Revolutionary war. At the end the Fathers asked themselves if future generations would appreciate and continue their work. Here are quotes from Washington and Jefferson.

"No country upon earth ever had it more in its power to attain these blessings than United America. Wondrously strange, then, and much to be regretted indeed would it be, were we to neglect the means and to depart from the road which Providence has pointed us to so plainly; I cannot believe it will ever come to pass." – George Washington

“Yes, we did produce a near-perfect republic. But will they keep it? Or will they, in the enjoyment of plenty, lose the memory of freedom? Material abundance without character is the path of destruction.” – Thomas Jefferson

What is our answer? If we don’t fix the current state of affairs and restore the government to the true American vision we will certainly stand disgraced in history.

Lets Call a Temporary Truce and Solve the Real Problem

2010-07-28T08:55:00.000-07:00

Our Founding Fathers gave us a state-of-the-art governing structure that allowed us the opportunity to build a country like none before. It enabled a system that for the first time could focus on the welfare of its citizens rather than an elitist ruling class.

We were expected to use our best talents within the structure to “establish Justice, insure domestic tranquility, provide for the common defence, promote the general Welfare, and to secure the blessings of Liberty to ourselves and to our Posterity”, There was a lot of hard work ahead but the enthusiasm for the vision was there to tackle it.

Over the following 200+ years we successfully conducted a continual battle against domestic and foreign forces that would destroy that vision. Although there were ups and downs most Americans felt that progress would allow their children to inherit a country that offered increasing blessings of liberty along with a continuing improvement in general welfare. We became a very special nation that was an example to the world.

This progress has come to a screeching halt. The citizens feel shock and deep disappointment after the disheartening discovery that both the elected government and many sectors of the private economy have no interest in the Founders’ vision for America. They have led a period of governance that is inept and almost completely self serving. A recent Gallup Poll shows that citizens rate their confidence in Congress dead last among 16 critical institutions.

The fundamental problem can be stated simply.

We now have a government that is under the corrupt control of special interests acting to the detriment of United States citizens. The ineptness and self serving greed of our private and public institutions has brought hardship to good citizens throughout the nation, and destroyed our vision for the future.

These destructive forces have pushed their will on us not by an invading army-which we would surely defeat- but by hidden manipulations of our economy and successfully lobbying for damaging foreign national policies. This has siphoned trillions away from productive job- creating work in the United States. The misallocation of resources is bringing the nation to its knees. The result has been billions for the few and financial disaster for the many.

Unfortunately, those few benefitting from the situation have assembled powerful tools.

A two party system that works against our choices for responsible leaders.
Hugh wealth in large corporations and institutions used for the control of the government
Excessive influence through the financial sector
Extensive ownership of the media

They are already using these tools to divert the public outrage away from the fundamental problem into multiple confusing issues to which they are offering self contradicting solutions..

To counter their strengths we have the following

The Constitution power to replace governments
Our numbers
The vision of America we hold with the Founders

The level of effort required to focus and solve the fundamental problem as a precursor to solving the many others is not even seriously on the table for the two political parties.. Drastic actions will have to come from the patriotic citizen regardless of party. The Constitution provides the tools to do this. We need a major change in our government.

This is one goal on which patriotic Conservatives, Liberals, and Independents should agree. A sincere plan to rebuild should be a priority in all party platforms and in the thoughts of voters. Once we have the fundamentals back we can return to the traditional conflicts.

Intel Founder Explains Unintended Consequences on American Jobs from Mistaken Movements of Manufacturing Overseas

2010-07-06T10:19:00.000-07:00

Andy Grove, a founder and one time CEO of the semi-conductor giant Intel Corporation, has taken billions of dollars of product from startup to mass production. He correctly points out that most observers do not understand the job implications of what he calls the “scaling phase”, which is that part of the cycle that moves the product status from startup to mass production. Manufacturing is a key component of the scaling phase.

In the July 5 issue of Business Week article “How to Make an American Job” he presents a clear and detailed description of how the economist and financial experts lack of understanding of the scaling phase led America to give up leadership positions in critical industries. They did this in the mistaken belief that moving manufacturing out of the United States to “low cost labor” was a wise strategy that would only affect manufacturing lines. The consequences of this action to our nation’s workers, along with our position in the global economy, have been severe. To quote “Without scaling, we don’t just lose jobs; we lose our hold on new technology. Losing the ability to scale will eventually damage our capacity to innovate.”

He gives strong and specific advice on what must be done to recover some of our losses. It is a discussion of what is working, regardless of ideology. He describes how the governments of Asian countries have had great success in guiding and assisting their industries into critical areas against us. As a former Hungarian who came to the US in 1956 he is well informed on how a capitalist system can outperform a rigidly planned system. However we must recognized that our system is now being outperformed by the Asian system. We must intelligently incorporate some features from the Asian system if we are to compete.

. This is only a sampling. To hear from someone with real knowledge Please read the article.

Competency and Analytical Thinking –Two Missing Components of our Ideological Wars

2010-06-19T06:36:00.000-07:00

It is disheartening to watch our country in freefall while the two controlling ideologies major attempts at a solution is to blame the other party. The fact is that administrations from both sides have had their time in charge, with each one sowing seeds that made the situation worse. It is time we realized that the root problem is the mindless incompetency and lack of analytical thinking that has infected both our private and governmental institutions.

We face issues that are too complex to be resolved by blind adherence to either of the simplified ideologies being offered through our two party system. With only two parties controlling the political machinery and selecting the top management for government agencies we are given the choice of either a left wing or right wing administration. We are not tapping into the analytical skills of our country to obtainr the reasoned , balanced government most citizens desire.

A January 2010 post on this blog raised the question of just how much incompetence this great country can stand. The recent BP drilling incident shows that we are nearing the limit. The helpless frustration and disappointment is expressed in hundreds of articles in the media. This one is typical.

Incompetence is a well studied problem. A Google query on “government incompetency” returned 545,000 hits. A query on “private sector incompetency” returned 690,000 hits. There are probably several common sense paths to success buried in that mass of information. Unfortunately our internal arguments are so steeped in emotion and lacking in analytic thinking that we would not recognize them.

The first step in correcting this problem is to elect leaders who are capable of applying analytical thought to solving problems. We must eliminate the “suits” who can only recite party jingles. This requires a careful examination of all candidates, regardless of party.

I have formulated two initial questions for public meetings that I intend to use to test the competence and thinking skills of candidates for national office. I am sure you can formulate many more for your candidates.

Question #1

Our countries infrastructure is in terrible need of repair. We have millions of skilled Americans who are unemployed and ready to do the work. The American factories that produce the materials are operating well under capacity. Putting the workers and materials together with the required work would seem to be well within the capability of a competent government. Could you explain why that has not happened under our government and what you would do to correct the situation?

Question #2

We are finding that by off- shoring our manufacturing for many industrial sectors we have lost technical skills, created a dependency on foreign manufacturers, generated a large trade deficit, and exported millions of jobs previously held by Americans. The damage outweighs by far the marginally lowered retail costs to American consumers. Could you explain how this happened and how you would work to reverse this damaging trend?

Listen carefully to their answers. If they don’t reflect real thinking on the subject look for another candidate. Standard superficial party lines loaded with half truths are not acceptable.

Our Founding Fathers gave us the right and duty to choose our leaders. We have been much too accepting of low quality. We must demand more of ourselves and our candidates.

Underground Mining Must Meet Safety Levels of Other Dangerous Industries

2010-04-16T08:58:00.000-07:00

Coal Mountain--another heartbreaking coal mine accident. I have heard those sad reports throughout my childhood to the present. They never seem to end. They are mostly related to methane explosions or fires in one form or another.

One of the arguments often cited to excuse the deaths in coal mining accidents is that the industry is “inherently dangerous”. This implies that it is futile to expect a fatality free safety record.

Extracting coal from a deposit thousands of feet underground from a matrix that outgases explosive methane as the coal is accessed is indeed dangerous. But why have many other industries that are also engaged in very dangerous manufacturing, such as chemicals, petroleum, nuclear, and space been able to bring their fatality record under much better control? They have all found the technology and operational expertise to mitigate the danger. Why is the underground coal industry unable to design and operate extraction systems that bring the accident fatalities very close to zero as these other industries have done?

This answer should come from the National Mining Association. Its web site proudly claims the following:

The National Mining Association (NMA) is the voice of the American mining industry in Washington, D.C. NMA is the only national trade organization that represents the interests of mining before Congress, the Administration, federal agencies, the judiciary and the media.

In March of 2006 NMA established the independent Mine Safety and Training Commission to develop a status report on the industry safety practices and make recommendations for the future. In December of 2006 the following report of 193 pages was issued:

Improving Mine Safety Technology and Training: Establishing US Global Leadership

As it happens I have spent a large portion of my professional career as a chemical engineer in development, design, startups and operations in the petro-chemical industry. The chemical plants, along with the other dangerous industries previously mentioned, are engineered with a goal of zero accidents. Although fatalities do rarely occur, each one triggers immediate corrections to prevent a repeat occurrence.

With the recent Coal Mountain tragedy as motivation I reviewed the commission report. It is filled with industry safety practice information and recommendations that were valuable in comparing underground mining with my chemical industry experience. It answers my question by showing the differences in levels of prevention between the two industries.

The report is clearly written and is an apparently thorough report on the practices of the industry. It was contributed to and reviewed by academics and professionals with deep experience in mine safety operations. They obviously are sincerely concerned about the continued fatalities. (I recommend that you browse the report to gain some familiarity with the industry).

Strangely, however, the report specifically states that although these contributors agreed with the recommendations they were not asked for an endorsement of the report. (An obvious question is why this commission and assessment was not established until 2006 instead of 50-75 years earlier).

Five recommendations were listed in the commission transmittal letter to the NMA. .

1. Of primary importance is a call for a new paradigm for mine safety that focuses on systematic and comprehensive risk management for all life-safety issues.

That this would be a “new” paradigm is surprising. It is an admission that much of the industry has not followed the example of the other dangerous industries in putting life protection as an unquestioned priority in design and operation. The report states that many mines do not have risk assessment and management skills and must be educated. Good risk assessment is critical in preventing fatal accidents. This points to the overriding reason for the poor performance. It raises the question of how the industry has been allowed to operate at this level over the years

2. Better technology in communications, mine rescue training, and escape and protection of miners.

A very valid recommendation. Good voice communication between the working areas of the mine and the surface would be extremely useful after an accident. It is technically difficult but not impossible because of the unfavorable signal environment. There is no such standard system in practice. The report discusses hybrid systems which would work in a transition phase while undertaking a major development effort to make this a standard mining capability

.
3. More realistic and more frequent training

Detailed discussions on and recommendations to upgrade,

4. Broadened and more professional emergency response

Detailed discussions and recommendations on which I am not qualified to comment

5. Development of a culture that promotes safe production at the business core

This is very important. Without a pervading culture of safety in the business core piecemeal regulations will not be adequate. Considering the years of operation. such a culture should already be well developed. It is further evidence that the industry does not give safety the special priority in its business practices that other dangerous industries have. It corroborates well with the earlier stated primary need for more emphasis on risk management.

CONCLUSION

The underground mining industry has clearly underperformed in the application of technology for prevention of serious accidents. The industry must change its business culture to the point that prevention of serious accidents receives the same priority in operations and capital expenditures that it does in other dangerous industries. This is recognized in the commission report. If accepted it would put the underground mining industry on a path to the standards of other dangerous Industries and provide the basis for a zero fatality goal. Unfortunately the industry is far from this point

For example, the report mentions that the industry should monitor more. This is a tremendous understatement. If designed to the common practice of the chemical industry every area in which an explosive or toxic threat could develop would be protected with carbon monoxide and methane gas detectors. This would be combined with major increases in automatic ventilation capability that would also set an alarm and take other appropriate action if a threat is found to be developing. All of the detectors and ventilation blower’s status along with other sensors and appropriate operating information would be routed to a central control room which would continually monitor the complete status of the entire mine.

Does the United States have the technical and management skills to build a safe environment for underground coal mines? Of course. Will we have the discipline and vision to do so? That remains to be seen.

Doubling of US Exports Will Require Tripling of Smart Manufacturing Policy

2010-03-24T10:23:00.000-07:00

The administration has announced a goal of doubling US exports over the next five years. The program is called the “National Export Initiative (NEI). The goal for the program is to create 2 million new jobs.

As seems to be the practice when discussing US exports, the government actions that hurt exports and created overwhelming imports are not mentioned. Over the last 35 years mismanagement of trade agreements with specific countries and the World Trade Organization sent thousands of US based manufacturing opportunities overseas along with the fruits of American innovation. Once again our elected government representatives failed to protect Americans as they gave away US manufacturing sectors, one by one, to astute countries. Those countries wisely helped their own industries make good use of the gifts. The foreign factories are now built and running, selling us the results of our innovations that are now made in their factories. The receiving countries helped their industries make good use of the transferred technology by ignoring US reciprocal trade treatment.

In the review of the program with Reuters the Secretary of Commerce made statements showing that they do understand the problem.

"Free trade only works in a system of rules where all parties live up to their obligations," Locke said in the prepared text of a speech he gave detailing Obama's National Export Initiative, or NEI.

"The United States is committed to a rules-based trading system where the American people and the Congress can feel confident that when we sign an agreement that gives foreign countries the privilege of free and fair access to our domestic market, we are treated the same."

"The approach that we're taking is trying to get much tougher about enforcement of existing rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways."

It is good to see that we now have a goal and understand the problem. But this is only the start. It is in solving the problem that the challenge lies.

The US got here by blindly accepting the advice of economic specialists who claimed we need not worry about the loss of manufacturing jobs in existing industries because even more new jobs would be created in advanced industries by"innovation.” They failed to understand the effect of the large capital outflows that went to construction of plants in foreign countries and the strong inspirational link between innovation and the technology of manufacturing. It turned out that by shipping manufacturing sectors overseas we were also shipping our innovation infrastructure along with a large portion of the business of our parts suppliers.

Innovation in the US could not make up for the large number of jobs lost under these conditions. We are now also importing advanced technology products built by our newly educated foreign competitors.

This is all explained very well, with confirming statistics, in a webinar by the Association of Manufacturing Technology. AMT is the trade organization for companies which manufacture machines used in manufacturing, such as machine tools. Their members have had a front row seat on how unthinking actions by both political parties have hurt their American customers. If you can, stay with the whole webinar to get an ideal of how our manufacturers are fighting back and want government assistance in critical areas.

So what to do? In 2008 total exports were $1.826 trillion dollars against imports of $2.522 trillion for a resulting annual deficit of $696 billion. Doubling exports with reasonable restraints on new imports would certainly make a dent in the problem. But what more are we going to export? What needs to happen to allow us to recover our previous positions? Excluding devaluation of the dollar there are three other areas to work on:

1 Supercharge our innovation engine

America has been the hands down world leader in product innovation. Innovation has been the driver for our economic leadership. We are still leaders in innovation both through our established companies and from breakthroughs by startup small companies. Apple, Microsoft, Google, Genentech, Dell, are just a few examples of American companies that were either starting up or not existent just 35 years ago. Startups offer specialized expertise, ideas, and the willingness to work unreasonable hours for the idea. We must not let the associated American jobs from these sources slip away. Government should work closely with small and larger manufacturers to develop innovation friendly policies. Special financial incentives for investments in startups that encourage US manufacturing combined with associated basic research are already in place in many sectors but should be greatly expanded.

2 Redo one sided trade agreements and make changes in the World Trade Organization

China, Japan, Mexico, Canada, and Germany are the countries which supply over two thirds of our deficit. They have to be approached with the information that we will not continue the current imbalances. They must become more favorable trading partners for US goods to avoid direct action by the US.

The World Trade Organization is a special case in which we need revisions of many elements which are unfavorable to US trade.

3 Capture a favorable trade balance in emerging markets

Emerging markets are countries experiencing rapid economic growth after previously lagging the advanced countries. China, India, Brazil, Hungary, Poland, and Taiwan are typical of what is called advanced emerging markets. Chile, China, Argentina, and Egypt are typical of secondary markets. Wikipedia has 22 markets listed as “emerging”. These areas are targeted as future leading area for economic growth. The US must gain its proper share of exports to these areas. It will not be easy because these countries want jobs as well as products and we have supplied them with the technology they need to compete..

We have had almost 40 years of destructive behavior from both political parties that fell upon the American citizen. Even now our government is heavily lobbied by former federal officials representing foreign interests. We have a hard row to hoe. One thing for sure, it won’t be fixed by band aid rhetoric and a congress heavily lobbied and influenced by foreign interests. Like our other problems it will only be corrected through citizen anger and very hard work. We desperately need a sincere American- centric cooperative effort by our government and industry. Neither has the ability to succeed alone. The government has the responsibility of setting policies and negotiating agreements that have reasonable economics for manufacturers to produce in the US. The manufacturers have the responsibility to respond intelligently and with appreciation of the advantages of being an American company.

Fix Our Trade Deficit and Manufacturing Situation Now!!

2010-03-12T10:34:00.000-08:00

The continuing trade deficit is disgraceful, and an insult to the American worker. Americans want to build and manufacture, not borrow to buy products made by others.

From the early 70’s until now our elected governments and their appointees have mismanaged the US from a global manufacturing powerhouse with a trade surplus to an annual negative balance of over 696 billion dollars in 2008. The American worker hasn’t changed. The American export environment negotiated by our government is different.

We must face the fact that over the last thirty years our elected governments and some large corporations have traded away thousands of opportunities for American to add value to the worlds manufactured items. They did this by following the advice of narrow “experts” who did not understand the pivotal roll manufacturing plays in a nation’s strength. They seemed completely oblivious to the long tern consequences of the trade and financial policies they were promoting. As a result some few individuals have been grossly enriched while the large majority of American citizens, and the nation, have been severely harmed.

Our great nation has been crippled by leadership that damaged our ability to provide the challenging jobs our skilled people deserve. They undermined our position as a prime example of the benefits of a free working democracy.

They did this by committing to conditions of the World Trade Organization, and individual countries which were very unfavorable to US built products. They gave no consideration to the consequences for the US citizen worker. They failed to adhere to the sensible thought that a country of the size of the US should always have the capability to be independent in critical areas. They allowed themselves to be heavily lobbied by foreign and US companies to pass US legislation that favored foreign manufacturing. This all has a disheartening resemblance to failures of the financial sector to show any interest in the good of the US in its disastrous practices.

We need real action with America’s interest placed first. Fixing this entangled mess requires that we renegotiate our trade agreements with several countries and the World Trade Organization to a level of reciprocity between what we give and what we receive. We also must immediately develop a national plan for a guaranteed balancing of our imports versus exports and stand the pain to implement it. It should be easy to resist the nonsense of some who will say a trade deficit is good.

This situation was brought on by both political parties. Many of those responsible are still in power. The same old lobbyist system that brought us here is still in play.

A sincere effort will only be undertaken through the anger of the citizens. Our Founding Fathers anticipated these situations and have given us in the Constitution the required tools—Let’s use them in 2010. A quick and decisive end to the trade deficit and a resurgence of our manufacturing reach must be a sincere component of the program of any candidate who gets your vote.
.
If you are interested in a further understanding of the entangled mess we are now in and would like a better understanding of what needs to be changed I recommend the book "Saving Capitalism" by Pat Choate

Once Again Nature Teaches Us Humility

2010-03-06T06:21:00.000-08:00

Snow in the Eastern Shenandoah area is supposed to happen just a few times per year, is usually just a covering of a few inches ,and is rarely over 12 inches. It stays just a few days before warm weather returns to chase it away. Sure the old timers talk about the real storms of the past but they are usually associated with the Blue Ridge or Appalachians and taken with a grain of salt. The District of Columbia, that is over 50 miles to the east, has usually been spared even that modest amount. The most talked about snow in DC recent history was January 22, 1961, the day of the Kennedy inaugural. That day DC got a whopping eight inches which created havoc in the inaugural celebration events.

That is why two successive storms over 25 and 30 inches of snow each, combining with winds to whip up towering drifts, were so appalling to us. They essentially imprisoned most of the population around DC for over a week. It was a perfect example of how easily Nature can brush aside mans’ petty agendas and come forth with its own.

As in always true when Nature flexes its muscles its raw power was overwhelming. Our plows, energy reserves, food and heroic physical efforts were temporary barriers and couldn’t compete with the peak level storms. Schools, politics and almost all social functions faced reality and were cancelled and forgotten. Health care reform and the economy were dropped from TV for 24 hour coverage of the storm. We were put in our proper place each night as the bitter cold winds re-drifted the snow, destroying the days hard plowing.

As always, Nature final relented and the struggle slowly turned in our favor. The winds became less ferocious, the snow stopped, the main roads became passable, and the essentials of our society returned. The drifts and mountains of plowed snow remain but are largely out of the way of our critical life systems.

What important bits of knowledge can be gleaned from the experience? There are several:

We are a pretty tough society that fights back hard.

When the scope of the storms was understood a hardworking cooperative meta-organization was immediately formed. This front line defense was shared without hesitation by contractors, government, local volunteers and neighbors.

The commitment of the personnel who formed this line against the storms showed the toughness of the American workers. This includes both those fighting the snow and those restoring power. Many served consecutive 12 hour shifts or longer to work all night in bitter cold moving and blowing snow. A tremendous amount of back road plowing was done by private owners.

The commercial delivery system was also outstanding under very strenuous conditions. Large delivery trucks make it through on very marginal roads. As soon as a route for delivery to a commercial area was configured by the road team the word was spread and the delivery vehicles came through.

It was an excellent job by overextended teams. Another example of how good the American worker can be when challenged. A curse on those idiots that sent so many of their jobs overseas.

Citizen Behavior

Generally good, with the usual exceptions that caused suppressed resentment. The most common was people with the wrong vehicles stuck and blocking roads. Some residents didn’t grasp the need for high road clearance to travel through deep snow. They became stuck and blocked streets that had been previously passable by four wheel drive trucks, jeeps and most SUVs.

Side Events

There was a well deserved shift of wealth to construction operators that put previously underutilized construction equipment into 24 hour operations moving snow.

Many unemployed construction workers earned well deserved good paychecks for the period.

The internet was a priceless local information center for the citizens. You could always get the latest status of a local road or route by queries on the internet.

The storm was especially tough on restaurants, because neither staff nor customers could make it in.

A Philosophical Thought

This once again confirmed that when Nature is in a state of violence the tools of mankind are weak and only allow us to wait it out. We absolutely count on Natures violent excursions lasting only a limited time before returning to a quieter level where we can regain control. That is what happens in almost every clash of civilization with violent Nature, be it earthquakes, thunderstorms, volcanoes, hurricanes or flash floods. As expected, this is what happened in our record snow storm of 2010.

As powerful as it is, however, the damage done to mankind by Nature is small in comparison to that which man inflicts on himself through wars and stupidity. (Possible future cosmic events not considered)

Deep Snow and Howling Winds Make Hardening of Electrical Distribution Systems a Priority

2010-02-17T12:34:00.000-08:00

The hundreds of thousands of people who lost power in the recent storms leads me to question the cost to benefit analysis that always seem to leave our electrical distribution systems so vulnerable to weather. Power failure is by far the major cause of hardship and suffering by customers in severe weather. Because of this billions are continually spent on emergency restoration of power.

The electric companies work endlessly to restore power. Their literature is filled with advice to homeowners who lose power. But discussions to the public on programs to reduce the magnitude of the emergencies in the first place are rare. Each severe weather event seems to come with a list of thousands to hundreds of thousands of customers who have lost power. The same old story is told of how the electrical companies are working day and night to restore it.

The techniques available for hardening are well known. They include moving especially vulnerable lines underground, strengthening of lines and poles to support additional ice and wind loads, better connectors, and more attention to tree trimming to provide isolation from tree branches.

Electrical distribution systems are complex and expensive. The payback of hardening is in reduced costs to restore damaged systems on an emergency basis and the tremendous benefits to the customers who are spared days of powerless living. After studying a few of the upgrade proposals which are public and online I find that in true capitalist fashion the value of hardening is often understated when subject to cost analysis. It is hard to place a dollar value on the benefits to the customers even though they are substantial. Reduction in emergency repair costs alone does not seem to pay for an extensive upgrade in most cases.

Here as an example of the give and take which occurs is the presentation made by Oklahoma Gas and Electric to the Utility Board asking for a rate increase to pay for their hardening plan. Notice the importance and expense of vegetation management.

Because the number of failed power events is dependent upon both the hardening and the applied stress simple comparisons between utilities are not always appropriate but could serve as a starting point. Statistics on the long term performance of hardened versus standard systems do not appear to readily available.

This is just one of many examples where the needs of the people are not given adequate consideration. There is work to be done and people who want to do the work. Why can’t our system put the two together?

Imported Goods Dull the Effectiveness of the Fiscal Incentive Package

2010-02-01T08:13:00.000-08:00

Arguments continue on the effectiveness for job creation of the fiscal incentive package. There is no doubt, however, that it would be much more effective if the US was manufacturing a higher percentage of the goods consumed by Americans.

The job intensive part of the program is lost to the country when the stimulus leads to the purchase of goods manufactured outside of the United States.

To illustrate this effect, suppose first that the incentive package entices the citizen to spend on a product manufactured in the United States. The retailer takes the money to pay operating and fixed costs, pay the wholesaler to restock the item, and make a small profit. The wholesaler accumulates its regional orders for the item and places a factory order. So far only some sales and administrative labor has gone into the economy. It is when the order is received by the manufacturer that the benefit of serious job creation starts. The factory places the replacement order into its production schedule and commits to the plant labor to produce the required number of items. The multiplier effect starts as the manufacturer places orders to its suppliers for the required raw materials and sub assemblies. The economic engine starts up and begins to create some real US labor value add.

In the case where the item is not manufactured domestically the wholesaler or importer places the order to a foreign manufacturer and any further value added goes to another country. Not surprisingly, there are not many jobs created in the United States. The trade deficit grows and the chance for the American worker to add value is missed.

There are some “expert” economists who say that a trade deficit is good and doesn’t significantly affect manufacturing employment. (Some were advisors to Bush!!) To counter this the Enterprise Policy Institute (EPI) in 2004 published a detailed analysis of the contribution of the trade deficit to unemployment in manufacturing. It concluded that in contradiction to those “experts”, the trade deficit was an important contributor toward jobs lost in manufacturing, accounting for 59% of the loss since 1998. The other contributor to unemployment was the productivity increase of the American worker.

EPI examined the percent of US production in relation to the total demand for production goods in the US. It is very telling. In 1991 94.7% of the total product demand for the USA was made domestically. It dropped to 76.5% by 2003. 1991 was a time of almost full employment. They stated that if we could return to our previous position of around 90%, millions of jobs would be created. Another interesting fact is that the US had a trade surplus until 1971.

There are some who say that our service business will make up for our loss in manufacturing. In 2008 we had a service surplus of $144 billion. Our negative manufacturing trade was $840 billion. That is a long way to go and very unlikely.

President Obama has set a target to double the US exports. It will be impossible to do this without the increased value add of manufacturing. If it were done, however, it would result in millions of American jobs and return us to economic strength we once knew before the damaging actions of the past. It will take drastic action to reverse the decades of bad decisions. It must be done.

Our current approach just isn’t working for the American people. China, Germany, Japan and every country with a strong export record is implementing a strategic plan to support their critical manufacturing sectors. These plans address innovation, trade, tax, and educational issues. They are eating both our lunch and dinner in manufacturing while we turn our focus on finance. Where is our integrated plan? It is necessary if we are to compete in a capitalist global economy!!!

Watch out 28% Democrat and 24% Republican Blocs, Here Comes the 42% Independent Steamroller!

2010-01-25T10:40:00.000-08:00

The Massachusetts win by Scott Brown was a victory for independent voters, not the Republican Party. It was a big loss for Democratic Party politics but in no way an endorsement of the Republican Party. An insightful analysis of the voting was made by the Christian Science Monitor.

The voters were simply sick and tired of the screw-ups and ridiculous inability to govern shown by both parties. They voted for an individual candidate in defiance of party politics. This is strong evidence that the exclusive two party system is losing control. This bodes nothing but good for the nation.

It is good because the first task in rebuilding our sickened system is a massive injection of honesty and dedication into Congress. This depends on the success of two actions:

1. We continue to grow an informed and thoughtful bloc of voters who think independently of the two party system.
2. The two party system loses its almost exclusive power to govern the election process

Independent voters with no allegiance to either party will tend to support honest candidates who support the common good regardless of party affiliation. These voters will also be more aware and less tolerant of purposeful misinformation. Lies and misinformation are an inherent part of the current election process. This need not be the case. Legitimate election points and counterpoints can be made with truth. Parties that routinely incorporate half truths and outright lies in their campaign cannot be trusted with public office. Money spent on misinformation should be a negative marker to its own cause.

Political parties were not mentioned in the Constitution, and the concept was frowned upon by most of the Founding Fathers. Jefferson and Washington were especially adamant that political parties would be harmful to the nation. Loyalties develop for the party over those for the country. The parties limit creative thought, encouraging “party think” in its place. They limit the quality and quantity of candidates who are presented to the voters.

Neither party is tapping into the vast talent pool of the country. The selection process must be opened to more and better qualified people to become candidates. This will not happen as long as almost all seats in Congress are held by loyal party members.

Perhaps the system performance has finally reached the “tipping point” level of embarrassing incompetence and corruption. The Massachusetts election is an encouraging indication that the citizen has finally turned disgust into votes.

The Founders gave us a Constitution that allows the citizens to correct the government through elections. Unfortunately as it now stands those very elections are strongly influenced by those we hope to correct. This will require extra diligence. Our votes are extremely valuable. We must use them carefully and wisely. We desperately need a congress of citizen-legislators who will focus on the nation’s problems rather than a political party. This should be an important consideration before you give them your vote

The Financial Crisis Responsibility Fee: A Possible First Step

2010-01-17T07:11:00.000-08:00

On November 6, 2009 we made a post detailing how almost all citizens feel completely betrayed by both government and private institutions. They see that the government is acting for special interests, not the public good as required by the constitution. To restore our nation we stated that:

The citizens require a strong program that will absolutely guarantee that the psychology and ethics that led to the betrayal is completely disgraced and placed outside the American system forever. It is critical that those in the entities who were responsible for the meltdown are publically identified and punished. There must be significant retribution with large sums recovered for the people who innocently suffered. The public consequences to those that caused the situation must be adequate to prevent any thoughts of ever returning to similar behavior.

The banks however have been operating under the assumption that their only obligation toward the citizens suffering from the economic meltdown they caused is to repay the TARP funds at some point. They expected no further consequences for the misery they have caused the nation. They are reporting large profits and intend to reward themselves with record bonuses-while the rest of the nation suffers.

The announcement by the administration of its intention to impose a Financial Crisis Responsibility Fee* on banks with over 50 billion dollars in assets is the first credible indication that the necessary consequences may be coming. It could mean that the cozy financial sector/government relationship is starting to unravel under the relentless anger of the US citizens. Of course the 90 billion dollars expected to be recovered in 10 years is minuscule compared to the damage done to the nation. But at least it initiates a principle of collecting consequential damages that should deter future similar behavior. Watching how congressmen react to this bill will be a real marker for those who must be replaced.

As currently described the bill will only apply to banks with over fifty billion in assets and will be structured so that there will be a strong incentive to pay the fee from the planned excessive bonus pool. This will protect the smaller banks and prevent the large banks from simply passing the fee through to its customers. It is indeed meant to have the large banks who acted against the public good suffer additional consequences.

The drumbeat of the bank lobbyists against the bill is already underway. There will be a very aggressive effort to have it either killed or weakened with loopholes. Hopefully this will not end as a Republican versus Democrat issue. We must follow the life cycle closely and be sure that our congressman and senators understand that regardless of their party affiliation you expect them to act in the public good. Follow their statements and votes very closely. Its will be a good warm-up for the many battles we have yet to fight.

The Big Question: How Much Incompetence Can a Great Nation Stand Before it Becomes Not Great?

2010-01-09T09:40:00.000-08:00

Is the US running out of runway?

The previous decades have been characterized by incompetence from our elected government and private sectors that have eaten up large amounts of runway.

•Emergence of the financial sector as the nations policy leader
•Failure to develop a reasonable integrated energy plan for independence from enemies
•Disastrous trade policies that seem designed to weaken America manufacturing
•A misdirection of effort on climate change
•Ill thought out wars
•Major public policy being controlled by gullible uneducated media, alarmist environmentalists, and special interests

This has resulted in:

• A global recession
• Millions of Americans losing jobs and homes while being forced into government assistance
• Thousands of our young dying in those ill thought out wars
• A complete loss of faith by the people in both their government and private institutions
• Disastrous trade balances
• Gigantic misallocations of resources

There just isn’t much runway left!

All this has happened on our watch. To avoid the terrible disgrace of destroying a great country we must turn it around.

So what weapons do we have?

• A population with a continuing love of country and respect for freedom
• Intelligence.
• Tools our founders gave us to change the elected government.

If we use them wisely they should be enough. Let us begin by accepting certain high level truths and targets for correction:

1 First, we must acknowledge that the two party system we now have is corrupt and is failing us. There is nothing in the constitution about political parties. Both George Washington and Thomas Jefferson were among the founders who were outspoken against them. Their fear being that people would develop loyalties for their party that would override their loyalty to the country. We have seen this come true in spades! The two national parties focus on sustaining their own standing. They have passed laws that purposely limit citizen choice. Their sole control of the election process must be broken and the process re-opened to the citizens.
2. The financial sector must be placed in its proper role as a simple service to the producing sectors of the economy-not its current commanding position of control. Its current consumption of the wealth created by the country is completely out of line.
3. The government is not able to adequately manage the large sums of money being spent on major R&D projects. Climategate is but one example. The citizens must have a better view of these expenditures. The country has thousands of experienced engineers, scientists and tradesmen working in the private sector or retired who would provide an independent view as a public service-possibly organized by the professional societies. This would be an important step for the citizens to regain control of the country finances and allocation of resources.
4. The availability of education opportunities to the citizens must be greatly expanded to match the increasing need for an informed electorate.
5. The media should be distinguished for providing, facts, education, and free discussion by the public. The ownership and control of media assets by only a few corporations is not desirable.
6. The Founders went to great effort to protect the individual citizen against infringement by the government. They are well stated in the Bill of Rights. We must reaffirm these protections in all our actions.

This is just a beginning list and shows how far we have to go. Once again, can we trust the current elected government to initiate these and other steps? If not, the Founders built in the ability to replace the House in two years and the entire Senate in six.

We have to keep this great country great!

With Global Cap &Trade and Climate Change in Free Fall Where is USA Energy Plan B?

2010-01-03T08:14:00.000-08:00

In accordance with its standard policy of minimizing the useful information it provides to the public the mainstream media has only discussed two choices for a US energy program.

1.Lead the world in an economy killing global cap and trade system to control CO2
2.Allow civilization to be destroyed by CO2 caused climate change.

In spite of our elected government’s record for bad decisions, surely climate gate and the general impracticality of an energy policy based totally on the global control of CO2 will prevent the first option. The second is not worth discussing. But where is the plan for a third option that presents an environmentally sustainable and balanced energy plan free from the noise of global CO2 control? A plan that is directed to what is best for the USA?
.
We need an integrated energy plan that uses all of the technologies in their best applications and is based on quality engineering, science and economics. It must be created for the general good of the US citizens and not the result of public relations and lobbying by special interests.

After over thirty years and untold billions you would think that the Department of Energy could pull a copy of a plan like that right out of the files. They might make a few adjustments to reflect the increased domestic reserves of natural gas before publishing it widely for Congress and the public to judge. It should be open and well explained so the public can judge how intelligently their congressmen are addressing the problem. It will be a base case for risk/benefit analysis against which the demands of global CO2 control advocates could be publically judged.

Sadly, this is a fantasy. The intimidation of the media and political system by the climate change alarmists has been so complete that they could politically stop any such plan from being developed. This is another example of just how blundering these institutions are as guardians for the public good. However, climate gate has finally opened the subject for objective analysis and correction. Can we count on either institution to correct the errors of their ways and lead? Sadly again, that is fantasy B.

We must somehow change this situation.

Climategate and Climate Change: We Urgently Need an Energy Plan That is Not Deferential to the Climate Change Agenda

2009-12-27T11:08:00.000-08:00

By making solutions to known energy problems submissive to an unattainable global CO2 agenda we have created a terrible misapplication of valuable time and technical resources.

Climategate highlights the lack of engineering and science basics in our private, political, and government leadership that allows glaring errors to happen. It is bad that climate change activists broke rules of science to mislead us. The larger disgrace is that we are just discovering the deception and impracticality of a CO2 control focus after spending billions of dollars and wasting years of valuable time. The various review committees responsible for overview on the program failed us.

In retrospect, giving climate change alarmists the popular lead on energy policy was preordained to fail. The climate change support came from academics in a soft and immature science, advising government and political leaders who were largely attorneys. financial specialists and economists. Add to this a cheering section made up of an undereducated press, Wall Street licking its chops to be brokering carbon credits, and emotionally driven environmentalists. It seems inevitable that such a lineup would come up with an impractical program that lacked good engineering and science.

The country has the technology and innovative spirit right now to support an environmentally sound energy plan. A knowledgeable and objective leadership could at this stage initiate a plan that would return us to world industrial leadership. The engineering, hard science, and willing workers are available. The technologies are at a ready state to be engineered for national application.

Unlike climate change research, energy technology has a backbone of traditional engineering and hard science combined with practical experience. New technology has given us vast reserves of natural gas. We are the world leader in agriculture and biotechnology. The country has the land resources for wind, solar, and biofuels from numerous sources while our biotechnology is increasing both the food and fuel supply. Nuclear electrical technology has been on standby in the US for over 25 years for no legitimate reason.

With these vast resources, why in the world are we not moving forward with a solid energy plan supported by the entire nation? The enemies are internal.

A major reason is the lobbying and public relation efforts by many oil and coal companies who have outdone climate gate with half truths and misleading data. There is also plenty of evidence that Congress is in the control of lobbying by those corporations that are highly vested in the current system, no matter how it harms the nation Finally, we have fallen for the fantasy requirement to control CO2 on an emergency basis.

Where is the knowledgeable and objective national leadership that will sort out the lies and exaggerations that are coming from dishonest sources? We disparately need a community that can put together a level-headed energy package for the nation. A plan that will really be for the common good.

I suggest that the professional engineering and science societies are the only candidates. They must rise to put partisan politics aside. They are qualified and generally free from special interests. The could organize the independent and objective technical guidance the national leadership so desperately needs. An important part of this contribution would be to honestly educate the general public so they could make informed decisions.

Your members have the knowledge. Let them be heard!

Climategate: How Much of Climate Change Policy is Fruit from a Poisonous Tree?

2009-12-19T10:18:00.000-08:00

Sophisticated Americans Want to Know.

In court, evidence that is derived from prior evidence judged erroneous or inadmissible is itself inadmissible. It is considered “fruit of the poisonous tree”. Our government certainly owes its citizens the respect to apply this same principle of thorough examination of information and decision flows. The current climate change proposals are too costly and life changing to the nation to be based upon any poisonous trees or their fruit. This, of course, applies to both sides of the issue.

It appears that the only solution is to make all information available for review and critique by specialized and qualified private citizens who would volunteer their time as a patriotic responsibility. I would like to see that the following information is available for qualified citizens to examine before any major government initiative:

Details of the underlying data collection system combined with assurance that it was carried out in an objective manner by professionals with no vested interest.

Modification of raw data for analysis is thoroughly documented and available for full examination by other organizations or citizens.

The analysis behind the recommendations is thorough and presented in an orderly manner for critique by citizens and other organizations.

Consequences of the recommended or alternate actions are thoroughly explained and documented

As revealed by climategate we are far from these standards now.

This objective participation by specialized private citizens would provide an objective technology source to counter the existing decisionmaking methodology of using dueling public relation programs. It would also be one step in the process of the citizens outside of Washington having some disparately needed representation in the Washington government technology monopoly.

Is there a truly non-partisan, objective, privately funded organization that could provide the required administration leadership?

Climategate and Climate Control: Policies Based Upon Unvalidated Computer Models Can Lead to Enormous Misallocation of Resources

2009-12-12T15:13:00.000-08:00

The country definitely needs to address its energy problems. We actually have an excess of technology to do that. We can begin serious engineering and construction as soon we develop a levelheaded plan and schedule.

What we don’t have is the practical technology to control carbon dioxide. Nor do we have convincing evidence that it is even necessary. The computer models that provided predictions of future values have done poorly and are certainly not sufficiently validated. The cost to society of trying worldwide carbon dioxide cap and trade control at the current level of knowledge is incalculable.

Because the climate control advocates chose to not provide their raw data, much of which was later destroyed, there has not been the opportunity by skeptics to participate in detailed analysis. Participation by opposing views is normally a part of any event which claims to be science. There is a lot of work required before we have an objective climate control program. Meanwhile critical energy programs await the resolution of climate control issues that may be years away

By making the energy program dependent upon carbon dioxide control we have reversed the priorities. We should go foreword full bore on an energy plan which does not wait for either carbon dioxide or climate control resolution. The energy plan would certainly include environmental fixes where well-founded information is available.

Climate control work should be restarted as objective programs aimed at resolving the list of current unknowns. A validated predictive computer model based upon improved understanding of governing principles should be high priority. All data must be available to all researchers. As objective and validated information is developed it would be integrated into the energy program.

Please Truth, Come Set Us Free

2009-11-20T08:03:00.000-08:00

The truth shall set you free. Religion, history and philosophy agree that knowledge of the truth is an important component of enduring freedom. Dictators and oppressive governments rarely have an interest in talking truth to their citizens.

It therefore appears logical to think that a society that values freedom, such as the United States, would be very good at detecting lies and deceptions and strong on the truth. Our forefathers, through our constitution have given us powerful freedom of expression rights that strongly support the pursuit of truth.

Then why is the US awash with such a confusing mess off half-truths, deception and outright lies?

One night, after a particularly painful evening of trying to sort out truth from the cacophony of noise from TV, the internet, politicians and just plain conversation my mind was exhausted. I tried prayer as I went to sleep.

“Please God, we are so confused. Could you intervene and help us know truth?”

To my surprise I had a dream that night with a reply. Not directly from God, but from a spirit who identified himself as the Apostle of Truth. I know that skeptics will attribute this to an overactive imagination or midnight pizza but I choose to take it as a legitimate answer.

It started as a light entered my bedroom and a voice began speaking. After introducing itself the voice offered the reason it could not intervene.

“As you know, your universe is special in that it is very complex and tightly balanced. God is reluctant to make changes. I knew he would not allow me to directly intervene for you. I did describe your prayer and he was glad to see you were working hard in the right direction. He also gave me permission to pass on to you the explanation he had given me a long time ago

About one million years ago God decided to give man the very precious gift of creative thinking. After a short time I noted that your species (humans) were abusing the gift. You were overwhelming my presence with your own imagined fabrications. God said that the gift of creative thought was absolutely essential to reach the high goals he had set for your species. Under no conditions would he limit this power. He had provided balance, however, by adding higher cerebral functions to your brain. With this power you can search the universe for information and apply reasoning that allows you to identify the actual truth over imagined events. These processes had only been in place for a short time. Natural selection would eventually strike a balance between the two competing processes and those based on truth would surely do well.

So God has given you the tools you need to win. Diligently use your cerebral processes to seek out the truth. Win your debates by truthful statements in which you can have confidence, not lies. You must put great effort into it if you are to be really free.

The United States is a great favorite for those of us who have been watching you from this side of the black hole. Although we have been a little disappointed in you recently, we think that you will eventually replace the people and their values that have weakened you. You will once again be great. Even though you have many friends here, however, you must do it yourselves.

Good luck. We will be following you with hopefulness.”

The light slowly dimmed and I was again in a darkened room. I was awake and apprehensive. This was advice that it was reasonable for us to follow. But would we?

Citizens Need Proof that the Cozy Big Finance /Government Relationship is Over

2009-11-06T09:45:00.000-08:00

It has been 16 months since we posted on the silliness of the media continually placing high net worth New Yorkers in front of cameras to be asked if they thought the country was in a recession. We pointed out that if they had talked to a reasonable distribution of small businessmen around the country it would have been obvious we were in a very painful one.

Since that time not only have the lost jobs and personal financial nightmares increased but we now realize the magnitude of betrayal we have suffered from the financial sector, the government, and our elected officials.

We have the sick feeling of being completely hoodwinked by both our private and public institutions. Most people now realize that in the dealings of these entities there was no concern for the United States or its citizens. The common good was simply not a consideration. This realization has triggered a great wave of discouragement toward the entire American system. This feeling is independent of the politics of the citizen. The vast majority of Republicans, Democrats, Libertarians, and Independents feel that the entire system is owned by the special interests and Washington insiders through their control of the Government.

Go to almost any gathering of what used to be the middle class and you will find that there is universal anger and even hatred toward the following entities:

· The financial institutions that wasted trillions that could have been used productively for our country
· The banks that won’t risk lending to small businesses but want to pay high bonuses to executives.
· The elected government that passed laws that protected these disastrous actions.
· The lobbyists and special interests that influenced and really bought the elected government
· The lying financial rating agencies

The disheartened American is sick of blowhard politicians seeking to gain by the situation. The citizens desperately need to see real evidence that the country will at some time be run for the common good. The strength of these feeling is not fully understood in the Washington and New York power centers. If not fixed the country will face major changes.

The citizens require a strong program that will absolutely guarantee that the psychology and ethics that led to the betrayal is completely disgraced and placed outside the American system forever. It is critical that those in the entities who were responsible for the meltdown are publically identified and punished. There must be significant retribution with large sums recovered for the people who innocently suffered. The public consequences to those that caused the situation must be adequate to prevent any thoughts of ever returning to similar behavior.

If the public were to see these events embedded into prompt institutional action it would demonstrate that the cozy relationship between the perpetuators and congress has ended and patriotic faith in the system might return.

Can this be done with the current elected government on whose watch many of the events occurred?

Both the House and Senate are circulating draft bills that are supposed to re-regulate the financial sectors so that the disasters will not be repeated. If normal history is repeated, however,they will be passed after usual lobbying oftains built in loopholes

In May of 2009 Congress formed the Financial Crisis Inquiry Commission (FCIC). It was given broad authority to determine exactly what happened to create the disaster(s) and to identify any incidents of law breaking they discovery. It has subpoena power. There is even a direction to compare salaries in the financial sector to those of equal responsibility in other sectors. Six members were appointed by Democrats and four by Republicans. The commission is to submit a final report to Congress in December 2010-safely after the 2010 elections.

The commission had its first public appearance on September 17. The introduction of members and their introductory remarks are described here. As would be expected, they are almost entirely insiders. Congress prided itself on the ground rule that only private citizens could be members-no one connected with the government would be on the commission. It turns out that although none have current government positions almost all have had deep earlier government connections. The commission is largely split between former Clinton and Bush appointees, with one former senator. There is no representation from the damaged citizens.

Reasonable results will take a lot of citizen intervention.

Teddy Roosevelt’s Advice, Our Energy Disaster, and Parallel Universes

2008-06-08T12:34:00.000-07:00

When asked the basic rule behind accomplishing an important task Teddy Roosevelt gave the following advice.

“Do what you can, with what you have, where you are.”

If only we had applied this advice in the early nineteen eighties, when the clouds of the forthcoming energy disaster first gathered. Can you imagine how it would have changed history if we had not placed the responsibility of our energy future into the hands of the oil companies? However, bad decisions that do not consider the future almost always lead to serious consequences. In this case, the United States is now suffering the consequences in spades.

The possibility of parallel universes is under consideration by many scientists. If so, perhaps there is a universe where we did push forward with an aggressive energy program and a mind to the future. The people living in that universe now enjoy a balanced energy program where there are multiple biotech and petroleum derived blends of fuels available. The transportation vehicles can run on any blend so the fuels are all competing with each other in a free market. The infrastructure to support this flexibility has long been in place. The disaster of a single fuel type and a few large companies completely controlling the market and prices ended years ago. The mergers that led to a few very large companies dedicated only to petroleum fuels never occurred. OPEC must now work very hard to sell their products in competition with the other sources of fuels.

The crippling transfer of dollars from the US economy to unfriendly companies also never happened. The United States, as a leader in biotechnology and agriculture, is enjoying a boom period that could not be imagined in 1981.

Unfortunately, we do not have a way of moving into that parallel universe at this time. However, let us apply Teddy Roosevelt’s advice right now and maybe 25 years from now we can pull alongside.

Are We in a Recession? Ask Your Local Bartender.

2008-03-31T11:00:00.000-07:00

Everyday the info-babes of CNBC ask each of their big shot financial guests a single question. “Are we in a recession?” Some of the big shot financial guests reply “yes” and some reply “no”. Some enter into long academic descriptions of what constitutes a recession. .

One thing of note-all of those guests opining on whether we are in a recession are high net worth individuals. High net worth individuals lack an important sensation that is necessary to detect a recession--- real pain! Not the irritating pain that you feel when your find that your portfolio is down 10%. I am talking real pain-the kind you feel when you do not know what you are going to do. The kind of pain that is accompanied by panic. When large numbers of hard working citizens feel that kind of pain we are in a recession.

If the info-babes and their guests had the capabilities to detect real pain they would learn a lot. The fact is that large numbers of hard working citizens are feeling real pain and we are in a recession.

The most strategically place locations to detect real pain are not on Wall Street. They are in the thousands of neighborhood bars scattered throughout the country. Here are a few reflections from one singe location. They are reported through the eyes and ears of a few local bartenders who are facing rows of empty seats once crowded with workers dropping by for a social hour after work.

Answers to the universal greeting “How is it going?”

“Slow, very slow”
“I have two days of work next week, You got anything for me?”
“We had three customers all day”
“I made all of $45 last night”
“I have not sold a property for three months”.
“I just don’t have work for my crew”

The politics have made a very sharp turn. In a county that went strongly for Bush in 2004 it is now a blowout for Obama. He is saying what everyone believes-that these problems are due to poor management and an administration that is in the bag for the elite. High gasoline prices, war in Iraq, credit crunch, ridiculous executive salaries, and toxic toys from exported jobs, make “tax and spend”, and “cut and run” not very scary.

But these people don’t watch CNBC. They do not realize that this is how the “free market” works. Ask the info-babes.

No Taxes on Tips versus Taxes on Hedge Fund Managers

2007-12-21T08:07:00.000-08:00

The tavern is back in business, with a new owner but the previous diverse customer mix. A recent topic of discussion was how money talks more than the people do. The following sequence of events is a perfect example.

Ron Paul entered HR 3664, the “No Taxes on Tips” Bill. His rational for the bill was as follows:

“It is an outrage that waiters, waitresses, and other service-sector employees have to pay taxes on the tips they earn. The IRS makes an estimate of how much service-sector workers will make in tips, and taxes them on it even if the taxpayer did not actually earn as much as the IRS' estimate!

Tips provide a substantial portion of the income of many service-sector employees, many of whom are young people just trying to make a few extra dollars to get through school, or single parents often balancing two jobs while trying to make enough to raise a family. This tax amounts to nothing more than the federal government punishing these employees for working hard and doing their jobs well.

I have introduced H.R. 3664 in Congress to end this problem. The Tax Free Tips Act of 2007 will exempt tips from federal income and payroll taxes. Ending taxes on tips will give workers an immediate pay raise, letting them keep more money to put toward things like a house or car payment, their retirement, or their own and/or their children's education.

When you give someone a tip, you should not have to simultaneously tip the federal government.”

A tip is pure free enterprise where the server provides a service and the recipient determines the price based upon satisfaction. It is not salary. This effort by Ron Paul to correct an unjust error received exactly zero coverage in the media. It is almost certain that no action will be taken by congress.

Now look at government money-guided treatment. It was provided to managers of hedge funds who are exploiting a loophole in the tax code that allows them to pay a 15% capital gains tax rate on their million dollar plus annual incomes. They should be paying the top 35% ordinary income tax rate. The fund managers get no sympathy from tax scholars, who point out that the current tax system inexplicably singles out fund managers for favorable treatment to the disadvantage of other workers and investment firms.

An attempt to fix this multi-billion dollar theft released a torrent of lobbying and misleading information from the financial community. President Bush himself has sanctimoniously come out against “raising taxes on hard working Americans.” There is now resistance from both parties to any change, including Senate Finance Committee Democrats John Kerry of Massachusetts and Charles Schumer of New York. Nothing has happened.

Government for the people? Now where should we go to get one of those? What do you say, Congressman?

Time Goes By

2007-08-24T11:56:00.000-07:00

When this blog was initiated in December of 2005 it centered around the culture of a small rural 17th century Virginian town that was feeling the interface of growth from the Washington Metro area. A local tavern seemed to bring all of the factors behind this environment together in a blend of cultures that was a mix of commuters to the metro area, local service workers, businessmen and women, and many recently- turned-21 party people who were just beginning to feel their oats. Each evening there would be a mixed population wearing business clothes, scrubs, service work shirts, and Redskin tee shirts-all joking and enjoying themselves in discussions that crossed both age and social barriers.

Sadly, a convergence of forces became effective that gradually separated these groups. By the spring of 2007, the mix had changed to only a reduced number of local workers and young party people. The social and economic diversity disappeared. The tavern could not operate with that the only customer base. August 10 was its last day of operation.

The closing marked the end of an era. The change was seriously discussed on that last night. Although there were certainly many reasons for its demise the primary mover was that the town was now inside the Washington Metro area. Its citizens now have the increased choices associated with an urban environment. The number of new restaurants and bars has made it possible for anyone to spend happy hour at an establishment largely filled with people of their own age and social/economic status. The diverse mix that made the small town tavern so interesting has been separated into several groups with more focused backgrounds and tastes.

Those of us who have hung on to the end must now make a crossroads choice. Some of us intend to go to the west where the honky-tonk neighborhood bars are still found, while others intend to go to the new and more expensive places in town or to the east. In spite of the exchange of e-mail addresses and cell phone numbers, we, like the other customers, will end up in several separate reformed groups.

Hopefully, there will still be the warm feelings of friendship which were developed over the years at the small town tavern.

We do intend to keep this blog active.

Biofuels Enemies Can't Back Up Economic Disinformation

2007-08-16T08:49:00.000-07:00

The last year the media has been filled with establishment organizations criticizing the cost to the government of the tax exemption for distributors blending ethanol with their gasoline. I have heard representative of both The Heritage Foundation and the Cato Institute say that these provisions in the Energy Policy Act of 2005 are “disastrous” acts by the government and that they “distort the free market”. CNBC has been especially aggressive in promoting this view.
The “think tank experts” never provide any data to back up these statements but they do prefer that large incentives continue go to the oil companies so they will be encouraged to find more oil. They also apparently feel that we should ignore strategic costs of supporting the government owned oil industries of our enemies- in the name of global free enterprise. In short helping out oil companies (either local or foreign government owned) = “good” and helping out our American ethanol industry = “bad”!

Well, the economic impact data for ethanol movement in 2006 is in. Let us examine it.

The following is a summary from the report “Contribution of the Ethanol Industry to the Economy of the United States” The summary and full report are found at these two sites:

RFA - Media Center - RFA Press Releases - 2007 Archive -Ethanol Industry Providing Sound Returns on Investment

RFA - Resource Center - Reports & Studies.

The most important points are:

1. In 2006 the federal government received tax revenues of $2.7 billion simply from the construction and operation of biofuel refineries. This is in comparison to the $2.5 billion tax exemptions granted by the federal government to oil refiners who blend ethanol-and cited by naysayers as a “waste of money”. In addition, the ethanol industry will generate nearly $2.2billion of additional tax revenue for State and Local governments.

2. The American ethanol industry alone produced nearly five billion gallons of ethanol. This meant that the US needed to import 206 million fewer barrels of oil-valued at $11.2 billion. This is money that all stayed in the American economy instead of flowing out of the country. I have never heard this mentioned in the media.

3. The operation and construction of ethanol bio-refineries spurred the creation of 163,034 jobs in all sectors of the economy in 2006. These include nearly 20,000 jobs in America’s manufacturing sector -- American jobs making ethanol from grain produced by American farmers. How about that? An American manufacturing sector that is growing!

Not included in the report was the expected savings to the federal government in grain subsidies of several billion dollars because the price of corn now exceeds the supported price. We no longer need to pay farmers not to grow corn while buying its equivalent in oil from foreign nations.

To me this just does not sound like the “economic disaster” and “waste of taxpayer money” that I have heard expressed on both network and channel news programs. I have not heard these favorable numbers mentioned or challenged in the major media.

It would seem to be newsworthy-where are the reporters?

Agriculture and Biotech Sectors Provide Fuels While Defeatists Use Disinformation

2007-08-13T11:09:00.000-07:00

The United States is by far the global leader in biological and agricultural technology. To this, you can add the existence of our vast land resources and the strategic advantage of providing more of our own fuel. You would think that there would be little resistance to applying these advantages to our fuel shortage problem. However, like the horse drawn buggy manufacturers fighting the automobile, the fossil fuel based energy companies have fought tooth and nail to prevent renewable fuels from becoming a reality. They have done this with a vengeance that leads one to believe that John Rockefeller’s ghost has returned and is directing their operations.

As each myth is proven false, a new one is invented. The media gives each headlines, but neglects to report on the proven falsity of the previous one. Surprisingly the economic elite are eager to chug-a-lug the false kool aid while the average average person has more common sense. For the benefit of everyone, however, we will examine the facts behind each myth over the next few posts.

Today we will look at the negative energy balance myth. Following days, we will look at the claims of cost to the economy, ethanol performance in an internal combustion engine, and finally we will address the food versus fuel myth.

For quite some time the TV, newspapers, and selected think tanks have been awash with reports that the production of biofuels, especially ethanol from corn, consumed much more energy than was present in the resulting product. This was confusing because almost all studies showed just the opposite. The U. S Department of Energy initiated a study by the Argonne National Laboratory to examine all studies, resolve the difference and finally put an end to the controversy.

The final report was issued on January 7, 2005. The fossil energy to produce one million Btu of fuel was

Ethanol 740,000 Btu
Gasoline 1,230,000 Btu

That is right; it actually takes more fossil energy to produce one million BTU of gasoline than one million BTU of ethanol. Has anyone seen this in the mainstream media?

This is not surprising. The second law of thermodynamics states that it is always necessary to add energy to move from a lower to a higher energy state. It is the price you pay for upgrading a material to a new level. In the case of ethanol from corn, however, the energy comes from a free, renewable outside source-the sun. For gasoline, it comes from burning some of the other crude oil components.

The report used existing dry milling technology for ethanol and did not consider the rapidly improving technology for producing biofuels.

A summary of the study and links to the full report is found at:

http://www.ethanolrfa.org/objects/documents/files/DOE_Summary_of_Argonne.pdf

This report received essentially no publicity outside of the specialized ethanol sector. Reports of a mythical negative energy balance continue to in the media. One change I have noticed is that the “negative balance” has been changed to “barely positive” in some releases. I have yet to see a comparison with the energy to manufacture gasoline.

The next post will look at the overwhelming economic and strategic benefits of this “failed and expensive” movement

Virginia “Civil Remedial Fees” Legislation Shocks Citizens

2007-07-23T08:01:00.000-07:00

A weird bill quietly passed by the Virginia Legislature and signed by the Governor has created uproar throughout the state. Its stated purpose is to finance new roads by imposing record-breaking fees and points on citizens cited for traffic violations. These fees only apply to Virginia residents and are in addition to the normal penalties. They are so severe that the state is paid in the form of three annual payments..

This site provides an explanation and listing of the fees.

http://www.courts.state.va.us/publications/hb_3202.pdf

For example any form of reckless driving requires that an additional fee of $350 per year be accessed for each of three years. If a suspended license is involved the law requires a fee of $1000 for each of the three years. This is in addition to the current penalties. I repeat that it only applies to residents of Virginia.

The first public reaction was a rush to find out who voted for the bill. I was shocked to see that my representative, whom I have supported in the past, was one of those who did. There is now a call for a special session for total repeal. The following site is active in the recall.

http://www.ipetitions.com/petition/VAtrafficfees/

There is also rage directed to the numerous law firms who track down unresponsive traffic violators under contract to the state. Because a large portion of the poorer citizens will face jail because they just can’t pay fines of this magnitude the law will be a multi-million dollar bonanza for these firms. A member of the legislation who owns such a firm introduced the bill. Read this

http://content.hamptonroads.com/story.cfm?story=127172&ran=8101

and this:

http://peninsulalaw.blogspot.com/2007/07/defending-civil-remedial-fees.html

Most infuriating is the blatant arrogance of those who pushed a bill of this magnitude through at the last minute. It has both Republican and Democratic support but is largely a Republican bill. The Democratic Governor signed it.

This site lists the voting records. It should be useful for the November elections.

http://www.thenewspaper.com/news/18/1856.asp

To experience the full fury of the Virginia Internet users on this subject do a Google Search on “Virginia Civil Remedial Fees”. I got 728,000 hits. Not everyone is against it but defenders are hard to find. At last I did find a defender-the governor who signed it

http://www.msnbc.msn.com/id/19857278/

So the battle to limit the ever-growing power of government continues. Maybe we still have some rebellious drive left in us. What do you think Tom Jefferson?

Do Think Tanks Really Think?

2007-05-30T19:37:00.000-07:00

Without getting into both the philosophy and science of defining “thinking”, I believe most people would agree that it is associated with a minimum ability to take a variety of inputs and produce an output that has higher order than the individual inputs. My question is “What is it called when an organism always produces the same output no matter what the inputs?”

Evolution has seen that there is no such organism surviving in nature. But human institutions with that characteristic abound. They are very inappropriately called “think tanks.” You can identify them by the descriptor, which follows their name-- The Heritage Foundation “a conservative think tank”, The Brookings Institution, “a liberal think tank”, The Cato Institute, “a libertarian think tank” and so on...

It appears that someone incorrectly installed their analytical engine. They do not carefully process all available inputs to produce a logical output. They start with the always-predictable output and simply ignore the existence of any input that might support a different conclusion.

Unfortunately, shouting matches between representatives of institutions of this type have become the TV standard for so-called “balanced discussion”. When was the last time you witnessed objective reasoning by a thoughtful analyst? You remember the type-people who actually consider all of the facts before reaching their conclusions.

Virginia Tech After Some Time

2007-05-13T13:51:00.000-07:00

The shooting at Virginia Tech hit Northern Virginia so hard that no post can adequately describe the aftermath. VT is by far the school of choice for the middle class of this area. Almost everyone had a relative who had, or is attending VT. One statistic quoted by one teacher was that out of a recent graduating class of slightly more than 400 students from one Loudoun County high school 123 went on to Virginia Tech. .

The image of a cold-blooded killer calmly walking the hallway, entering classrooms and eventually killing 32 students was so horrible that it originally muted public discussion. The plea to wait for the facts to come in before reaching judgment on the VT administration seemed to be holding. That period has now ended and there is deep resentment on how VT was so ill prepared.

In a recent heated discussion among several people, the following questions were asked.

Why could the classrooms not be securely locked from the inside? This would have stopped the shooting after the first classroom. The students were forced to attempt to keep him out with tables and their bodies. Is VT correcting this immediately? This certainly does not need a commission’s recommendation. (Loudoun County has just announced it is installing a buzz to enter system with closed cameras on all schools).

How long are we going to tolerate the ridiculous “gun free” zones that end up as “victim disarmament zones”? If the pilots were armed on 9/11 that tragedy would have been stopped.

What did they mean saying the failure to call an emergency (with two people murdered and the gunman free) was “the right decisions given the information”? It should not have even been a decision up for discussion. A thoughtful standing policy should have made calling a full emergency designation immediate and automatic. The fact that it was even discussed shows how little forethought was given to security.

It was also noted that if the killer’s mental condition had been put into the system, he would have been denied a gun but he might have used a rental truck.

The discussion ended with great sadness.

Socially Hip Things I Still Haven't Done

2007-02-15T19:03:00.000-08:00

1. Read a Harry Potter book
2. Been snowboarding
3. Bought a $10 martini
4. Paid $100 for a Redskin ticket
5. Established a PayPal account
6. Checked myself out in a supermarket
7. Sold anything on eBay
8. Established a MySpace site

One Iraqi Scenario on Which There is Total Agreement

2006-12-08T08:07:00.000-08:00

Although there is disagreement about the US being in Iraq for the “war on terror” there is total agreement on sectarian warfare. Everyone is adamant that under no conditions should we sacrifice a single American to prevent the radical Islamic Shiites and the radical Islamic Sunnis in Iraq from killing each other. In fact we should encourage it. [Based upon an unscientific but exhaustive survey of everyone sitting at the bar on Monday night]

The Virginia Marriage Amendment-What Have We Done?

2006-11-09T08:35:00.000-08:00

Because of the media attention to the national election the shocking overwhelming approval of a Virginia constitutional amendment has not received the attention it deserves.

This is not your standard marriage amendment that defines marriage but leaves the door open to marriage-like contractual relationships. It not only bans similar contracts but also extends the ban to anyone having a relationship outside of marriage.

The first sentence of the amendment reads:

"That only a union between one man and one woman may be a marriage valid in or recognized by this Commonwealth and its political subdivisions."

Now read the rest of it:

"This Commonwealth and its political subdivisions shall not create or recognize a legal status for relationships of unmarried individuals that intends to approximate the design, qualities, significance, or effects of marriage. Nor shall this Commonwealth or its political subdivisions create or recognize another union, partnership, or other legal status to which is assigned the rights, benefits, obligations, qualities, or effects of marriage."

Yes, that is right. If you are not married in a manner approved by the state, you cannot have a legal agreement that even intends to give you the effects of marriage.

Well, if it applies to gays it should apply to everyone. However, did those 57% who voted for it understand the level of this invasion on personal life by the Virginia government. A state that was at the forefront of the formation of the United States? Thomas Jefferson-please come back!

The approval was widespread. The only counties that voted against it were Albemarle, Arlington, and Fairfax. Loudoun supported it at the 54.6 % level. Where were all those people who moved to Loudoun from Fairfax to escape the “communist government” that had taken over?

I was at a tavern where the amendment was discussed in detail on election night eve. Every person participating understood both parts and disapproved. The conversation centered on what legislative body had the nerve to put such an amendment forward. I went home looking forward to seeing it go down by a large margin-at least in Loudoun.

I faced an even bigger surprise than seeing Allen go down.

A Time for Reflection

2006-10-11T17:44:00.000-07:00

Remember all the learned lectures oil experts gave us that $75 per barrel crude oil was due to natural laws of supply and demand over which we had no control-except to stop driving SUV’s. A BusinessWeek analysis based upon actual data reaches a quite different conclusion. Surprise! A large portion of the increase was due to overheated speculation by hedge funds. Now that the speculators are off for other waters to muddy, we have drastic reductions in the price of gasoline. You can read the analysis here

Speculation certainly has both a dark and bright side but this last little foray into speculation on transportation fuels was extremely costly to the country. Not only did it put a hardship on millions of working Americans and force our two automakers into major layoffs, it also pumped billions of dollars to our enemies.

The one bright spot would be if we do not forget. Please America, whichever political party; do not ever again turn our energy policy over to the oil companies. Please realize that the solution lies in the American spirit that has brought, or is bringing diverse renewable energy sources to practicality. If incentives are required to make this happen -provide them.

We really cannot afford another repeat of the last few years.

The Right Decision

2006-09-27T13:50:00.000-07:00

Weeks ago, S stated that she needed a job that would add more interest to the daily grind. Therefore, she had made the decision to leave a career in retail sales to take a position in child daycare. Because she was new to the field, she would be starting as an assistant-although she was herself a grandmother.

When she stopped in after her first day, you could immediately tell that she had made the right decision. Everyone within listening distance stopped his or her discussions to absorb her enthusiasm.

“Yes, there were two of us with fifteen 3 year olds-- all day. And just transitioning into being potty trained. But they were very well behaved-For many of them this was the first time they were away from their parents. In fact, they were adorable”

On and on she went. Everyone agreed they had never seen her is so uplifted a state.

What happened to S confirms a theory I have held for quite some time. The closer you are to working in cooperation with a basic force of nature the happier you will be in your job. The love and protection of children is one of the strongest elements of human nature. By changing jobs, S had made the jump from a derivative activity set by civilization to riding a basic force.

Oh yes there was one negative of the new job. Apparently it is a basic rule of childcare that you always address the children at their height by kneeling or bending over. S did say “My back is killing me from all the leaning over-I definitely will have to get in better shape.”

We're Back

2006-09-21T12:25:00.001-07:00

We are back. A lot has changed in the last five months.

The real estate boom is over for now. All of the “For Sale” signs are staying up and many have had “price reduced” added. The inflow of people with cash from selling their city house has dropped to a trickle

Admitting that moderation of the market was necessary, the opinion of almost everyone in the business is that the hard landing is due to the self-fulfilling prophecies that the media has been selling for years. The image of an impending housing bubble collapse finally became burned into every potential buyer’s mind.

However, there is still enthusiasm for the future. The experienced agents have seen these cycles many times in the past. Being close to the Washington DC has conditioned everyone to expect never-ending growth.

The lawn care business was hit with a double whammy this summer-high gasoline prices and the August drought. Although the drought is over, the grass is really growing in the cool weather, and gas prices are falling, the summer is now over. A winter with lots of snow removal requirements would be helpful.

The summer cost of gasoline has been bad for everyone. The real cost is being borne by workers who need heavy trucks to carry their tools to their work sites-which are never close to home. This was made worse by the knowledge that the pumped up costs were going to companies who are splitting the profits into channels that end up funding many of our enemies.

As for all that “oil is a free market” talk. Notice where the prices have dropped most drastically? The mid-west.- the only area where there is the wide availability of a competing fuel-ethanol.

Lots more to discuss in the next post

Don't Blame the Solution!

2006-04-23T13:27:00.000-07:00

Background

The newspapers and local television stations in Virginia are reporting stories of stations running out of gasoline in the Hampton Roads area. There are predictions of very high prices because “the government is making oil companies add ethanol to their gasoline.” The complexity and disarray in the countries supply of transportation fuels has allowed some outrageous lies and misleading spin but this is one that reaches the ceiling

Because I am a chemical engineer who spent 15 years in the industry and known to favor ethanol as a contributor to our transportation fuels supply I have been besieged by friends asking for a explanation of this situation. To save my failing voice and to spare those who are tired of hearing it repeated I have decided to post the facts where anyone interested can read them.

The Truth
The current situation was born in the 60’s when the world finally became fully aware that the tetraethyl lead the oil industry had been adding to gasoline as an octane booster for fifty years was a first order environmental and health disaster. The lead containing exhaust fumes were contaminating the air and lead oxide was coating everything along the highways. Once washed off by rain it entered the streams and groundwater. It was showing up in blood samples of children living near traffic areas. I remember warnings against picking any berries growing along the roadside.

Forget current worries about CO2 emissions -this was real poison! Tetraethyl lead in gasoline is considered one of the major environmental disasters of the 20th century . Leaded gasoline was phased out in the US from 1975 - 1986. Europe banned it in the 1990s. It is still used in the developing world where it is a major health hazard. For the dismal history of tetraethyl lead in gasoline you can click HERE

The industry needed another additive. This time the additive would not just be for octane enhancement. It also had to improve the burning characteristics of gasoline to meet new air pollution requirements.

There were two options: MTBE and Ethanol

MTBE is a manufactured petrochemical, of unknown toxicity to humans at low concentrations, but a carcinogen on inhalation and very persistent when spilled into nature. It is very soluble in water and once in is hard to get out. At concentrations greater that 40 parts per billion-it creates a turpentine taste in the water.

Ethanol as we all know is so non-toxic we sometime drink it. It is created in nature when sugars and the right yeasts are present.

Because I have pledged to include no speculation in my discussion, I will only report that MTBE was chosen by the industry as the favored additive . The effect of the decision was to push ethanol out of a large potential market and provide one for MTBE.

As could be expected MTBE began working its way into water supplies-presumably by overfilling at the pump and gasoline tank leakage. In 1995, major contamination was discovered in water supplies in Santa Monica, CA. This triggered extensive further monitoring and the discovery of additional contamination across the country.

This time it was the states taking action. By September 2005 twenty five states had legislation to end the use of MTBE. In 2002, a California lawsuit came down against the oil companies. California started a four-year replacement program with ethanol in 2003.

With lawsuits multiplying the oil industry made a major push for federal legislation which would shield them against legal action. The last chance effort was for inclusion in the Energy Policy Act of 2005. The protection was in the House version but eliminated in the Senate. The political winds were blowing hard against the oil companies. The Act as passed had no MTBE lawsuit protection for the industry.

With no shield from lawsuits, the industry announced the removal of MTBE from all fuels by May 2006. It would reformulate with ethanol. This sudden decision placed a short-term strain on ethanol capacity and created tight timetables for conversion of the blending facilities. There are now 99 operating ethanol plants with 33 more expected to start up in 2006. The Renewable Fuels Association has testified to congress that these facilities will meet the capacity requirements for ethanol. Any short term problems can be resolved by temporally importing ethanol from Brazil and the Caribbean.

However, ethanol prices have gone up. At the current price of ethanol, the cost of adding it to the 10% level in gasoline should go up by a few cents, and then drop as ethanol becomes readily available.

This industry chosen rapid reformulation away from MTBE may cause a small disruption. It has nothing to do with the Energy Act of 2005 mandate for the long-term use of more bio-fuels by 2010. That requirement is easily met.

To their credit, many of the oil companies and distributors have professionally rounded up the ethanol they need and say they will meet their goals. They promise to be a reliable supplier of environmentally sound transportation fuels. Buy your gasoline from them!

Do not listen to those who are putting out the disgraceful spin that this problem is somehow due to ethanol and not past bad choices for additives. Do not buy anything from them!

Growing Houses Instead of Corn, Northern Virginia is No Longer a Player in the Ethanol Boom

2006-04-03T08:26:00.000-07:00

During the first national push to replace a portion of the nation’s gasoline with ethanol derived from homegrown corn Virginia was one of the most active states. Because it was located close to the fuel consuming Washington area, grew lots of corn, and had a large dairy industry to consume the byproduct distillers grains Northern Virginia and the Eastern Panhandle of West Virginia were very attractive locations. The state legislature passed some tax incentives to get the industry moving and a number of ethanol plants were planned for the area.

This all ended in the early 80's when the Middle East suppliers dropped the price of crude oil to $15 per barrel and the nation was convinced that the problem was solved.

Twenty-five years later high quality crude oil is now approaching $70 per barrel and mostly available from unstable and unfriendly countries. The ethanol- for-fuel boom is back. There are 97 plants now operating and another 42 new plants going on line or expanding this year. Four billion gallons of fuel ethanol were produced in 2005. This amount will surely double within a few years. With all of the cash staying in the US instead of leaving the country, we appear to have finally learned our lesson. The industry is definitely here to stay.

But this time Northern Virginia will be a consumer, not a producer. The cornfields and dairy farms are replaced with housing developments and shopping centers. It is now more profitable to grow houses than corn. The excitement and energy of combining our agricultural strength with our process engineering skills to solve a national problem has all moved to the mid-west. That area deserves tremendous credit for keeping the vision alive until now, when the country desperately needs it.

On behalf of all those who were active in the early Virginia initiatives we are sorry our state can't be a larger part of the excitement.

Rural/metro Interface Brings New Experiences to Animals

2006-03-03T08:01:00.001-08:00

The recent snow brought many children to a local pasture that had a rolling hill that was ideal for sledding. When they quit for the day most left their sleds for later riding. Thus, the hill was dotted with brightly colored plastic sleds. These bright colors attracted a number of cattle. K happened to be watching and reports this funny event.

One large cow approached a bright red sled and began pawing it. After a few minutes she grew bored and started to walk away, but tread directly on the sled. The sled slide out and the cow fell in a perfect sitting position on the sled that began to slide down the hill. After several feet of travel, the cow wiggled and kicked to a standing position and returned to stare at the sled. With one strong stroke she sent the sled flying and walked away.

K said that if she had a video camera that scene would have been a sure winner on “Funniest Animal Videos”

Meet on Monday-Marry on Wednesday – A 3 ½ Month Update

2006-02-10T06:20:00.000-08:00

A previous post told how C first met her husband in the tavern on Monday and they were married in Vegas on Wednesday. It was her first marriage. We promised updates as “time goes by.”

She was in last night and reported that everything is fine. He is helping her with her dog care business and they are settled in. She admitted to “a few small tiffs over the period that did not amount to anything.” Her report to everyone is that it is “still very good-and we are still determined to keep it that way “.

?????? Can it be? When will the post marriage chemical changes in their brains kick in??????

Rahzel’s Unrequited Love

2006-02-04T19:02:00.000-08:00

A few nights ago, K told a strange story about her dog and a wild deer.

After caring for the horses in the morning, K usually takes her dog Rahzel (a 50lb mix) for a walk through the fields and along a 15 acre lake which is on the property where she works.One morning, she heard a commotion behind the lake bank, a little distance away.A deer’s head appeared momentarily above the bank level and then disappeared.Rahzel immediately took off toward the lake.K ran behind.She heard a splash and saw several geese fly.When she reached the bank,the deer was swimming in the lake.Rahzel had jumped in and was swimming toward it.

The deer reached a point where several trees had fallen into the lake and scrambled to a position where she was standing on the trees. Rahzel joined her in the same position and the two began to touch noses. After a short time, Rahzel wanted to further the acquaintance by sniffing at her rear end. The deer did not like this and moved her backside away from him. They formed a rotating pinwheel with Rahzel continually trying to approach her backside and the deer moving it away in a circular motion. This went on for some time.

The deer finally broke off and began to swim across the lake,with Rahzel swimming right along with her. K finally succeeded in calling him and he returned to her. They watched the deer swim completely across the lake and climb ashore. She was wobbly and could hardly stand up—apparently exhausted. Finally, she regained her strength and walked into the woods.

Since that day, Rahzel gets very excited when they come within view of the lake. He breaks off and runs to it-- his tail wagging in anticipation of seeing the deer. Sadly, she has not appeared again,

But perhaps it is for the best. They came from such different backgrounds that it probably would not have worked out.

Moving to the Country? Some Advice.

2006-02-01T09:28:00.000-08:00

Almost all of the newcomers fit in well with their new small town or country environment and find that their expectations are exceeded. If you are moving to recapture the lifestyle in which you were raised you will be overjoyed to find it still exists.

However, there are a few people that just start wrong. In a small town, you will be dealing with the same people repeatedly, so initial impressions are important. After several years of watching newcomers integrate with those who have lived there all their lives, I can offer the following advice.

1. Most important of all, realize that your standing in the community will be based upon your kindness, courtesy and respect for others.No amount of wealth or status will get you a bye on this rock hard standard. Wealthy, arrogant people are in the country and small towns but they go through life missing its most important component-the warm fellowship of others.
2. Always remember that you are here to enjoy the country not to bring the city to the country.
3. Realize that Virginia is a distinguished state and far superior to NY and CA.
4. To avoid the appearance of arrogance or pretentiousness never forget the following
--There is no class system in any social environment.
--Assume that the natives know more than you and want to help.
--Service staffs at restaurants are not servants-they are friends.
--Leave political correctness behind you.
5. Do not even think of proposing new gun control legislation.
6. Never be in such a hurry that you can’t have a short conversation.
7. If a merchant or service person asks about where you live they are getting to know you and will not sell this information to internet companies.
8. Do not complain about
--Power failures as a unique feature of country life.
--ATV’s and dirt bikes as long as they are handled responsibly.
--People hunting deer in the hills behind your development.
--People starting meetings with a prayer or the pledge of allegiance.
--Things you miss from the city.
9. You can complain about
--The price of gasoline.
--The traffic.
--Irresponsible kids on ATV’s and dirt bikes.
--Tradesmen who do not call you back.
--Grouchy merchants-everyone will know who they are.
--Eastern Loudoun and Fairfax Counties.
--The federal and state governments.
--The county and local government after you have been here a year.

You can be of any political party, religion,ethnic background, or race. As long as you heed these rules, you will make friends with both the long timers and the other newcomers

Differences Between Men and Women (1)

2006-01-26T18:24:00.000-08:00

The discussion was about the difference between the ways women and men punish others when the person displeases them. For women the most punishing and effective action is to stop speaking to the offender-and to tell others that is what you are doing. Men never use this tool on each other.

K confirmed that if she finds another woman is not speaking to her it is crushing -- and she immediately begins to worry about what she has done to trigger the action.

J tells about the time that she was angry with her boyfriend and after a long session of verbal abuse ended it with the statement that she was just not going to speak to him anymore.

The difference between the sexes is shown by his reply

"And that is supposed to be punishment?"

Recycled Old Movie Scenes

2006-01-19T11:51:00.000-08:00

The discussion was on certain scenes in the old movies that were used over and over until they are burned into the moviegoer's mind. Here are a few:

1. The villian who appears to be dead after a long battle with the hero suddenly revives at the last moment for one last try.
2. The herione in high heels who is being chased through the woods,jungle,or field breaks a heel and falls.
3. The herione sleeping in a spooky mansion hears a strange noise and gets up to investigate in very revealing nightwear.
4. After being chased by a mad killer,alien,or monster the people finally reach their car-but it won't start.
5. The picture on the wall has real eyes and spies on the people in the room.
6. Two competing gangs in westerns go behind the same rocks (located just outside LA) and blast away at each other for minutes-doing no harm.
7. The bookcase swivels revealing a passageway to a secret lab.
8. The pin which ties the horse gear to the racing stage coach is shown bouncing around and finally falls out-causing the stagecoach to go over a nearby cliff.

Readers are encouraged to add their favorites to the list

Overheard II

2006-01-16T06:49:00.000-08:00

After hearing the bartender tell of the virtues of the young man she was dating an experienced customer advised:

"Love is just a socially acceptable form of bi-polar disorder.I suggest you immediately take a lithium pill."

The relative difficulty of raising sons versus daughters is a never ending discussion. One woman said she asked her father who was the most difficult to raise-her or her brother-and received the following answer:

"With a son you only have to worry about one person's testosterone getting him into trouble. With a daughter you have to worry about all the testosterone in the world."

(Note: Language slightly changed)

Only Absolute Perfection Accepted

2006-01-09T12:49:00.000-08:00

L___ announced that he had his new Harley outside and a crowd moved to the parking lot to see it. It was beautiful, shining in the afternoon sunlight, and impeccably maintained. He was accepting a flood of compliments from the crowd when he noticed a very small water spot on the mirror-like exhaust manifold. He quickly wiped it off--- but it was too late! A voice from the second row called out,

“Damn, it L__, If you weren’t going to take care of it you shouldn’t of bought it.”

Horse Industry Grows While Dairy Farms Disappear

2006-01-07T19:33:00.000-08:00

In spite of the onrushing development, horses still are a major part of Loudoun County business and culture. The number of horses may be actually increasing because the new population is also participating in horse ownership. It is hard to find a native of Loudoun County who did not grow up with horses.

The Rural Economy Task Force reports

Loudoun County is home to over 19,800 horses, more than any other county inVirginia. Loudon’s horses generate on average $89 million per year in sales, $78 million in operating expenses and provide employment for 2,480. The capital investment per horse is estimated to be $14,251 and the land supporting each horse is valued at $46,445. Horse owners in Loudoun spend almost 50 percent more per year per horse ($3,930) than all other Virginia horse owners

G. .recently moved his horse shoeing business from Lancaster County,PA to Loudoun because of the larger concentration of horse owners here.. He says that you can run a very busy shoeing business all within a radius of 20 miles of Middleburg

The decline of dairy farms has provided the developers with the land. In 1965, there were approximately 300 dairy farms, now there is only one.

A Surprising Response

2006-01-05T14:15:00.000-08:00

Almost all of the old-timers (like myself) can’t help comparing the current male-female relationships of the modern young with those we experienced growing up in more restrictive times and places.

Two young men who work as waiters always seemed to come in on their off hours with beautiful young women hanging on them-and the women seemed to change on a regular basis. One night when they were working, it happened that both were waiting at the end of the bar while the bartender prepared the drinks for their tables. The following conversation took place

Old Timer #1 “You young guys don’t appreciate how good you have it. In our day we had to work for months to get a girl to the point where I know you guys are getting them almost right away.”
Old Timer #2 “Yes and some of us had to actually marry them!”
After the laughter ended, it was obvious that the two young men had given the matter some thought.
Young Man #1 “We wish it was that way now. At least you had something lasting. "
Young Man #2 “Yeah, there was loyalty”.

The drink orders filled , they left for their customers table—leaving behind several newly respectful people.

Senator Byrds Mach 1 Hairdo

2006-01-04T10:29:00.000-08:00

B. was a pilot in the Air Force and now has a commercial aviation career. He tells of a scene he witnessed as a pilot of Air Force 2 flying a congressional congregation to northern Russia.

"We landed during a major blizzard and wind storm. The plane was severely rocked and buffeted while on the landing strip. As the congressional passengers were disembarked each endured a tremendous struggle with the wind, resulting in all types of severe dishevelment. But when Senator Byrd of WVa left the plane and walked into the howling wind not a single hair on his groomed head was disturbed. His hair remained as perfect as it is when he delivers a speech in the senate. The crew and other passangers were astounded. It was thereafter referred to as Senator Byrd’s Mach 1 Hairdo. "

Meet on Monday-Marry on Wednesday

2005-12-27T07:07:00.000-08:00

C. usually drops in for a beer about twice a week. I saw her on the Saturday before Halloween and remarked that she hadn't been in as usual. She said she was in on Monday and got married in Vegas on Wednesday--to someone she had met at the bar on that Monday. He came in shortly and was introduced to everyone. They knew they were facing some skeptics and said "they were very happy so far, and were determined to keep it that way" In addition to C. he had gained a family of three Saint Bernards.

I saw her again just before Christmas and couldn't resist asking for a marriage status. She said it was still just as good and readily agreed to my request to post the story to the Weblog.

Can this be happening??? Have they found true love? Stay tuned.

Overheard

2005-12-26T09:09:00.000-08:00

The female manager dictating the dress code for bartenders
"If my six year old can see up your skirt it is too damn short!!"

A woman describing the axieties of moving to Virginia from Metro New York City.
"We were afraid we wouldn't be able to get good Chinese"
(she eventually gave local Chinese food her approval)

A bartender in response to a comment on her somewhat revealing blouse
"It's my pay the rent shirt."

The kitchen staff after I thanked them for putting up with the kitchen heat.
"No problem, we're from Guatemala. We know real hot."

W. was describing the scene at the campus of a large southern university where he took his daughter to start the semester
“I’ve never seen so many good looking honey blondes with boob jobs driving Mercedes- and they were the mothers!!!.”

A flustered and very busy waitress asked the people at the table next to mine if they were ready for their check. Their reply:
" Can we have our food first?"

You Eventually Just Get on with It.

2005-12-26T08:55:00.000-08:00

Drug addition in a family member is a terrible experience. But you evenually just get tired of the lies and bad behaviour. At that point you get on with your life, and the addict becomes only a painful background distraction. This is illustrated by a recent story told by a 24 year old female bartender whose father has been a cocaine addict since her early memories.

Other than for his addiction my father has been wonderful to us. But over the years he has caused such pain and worry to my mother that we have become hardened to whatever he says. By agreeing to enter treatment centers and having good lawyers he went many years without doing any hard time. Finally we were faced with a sentencing which would almost surely include jail. My brother, sister, mother, and myself drove him to the court. He was given a light sentence but it did include jail. We watched him taken away. A hard thing to see happen to your father.

When we got into the car to go home, my mother started the engine, and turned to me and said
"Do you want to stop off for ice cream?"