Founding Fathers Warnings on Current Issues

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

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

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

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

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

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!!

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

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

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

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!!!