Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

31 August 2008

Obama's Call to Service

I just read a speech given by Obama on 2 July 2008 in which he makes it very clear that he believes it is more honorable to serve others than to seek the fulfillment of one's own goals. He calls on Americans, especially young Americans, to serve in many ways which seems fundamentally designed to teach and train them to become the servants of the state. Make no mistake, Obama loves the old socialist dream of mobilizing the people to respond to a cause which is larger than themselves. This appeals to many people, but substituting a larger cause for ourselves has always led to the excesses of the socialist state. It recalls Lenin and Stalin in the USSR, Mussolini in Italy, Hitler in Germany, Castro in Cuba, Mao in China, Pol Pot in Cambodia, and Hugo Chazez in Venezuela. This is a road we should be very careful not to go down.

He insists that we must serve a common purpose. No, there is no reason why we must serve a common purpose. We are free to pursue our own values, goals, and dreams. America has always prospered and been innovative and motivated by this individuality. Our government was designed to facilitate a society in which individuals could work voluntarily for such goals as a number of people had, but just as importantly, others with different goals were not required to contribute. In Obama's scheme of things, we are all obliged to find many goals we hold in common with all other Americans and then we must contribute to achieving those goals. Of course, he as president will determine what the many goals are and then he will require us all to contribute in the name of a higher purpose.

Fundamentally, Obama just does not get it. He says we "are connected to that fundamental American ideal that we want Life, Liberty and the Pursuit of Happiness not just for ourselves, but for all Americans." Somehow, from this he thinks it follows that we are obliged to see to it that everyone has a wonderful life and is happy. Well no, this is an impossible burden to put on everyone. It is not even possible for a person concentrating fully on their own life to always manage to have a wonderful life full of happiness. If we tell everyone that they should focus less on that and more on trying to make all other American lives wonderful and full of happiness, American lives will be less wonderful and much sadder. This is what has always happened in the socialist countries that pursued this course far down its road. This is in no way surprising - I cannot understand your life, values, and causes for happiness as well as I can understand my own.

Among other causes, we are called to reduce our energy dependence upon sources in other countries and to prevent climate change. We are warned that "our American Dream risks slipping away." Obama says, "I will ask for your service and your active citizenship when I am President of the United States."

Surprisingly, he will ask more people to serve in the armed forces. He will expand AmeriCorps from 75,000 to 200,000 with added slots for providing health care and education, saving our planet and restoring our standing in the world. He will start an Energy Corps to conduct renewable energy and environmental cleanup projects. He will double the size of the Peace Corps. He will expand USA Freedom Corps to create an online network where Americans can browse opportunities to volunteer. He will fund R&D for nonprofits. He will start a Social Investment Fund Network.

He will integrate service into education, presumably the way Maryland does this. Students are not allowed to graduate until they have many hours of public service work acceptable to the state. This will not be voluntary in his case either, because he will not give federal money to schools unless they participate, which means the schools will force students to participate so they can get as much money as possible. This is a clear trampling of the rights of the individual to pursue their own happiness.

The Energy Corps will provide jobs for the nearly 2 million young Americans who are out of school and out of work. If they do not want to be in school, it is not clear they will want to be in the Energy Corps, but he has no concerns about this. He could allow many of them to find work if he removed the minimum wage rate laws, but he will not do that, since he loves that law. No, he wants them out of work so he can mobilize them for a socialist cause. He will put these disadvantaged young people to cleaning polluted areas, weatherizing homes, and gaining skills in a growing industry. I suppose the industry he has in mind is the Green Industry, supported by federal tax credits and subsidies and somehow able to achieve energy independence in 10 years. He will also expand the YouthBuild Program putting young Americans to building affordable housing in America's poorest communities, but he will not end local government building restrictions that make housing more expensive.

He says students want to end the genocide in Darfur (as soldiers?), farmers want to free us from the tyranny of oil (by turning corn into ethanol?), the oceans must be kept from rising. Every task on his wish list will be tackled by young or old volunteers and solved. Many of them will have little in the way of skills, but they will solve intractable problems, such as overcoming the huge natural forces that cause the earth's climate to change! No, he stupidly thinks it is only CO2 emissions that cause that. With such a Manager-in-Chief, we can be sure none of this multitude of unfocused programs will accomplish anything useful. They will only delay the professional training of our young people in their career paths.

But, every American will be forced to pay for this plethora of programs in which those who know nothing will be directed to solve every conceivable problem by those who have no management experience and lack the discipline of having to make a profit or even having to live within a budget. But, what a grand and glorious army of mobilized youth to pursue every socialist dream of the last 100 years! And at the head of this marching army, Commander-in-Chief Obama will lead them with his piping into endless folly.

68 million acres of non-producing oil leases

Nick Snow in the Oil and Gas Journal says that "the independent Petroleum Association of Mountain States charged on 28 August that government red tape and environmentalist hindrances are the primary causes of lease development delays, and it urged Democrats to cease the inflammatory and erroneous claim that US producers are just 'sitting on' 68 million acres of leased land as the fall campaigns get under way." The article is entitled "IPAMS to Democrats: Quit promoting dishonest energy claims."

IPAMS Executive Director Marc Smith says House Democrats, including Speaker Nancy Polosi (CA) and Chief Deputy Whip Diana DeGette (CO) made this false claim at the Democrat national convention in Denver.

Smith said that 100% of the Bureau of Land Management oil and gas leases in the Mountain States region have been protested by environmental groups. He says "Industry is in a classic Catch-22 situation whereby the government has created a cumbersome process that takes years to complete, environmental groups exploit the process to throw up legal roadblocks at every stage, and then Congress and the environment lobby turn around and blame the industry for not 'diligently drilling.'"

When Obama calls for producing more natural gas and reluctantly allows a wee bit of drilling, it may mean nothing, since he may simply be counting on the bureaucracy and environmental groups to keep any additional oil and gas from being supplied. Until the politicians do something to speed up the process of bringing new finds to production, the granting of a few leases may mean nothing. We must remember that the Democrats have nearly uniformly decided that any use of carbon-based fuels is bad because they result in CO2 emissions. Consequently, they want carbon-based fuel costs to go up, which delays in production accomplishes by delaying production and raising the costs of production.

Thanks to Lemuel Linder for pointing this article out to me.

29 August 2008

47 million uninsured Americans

The U.S. Census Bureau said that there were 47 million people in the United States who did not have medical insurance in 2006. However, that number went down in 2007 to 45.7 million people.

Texas has the largest percentage of uninsured people. It probably also has the largest percentage of illegal aliens. New Mexico, Florida, Arizona, Louisiana, Mississippi, California, Oklahoma, Nevada, Georgia, and Arkansas in that order, have the next highest percentages of uninsured. A look at the map suggests that it would make sense that these states have the highest percentages of illegal aliens from Latin American countries.

Critique of Obama's DNC Acceptance Speech

On 28 August, Senator Obama gave a masterful acceptance speech to the Democratic National Convention. He presented his empty populist and socialist program with complete self-assurance and sincerity. His rhetoric wowed the Democrat crowd. Let us examine it critically.

Early on, he claims the American promise is threatened because the economy is in turmoil. Well, yes, the economy goes through business cycles now and then and sometimes policies long encouraged by Congress backfire and cause a problem, such as the home mortgage problem. Well, guess who wanted Fanny Mae and Freddy Mac and other businesses to issue risky mortgages and consistently pushed for more of them? The Democrats in Congress. Nonetheless, are we to believe that the American dream is so fragile that it is threatened by a GDP growth slowdown which is not even a recession, let alone a depression?

So he complains about lost homes and reduced home values. Gasoline prices which are high. Could that be in part because the Democrats have consistently opposed drilling for oil in America and prevented us from exporting more oil from Iraq? The credit card bills he complains about would not be so high if people did not work until 16 July to cover the cost of government. The tuition bills would not be so high if socialists did not have total control of the universities.

He complains that a man in Indiana packed up equipment he used for 20 years and shipped it to China. Could it be that the equipment was now obsolete and selling it to China was a good way to get some money for it. Maybe the company bought better new equipment, using the income from the obsolete equipment as the down payment? We do not know. But there is not nearly enough information given here to bring tears to a rational listener's eyes.

He claims we let veterans sleep on the streets. We probably do. There is no guarantee given to a veteran that he will never see hard times. He can go bankrupt, or he may become an alcoholic or a drug abuser. We do have many programs to help veterans, but he should not tell a veteran that he will be forever on easy street because he has served in the military.

Obama says "John McCain has voted with George Bush ninety percent of the time." Ummm.....I thought George Bush was President and has never served in the Senate. He never votes with Senator John McCain!

Obama falsely claims that McCain proposed "tax breaks for big corporations and oil companies but not one penny of tax relief to more than one hundred million Americans." First, McCain proposes a reduction of the tax rate to all corporations, big and small, and to all industries, not just oil companies. The phrases Barack Hussein used were meant to be inflammatory. Second, McCain does propose that the Bush tax cuts be extended, which will provide tax relief for more than one hundred million Americans. The Democrats have long opposed the extension of the Bush tax cuts which are due to expire in 2010. Obama realized he would have problems winning the election if he went along with the majority of the Democrats on this opposition and has embraced a pledge of no new taxes on middle class individuals, except those leveled upon business owners and that half of the population that owns stocks. Or upon those who realize a capital gain.

He complains that McCain has offered "an education plan that would do nothing to help families pay for college," but there are already programs that provide student and parent loans adequate for that purpose. Obama does not bother to tell us what he would do.

He says McCain "would privatize Social Security and gamble your retirement." No one is changing Social Security for those near retirement. But the present plan is not funded fully and for the younger workers who will be soon heavily burdened with additional taxes to give Baby Boomers many luxurious years of retirement on Social Security, where is the security for their retirement? McCain knows that the only way to provide for that is to end a purely Ponzi scheme and get at least a part of the money withheld from paychecks into investments which over time will grow with the American economy. Funding everyone's retirement with tax money is stupid.

Obama claims the Republican philosophy was to give the rich more money and hope some benefit trickles down to those less well off. Hogwash!!!! The Republican philosophy was to reduce everyone's taxes and they did it. They did include tax reductions for high income groups and everyone else. As a result, the fraction of the income tax paid by the highest income groups went up, not down as you would suppose from the Democrat complaints. The higher income groups now pay almost all of the income tax monies collected.

Obama says "in Washington, they call this the Ownership Society." Yes, and under this philosophy a larger fraction of the population than ever has come to own their own homes and to own investments in stock and other retirement funds. To the dismay of the Democrats, more and more people are building wealth.

He says the average American family saw its income go up $7,500 under Clinton and then down $2,000 under Bush. I have spent a while trying to figure this one out. I know what average family income is and I know what median family income is, but I am not sure what he means by the income of the average American family. It probably means average family income.

But first, let's look at the median family income. This is the income of most interest to most American families. In 1992, median family income in constant 2000 dollars, was $44,129, while it was $52,148 in 2000. This is an increase of $8019. Good for the relatively low spending of Clinton and his free trade policies, so unusual for a Democrat. Of course, this was largely necessitated by a Republican Congress. From 2000 to 2006, median family reported income went down by $1595. But, as we have noted before, workers are taking more of their compensation in the form of unreported retirement investments, vacation time, medical savings plans, family leave time, and paid sick leave, rather than taxable income. People have many more options now on how they take their compensation for their work. Taking advantage of them is just plain smart given the high marginal tax rates, which have gone up in many states and locales during this period. Since these calculations are in price change adjusted dollars, the rise in gasoline prices and food prices plays a big role here. Both Bush and Congress are responsible for the rise in food prices, but it is mostly Congress who is responsible for the increase in gasoline and other fuel prices.

I have not been able to find good numbers for the average family income for this complete span of years, but the average income numbers are much higher. This is because they are weighted heavily by the families with very high incomes. So, a reduction in average family incomes may simply indicate harder times for the very wealthy, who we know Obama to be uninterested in.

Obama claims the American promise says we have "the freedom to make our own lives what we will, but that we also have the obligation to treat each other with dignity and respect." Generally, yes, but he is actually smuggling in a requirement to be our brother's keeper here, which we shall see down the pike. If I really treat someone with dignity and respect, then I expect that they can take care of themselves.

He says "businesses should live up to their responsibilities to create American jobs, look out for American workers, and play by the rules of the road." First, businesses do not have an obligation to create jobs. A business is composed of people. These people are not obliged to create jobs for others. If they were, then those others would be equally obliged to create jobs. That would logically require everyone to create a job. If everyone creates a job, then no one has to create a job for anyone else but himself. Then everyone would be looking out for himself.

Barack says government should do what we cannot do for ourselves. "Protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology." What, we cannot protect ourselves from harm? We often do. Government has some role here, but not a comprehensive one. We do not need government to provide education. That is an experiment that has failed and it is fraught with the conflict of interest that one of the primary reasons we need to learn to think rationally for ourselves is so we will not be so vulnerable to government tyranny. Putting government in charge of schools is putting the fox in the chicken coop. We do not need government to keep our toys safe. We need responsible retailers to check on safety using good laboratories to examine products from China or other unreliable foreign vendors. Government should play a role in some basic science research, but the development of technology should generally be the province of private enterprise. Government develops technology very poorly.

Now Obama drops the big idea on us. "We are responsible for ourselves, but that we also rise or fall as one nation; the fundamental belief that I am my brother's keeper; I am my sister's keeper." This is surely conflating religion with government. If I am responsible for myself, why isn't my brother, or more probably, some stranger, also responsible for himself? This is clearly contradictory and a recipe for standard socialism with the government intervening in our lives to tell each of us that we must sacrifice our individual rights, privileges, and immunities along with our own individual idea of our values and our goals to some need of others. Soon, no one has any job but to take care of others, but a society in which everyone takes care of others at the expense of themselves is nonsense. Consequently, everyone simply becomes a servant of the state. Then the state determines who gets what "rights", rather then the individual having an inalienable right to anything. This logic is what caused Senator Joe Biden to be furiously suspicious that Judge Clarence Thomas might believe in inalienable individual rights. Biden was adamant that only government can give anyone a right.

Now Obama says "change means a tax code that doesn't reward the lobbyists who wrote it, but the American workers and small businesses who deserve it." Yet, Obama plans to write tax codes that do reward certain businesses he likes. Does he really suppose those businesses lobbyists will not be working overtime to see that he picks their businesses for these favors. It is McCain who goes much further in not trying to play favorites with the tax code.

"Unlike John McCain, I will stop giving tax breaks to corporations that ship jobs overseas, and I will start giving them to companies that create good jobs right here in America." Do you really want Obama, who has never managed a business, deciding whether jobs have been shipped overseas and which are good jobs here? This is not the job of a President of the United States. Besides, there may well be good reasons to eliminate some jobs here which are unable to compete in the global economy. Obama will wind up erecting high tariff walls to protect unproductive jobs and destroying our export industries and our competitiveness in the process. This is very simple-minded.

"I will eliminate capital gains taxes for the small businesses and the start-ups that will create the high-wage, high-tech jobs of tomorrow." Does this mean he will try to decide which small businesses will create high-wage and high-tech jobs and which will not? Many states were doing just this and encouraging investors to start dot-coms and other computer software firms, biotechnology, and optical communications companies which fed the frenzy that led to their collapse in the so-called dot-com recession that hurt the economy so much in the early part of Bush's first term in office. The loss in incomes due to that are a part of what Obama blames him for compared to Clinton, but the frenzy was started and fueled mightily under Clinton's time in office. Government is incompetent in picking winners among small businesses. Forget this. Even if he does not mean to discriminate among small businesses, they really just need a more even playing field, which masses of government regulations do the most to destroy.

"In ten years, we will finally end our dependence on oil from the Middle East." He must think he is God. This is absurd. Even an enthusiastic driller cannot do this and he is not a happy driller. His idea to pour money into alternative energy development will result mostly in wasting tons of money and only a small increase in energy. Crash government programs are very wasteful and do not translate well into functioning businesses.

He will use more natural gas, invest in clean coal technology, and use safe nuclear power. Glad to hear he will allow more natural gas production, use of coal, and nuclear power. Will he reduce the time it takes to get government approvals to build facilities? This will be the real test here. And, will companies be allowed to proceed in a way that will allow them to make a profit, which he thinks is a dirty word? Then he will subsidize fuel-efficient cars and alternative energy. It would likely be less wasteful to give our dollars to Mideast sheiks. He will create 5 million new jobs by taxing Americans enough to get the money and thereby destroying another 5 million jobs. Where do politicians get the idiot idea that they create jobs?

He wants every child to have a world class education so they can compete in the global economy from which he wants to retreat to protect unproductive jobs. How he will do this keeping his Democrat Teacher's Union friends happy is not stated beyond saying he will do more of the same things that have always failed.

Somehow, he will give us all accessible health care. I thought we had that, but clearly he proposes to take control and second guess medical experts still more than Medicare already does. This will cause costs to skyrocket, as Medicare has already proven they will. It will also result in highly rationed care. Like Canadians, we will wait many months for an MRI examine for a brain tumor and then 8 more months for an operation to remove it and by then most of our brain.

He will decree that businesses provide more paid sick days and better family leave. This will put some businesses out of business and cause many to hire fewer people.

He will decree equal pay for equal work. So, bureaucrats will visit businesses they know nothing about and interview workers and decide which ones have the same job and do it equally well. Then they will tell the company what to pay them. Really wise! So, who do I fire? All of my female employees or all of my male employees?

As in Biden's speech, he claims Iraq has $79 billion in surplus money. Of course Iraq has terrible needs for this money in rebuilding the infrastructure and society that Saddam Hussein destroyed over many decades and to increase their oil production, but they cannot agree among themselves on how to spend it. Meanwhile, Congress, controlled by the Democrats, opposes their spending it to get any help from American oil companies and until all factions are happy with its use. So, of course it is unspent.

Obama will "build new partnerships to defeat the threats of the 21st century: terrorism and nuclear proliferation; poverty and genocide; climate change and disease." There is no focus here. He who chooses to defend everything, defends nothing. Unless, this joker is God. Seriously, He will defeat all poverty and all genocide. He will defeat the earth and make it keep a constant climate? He will defeat all disease? Incredible. Unbelievable. Childish. Megalomaniacal. Unbalanced. Insane. Otherworldly.

The rest of his speech was just rhetoric with nothing but apple pie, mom, flag-waving, and invocations upon God.

2nd Quarter GDP Growth 3.3% Annual Rate

The revised second quarter growth rate was a very healthy annualized rate of 3.3%. The rate for July was 1.9%.

90% of the growth in the 2nd quarter was due to exports. This goes far toward showing why free trade is a good thing for America. We are very able to compete on the world markets. Exports increased in the second quarter at a 13.2% annual rate. The U. S. trade deficit fell to its lowest level in 8 years as a result. In comparison, the economies of Japan and Germany shrank in the 2nd quarter. Corporate profits in the U.S. were 7% lower than they were in the same quarter a year ago, however. U.S. GDP growth in the third quarter is predicted to be a slower 1.5%, but the predictions lately have been systematically on the low side.

Arctic Oil and the Northwest Passage

Recent climate conditions, especially increased winds, have resulted in the Northwest Passage being used more frequently by shipping. Canada is asserting control over that Passage which works its way through islands and along coasts which are part of Canada. The U.S. and most European nations refuse to recognize Canada's sovereignty over the Northwest Passage.

On the other hand, the U.S., Russia, Denmark (owner of Greenland), and Norway are eager to lay claim to offshore areas along with Canada, because it is estimated that about one-quarter of the earth's as-yet undiscovered oil is in these waters. It sure would seem likely that with the oil on the North Shore of Alaska, there would be some along the North Shore of Canada nearby.

Given the distance over which mineral rights are claimed offshore, it would seem that Canada has some claim to the control of the Northwest Passage. That would sure create some problems for our nuclear submarines, however.

Our Federal Government Debt

While considering which problems the Federal government should add to its goals to find and develop solutions, we should consider the size of the national debt. It is now over $9.5 trillion, with each and every family owing an $80,831 share of that amount. This is just the money we have already overspent.

Far more alarming is the unfunded future obligations to Social Security, Medicare, and other social programs. These unfunded promises now amount to $53 trillion.

Maybe we should stop to think about Obama's promises to spend still more on alternative energy, ending global climate change, and funding a national health care system, among many other new programs. Possibly, our resources are limited, despite his rhetoric being unlimited.

American and Chinese Exports

For the 12 months through June, the United States' exports grew by 23%, while those of China grew by 17% in terms of dollars. There are predictions that China's export growth will disappear by the end of the year and that its exports will shrink next year.

America's exports to China are up by 20% in the first half of this year compared to the first half of last year. Our imports from China are up only 4% on the same basis.

China's domestic spending is up by 33% in dollar terms in the past year, while America's real domestic demand has been level. Growth of the American economy has been entirely due to increased exports. U. S. retail sales fell in July for the first time in months, but due to net exports, our real GDP did not fall in every quarter since the 3rd quarter of 2007.

Elsewhere: Japan's GDP fell at an annual rate of 2.4% in the 2nd quarter. The growth of the European Market has ended. Japan and Europe account for 20% of America's exports, so this will hurt. However, emerging economies buy more than half of our exports! Brazil, Russia, India, and China are expected to grow by more than 9% next year, so our exports to those countries should be high.

Our Overblown Expectations of Presidents

Whenever there is a problem in America, we expect our President to identify it and to mobilize us all in a crusade to solve the problem. We expect our President to feed and nurture our very souls. We count on him to inspire us to greatness and to show how we can sacrifice our individual selves to the greater good. We want him to be our Messiah, or at least our head priest, as well as our Commander-in-Chief and the chief administrator of the Executive Branch of the Federal Government. Frankly, there is nothing which is to escape his attention and his focus. This, in effect, means he had better be omniscient and all-powerful. Then, we try to give him too much power so he can do what we expect, while at the same time never giving him enough power to do what we expect.

This is ridiculous. No one is up to this job and anyone who pretends to be is a fraud. I have argued against this tendency to expect too much many times. To give a president so much power and to expect so much is to deprive ourselves of self-management and to lower our expectations of ourselves. Rather than being independent thinkers and valuers, we become supplicants and the wounded.

Gene Healy, a vice president of the Cato Institute, wrote a fine article on this topic which appeared in The Christian Science Monitor on 28 August 2008.

Dissecting DNC Speeches

A long discussion of Senator Joe Biden's speech before the Democratic National Convention precedes this post. In the television commentaries, the commentators only discussed the effect on the campaign of the speech and its effects upon other Democrats to fire them up. There was no careful evaluation of the listed policies of a new Democrat President. This must be done. These must be thought about carefully, not just viewed as "Oh, wouldn't it be nice if the US were energy independent in 10 years." Or, "Wouldn't it be nice if every family paid out less in healthcare costs." Or, "Wouldn't it be nice is we controlled the climate." These issues are too important not to analyze them rationally. We have to make an effort and think about them.

I intend to similarly analyze Barack Obama's acceptance speech, which includes a similar laundry list of imagined problems with imagined solutions. He is a great speaker, but his ideas are very weak.

28 August 2008

Joe Biden Says American Dream Slipping Away

Senator Joe Biden's speech before the Democratic National Convention last night was unremittingly depressing. He says, the "American Dream feels as if it is slowly slipping away." He claims that economic progress during the Bush years was abysmal. Meanwhile, as I pointed out in my post of 17 July, the real record is that earnings have increased by 17% in the last 8 years. Because of the high marginal tax rates people pay on additional income and because government is costing us more and more as evidenced by the addition of 4 days to the date of freedom from the cost of government which is now 16 July, people are taking more of their earnings in the form of untaxed benefits. Of course, having done this, the more static take home pay does have more trouble dealing with rising gasoline costs and food costs. Of course, the Democrats have no realistic plans to address those problems! In fact, they intend to increase the cost of gasoline and other fuels, the cost of many goods by restricting free trade, and the cost of government.

Biden trotted out an ever reliable jab at the oil companies and their large profits, despite the fact that they are only large because the industry is large. The rate of return on investment or the profits as a percent of sales is actually below the manufacturing industries average! But, it suits their demagogic purposes to only speak of the dollar size of the profit and to rely on the ignorance of the people for them to draw foolish conclusions to demonize the oil companies. Of course, there is really nothing wrong with them operating their businesses to make larger profits, if they can do so without invoking government subsidies. But as it is, their profits are a smaller fraction of the cost of a gallon of gasoline by far than are government levied taxes. Perhaps we should really be looking harder at the tax take than the profit take.

He also complained that McCain's reduction of corporate taxes was another $4 billion of tax breaks for the oil companies. Of course, he did not mention that this was not a tax reduction aimed only at oil companies, but a broad-based tax reduction to allow corporations to compete with the corporations of most other countries in this global economy, most of which now have a lower tax rate than U.S. corporations. Besides, if oil companies have lower taxes, they can hire more people and they can drill for more oil. But, Democrats do not want them to hire more people and drill for oil, so it is good for them to attack the oil companies for their profits as an excuse to continue draconian restrictions on drilling for oil in America.

He said McCain voted 19 times against raising the minimum wage rate. Great, that makes McCain the real champion of all the poorly educated young people who would have lost their jobs or would never have gotten their first job, if the minimum wage rate had been too high for a business to be able to hire a low productivity worker. The Democrats clearly prefer to pretend to be the champion of the underdog, while they are actually putting him out of work. The real job-killing effect of the minimum wage rate laws is well-established in history, economics, and in business. This is not rocket science. The Democrats are clearly without scruples here.

He claimed we should not be spending U.S. money on the war in Iraq when Iraq has a surplus of $80 billion. Iraq would have spent that money on needs of its people, except that they cannot yet agree among themselves on how to do that. The Kurds, Sunnis, and Shiites are all fighting for that money. The U. S. will not let them spend it until they come to an agreement. What is more, that money will not likely be spent instead of the current U.S. spending, but will likely complement it. In addition, Iraq could make much more money from its oil, except Democrat Senators have opposed their letting contracts to U. S. oil companies. We would not want those oil companies to make more money so they can afford to drill for more oil or pay dividends to American shareholders, now would we? This really is another case of Democrat demagoguery.

Obama's alternative energy plan, which is very mysterious, will create 5 million new jobs. Well, I doubt it. Obama wants to spend $150,000,000,000 in ten years on alternative energy schemes so we will, he says, not need Mideast oil in 10 years. Apparently, this $150 billion will create the 5 million new jobs at a cost of $30,000 per job. Hmmm....maybe. But, each $30,000 removed from the economy in taxes to provide this alternative energy subsidy money will also kill a job. So where is the gain? If his gamble on the use of all this money does not result in subsidy-free and self-sustaining jobs in 10 years, then the destruction of other jobs through added taxes will continue and/or the created jobs will be terminated. This is just another case of government trying to pick losers and winners in the marketplace. We know how well government does that. This claim to produce 5 million new jobs is again a fraud dependent upon an unthinking public. Besides, there is no way we will not need Mideast oil still in 10 years. This is a whopping bit of blarney. No, that is too kind. This is a clear lie.

Biden said Obama will decrease the cost of healthcare for the average family by $2500/year. How? We all know that Medicare and Medicaid were supposed to cost a tiny fraction of what they now cost. We know that those systems have very little interest in reducing their costs, in reducing fraud, and in preventing waste. If you believe for a moment that Obama will decrease healthcare costs per family by $2500/year, you are an easy target for a con man. You had better closely examine his plan, if he ever gets around to telling us what it is! I suspect he has visions of turning water into wine and creating fish and bread with words. I am sure he is not going to save a family this much money. Perhaps he thinks he will simply tax the rich and use that money to pay for healthcare for the average family. If he does, the economy will have slower growth and the average family will lose more than $2500/year very soon in added income they might have had in a faster growing economy.

Obama will put more cops on the streets. Just what we need, the federal government playing a bigger role in local police law enforcement. No thanks. Leave this to the locals who can decide how much they want to spend. There is no reason why the people of Buffalo, Oklahoma should be paying taxes to put more cops on the streets in wealthy Boston or New York City.

Obama will put security back in Social Security. This just means that Obama will continue the giant Ponzi scheme and increase taxes to cover the shortfall which will be developing rapidly as Baby Boomers retire. Sure, let's increase the taxes on fewer and fewer workers so we can transfer their income to the group which has the most wealth, the older people. Of course, these are older people who will enjoy good health for many more years in most cases and be supported in luxury ease and indolence by hardworking younger people. The younger people could be putting their money into investments that would give them a great and secure retirement some day, but instead we will mandate that they get no return on their money. Some security we will offer them. Social Security as the Democrats see it is security for the wealthier older generations and insecurity for the poorer younger generations.

Obama will provide equal pay for women. Whooppee! So women are able to do equal work, but they are unable to get equal pay? If that is so, then it seems dubious that they are able to do equal work. If you cannot drive a hard bargain, if you do not have the self-confidence to get what you are worth, then you surely would have other job shortcomings. The Democrats like to say women get 30% less for equal work. This comes from some really poor studies. Better studies have found the differential much less. There is reason to doubt that the better studies have even figured all the differences out yet. In any case, it is terrifying to think of some government agent coming into a workplace and decreeing that Joan and John are doing the same job equally well after interviewing each for 15 minutes and then dictating to the employer what they will be paid. Can you imagine the chaos? It would really be tempting for the employer to decide that he would only hire men or only hire women to avoid this. I suppose that any firm hiring only men would be prosecuted for discrimination, so all firms would have to hire only women to avoid that.

Bush failed to deal with the emergence of Russia, China, and India as great powers. Well, as I recall, Russia is the much less powerful result of the breakup of the USSR. That occurred under the Republican presidencies and based in large part on policies the Democrats resisted. The more recent belligerence of Russia is based upon its surge in oil income as the price of oil has gone up. The reason for that is increasing world demand which national oil companies, who have almost all the oil, do not wish to increase production sufficiently for. What is more, the Democrat Congress has not allowed U.S. oil companies to drill in many of our most promising areas and they have acted to reduce the oil exported from Iraq, which has the third largest known oil reserves of any country and much undiscovered oil. So, the real reason Russia can be so aggressive is fueled by the anti-fuel policies of the Democrats, who also do not encourage our military with their support. It is rather foolish to think that anyone is going to control China. China has had a hurt national pride for centuries of interactions with the West and it is going to take some time to work out our differences. Our commercial operations with them may help to generate mutual respect in time, though they also provide China with more wealth and knowledge to devote to building their military. India on the other hand has been turning more to the U.S. as they worry about Pakistan and China. We are doing much more business with them and we share a language. I have seen no reason to believe the Democrats will work better with Russia, China, and India than has Bush.

Biden says the Democrats will provide secure energy, food, and water. Apparently, the pie in the sky idea of $150 billion in subsidies for 10 years is the idea for supplying the secure energy. We have no idea yet of the idea for supplying secure food, but it sounds like it would go down some protectionist path to refuse entry of imported food and refuse to allow some food exports. This will only result in higher food prices and less food selection. Dems may like this, since it would allow them to pretend to come marching to the defense of the newly food-deprived and create a new government food program for the poor. I have still less clue what the Democrats are promising with respect to water. Perhaps they will redistribute the limited water in the west in some way. This line sure does seem to suggest that the Democrats are promising to solve every real and imagined problem, without regard to any need to focus our still finite resources. There will be many broken promises if they win the Presidency.

The Dems will prevent Climate Change. This is pure pretense. The claim that anthropomorphic global warming has occurred is unproven. Worse, it is already clear that it is ridiculous. This topic has been addressed many times in this blog. It is clear that natural effects are very dominant in determining the earth's temperature and climate. Man has a small effect around populated areas, which causes a heat island effect, which causes the land temperature record to be wrongly biased upward. Upper atmosphere and ocean temperatures are clearly not showing the temperature increases they would if CO2 greenhouse warming were occurring. Increased radiation from the sun was clearly behind most of the warming of the 1980s and 1990s. The other planets, without benefit of man-made CO2 emissions, also warmed then. Since 1998, there has been no warming, yet the CO2 in the atmosphere has increased. There is no claimed CO2 emission effect causing warming which we can observe scientifically. So, in the name of this fictional man-made Global Warming issue, the Dems want to grab control of everyone's use of energy and cripple our freedom to travel, to transport goods and provide services, and to control manufacturing processes. This is a socialist's dream. Let's keep it an unrealized dream!

He then said the Democrats will hold Russia accountable. How? So far the Democrats have been very slow to respond to the Russian invasion of Georgia and have had little to say about the recent threats against Poland and Ukraine. It seems clear to me that if you want to hold Russia accountable, you go with John McCain. There are many accounts of socialists on the web apologizing for Russian actions already. The left, as usual, is divided on any effort to confront socialist powers.

Then there was a quick reference to removing troops from Iraq. The extent to which it is now possible to look to being able to do that is the extent to which the Surge in Iraq worked and the task has been so diminished that the now better trained and better committed Iraqis can hope to handle the ongoing military challenges in Iraq. But, some American forces will likely remain in support and it is unlikely that Obama will understand what number will be needed. I am always puzzled by the Democrat claims of being stern guardians of the national security when Clinton did nothing about the first attack on the World Trade Center, nothing about the attack on our two embassies in East Africa, and nothing about the attack on the USS Cole. Then there was the Carter debacle in Iran. Before that, there was the refusal to supply and support South Vietnam two years after American troops were pulled out. The Dems are very weak as defenders of our allies and as supporters of our military capabilities. There is very little credibility here.

In short, Biden's speech was a grab bag of assorted old and standard socialist "problems" with a wild flurry of promises to solve them. Many of the "problems" are imaginary or the likely "solution" is imaginary. There was certainly no reason to think anything promised represents anything but business as usual for the Democrats. They have controlled the Senate and the House for some time now and they have solved nothing. The American people view the House and Senate in even more unfavorable terms than they do President Bush. Yet, they are offered a 30-year veteran of the Senate in Biden and a newbie from Illinois, who accomplished nothing in the Illinois Senate of note and much less in the U. S. Senate, as the agents of meaningful change. Hogwash!

We shall see just how gullible Americans are. We know that many are: they voted in large numbers for the condescending Gore with his crazy Global Warming mantra and for the traitor from the Vietnam era, Hanoi John. Perhaps enough can be gulled into votes for the silver-tongued socialist of the current campaign that he will become our master.

Supplying Eastern Europe with Anti-tank and Antiaircraft Weapons

In view of the brutal and uncalled for Russian attack upon Georgia and the many threats, including nuclear warfare by Russian generals, against Poland, it is important that we should help those countries with borders with Russia or very near those borders to improve their defense capabilities. In my comment on 11 August to Robert Bidinotto's post on the invasion of Georgia of that date called "Russian aggression meets "anticipatory capitulation"", I recommended that we supply Georgia with anti-tank and antiaircraft weapons systems as a part of our response. Now, Senators Lindsey Graham and Joe Lieberman have made the same recommendation in a Wall Street Journal OpEd on 26 August. Max Boot on 25 August called for our helping to arm the ex-Warsaw Pact and border countries with anti-tank and antiaircraft weapons in this Wall Street Journal OpEd.

Such largely defensive and relatively inexpensive weapon systems would make future Russian invasions a much more expensive proposition for Russia.

27 August 2008

Russians Threaten to Take Military Action Against Poland

The Russians today threatened to take military action against Poland if the United States proceeded to install the anti-missile defense system there intended to intercept a few missiles from an attack by a small power such as Iran. Poland agreed to the installation of the system within days after Russia invaded Georgia.

Poland is a NATO treaty member and is protected as such from invasion by all NATO countries. This requires the United States of America to defend Poland from a Russian invasion, which the Russians must understand. It is not believed that the Russians will invade Poland, but they are likely to make a response in Belorus or in Kaliningrad Oblast, both of which border Poland. Belorus is closely allied with Russia and Kaliningrad Oblast is a small area retained by Russia on the Baltic Sea which is surrounded by Poland and Lithuania.

We must not make a weak response to Russia. We must be stout in our determination to move forward with the missile defense system in Poland. We should expect NATO to be equally stout in not allowing Russia to intimidate us or Poland.

Democrats Create Unemployment Before Election

As preparation for the upcoming Presidential election, the Democrats have arranged for an increase in the unemployment rate. This allows them to claim that under President Bush the economy has gone sour and unemployment has gone up. For almost the entirety of President Bush's presidency, unemployment has been remarkably low. This would have been awkward for the Democrats going into the election. They fixed the problem by increasing the minimum wage! The unemployment rate has now risen to 5.7%.

Compared to the unemployment rates in the more socialist countries of Europe, this is a very low unemployment rate still. But the average unemployment rate in 2006 was 4.6% and it was again 4.6% in 2007. Such rates were very low and the July rate of 5.7% seems high in comparison.

In 2007, the minimum wage rate was $5.15/hour. The minimum wage law passed by the Democratic Congress has already raised the minimum wage rate twice, with the rate most recently raised in July 2008 to $6.55/hour. It will rise again to $7.25/hour in January 2009. Not surprisingly, teenage unemployment has risen by 2.2% to a rate of 20.3%. The rate for workers over 20 years old has increased only very slightly and it has actually fallen for women over 20. Ed Feulner, president of the Heritage Foundation published a commentary in the Washington Times on 26 August 2008 on this subject entitled "Rolling back government."

As I have noted before, raising the minimum wage rate is a sure way to cause employers to hire fewer young people, especially those with the worst educations and the worst job ethics. These potential workers are far more likely than most to come from families whom the Democrats pose as the champions for. These young workers desperately need the experience of holding a job and obtaining on-the-job training, but the Democrats deny that opportunity to them by insisting on raising the minimum wage rate by law. Over and over they have put under-educated and often under-parented young people out of work or made it extremely difficult for them to find work. These Democrats claim to be raising the minimum wage rate for everyone's good, but it is historically and thinkably clear that what they really do is put people out of work. They are busy preventing young people from getting the on-the-job training that they desperately need.

Why do they do this? Because it is an easy way to pose as do-gooders, since few people stop to think that you cannot evade the requirement that the worker must be able to earn the money he is to be paid. The employing company must make enough more money as a result of the hire to be able to afford the worker's pay, benefits, all payroll taxes and insurance, all capital costs, and all other overhead costs. Rules of supply and demand rule even if Congress tries to intervene. This is inescapably clear by now, yet Congress persists in a minimum wage rate fraud.

There is a second reason. Most people have an exaggerated idea that whatever happens under a president's administration is due to his actions, when outside of defense and foreign policy, it is really usually the Congress which has more impact on what happened. Sometimes, neither Congress nor the President were major causal factors, but the public tends to suppose that they were. Congress plays upon the idea that the President is responsible for all things economic by causing mischief when they want a poor economy to make it easier for them to get a Democrat elected President. Causing unemployment to go up by increasing the minimum wage prior to an election works great for this purpose.

Be wary of a lack of scruples in most politicians. People in this era of big government are too often drawn to politics by a desire to enjoy the powers of ruling and the ability to do so for their own gain. But above all, do not underestimate the unscrupulous nature of Democrat politicians.

Hilary's 47 Million Uninsured Americans Demagoguery

In her speech before the Democratic Party Convention last night, Hilary Clinton made the claim that 47 million Americans are without health insurance, which is not true as I have previously explained here in a detailed breakdown of the numbers and then discussed with another post on 23 July 2008 here. Of the 47 million, 10.2 million are neither U.S. citizens nor legal residents. Of course, if the rest were desperately poor Americans who could not afford health insurance, which is what we are supposed to think is the case for all 47 million, we would still have many Americans without health insurance. However, even such a number would not justify the use of government force to make everyone forfeit their options on health insurance and comply with a government health insurance mandate.

In fact, only 19.0 million Americans without health care insurance have household incomes of less than $50,000 per year! Of these, some would have health care, but for the fact they are briefly between job changes. These 19 million Americans are also not without health care, since many qualify for Medicaid or can receive treatment at hospital emergency rooms. In some cases they can go to clinics, such as those Michelle Obama helped set up for the University of Chicago Medical Center. Strange that Michelle Obama has not corrected her husband and Hilary on their use of the 47 million uninsured to imply that 47 million Americans do not get health care!

Hilary Clinton, Barack Obama, and others using the 47 million uninsured Americans as a reason for imposing a government system of health insurance upon Americans is clearly demogoguery. They both have long had Senate and campaign staffs to look into this number for them and both are supposed to be highly intelligent people educated at excellent universities. Yet, they use this mythical number to mislead the American people so that they can build a highly socialist society. They knowingly are defrauding the American people and virtually no one is calling them on this fraud. It makes it very clear that they love socialism far more than they love the truth. This is a common trait for socialists and a necessary one, since socialism has so demonstrably failed as a path for good government.

The only proper goal for government is to protect the inalienable rights of the individual to life, liberty, and the pursuit of happiness. Free individuals are free to form voluntary organizations to help any such unfortunate people as they wish who do not have health care insurance. This is the route those who call for government coercion should be taking, but they will not put their money where their mouths are. Meanwhile, those who do not believe in socialism are more likely to voluntarily contribute to charities to take care of those in need. If helping those in need is in any way virtuous, that virtue must be attributed to those who help voluntarily, not to those who wish to use force to accomplish that end. There is no virtue in socialism no matter how great the pretense.

26 August 2008

Sen. Joe Biden Opposes Inalienable Rights

David Boaz of the CATO Institute wrote a brief article on Senator Joe Biden's angry demonstration against the idea that man has inalienable rights and against property rights during the Senate Judiciary Committee deliberations on whether to approve Justice Clarence Thomas' appointment to the Supreme Court. Biden was the chairman of the Judiciary Committee and made it very clear that he does not think the Declaration of Independence has legal standing. He said it got it entirely wrong that each individual has the right to life, liberty, and the pursuit of happiness except insofar as the legislature chooses to say they do. The Constitution does not secure individual inalienable rights in his viewpoint either.

In his and other socialists' view, man exists to serve the state and has no individual rights. Man may or may not be granted privileges by the government, from which all things flow. For the state is jealous of all other sources of human empowerment, whether the Nature of Man, the State of Nature, or God. Senator Biden and Senator Obama are brothers in the socialist brotherhood.

25 August 2008

Continuing the Social Security Mess

The second to the last post reviewed some aspects of the trouble the Social Security system is in. The likely path to solving the problems is unclear, but I suspect that little will be done in the near future to reduce the benefits of social security and more will be done to increase taxes to keep it afloat. There are too many retirees now who remember The Great Depression and/or soaked up its mentally of personal hopelessness and entitlement. There is also the coming onslaught of Baby Boomer retirees who have many, many votes and are keenly interested in ensuring that Social Security will be there for them as they are about to retire. Many of them have otherwise poorly prepared for retirement. So, politically, doing the right things to fix Social Security is very difficult. The Democrats, and for that matter politicians in general, are not wont to do difficult things. In any case, the Democrats believe their reason for being is programs like Social Security, so they cannot give it up. Meanwhile, fixing Social Security will become more and more painful and the tax cost to the younger generations will mount.

In time, as more of the Baby Boomers die and as more young people enter the overtaxed labor market, pressures to reduce Social Security benefits and to raise the retirement age will build. The final outcome will be more severe cuts in the value of benefits than would be the case if something was done to reform it early. The younger generations will press for more opportunities to save their own money for their retirement. They will count less and less on Social Security and it will more and more be seen as a pathetic investment compared to what they can do with their personal investment plans. Interest in Social Security will weaken still further and the benefits will be cut still further. It probably will not vanish, but most people will see it as only a last safety net for the truly foolish who will not invest and save for their retirement or have done so very badly. The tax burden for Social Security will finally begin to fall, though this is likely to be several decades away.

Social Security always depended heavily on having more new taxpayers entering the system than there were people going into retirement. It also depended upon people not living a dozen years or more after retiring. These necessary conditions are now about to be badly violated, so the system will soon be hemorrhaging cash. The voting demographics being what they are, the politicians will remain unwilling to diminish Social Securities benefits for as long as they can get away with it. I expect they may be able to delay dealing in a major way with the problem until 2027, when Social Security has to actually begin drawing down its assets. That is when the government will see absolute decreases in the amount of deficit spending debt that will be financed by social security, requiring substantial increases in general taxes or major cutbacks in non-Social Security programs. Meanwhile, the rapid increases in Medicare costs are going to be an even bigger tax problem for the government. Because of it, there really will be no choice but to decrease Social Security benefits by then. When there is no choice, the politicians will begin to face up to the problem. Maybe.

Column published at The Atlasphere

A column entitled "The Economics of American Oil" by me has been published at The Atlasphere. The column is based on the post entitled "68 million acres of non-producing oil leases" of 15 August 2008. The column has generated a fair number of comments there.

I want to thank Joshua Zader for his invitation to publish it there and for his editorial help.

22 August 2008

Fixing the Social Security Mess

The task of fixing Social Security remains a low priority in Washington. Apparently, this problem will not be addressed anytime soon. The longer we wait, the more painful the solution for the American people, but the less pain for the politicians in power now. That government is all about politicians maximizing their power and minimizing their pain should hardly be a surprise to any rational observer. If government were rational, it would identify real problems and fix them in the most rational way, but we have government by evasion most of the time on most of the issues. The operative corollary is that government can fool most of the people most of the time. Sad, but apparently very true.

So what is the problem with Social Security? For decades the Social Security payroll tax has brought in more money than was paid out in Social Security benefits and administrative expenses. But, those doggone people just keep on living longer and longer after retiring and sometimes Americans are born in pulses. One of the biggest such pulses gave rise to the Baby Boomers, who are about to start retiring in large numbers. OK, so all we have to do is trot out the money they paid into the Social Security Fund and slowly give it back to them over the years, right? Well, no. The government has already spent that money for all sorts of other purposes! So, to pay the money to the Baby Boomers that they contributed to the system simply means that increased taxes have to be laid upon the smaller numbers of workers in the succeeding generations.

The American Academy of Actuaries put out an issue brief called "An Actuarial Perspective on the 2008 Social Security Trustee's Report", which is full of interesting points. Some key dates are:
  • In 2017, benefits and administrative expenses are expected to exceed tax income. Initially current interest income on trust fund assets will be enough to cover the difference.
  • In 2027, benefits and administrative expenses are expected to exceed tax income and interest on assets, requiring the fund to begin drawing down the assets.
  • In 2041, the trust fund assets are expected to be completely gone.
It needs to be noted that the trust assets are federal bonds, which additional taxes will have to repay to the Social Security fund. When in 2041, the fund's assets go to zero, the current tax income will only allow the payment of benefits at a 78% level of those promised to retirees.

At the present time, the payroll tax rate is 12.40% and an increase in the rate to 14.10% would provide for long-range actuarial balance. Alternatively, a cut in benefits of 11.5% for all current and future recipients right now would put the program into balance. Mind you, this is a very different thing than saying that the Social Security program could ever be called a good retirement investment, which it is not. It just means that it would meet its very unchallenging (as an investment) commitments.

The cost of Social Security in benefits and administrative expenses expressed in terms of the GDP is an important measure of its cost to the economy. In 2008, it is 4.3%, but it will be much higher at 6.1% in 2035 and then is expected to fall to 5.8% in 2082. The 6.1% figure will be quite a drag on the economy.

The figures discussed above still do not make it fully clear how this will impact our lives. Social Security fund income relative to outgo will decline beginning in 2011. The government, which has grown very accustomed to borrowing the excess income of Social Security to fund its deficits, will have less and less money to borrow from that previously very dependable source of funding. In 2017, the benefit payments and expenses of Social Security will exceed the tax revenues of the fund, so the government will actually have to start paying back the huge sums of money it has borrowed from the Social Security fund. For government, the party is over in 2017! For taxpayers, general taxes will have to go up, or the government will have to cut other programs and expenditures, which it hates to do. But, some government teeth will have to be pulled.

Obama says he will address the problem by adding a tax of 2 to 4% on people with incomes above $250,000 with the tax hike scheduled to start in 10 years. This would now generate all of about $396 billion over the next 10 years, which is a small part of the $7 trillion extra dollars the government will have to pay out in benefits and administrative costs plus the borrowed money it has to repay over the next 75 years.

Of course, these burdens can be reduced by such approaches as delaying the retirement age. It used to be 65, but now it is scheduled to be 66 for some people and 67 years old for others. Since people are living much longer and are much healthier in their late 60s now, the retirement age should be further extended. I plan to work to at least 75 full time and part time beyond that. Others should do the same.

The cost of living formula for calculating benefit increases due to inflation or personal income increases can be changed. There has been considerable debate about such formulas.

On the other hand, taxes can be increased. The tax rate can be increased, or the total income on which taxes are paid might be increased above the $102,000 limit now used, or the Social Security income of retirees could be taxed.

I much prefer approaches with reductions in benefits rather than new taxes. Other than taxing Social Security income, the increased taxes unfairly fall upon the younger generations to make life easier on the older generation, which is always the wealthiest generation. Besides, after decades of supporting this Social Security Ponzi scheme, the Baby Boomers do not deserve to live comfortably on Social Security eating off the fat of the land. Make them all work longer!

If anyone can ever figure out how to defeat their political power anyway. That being what it is, it is much more probable that taxes will go up more than benefits will be cut. The elderly will continue to rob the young.

21 August 2008

Iraqi Oil Production

One of my criticisms of American policy in Iraq has been that we have placed too little emphasis on getting oil production up to levels high enough to provide jobs for many Iraqis and to help bring down the world price of oil. Admittedly, increasing Iraqi oil production is not an easy goal.

The principal reasons are all political. First, Iraq nationalized the production of oil in 1971 and Iraqis are easily upset at any possibility that foreigners might own or control a part of the oil in Iraq. So, oil production in Iraq is the sole responsibility of Iraq National Oil Company. INOC does not invest much in new oil infrastructure and has not done so for a very long time. It is immensely corrupt and the more competent employees left its employ long ago. Because it is run for the benefit of politicians, rather than for making a profit, its mandates are largely self-destructive.

Second, there are immense security problems. The terrorists have made a practice of attacking oil field and pipeline infrastructure. Recent increases in production from last year's average of 2 million barrels per day to 2.4 million barrels per day in the 2nd quarter this year are due to increased security in Iraq. For instance, the Kirkuk-Baiji pipeline has been given much improved protection, resulting in 91 million additional barrels of oil being exported in the 11 months before May. The 2.4 million barrels per day of production now is still much less than the 3 million barrels per day produced in October 2001 even under the U.N. embargo. Hopes to further increase oil export are crippled by a lack of oil transportation infrastructure.

The third problem is that the various regions of Iraq would like to have a greater hand in the production and earnings from the oil fields in their areas. There has been much political squabbling between the national government and the regional governments and between the various tribal, religious, and ethnic groups. The Bush administration has discouraged oil contracts until a political consensus is reached in Iraq on how the oil wealth will be used.

This really is too bad, because Iraq could otherwise easily produce much more oil than it has. After Saudi Arabia and Iran, it has more known oil than any other country, yet it is only 13th in production. Russia has only 80 billion barrels of oil reserves, but it produces 10 million barrels of oil per day. Iraq has 115 billion barrels of oil reserves, despite being barely explored and developed in terms of its potential oil reserves. Only 27 of about 80 oil fields have ever produced oil. Whereas 1 million oil wells have been drilled in Texas, only about 2,300 wells have ever been drilled in Iraq. Geologically, Iraq is expected to have many more oil fields than have been proven to date. The known fields are close to the surface and the rock is highly porous, so the oil is very inexpensive to produce. Increased production from the known, developed fields costs only about $1-3 per barrel! The potential to bring down the world price of oil is substantial.

So, Iraq fails to produce much more oil than it does due to purely stupid politics. As if the foolishness of Iraqi politics were not enough, four American Democrat senators have asked for an investigation into how Iraq has let contracts to seek some help in increasing production from American oil companies. The Ohio congressman and socialist populist Dennis Kucinich has proposed a law to prevent American firms from receiving oil contracts in Iraq at all! Stupid politics is not unique to Iraq.

15 August 2008

68 million acres of non-producing oil leases

One of the most common arguments tossed at voters as the reason why Congress should continue to disallow the production and exploration of oil and gas on federal lands and off-shore areas is that the oil companies already have 68 million acres of non-producing oil leases. This number seems to present implications to the uninformed similar to the statement that 47 million Americans are uninsured. It begs an examination by anyone of intelligence or mental diligence.

I was particularly suspicious of the implications because I worked on two seismic exploration crews, in a Red River oilfield, and for a pipeline company during my summers in college. I had retained an interest in the oil industry and read about it in business magazines and other publications over the years since.

Congress does not allow drilling in 60% of onshore federal oil and gas prospects or in 85% of the Outer Continental Shelf prospects, according to a commentary by Newt Gingrich and Roy Innis that appeared on 13 August 2008 in the Washington Times. Some Democrats have pointed out that the oil companies are drilling record numbers of holes and more and more of them are coming up dry, so why let them drill in these off-limits areas? We are supposed to think that the oil companies would then just drill dry holes in all of the opened new areas also. In fact, a wee bit of thought might suggest that the oil companies have been working very hard against uphill odds to find every little bucket of oil they can in highly explored areas, when they should be allowed to find and develop larger and more economical oil and gas in those areas that have been kept off-limits. In some cases, we actually know that there is probably a great deal of oil in some of those now off-limit locations. They certainly should be thoroughly explored.

Now, if oil companies have been scouring those other areas they can drill in so hard, why wouldn't they do the same in the 68 million acres of non-productive oil leases? First, when an oil company is offered a chance to bid for an oil lease, the lands are very often not even close to adequately explored for oil. Companies have to make educated guesses on less than adequate information. If they win the oil lease, they have to use seismic, magnetic, and other techniques to map out the geological formations underground. Then they will drill a $1 to $5 million well if the land is on-shore or a $25 to $100 million well if in deep water, which they will only do if the geological formations look really favorable. Gingrich and Innis note that one in three on-shore and one in 5 deep water exploratory wells give promising results. For those few which are promising, more work is required before oil is produced. The extent of the field has to be determined with more wells being drilled. Production facilities must be built, brought to the site, and installed. While all of this is going on, the seismic and drilling operations are protested and legal actions launched to stop the work. While these obstructionist tactics continue, the oil company is paying leasing fees and commonly incurring many other expenses owing to the delays.

Is it any wonder that 86 million acres of oil leases are non-producing. Much of that land has no economically recoverable oil. Some of it is still in the long process of exploration and development. The oil companies who hope to develop an oil field face many inscrutable risks. There may be oil, but there may not be enough of it. The oil may be loaded with sulfur, rather than the more valuable sweet crude oil. Huge storms may damage the facilities they are building in off-shore sites. A court may order them to stop working, causing them to lose everything already invested. A field that is judged economical when oil is selling at over $100 per barrel may not be if the future price of oil falls below that. If Saudi Arabia ramps up its production for a few years, the oil company developing the new field might lose tons of money. Or, Congress might choose to slap a so-called windfall profits tax on the oil companies. If so, the money invested in the field may be lost or at least become a bad investment. Congress can also change the tax laws in other respects at any time and that may upset the oil companies' calculations on what oil fields can justify their investment. Prudence dictates that they do a thorough job of exploring any oil field before committing huge sums of further money to bring the field to production.

Gingrich and Innis give an example. Shell Oil and partners leased an area 200 miles off the Texas coast with 7,800 feet of water over it. For 5 years they evaluated the area and then drilled several dry holes, before hitting an oil pool in 2002. At a cost of $100,000,000 each, three appraisal wells were drilled and confirmed that the field was a major find. In 2006, a huge floating platform and drilling system was ordered and production is expected in 2010. This lease is classified as non-producing, despite the fact the oil companies have spent more than $3 billion on it. The Democrats make them appear to be inactive on this oil lease. Now, is that disgusting or what?

The Democrats who oppose Americans having reasonably priced and available energy are masters of demagoguery. They play fast and furious upon people's ignorance and they are very good at planting false suggestions. They do this with the 47 million Americans uninsured and they are doing this with the 68 million acres of non-producing oil leases. We must not let them play us for fools! Fight back and demand that they respect your intelligence. Tell them that you expect them to stop lying games and get out of the way and off the backs of the producers in America!

09 August 2008

Russian Expansionist Efforts

For centuries, Russia has sought to control most of Asia and Eastern Europe. Russia has also sought control of the Black Sea and access to the Indian Ocean. The collapse of the Soviet Union in 1991 resulted in many parts of the USSR becoming independent countries. These newly independent states are Ukraine, Latvia, Estonia, Lithuania, Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. Russia has been trying to regain control of many of these states.

One of the mechanisms for claiming a cause for taking many of them over again was one used by Adolf Hitler prior to and at the start of World War II. Germans had long been spread all over Eastern Europe. Many professionals and many successful businessmen in the cities and major towns of Eastern Europe were of the German nationality. Hitler would claim that the government of one country or another in Eastern Europe was abusing these Germans and then use that as an excuse to threaten to invade the country if he was not given what he wanted. He used this to put pressure on Czechoslovakia to give up the Sudetenland, a large portion of the western part of Czechoslovakia. Czechoslovakia had to give it up when its allies, Great Britain and France, made a deal with Hitler in an infamous conference in Munich. Hitler used the fact that many Germans were in the city of Danzig in Poland to put pressure on Poland. When Poland would not give up Danzig, Hitler, working with Stalin, invaded Poland and WWII started as France and Britain finally declared war on Germany.

When the USSR controlled the former Soviet states which are now independent, it moved many of their people to remote areas such as Siberia and installed many Russians in high positions in desirable areas in those formerly independent countries. Now, there are Russians still in many of the former Soviet states, though they were not native to those areas. One of the Russian tactics to put pressure on these countries now is to claim abuse of the Russians in those countries. This has occurred in each of the Baltic States and to Ukraine, for instance. Russia and Belarus are now in a loose cooperative association, which Putin heads.

The independent state of Georgia, has become an ally of the United States and has contributed troops to the fighting in both Iraq and Afghanistan. The country has a population of 4.6 million and is separated from Russia by the Caucasus Mountains. There are many small ethnic groups in the Caucasian Mountains and some are dissatisfied with the government of Georgia and some are dissatisfied with the Russians. The Russians have given those within the border of Georgia who are dissatisfied Russian passports. There are two regions with many dissatisfied and rebelling people, one with a population of about 50,000 and another with a population of about 200,000. South Ossetia is the smaller region and the Russians have been supporting their efforts to breakaway from Georgia. Here is an article on the issues there and here is one describing the Russian invasion of Georgia.

The Russians have sent in 150 tanks in this invasion of an ally of the United States which has been seeking entry into NATO. The Russians are very opposed to Georgia being an ally of the United States and a member of NATO. As always, the socialist leadership of Russia is eager to learn whatever they can from such fascist socialists as Hitler, who was also eager to learn from Lenin and Stalin. The communists and the fascists have always demonstrated that they have much in common, even when their rivalries for socialist power led them into conflict.

It is wise to remember that American socialists have a long tradition which evolved from an admiration of such socialist leaders as Marx, Lenin, Mussolini, Hitler, Stalin, Mao, and many others. As many of these men were very paternalistic and ruthless leaders, so are many of our American socialists, though they put a smiley face on their socialist agenda most of the time. Nonetheless, they all believe that power grows out of the mouth of a gun and are eager to use those guns to force others to their will. This is the nature of socialism, whether the version holds power over property while leaving nominal ownership in private hands most of the time as in fascism or whether property is owned by the state as in communism. Note that Russia today is a mixture of communism and fascism. The United States is still primarily capitalist, but with a very large measure of fascism, and a smaller measure of communism. The widespread use of income redistribution and heavy hand of regulation is fascism at work, while the U.S. postal system, the U.S. park system, and the public school systems are all instances of communism.

06 August 2008

Gasoline Taxes by State

The Democrats in Congress love to complain about the huge profits being made by the oil companies, who are making a profit of about 8% on their total revenues. This is not a particularly good rate of return for oil company investors. Many industries provide a better profit margin. But Barack Obama calls these windfall profits and wants to confiscate them and turn them over to people with low incomes to help pay for their home heating costs.

Now oil companies revenues come largely from the sale of oil, gasoline, and some organic chemical products, such as those that go into making plastics, waxes, paints and other products. If we assume that they make about the same profit on a gallon of gasoline as they do on all of their other products, then they make a profit of about $0.32 per gallon when gasoline is selling for $4.00 at the pump. In comparison, the sum of gasoline taxes taken by local, state, and federal government in July 2008 is shown by state in this map.

Some states and the federal government have a tax which is a fixed dollar amount per gallon of gasoline. Some states set the rate as a percentage of the cost of the gasoline sold at the pump or have a combination of fixed amount and percentage tax rates. Because Americans used less gasoline in the first half of this year, those states with fixed amount rates are crying in pain because they are raking in less gasoline taxes, so some of them have actually increased the gas tax this year! Those who tax as a percentage of the price are very happy with the gasoline tax money swamping them. Well, of course they are up to the task of spending any tax revenues and then some on top of that!

In July, in California governments raked in $0.749 per gallon of gasoline sold at the pump. Connecticut was nipping at CA's heels at $0.708/gal. total taxes. Let us make a list of the tax take by all levels of government by state for the most expensive states:

California $0.749
Connecticut $0.708
Illinois $0.666
New York $0.623
Michigan $0.607
Indiana $0.569
Washington $0.559
Florida $0.516
Wisconsin $0.513
Hawaii $0.51
Nevada $0.51
Pennsylvania $0.507
West Virginia $0.506
Rhode Island $0.494
North Carolina $0.486

Other state tax takings of interest to some friends and family are:

Ohio $0.464
Kansas $0.434
Minnesota $0.424
Maryland $0.419
Colorado $0.404
Texas $0.384
Oklahoma $0.354

Only South Carolina at $0.352, Wyoming at $0.324, and Alaska at $0.264 have lower gas tax rates than Oklahoma. Only in Alaska is the government gasoline tax taking less than the estimated $0.32/gal. of profit for the oil companies.

So, if you live in a state with a gasoline tax stated as a percentage of the gasoline price, you would have a much better claim for relief from the high cost of gasoline against your state than you would against the oil companies.

In any case, if we have a shortage of gasoline and that is causing the high gasoline prices we are paying, taking profits away from the oil companies will only encourage them to forget drilling for more oil and forget refining oil into gasoline, and perhaps encourage them to invest their money instead into photovoltaics and wind farms, while seeking government subsidies for those operations. Of course, these subsidies will be paid by you for many, many years. But, neither photovoltaics nor wind farms are going to power your car now or in the next few years, so any so-called windfall profits tax on oil companies will only drive the price of gasoline up more. This is exactly what Barack Obama and the Democrats want. They want gasoline to cost more and they want to try to reduce oil and gasoline use while forcing the oil companies to invest more into the development of alternative energy.

The net result for you will be more expensive fuel costs all around and higher taxes to pay for more subsidies. What a bargain. Oh well, you can feel good that you are doing your part to stop man-made global warming! Ah....., but there is no evidence that that is a problem, while there is clear evidence that high energy costs are a huge problem. What a bargain those Democrats are offering you! But, they can sell half the people Brooklyn Bridge, so we have to hand it to them that they are effective salesmen. Demagoguery is their specialty.

Poor Forecasting of IPCC 2007 4th Assessment

The 2007 assessment report by the United Nations Intergovernmental Panel on Climate Change was examined and assessed by Kesten C. Green and J. Scott Armstrong, who are specialists in scientific forecasting methodologies. Green is with the Business and Economic Forecasting Unit, Monash University, Victoria, Australia and Armstrong is a professor at The Wharton School, University of Pennsylvania. Armstrong founded a number of journals on scientific forecasting and has written several books on the subject.

In an article published in Energy & Environment, they examine the IPCC report of 2007 for its use of scientific forecasting principles. This is the latest U.N. report claiming that man is causing dramatic increases in world temperatures and what these increases will be over the next 92 years. Green and Armstrong conclude that these forecasts by the U.N. IPCC violate scientific forecasting principles badly and are not a good basis for developing scientific or public policy.

Chapter 8 of the report provides some information, albeit inadequate, on the forecasting methodology used by the IPCC. It turns out that a huge effort was made in the 1990s to establish what good scientific principles for forecasting were. Many forecasting scientists made a joint effort to elaborate these principles and established 140 principles. Green and Armstrong used these principles to judge the scientific methodology of the forecasts made in the IPCC report and found that there was enough information in the report to make that judgment on 89 of the 140 principles. The IPCC violated 72 of the 89 principles for which sufficient information was provided to make a judgment! Green and Armstrong say that many individual failures to follow a particular principle would of itself make nonsense of the 92 year predictions of the report.

This is a very damning evaluation of the IPCC report and the predictions it makes. "The forecasts in the Report are not the outcome of scientific procedures." "We have been unable to identify any scientific forecasts of global warming. Claims that the Earth will get warmer have no more credence than saying that it will get colder."

Some further comments of interest are:

  • "Complex models (those involving nonlinearities and interactions) harm accuracy because their errors multiply."
  • "Given even modest uncertainty, prediction intervals are enormous." This means that a prediction of a future value of a property will have very large errors. Predicting the sales of General Motors over the next five years is a much simpler problem than predicting average global climate over 92 years, but the error in predicting General Motors sales is still likely to be very large.
  • "When there is uncertainty in forecasting, forecasts should be very conservative."
Among other interesting comments in this article is a reference to a surveys performed by Bray and von Storch in 1996 and in 2003 of 1,060 respondent climate scientists throughout the world. 47% disagreed with the statement that "Climate models can accurately predict future climates." 35% did agree with the statement. One of the things that people do not properly appreciate is how the U.N. IPCC has weighted its selection of scientists to participate in the report to favor those who are anthropogenic global warming alarmists and tends to disregard the judgment of those who disagree in the summaries written for the IPCC assessments.

The IPCC reports are principally about pretense, not about good science.

05 August 2008

The Penalty for Breaking any Law

What is the penalty for breaking any law, whether the law be a good or a bad law? Some would say that this is complicated, since there are many penalties covering a wide range of monetary fines, terms of imprisonment, confiscations of property, and occasionally death. Of course, at one level this is very true. But, what if someone objects to the law in question or to its application to him? He might seek a government remedy in the courts, but if he is simply sure that the courts are members to the conspiracy against his well-being or against his rights and his privileges and immunities, what if he chooses to stand up to protect those rights, privileges, and immunities? What if he claims they are protected by The Constitution of the United States of America and by the Law of Nature itself? Should he defend his rights, as he sees them, can he not expect that the government with jurisdiction will use whatever force it believes is needed to get him into jail, to take his property, or to accomplish whatever they choose to put down this rebellion? If he is effective in fighting off the agents of the government, will they not respond by killing him? Perhaps they will also kill his family members and destroy his property. Isn't this what happens?

So, at one level the penalty for breaking and defying any law is the same. The penalty is death. Bearing this in mind, don't you suppose that those who favor any new legislation should be very careful in considering whether someone might reasonably consider that law a violation of their individual right to life, liberty, and the pursuit of happiness? When someone makes the decision that they want to transfer more than 50% of the payment someone else received for working an hour to themselves or a third party, shouldn't they be concerned that the person losing half of his hour might consider that the same as being enslaved for half an hour? If you want to enslave someone, shouldn't you expect that the person to be enslaved might rebel? If he does, are you prepared to administer the penalty for rebellion against your redistributive law, which requires his enslavement and that you serve in the demeaning role of slave master? Are you prepared to kill in the name of your supposed effort to do a good deed for someone with less money or for someone with more political influence and clout than the man to be enslaved? Is this the route by which you come to feel moral satisfaction? Is it so important that your will be accomplished through law and the use of government force that you are willing to threaten the use of force like a thief or a slave master and willing to kill should any person rebel?

And why? Are there not plenty of other options for accomplishing whatever you want accomplished than those acting through government? In most cases there are. When there are, that is the route any moral, benevolent man would take. Such a man would not be constantly daring others to defend their individual rights and die as a consequence when the brutal force of government falls upon him and perhaps upon those he loves. Such a man would not hold cheap the manhood of others. The good man would seek out others in voluntary associations to accomplish whatever he thought was good, rather than turning to government. America has always had a rich tradition of many, many charitable organizations, most of which are much more effective than government in doing good deeds in any case. If you want to do a good deed, doesn't it have to be done by moral means? And what is the point of doing it anyway as ineffectively as government does anything but use force?

So why do people turn constantly to government as the means to do what they think, but usually not very hard, effective thinking, will be a good thing for someone or other? Usually because it is the easy, the lazy thing to do. If they were to take the lead in a private organization, they would have to work harder and think more about how to accomplish the desired ends and how to enlist the support of others. The political process is so easy. You listen to some politician declare that there is some problem in need of a solution and if you vote for him, he will take care of the problem. You do not have to have a clear idea of what the problem is or how to solve it. You do not have to write a check and mail it to an organization. All you need to do is go vote for that guy and you feel as though you are a very moral and good person. Such an easy route to virtue!

Then the politician you voted for will have some staff members work with some special interest group to write a huge law, which the politician will vote for without even reading. Then the executive branch will try to figure out what on earth the 1,000 pages of the law mean and will set up an agency to administer the law. Then the courts will try to straighten out all the complex issues which will result in legal challenges. And, should anyone personally reject the law and disobey it, penalties up to and including death will be meted out. And the voter, who has no idea what he has actually done, will be full of noble feelings. And that my friend is all that matters in this system in which no principles limit the scope and domain of government.

The Framers of the Constitution tried very hard to so limit the scope of the federal government that most of them argued that the Bill of Rights was not necessary because the government had not been given any powers which could be used to violate the individual rights to be protected by the Bill of Rights. Indeed, their argument was actually pretty much correct. They argued that if a Bill of Rights were added to the Constitution that there would be a tendency of the government to assume that they could do whatever was not denied by the Bill of Rights. They were right, but if there had not been a Bill of Rights, it is probably also true that the government would have soon changed the interpretation of the Constitution so severely that they could do almost anything they wanted anyway. Indeed, this is exactly what the government has done also! So, the principle implicit in the Constitution, and explicit in the Ninth Amendment of the Bill of Rights, that the purpose of government was to protect the rights of the individual, has been set aside. Now any issue is considered ripe for government law whenever a plurality of voters approves of it, at least as expressed by their vote for a politician.

The plurality of voters is usually a group of people who know little about most of the issues that new laws are written to address. Such a large group of people can be counted on to understand that government should prevent John from holding up Sam on the street and stealing the money from his wallet. But the laws necessary to prevent that from happening were generally put in place a long time ago. On the other hand, when the government was considering whether a large fraction of the corn crop should be turned into a gasoline additive, the public who voted for the politicians in favor of that fraud and boondoggle, knew nothing about the science, the economics, and the special interest groups interested in the subsidies and the federal mandates to do that. Neither does the public know much about running the television and radio broadcasting or cable operations, or about telephone systems, affordable housing, environmental issues, global warming, railroad freight rates, loan interest rates, drug effects, medical care, financial institutions, and many other issues. The lawmakers they choose as their representatives either know little about these issues themselves or they completely subjugate their knowledge to whatever 30 second soundbite they think they can best sell to the public, or at least to the plurality of voters. The politicians are expert at one thing: getting re-elected.

Ignorance is an excuse for lawmaking activities! The more ignorant the public is about something complex, the easier it is for a politician to play upon their fears of what they do not understand. The elected politician is usually qualified for election by virtue of being very cunning and very manipulative. He is a chameleon skilled at appearing to be all things to most large groups of voters, commonly able to tell one group one thing convincingly, while telling another group something else entirely. For instance, he tells American voters that he opposes NAFTA, while quietly telling the Canadian government that he really does not oppose it. No, this is actually unusual because the Canadian government does not vote in an American election. Ah, but in this case the politician is sure he going to become the President of the U.S. and that he wants good relations with the Canadian government then. OK, so a better example is he tells voters that he will provide affordable housing and he tells building contractors and managers that if they donate lots of money to his campaigns for office, he will see that they get contracts to rennovate and manage the affordable housing projects whether they do the job decently or not.

The politician is a demagogue. He tells the public that there is no need to allow oil companies to drill in more areas than they already have leases to drill in, because they should drill there first. The public is not supposed to know enough to ask whether there is oil on those leases, whether the technology to get it both exists and is affordable, and what does the global price of oil need to be several years from now so that the oil company can make the profit it must make to justify developing an oil field at that lease location. Or the demagogue repeats over and over that there are 47 million Americans without health insurance as justification for a new federal program to require everyone to have health insurance. The public is not supposed to know that many of the 47 million are illegal aliens and that very, very many are able to afford health insurance now, but choose not to have it. Many are self-insured millionaires. Many are young people in good health. Many have a rich relative who will provide for them if they need it. The politician, being a full time politician with a large staff knows this, but this is not what he tells the public.

So these are the people we employ to make up a constant stream of new laws to address issues the voters do not understand and which the politicians either do not understand or do not find it convenient to educate the public about the truth. These politicians see this constant stream of laws with nice sounding names as their means to appearing to be doing something about problems they have often manufactured themselves and certainly are not effectively addressing. The public is pleased to see that some moral problem was solved by themselves in an act of selflessness or that they have won some government plum, whatever the actual cost to the rights of many other individuals may have been.

Only a minority of the people are feeling violated because they understand that their right to their life, liberty, and pursuit of happiness has been made victim to demagogical politicians, ruthless special interest groups, and a largely ignorant voting public feeling very moral because they have robbed some to give a gift to others they like or for whom they feel more sorry. Not only this, but some of these people feel helplessly emasculated because they are unable to face the massive forces of government to uphold their own rights. They feel they should, as the Minutemen did, stand with arms in hand and stop the theiving and protect themselves from slavery, but they know this is sure suicide if they do. These people who understand that government is massively trampling upon their rights, their privileges and immunities, are the victims of the system of government we have converted our once proudly limited government into. Government has become the enemy of the individual and all his values in America.

Governments, federal, state, and local, have commonly come to violate their most sacred trust: that they exist to support and secure the rights of the individual. American governments are widely and comprehensively failing the test of good government. They all are massively threatening to kill any American who stands up for his individual right to life, liberty, and the pursuit of his happiness.

The only solution to this greatest problem of our age is to commit ourselves to the principle of highly limited government which our Constitution was originally intended to provide. The only route to moral politics in America today is this principle that the domain of government laws is limited to those enumerated powers given in the Constitution and that government is good and effective only insofar as it protects the rights of each and every individual American citizen and resident. Any law meant to protect John at Sam's expense is clearly outside the role of government, since the rights of both John and Sam are to be equally protected. Both John and Sam are created equal in this sense before the law and both have their inalienable individual right to life, liberty, and the pursuit of happiness. It is not the role of government to pick winners and losers and it is certainly not its role to see that material goods are distributed equally or more equally. Good government stands aside as John and Sam make their own decisions about how they will pursue their happiness. That is one subject on which John and Sam are more knowledgeable than any government or any plurality of voters. Government and mobs of voters have no business meddling in their pursuit of their happiness as long as neither uses force to pursue it or commits a fraudulent act to acquire a material good.