An Objectivist Individualist

Obama's Socialist Fantasy Tale - Jobs

2012-01-27T21:34:00.000-05:00

In the State of the Union address before Congress, some of the Justices of the Supreme Court, and a number of top military leaders, Obama made the claim to them and to the American People, that he has created 3.1 million new jobs in the private sector. Let us examine this claim.

First, we should look at some employment numbers. In December 2007, before the recession hit the United States, we had 146,334,000 people employed according to the household survey that covers all jobs. At the depth of the jobs recession in January 2010, we had only 136,809,000 jobs, for a loss of 9,525,000 jobs! In December 2011, when Obama was in the White House for 3 years and two years after the bottom in the employment market, we have had an increase of 3,872,000 jobs since the bottom with 140,681,000 people employed. Great, but the number of people of working age has also increased during that time. Strangely enough, many of the additional 3,752,000 people want jobs.

Note that in December 2011 we actually still had 5,653,000 fewer jobs than we had in December 2007. Meanwhile, the working age population grew by 7,428,000 people over the course of that 4 year period. This is a monthly average growth rate in the working age population of about 154,750 people. Back in January 2000, when jobs were plentiful, 67.49% of the working age population had or wanted jobs. If we use that figure to calculate how many of the added 154,750 people a month in the working age population want jobs, we get 104,441 people/month want a job.

During this Obama recovery between the bottom in January 2010 and December 2011, we would have needed 23(104,441) = 2,402,143 new jobs just to keep up with population growth. Since 3,872,000 were added in that time, we did a bit better than keep up with population growth. Over and above those wanting new jobs due to the working age population growth, 1,469,857 jobs were created. We can count these new jobs against the 9,525,000 jobs lost from before the recession to that low month of January 2010. At this rate, in 6.5 years we can re-employ all the people who lost their jobs in this recession. Thus, this recovery will take a total of 10.5 years from December 2007. A truly lost decade that only the Great Depression exceeds.

The jobs situation is much more grim than Obama would have us believe. He is not lying about the 3 million new jobs, but he is using the fact that the number sounds impressive to misdirect our attention from a real understanding of the magnitude of the problem. He is assuming, as Progressive Elitists so often do, that most of the People are too ignorant or too busy to notice how he is misdirecting them.

His prescription for creating new jobs is more of the same old failed policies of his administration to date. The reason he will not learn from his past mistakes, which were dumb in the first place, is because his policies are really all about politics and giving his core supporters what they want. He is not really motivated by solving the jobs problem and most certainly is not motivated to let the private sector create jobs. He wants to reward teachers with more federal funds, despite the fact that the present huge federal fund expenditures on education have not improved student knowledge. He wants to throw more money at infrastructure despite such projects doing little to revive the economy. Since those getting infrastructure money have to go through long environmental studies, which provide jobs for many government workers, and contractors have to use union labor, this is really just another scheme to give taxpayer money to his supporters. His other big claim to fame is funding so-called green energy. As we have seen, that is just a means to provide his rich supporters with tons of money as their companies fail because even with government grants, subsidies, and mandates to use their energy, that energy is so expensive and unreliable that it cannot compete except in niche markets.

Meanwhile, Obama continues to threaten most businesses with volume after volume of new and expensive regulations, with ObamaCare, with Dodd-Frank, and plans to pick more losers from among businesses. This will never be a successful approach to creating jobs. We desperately need a new man in the White House who realizes that jobs are best created by the private sector with little government interference.

Obama's Socialist Fantasy Tale - Regulations

2012-01-26T05:46:00.000-05:00

In his State of the Union speech, Obama claimed to have reduced the number of new regulations each year compared to President George W. Bush. This may be true in one respect, but it is a matter of sad misdirection in most respects. Let us examine this issue.

First off, there may be more important measures for the effects of new regulations than the number of them. Not that the number is unimportant. It is and it is bewildering, especially for business owners at whom most are aimed and for whom little tolerance exists. Homeowners and employees have it easy compared to business owners and managers. So what other measures are important. One that is easy to establish is the number of pages of the regulations newly added to the Code of Federal Regulations. Another is the number of new regulations costing more than $100,000,000 to implement annually.

We need some historical background and perspective. In 1970, the Code of Federal Regulations (CFR) had 54,834 pages of regulations. That would be a good many more pages of regulations than any businessman would have time to read and study. Remember that the Congress was unable and unwilling to read the over 2,000 pages of the ObamaCare bill, but they have no hesitation of expecting businessmen to know many tens of thousands of pages of regulations. By 1998, the number of pages of regulations had grown to 134,723 pages and the 201 volumes containing them required 19 feet of shelf space. I wonder of any businessman alive ever read through that complete set of volumes to find out which regulations applied to his operations. The General Accountability Office (GAO) says that in fiscal years 1996 to 1999, a total of 15,286 new regulations went into effect. 222 of these cost more than $100,000,000 a year to implement. In those 4 years, the cost of operating US businesses went up by more than $22.2 billion a year due to these regulations. No doubt that is a very low-ball figure.

As a candidate for President, Obama blamed the recession on Bush because he failed to regulate the economy enough. Nothing could have been more untrue. Government controls tended to push the financial institutions hard toward making sub-prime mortgages and toward supplying the easy credit bubble that collapsed the economy when the sudden price increase in oil in 2007 put the economy under strain and pin-pricked the balloon. As for regulation in general, George W. Bush was a champion of regulations. The great economist Veronique de Rugy documented that fact very well in a Reason Magazine article in the January 2009 issue called Bush's Regulatory Kiss-Off. Examine the graph of the regulatory budget increases by President from de Rugy's article:

George W. Bush loved regulations even more than Clinton did in his second term or his father or Nixon. Republicans in general do not have a good record of minimizing regulations. It is one of the many shortcomings of Republicans and generally flies in the face of the rhetoric they use honoring individual rights and respecting business activity. So let us bear this in mind when Obama claims to have implemented fewer regulations than Bush. That is like saying that I love graft just a bit less than Tammany Hall did.

But by other measures, Obama is no regulatory saint. Wayne Crews, of the invaluable Competitive Enterprise Institute, anticipated regulatory claims by Obama in his State of the Union address and tells us much more about his regulatory regime in an article called President Obama's State of the Union? Hyper-Regulated. He notes that Obama has claimed to be reducing ineffective regulations, but he is strengthening the National Labor Relations Board to prevent plant relocations, he is not allowing speedy energy infrastructure building (Keystone XL Pipeline), he has not allowed oil and gas drilling on federal lands, and the EPA is going forward with "maximum technology" requirements for utilities, cement plants, and industrial boilers. The Dodd-Frank Too-Big-To-Fail Bill requires tremendous numbers of new regulations, most of which have missed their statutory deadlines. Hey, when the Senate cannot produce a statutory required budget for any of three years, why should the bureaucracy of the Obama Administration have to meet the deadlines they are required to meet by law? And Crews notes that despite widespread opposition, the FCC is proceeding with net neutrality, even without congressional authorization.

General metrics such as the number of new pages added to the regulatory law are literally horrifying. In 2011, 82,351 pages of regulations were added and in 2010 Obama added 81,405 pages. In these two years, Obama added 163,756 pages of regulations which we should compare to the total pages of regulations in 1998 of 134,723 pages. The 19 feet of shelf space needed in 1998 for the regulation volumes, grew by 23 feet of additional shelf space in two years under Obama! Unfortunately, those years between 1998 and 2010 saw huge increases in the necessary shelf space also. There is surely no lack of regulations now. In fact, it is a travesty of law to have so many regulations that no one can know them and no one understands them. In fact, no one could obey them, because such a volume of regulations will have many contradictions in them and there will be many cases in which obeying one regulation will put one in conflict with another. Such a body of law cannot be self-consistent.

Wayne Crews also examined the number of new regulations with major impact upon businesses. In 2008, the Democrat Congress and Bush put out 180 new regulations with major economic impact. Obama put out 212 in 2011 and 224 in 2010. The highest number of such important regulations added prior to 1998 was 159. The government is really going for major impact on our weak economy! The number of regulations in the pipeline for implementation was 4,004 rules in 2008, but in 2010, Obama had increased this to 4,225 and in 2011 it was 4,128. So, there will be no future shortage of new regulations unless a very determined President and Congress act to stop them.

Rules in the pipeline affecting small businesses, who create so many new jobs, are now 822, compared to the 2008 number of 753. Crews says that about 21% of all rules affect small businesses directly. Most regulatory rules affect small businesses by increasing their costs or by using up the money of big businesses so they are unable to do as much business with small businesses as they otherwise would.

As we know, Obama has a special reverence for environmentalism. The EPA is especially threatening under his regime. The EPA has 318 new rules in the pipeline and 18 of these are economically significant, meaning that they admit that they will cost more than $100,000,000 annually to implement. Some will cost much, much more. 93 of these rules will affect small businesses directly. Of these, 14 are economically significant.

Almost every time there is a complaint that something went wrong because we had too few regulations, careful thought and research reveals that regulations caused the problem or that regulations already in place were not used to prevent the problem. This is not surprising given the massive regulatory structure already in place. No one understands the regulations and it is not reasonable to have sufficient regulators to see if companies are obeying the regulations. The first law of good law is that the laws should be knowable, reasonable, and enforceable. Our regulatory structure massively defies this simple common sense. Nonetheless, governments all over the US believe it is their primary function to give us more laws and more regulations. This is otherworldly wrongheaded.

Unemployment, the Lie by Misdirection

2012-01-07T03:33:00.001-05:00

With the publication of the Bureau of Labor Statistics unemployment numbers for December 2011, we have generally been told that there is good news for employment. We have been told that unemployment is down to 8.5% based on seasonally adjusted numbers. This is a very big lie by misdirection, though it may be fully consistent with the usual practice by which unemployment is defined. As I have said many times, during a long recession or depression, the usual practice produces a meaningless number. Let us search for some real meaning in the job statistics of the BLS.

Because of the tendency for people to give up on searching for jobs when they have been long unemployed and unable to find employment, the number of people listed as unemployed and in the job market tends to drop or at least not to keep up with the growth of the population. As a result, the usual unemployment number becomes meaningless. One has to start looking at the actual numbers of people employed and the percent of the working age population that has a job. This is where the real story is. To do this, we must look at the numbers given in the following table:

Note that this table does not use the seasonally adjusted numbers which I suspect may not be realistically adjusted using normal seasonal swings when one is in a long-term recession. In this table, we can follow the actual numbers of civilian work age people, the actual employed, the percentage of people employed, and we can calculate the number of people who would want jobs if good jobs were as plentiful as they were in January 2000 and for several years prior to that. Note that in December 2005, 142.779 million Americans were employed, but in December 2011, only 140.681 million Americans were employed. The number of employed Americans in that 6 years dropped by 2.098 million even as the working age population grew by 13.159 million. The Obama economy of December 2011 is indeed in a very sorry state. But this does not keep Obama from crowing at the top of his lung power that the economy is healing due to his policies.

The number of people unemployed is only 12.692 million now and it was 15.137 million in July 2010. That looks like good news! Ahhh......, but how disappointing it is to see that there were only 0.547 million fewer people employed in July 2010 than in December 2011. In that year and a half of "recovery" from the recession, the working age population grew by 2.694 million while the number employed grew by only 0.547 million. The percent of the working age people employed fell from 58.91% to 58.47%.

What happened to the number of missing jobs? Not much. In fact the number increased from the November 2011 report. To be sure, month to month variations are not very meaningful, so we should look at longer trends. Note that in seasonally adjusted numbers, the Obama administration is claiming that the number of jobs increased by 200,000! The actual numbers of employed show no such increase. In December 2011 the number of missing jobs was 21.689 million. This is 378,000 fewer missing jobs than in December 2010. At this rate of recovery, we can have as few missing jobs as in December 2007 in 28.2 years. Yes, that is years, not months! Obama should crow really loud about that. With this Obama rate of recovery from the recession we can achieve the January 2000 number of missing jobs in 42.3 years!

Since May of 2011, the number of missing jobs is almost flat. There is no sign of improvement. Indeed, there is very little change over the last two years of supposed recovery. This is totally unlike any recovery from a recession since WWII.

The wonder is that we have an economy which is stagnated in job growth. Given the impending ObamaCare and Dodd-Frank regulatory controls onslaughts, the totally union-boss controlled NLRB thanks to unconstitutional despot appointments, the soaring costs of gasoline with central planning help, the soaring cost of electricity, the government refusal to allow oil and gas drilling, the upcoming cost increases for vehicles forced to go 54.5 mpg, the increased costs for food and drugs thanks to heavy-handed Obama regulations and added taxes, the money extracted from the private sector to be wasted on green energy developments, the increased state taxes in many states, the failure of the federal government to reduce our highest in the developed world corporate income tax and very high capital gains tax, and a never-ending threat by the President and Senate leadership to punitively tax the most productive members of society, it is a wonder that the private sector is keeping pace with the population growth at all in its job creation rate. One can only imagine what the private sector could do if the governments, federal, state, and local, were to get off the backs of businessmen.

Can Two People be Friends Who Disagree Greatly Politically?

2012-01-04T23:08:00.000-05:00

This question was asked on a discussion forum in which I am a frequent participant. This discussion group has a very broad cross-section of mostly American contributors.

There are still values in America which are not predominantly dictated and controlled by government and friendships between individuals on the basis of such shared values are still possible. But it is a serious impediment to friendship when your supposed friend or relative wants government to create and enforce numerous laws and regulations which trample your sovereign individual rights. Any noble man is obliged to defend his individual rights with his very life, just as was the case for the Founders. When a man of sound moral principle is committed to defending his sovereign rights and the Constitution which is supposed to keep the government from trampling his rights, the response of the Progressive Elitist, the welfare queen, and the crony mercantilitst is to have government agents put a gun to his head and threaten to blow him away. The government does not tolerate the man who responds to the government use of force to deprive him of his rights by exercising his right of self-defense. This is the nature of the Rule of Law, but it is also why the morality of the Rule of Law depends upon a minimal government of very limited powers and scope, such as was provided Americans by our Constitution when the Constitution was honored.

This brutality and constant resort to threats of violence by proponents of big government today belies the claim of friendship. It is the act of a brutal enemy who refuses to acknowledge the fact that the right to choose values and the freedom to act upon those values resides in the sovereign individual, not in the state and not in any collective gang. The very concept of friendship presupposes that individuals have values and are allowed the essential freedom of association to voluntarily acknowledge those others who share their values as friends. Our present government refuses to acknowledge our very individuality, our individual values choices, and our broad freedom of association in a dominant and thriving private sector. Those who support such government tyranny denigrate the very basis for friendship between individuals.

The EPA's Newest Environmental Vendetta Against Coal

2011-12-23T22:27:00.000-05:00

The EPA has proposed lower emission limits on power plants for 84 pollutants, including mercury, arsenic, nickel, selenium, cyanide, and acid gas. The mercury emission limit has been given the most attention and will be tightened to 1.2 pounds per million BTUs produced by a power plant. The most affected electric power plants will be those that generate half of our electricity using coal. In 12 states, coal-fired power plants generate from 70 to 98% of the electricity used. Coal-fired electric generation plants will have to add expensive further scrubbing equipment and the expenses of operating that equipment. The EPA claims this will cost the electric power companies $10.9 billion a year, though industry estimates run somewhat higher. Some older coal-fired power plants will not be worth the added investment. Several plants are scheduled to go off-line in 2014 as a result of this EPA proposal already. Plants totaling 2,290 to 3,950 megawatts may be lost in Illinois alone.

The EPA claims lost jobs, more expensive electricity, and less reliable electricity will be justified because the stricter regulations will save 11,000 lives and up to $140 billion in health benefits per year. The claim is that there will be 4,700 fewer heart attacks a year and 130,000 fewer children suffering asthma. 6,300 fewer children will have acute bronchitis. These EPA claims have been widely called into question. With 2,423,712 American deaths a year, 11,000 fewer deaths is a change of less than 0.5%. Studies will have great difficulty in proving the cause or even the existence of such a decrease were it to occur.

Great fanfare has been given to the required reductions in mercury. Environmentalists like to say that power plants generate half of the mercury to which we are exposed. Let us examine this claim. The U.S. and China generate about the same amount of electricity from coal. The U.S. coal-fired power plants are estimated to produce between 41 and 48 tons of mercury per year. The middle of this range is 44.5 tons. The Chinese power plants, which do not scrub their emissions, are thought to emit about 400 tons of mercury a year. This is about 9 times as much as U.S. power plants emit per kWh of electricity. While coal is mostly used in the U.S. for electricity generation, in much of the world it is used extensively still for heating and it has industrial applications also. World consumption of coal is about 7,229 megatons. The U.S. consumes about 858 megatons. Assuming conservatively that the total generation of mercury from coal use is about 4 times that in the U.S., the world total output of mercury from coal use would be about 1500 tons a year. Thus a total elimination of mercury from coal-fired electric power plants in the U.S. would result in a decrease in mercury from coal use of only 3%.

This does not tell the whole story. Forest fires in the U.S. generate about 44 tons of mercury per year. Forest fires consume about 5 million acres of forest a year in the U.S. But forest fires in the world consume about 123 million acres of forest a year. This implies that about 1080 tons of mercury are generated by forest fires worldwide in a year. Cremation of human bodies generates another 26 tons of mercury from tooth fillings a year. This means that the 44.5 tons of mercury from U.S. electric power plants is only 44.5/ (1500 + 1080 + 26) = 0.017 or 1.7% of these sources of mercury.

It gets worse. Volcanoes, subsea vents, geysers and other natural sources are thought to emit between 9,000 and 10,000 tons of mercury a year. Compared to this and the other sources of mercury discussed, the mercury output of U.S. coal-fired power stations is then about 44.5 / (1500 + 1080 + 26 + 9500) = 0.0037 or 0.37%! So totally eliminating mercury from coal-fired power plants will only reduce the world's mercury output by 0.37%. It is very difficult to understand how this will change the number of deaths or illness in the U.S. due to the effects of mercury unless our primary exposure to problems from mercury is of a very local basis.

It turns out that the EPA change in mercury limits is not based on health studies of the local effects of mercury from electric power plants in the U.S. This is because Americans primary exposure to mercury is from eating fish. There are 200,000,000 tons of mercury in ocean water. The 44.5 tons of mercury from U.S. coal-fired power plants is only 0.2 millionths of this amount! Despite this natural exposure to mercury, the blood mercury concentrations for U.S. women and children dropped steadily from 1999 to 2008 according to the Centers for Disease Control. Levels are now way below the safe level established by the EPA, which safe level was well below any level of known harm.

The EPA mercury limits are based on a study of Faroe Islanders who eat huge quantities of whale meat and blubber and little in the way of fruits and vegetables. The whale intake is very high in mercury and polychlorinated biphenyls and low in selenium. Fruits and vegetables provide anti-oxidants thought to decrease the effects of low concentrations of mercury and polychlorinated biphenyls and selenium helps to negate the effects of mercury. Meanwhile, the EPA ignored the Seychelles Children Development Study of 17 years that found no measurable cognitive or behavioral effects in children who ate from 5 to 12 servings of fish a week! There is no effect even though these fish are swimming about in 200 megatons of mercury.

The EPA claim of 130,000 fewer children suffering asthma also makes no sense. In 1995, 7.5% of children had asthma and this was up dramatically from 1980 when only 3.6% of children had asthma. Despite this, air pollution in 1995 was much lower than it was in 1980. Air pollution has steadily decreased since 1980, yet in 2009 asthma affected 10% of American children. The Centers for Disease Control are baffled by the cause of this increase in asthma in children. Despite this lack of understanding, the EPA claims that this 130,000 decrease in child asthma will occur to a reduction of fine particles that will be a side benefit to removing more mercury from power plant emissions.

The lowered mercury output level to be required of electric power plants is not rationally based on health concerns. It is another javelin the Obama Administration has chosen to throw at the heart of the coal-fired power plants and at fossil fuel use in general. It is a product of their alarmist viewpoint that fossil fuel use, particularly coal use, is a primary cause of catastrophic man-made global warming. This is the real reason that Obama and his henchmen are willing to kill power plant jobs, drive up the cost of electricity, and kill coal-mining and transportation jobs. This is the reason they are prepared to cause rolling blackouts such as undeveloped countries experience, despite the impossibility of continuing many industrial or laboratory operations under such conditions. They will kill off many industries and companies in this way. This is the reason they are willing to make many families suffer the cold in homes they cannot afford to heat or the heat in homes they cannot air-condition. This is the reason they choose to ignore the deaths of people who will die because they are too cold or too hot in their homes.

They are doing this for the same reason that they are determined to kill the Keystone XL pipeline. This is the same reason they oppose many oil and gas drilling projects across the United States. This is the same reason they throw taxpayer money at any fraud who claims to have a scheme for renewable energy or energy conservation, especially if he is a campaign contributor. Jobs and economic well-being take a backseat to their fanatical and misplaced belief in the false hypothesis of catastrophic man-made global warming due to man's CO2 emissions. This irrational fanaticism is the death of many American jobs. Fanatic irrationalism has fatal consequences. I hope one consequence will be that Obama is not rewarded with a second term.

The Legitimate Role of Government - Summarized

2011-12-19T23:17:00.002-05:00

In determining the proper role of government, we have to start with some foundational observations. Man must use reason to identify reality and to choose the values he will pursue. He must be free to use his mind to then pursue those values, which is the pursuit of his happiness.

The advantages of a society accrue optimally if a man is free to associate with others of his choosing for the purposes of his choosing. When that is the case, his ability to use his reasoning capability is amplified and he is better able to achieve his chosen values. People are complex and highly differentiated, so while they share some basic needs universally, such as their equal, sovereign individual rights, their choices of values beyond that level quickly diverge in many ways. Yet, as long as they have freedom of association, they can trade and cooperate to develop ideas, goods, and services with selected others to enhance and enrich their lives in the pursuit of their personal happiness. For some this may place great emphasis on material goods, for others the goal is more intellectual, and for others the goal is to have much time for recreation. This divergence of choices is all well accommodated by the private sector, given a legitimate government that only protects the People's equal, sovereign individual rights. This ideal of legitimate government was defined in the Declaration of Independence and our Constitution was to so limit the power and scope of government that it had no function but to protect our individual rights.

Because Americans have ignored these basic concepts of individual human nature, the advantages of society, the nature and need for individual rights in society, and the role of legitimate government, we have a government that dictates the choice of values to the individual and which ignores his own personal values. In the pursuit of decreeing values and micromanaging the lives of every individual, this government has become complex and tyrannical. The complexity of the government has made it unmanageable by our elected politicians. It has made it a threat to everyone and to every interest, since it is incompetent in identifying our personal values and has pursued many extortion schemes. Special interests must respond with lobbying to protect themselves from these misunderstandings and extortion schemes.

Other special interests observe that the government is much too complex for the People to understand what is going on and for them to control it. Since the government is out-of-control, it is easy for the clever and invested special interest to manipulate the levers of power in the government to provide their special interest with favors, such as restrictions upon competition with them or subsidies and grants. Soon, the big government that claims it is trying to do the greatest good for the greatest number is doing nothing of the sort. It is actually doing the greatest harm to the greatest number. In order to help Peter, it is robbing Paul and preventing Joe and David from pursuing their personal values.

This government is not providing for the General Welfare and has become the tool of rapacious special interests. This is the inevitable result of government that has lost the understanding that its only legitimate function is to protect the equal, sovereign individual right to life, liberty, and the pursuit of happiness. The protection of our individual rights is the only way government can enhance the General Welfare and escape becoming a tyranny controlled by special interests.

Federal Go-It-Alone Immigration Foolishness

2011-12-13T17:55:00.001-05:00

It was only in 1875 that the Supreme Court decided that immigration policy was a federal responsibility. In 1882 and 1891, Congress passed immigration acts. The 1891 Immigration Act set up the Office of the Superintendent of Immigration to admit, reject, and process immigrants. In 1893 the Office of Immigration had 119 employees at Ellis Island with a total staff of 180 employees. Many of those other employees staffed other points of entry for immigrants. How many employees remained for the task of finding and deporting illegal immigrants? Clearly no more than a handful, if any. So who did such work as was done to find illegal immigrants? The answer has to be that this was the work of local and state governments. The federal government defined and determined who could enter the USA legally, but it lacked the manpower to hunt down illegal immigrants.

By its own admission it still lacks the manpower to hunt down illegal immigrants and to deport them. Logically, the states and local governments have continued the role they have always had in using their police power to do the task the federal government does not do now and really never has done. Yet, I heard an Obama administration official just today claim that the federal government is the quarterback and states such as Arizona, Alabama, and Georgia have no role in finding illegal immigrants. The Obama administration wants to be the quarterback who will hike the ball to himself and pass the ball to himself. What a concept!

Of course, the federal government should do just what the 1891 Immigration Act said it should. It should admit, reject, and process immigrants. But, as the quarterback, it should understand that state and local governments are on the same team and have a vital interest in the law abidance of immigrants. Of course they are tasked with protecting their local citizens from murder, theft, and other illegal activities of immigrants, as with anyone else. Since the main reason there are immigration controls at all is a combination of concerns to keep criminals and terrorists out of the country, to control the effects of immigrants on wages and jobs, and to limit the number of people not yet well assimilated into the population and not familiar with the concepts of individual rights and limited constitutional government, these same concerns must be concerns of local and state governments. To the extent these concerns are rational, then local law enforcement must not be denied a role in finding and removing illegal immigrants.

I am not anti-immigration at all. I believe we allow too few legal immigrants. I would like to see a large increase in the number of professional immigrants allowed into the country. I also favor easy entry on work visas for less skilled workers, who upon completion of a few years of law-abiding work would be readily accepted as permanent residents should they choose to apply for such status. I very much would like to see our immigration policies made freer, easier, and more welcoming. Whatever the policy on immigration is, however, the laws should be enforced. The only way the laws will be enforced is if the vainglorious quarterback becomes a team player and works well with the states and local governments.

This being the case, the only rational decision the Supreme Court can make on the Arizona illegal immigration bill called Our Law Enforcement and Safe Neighborhoods Act or SB1070 is to overturn the lower court ruling that much of it is unconstitutional. The Arizona law does not interfere with the federal government deciding who can legally emigrate and who cannot. It simply requires that people within the Arizona borders obey the law, whether local, state, or federal law. This is entirely the proper function of the state government. It is a straight-forward excise of protecting the local people. If it is not viewed as protecting the people to keep illegal immigrants out of the state, then the federal policy for deciding who can legally enter the country is clearly wrong. Unfortunately, federal policy is rather poor, but it is not entirely without rational basis and the states are obliged to enforce the federal law as though it were rational and justified. If the federal policy is too egregiously wrong, then the states are still obliged to rationally protect their citizens even if that brings them in conflict with the federal government.

Consider the defense of America from foreign invaders. This is clearly a federal responsibility also. Despite this federal responsibility, the states have a National Guard and while they do not set defense policy, they do provide manpower to make it possible to defend the country. More to the point yet, if a company of enemy troops were to sneak into Tulsa, Oklahoma and attack the people there, would we not expect the Tulsa, Broken Arrow, Jenks, and Catoosa police forces and any local National Guard units to converge upon that company of foreign troops and protect the people of Tulsa from the invasion force before the federal government could get troops there to provide the protection. Of course we would. The fact that the federal government has the responsibility to set immigration policy is irrelevant to the need for local government officers to see to it that the law is obeyed locally and the people are protected.

The most severe problems of illegal immigration are diminishing due to a combination of factors. According to an article in the 13 December Wall Street Journal, there are now 21,500 agents along the Mexican border, an increase of a factor of two since 2004. The slowdown in the U.S. economy has made us much less enticing, especially since the Mexican economy is growing faster than ours. Another big factor is that Mexican families are becoming smaller and the population growth is now at a replacement level. In 1970, the average Mexican woman had 6.8 children. In 1990, that number had fallen to 3.4 and now it is the stasis rate of 2.1. According to the Pew Hispanic Center, the number of illegal immigrants in the U.S. reached a maximum in 2007 of 12 million. That number is now about 11 million. Mexican immigrants are about 60% of the illegal immigrants. In 2000, a total of about 750,000 Mexicans came to the U.S., counting both legal and illegal immigrants. That year, the U.S. Border Patrol caught 1.64 million people along the Mexican border. A net of only 150,000 Mexicans are believed to have made it into the U.S. last year and 340,252 were apprehended at the Mexican border. Deportations hit a record high in the last fiscal year of 397,000. While the problem is diminishing, 11 million illegal immigrants is still a huge number of illegal immigrants.

Domesticating Free Pigs or Free Americans

2011-12-07T04:05:00.001-05:00

This is a particularly interesting story applicable to how Progressive Elitists are carrying out their plan to make Americans forget to assert their equal, sovereign individual rights to life, liberty, property, the ownership of their own minds and bodies, and the pursuit of their own happiness. It is well worth thinking about. The story follows:

There was a chemistry professor in a large college that had some exchange students in the class. One day while the class was in the lab, the professor noticed one young man, an exchange student, who kept rubbing his back and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country's government and install a new communist regime.

In the midst of his story, he looked at the professor and asked a strange question. He asked: "Do you know how to catch wild pigs?"

The professor thought it was a joke and asked for the punch line.

The young man said that it was no joke. "You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come every day to eat the free corn.

"When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. "They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side.

"The pigs, which are used to the free corn, start to come through the gate to eat that free corn again. You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity."

The young man then told the professor that is exactly what he sees happening in America .
The government keeps pushing us toward Communism/Socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tax exemptions, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. While we continually lose our freedoms, just a little at a time.

Obama Friend Advocates Chinese Central Planning

2011-12-05T02:24:00.001-05:00

Andy Stern, who until recently headed the SEIU labor union and made weekly visits to see Obama, has just recently written an opinion piece for the Wall Street Journal in which he strongly advocates Chinese central economic planning as the winning economic model of the future. He informs us, from his perch as a senior fellow at Columbia University's Richman Center, that

the conservative preferred, free-market fundamentalist, shareholder-only model -- so successful in the 20th century -- is being thrown onto the trash heap of history in the 21st century.

Given that this does not correctly characterize the economic system we actually had in the 20th century because it clearly forgets the anti-trust effort by Teddy Roosevelt and the tampering with free markets by Wilson, Hoover, Franklin Roosevelt, Truman and the many Presidents and Congresses throughout and since, we can only wonder what a real free market would have accomplished. Unlike Stern's implication, the present stagnation of the system we now have can hardly be taken as an indicator of free market failure.

Apparently, both he and his friend Obama believe that even with a private sector saddled by the EPA, FDA, IRS, SEC, FAA, FCC, NLRB, FDIC, FHA, Fanny Mae, Freddy Mac, government student loans, the Energy Dept., the HHS Dept., the Transportation Dept., the Agriculture Dept., the Interior Dept., HUD, Education Dept., ObamaCare, Sarbanes-Oxley accounting, Dodd-Frank Too Big to Fail Regulations, the Federal Reserve, farm subsidies, ethanol subsidies and mandates, renewable energy subsidies and mandates, export subsidies, and many more controlling and planning agencies, subsidies, and mandates, we are still essentially an out-of-date free market economy.

This does not even note the similar controls and interferences of state and local governments, all of which have been growing madly over time, especially in the last decade before the Great Socialist Recession started due to the housing and debt market bubble encouraged so vigorously by the federal government against the housing restrictions and expense-adding practices of many state and local governments.

Andy Stern tells us that the Chinese model of single-party top-down control is much better. He does not tell us a thing about how one can square that model with our concepts of individual rights and constitutional limitations on government. He does not do this, because as a power-lusting aristocrat of academia and labor union leadership, he has no concern about such issues. He objects to our spending time thinking about the next election when we should be adopting a Chinese system of government controls. The Chinese do not waste time on elections. No, the government takes care of the people. After all, he saw cranes everywhere building buildings for government and for public housing. Never mind that the pointless growth for growth's sake directed by Stern's popular local communist leaders in China is about to collapse in a pile of debt and useless "investment" that will make the Japanese planned economy failure of the 1990s look small in comparison.

He swoons over the next Chinese five-year plan (their 12th five-year plan) which aims for 7% annual economic growth, $640 billion invested in renewable energy, building six million homes, investment in IT, clean-energy vehicles, biotechnology, and high-end manufacturing and environmental protection. Somehow, though most of the prior Chinese 5-year plans were abject failures, Stern is sure they have figured out how to beat a free market while promoting social equality and rural development.

In reality, the rural Chinese are restricted from moving to the cities and rural China languishes neglected and in a high state of unrest. Almost all investment in those areas which have seen investment is controlled by the Communist Party and if you want their money, you had better be well-connected to the Party. American renewable energy companies are heavily dependent upon government subsidies and mandates to use the expensive and unreliable renewable energy. In China they are supported with subsidies, with the added problem that Chinese renewable energy companies have no local markets and are heavily dependent upon the failed hypotheses in the West that we are about out of oil, gas, and coal and that CO2 emissions from fossil fuels are going to cause environmental catastrophe.

The Chinese high-speed rail system does not work well and is losing money badly despite many potential riders, who cannot afford the service however. Similarly, the high speed rail systems Obama and Biden have backed will not have enough riders and will have to be heavily subsidized or they will have virtually no riders. The IT bubble we had burst in the early 2000s was really a combination of IT, optical communications, and biotechnology, all of which were heavily pushed by the federal, state, and local governments in the United States without proper regard for the development of actual markets.

The Chinese have the GDP growth advantages of starting at a very under-developed level and can play rapid catch-up by copying the technology already developed in the West and especially in the United States and they have a very large population. It is not reasonable to laud their system as the equal of ours when their per capita GDP is still so low compared to ours. Their GDP growth numbers may be largely meaningless in any case. There are reports of complete cities built with the effort counted toward GDP, but which are unoccupied and of low-quality construction. You have to ask how much of the Chinese dry-wall exuding noxious fumes of H2S went into their home market construction. One has to pay attention to the surveys that say that successful entrepreneurs want to emigrate to the West in huge numbers. There are many reports of companies seeking high rates of growth getting in way over their heads with borrowed money and owners running to escape their creditors. Remembering that their creditors are essentially one and the same as the Communist Party, this is the equivalent of running from the Mafia loan shark in many cases.

The return on investment for much of the construction in China does not look good. This is not a surprise. The Chinese Communist Party's five-year plans do not pay much attention to return on investment and that will mean their claimed growth will not be sustainable. They are not planning anywhere near as well as the Japanese did and yet the Japanese plans failed. At the moment, Chinese exports are falling due to a combination of depressed buying power in the West and more inexpensive labor competition from Southeast Asian and Latin American countries. The Chinese currency, while still undervalued, is appreciating. The Chinese also face a major problem with their rapidly aging population, thanks to their ill-conceived one-child policy.

Oddly, Andy Stern expresses no concern about the miserable working conditions of Chinese workers and their very low pay. He is not infuriated that they are not allowed real labor unions. He is not bothered by the recent increase in strikes and labor disputes, which the Chinese Communist Party uses the police to suppress. Apparently, Andy Stern desires communism more than labor union representation. We must remember Obama saying he always sought out Marxist professors, that Van Jones was a Communist Party member, and that Obama's Communications Director Anita Dunn had wet dreams about Chairman Mao. Her husband, Bob Bauer, served as Obama's personal lawyer, then his White House Counsel, and now serves as a Democrat Party adviser on election and campaign finance law. Obama's Manufacturing Czar Ron Bloom is another admirer of Mao. Mark Lloyd, the Diversity Czar of the FCC, admires socialist Venezuelan Hugo Chavez for his control of that country.

Obama and most of his friends are essentially Marxist-Leninists. Most of America's labor union leaders are Marxist-Leninists, as is Stern, and this makes one very uneasy about the 36.2% of government workers being led by such union leaders. Obama and his friends, including those in the labor unions, want a top-down imposition of value choices and controls supported by a huge central planning bureaucracy which can supply a home with power for many an academic Marxist-Leninist and their well-indoctrinated graduates. They want to impose this system with a flurry of Executive Orders, because it is too messy to have to win elections and fill Congress with one's supporters. The present, hardly free market system, is still much too free for their taste. Andy Stern is truly Obama's close friend and ally. He has made his agenda very clear in his Wall Street Journal Opinion. He has also revealed Obama's plans in the process.

Politicians Use Big Government to Enrich Themselves

2011-12-04T10:46:00.001-05:00

For a politician, the temptation to increase the power of government is huge. The more power the government has and the wider the range and scope of its activities, the more power the politician has both to acquire wealth and to satisfy his growing lust for power. Absolute power corrupts absolutely. Absolute power makes a man wealthy.

Presidents, Senators, and Congressmen can threaten an industry, or an entire sector of the economy, or even a single business with legislation which will hurt its profitability. This threat may go no further than talk, or it may be approved by a committee of Congress, or it may become law. At any stage of the process of producing a potential law, politicians can line up as saviors of those threatened and hold out their hands for campaign rewards or they can wait for a company or industry to approach them asking how the industry or company can save itself. Savvy companies and industries often shower politicians with benefits such as hiring a relative or providing campaign contributions to head off any such attack upon them. Politicians are very wily about using this process to extort money from private companies and the wealthy. The Democrats have been very effective in using their power to hurt Wall Street to extract huge campaign contributions from Wall Street financial firms using this technique, resulting in Obama's huge contributions in 2008 and further large contributions to many of the Democrats in the 2010 election.

Alternatively, a company or industry may be seeking to use its relationships with politicians to win subsidies or to win protections from competition. Immoral companies and industries will pay for this. For instance, many health insurance companies and drug companies were eager for ObamaCare to pass, since it would bring more business to them if many more people were to use more medical benefits. There are large agricultural businesses eager for farm crop and land use subsidies. Corn growing farmers and ethanol refiners are often strong lobbyists for the ethanol subsidies that make no environmental or energy sense. The so-called green energy companies stand in line for billions of dollars of grants from the Department of Energy. Peter Schweizer's book Throw Them All Out shows that a number of wealthy Obama supporters won $16.4 billion of Department of Energy green energy grants as a huge return on their campaign contributions. Wall Street companies are eager for special assess to Federal Reserve money or for protection against losses under Too Big to Fail. Congress' and the President's ability to change the rules of business also entice labor unions to make huge contributions in exchange for favors.

There are other ways this process of stirring the pot with threats against industries and companies can yield wealth for our legislators. If they simply talk about making a change of law that will hurt or help a company or industry, they can drive that industry's or company's stock prices up or down or they may affect the cost of a commodity. Knowing that they are about to talk down or talk up a company, they can use that information to make almost certain money on purchases or short trading of its stock. They can talk about taking harmful action, but then back off, having bought much stock when the price was depressed. A last minute provision or even a last minute complete bill such as ObamaCare or the Dodd-Frank financial industry control bill may have stock value implications that Senators and Congressmen or a select few of them know about. They can use this information to make a stock investment killing. In the case of bills that give major rule-making power to executive agencies, those government insiders with information on those rulings can make a killing. For members of the Executive Branch, this is illegal, but it is also commonly not discovered. Congressmen are often informed about how these rulings are going and there are no laws against their using this insider information.

Now, it is not the fact that they are becoming rich men and women which is the worst of this. It is the fact that each of these possibilities to become rich are actual incentives to cause them to do harm to others that goes way beyond their having campaign advantages or having an advantage in making money that most investors do not have. These power and wealth incentives mean that bill after bill that is claimed to be passed for the general welfare is actually passed despite its hurting most Americans. Or, if it is not passed, it is only because companies or industries or wealthy people have been successfully extorted.

We need to bear in mind that all of these nefarious activities are the result of big government. They are inherent in the size and scope of government which allows it to be such a business and labor market threat that such activities are not just enabled, but they are inevitable. One hears talk of campaign finance reform, but that inhibits freedom of speech and has rightly been ruled by the Supreme Court to be a violation of the Constitution. There is now talk of banning Congressional insider trading either entirely for serving members of the Congress or at least when Congress is in session. There is also talk of making Congressmen set up blind trusts. Congress has to pass any such reform bill and history tells us that they will only pass a bill with many loopholes and that will only happen if there is a major popular outcry.

All this mischief and grief occurs because we have allowed the government to greatly exceed its very limited constitutional powers. This is why we have a government that panders to special interests and which has every incentive to ignore the general welfare. The General Welfare is served by protecting our equal, sovereign individual rights to life, liberty, property, and the pursuit of happiness. Government is the problem, because it has become gigantic government. While the People retain the nominal control of this government, the reality is that its activities are too complex and too all-pervasive in our society for most of the voters to follow them and to understand them. Government by the People can only be effectively managed by the People when that government is of highly limited power and scope. That was the condition that the People wisely mandated with our Constitution. Because we have ignored these wise limits, we now have a government of the special interests, by the special interests, and for the special interests. Abraham Lincoln's description of our federal government, while much preferred, has become a practical lie.

Some Nations See Individual Rights Differently

2011-11-27T23:59:00.001-05:00

How very strange is the viewpoint of many of the world's other nations. Syria has just been chosen by the nations of the United Nations to serve on a UNESCO committee that deals with human rights violations. Despite killing 3,500 protestors to the ruling Syrian regime, Syria was just reappointed to serve on the UN Committee on Conventions and Recommendations. This committee examines the violations of nations of human rights in education, science, and communications, among other areas. The United States just recently froze its funding of UNESCO because it had admitted Palestine as a member. Terrorist nations are thought by many U.N. countries to be best put in charge of monitoring human rights violations. More rational observers will clearly recognize that means the U.N. views human rights as a farce.

The United States backed draft resolution in the United Nations condemning Iran of human rights violations passed by a vote of 86 - 32. But of the ten largest recipients of our foreign aid, only Israel voted for the resolution, while the two largest aid dependents, Afghanistan and Pakistan, voted against the resolution. Iraq did not vote at all, while Egypt, Jordan, South Africa, Kenya, Ethiopia, and Nigeria all abstained. As is commonly the case, Russia and China voted against us. India, which used to usually vote against us, but more recently has been more likely to see its interests as more consistent with ours, also voted against the resolution condemning Iran. Our ever greater commercial ties with India and China have not caused either nation to become consistently rational in its foreign policies. Such additional lines of communication as exist with the people of these countries has not led to their understanding that tyrannical governments are morally repugnant and make bad friends. Once again, many nations of the world express their disdain for individual rights.

The defense of individual rights has to be maintained with vigor around the world and within the United States. While Obama, Biden, Pelosi, and Reid have little regard for many of our individual rights, they are trending in the direction of the crueler and more ruthless nations of the world, but are not yet a match for them. We need badly to choose American leaders who will work to establish the many essential individual rights that are now so widely ignored even in the United States. When the United States lives up to its own standards of rights as proclaimed in its Declaration of Independence and as sustained by the Constitution, perhaps many of the people of the many rogue nations today will also be inspired to assert their own individual rights. The best foreign aid we could offer would be a better example of devotion to individual rights for Americans.

ClimateGate 2.0, Climate Uncertainties, and Funding Bias

2011-11-26T01:27:00.001-05:00

The latest release of e-mails among the prominent catastrophic man-made global warming scientists at the University of East Anglia and their like-minded scientific colleagues around the world has further established many scientific blunders, uncertainties, political maneuverings and biases among this cabal of scientists. There is evidence for each of the following shortcomings:

1) More uncertainty among these scientists than one would expect given their claim that the science is settled.

2) Admission that the global climate computer models are wrong about how they handle cloud cover. Since cloud cover effects are by themselves easily large enough to account for all the claimed global warming, this is a serious fault.

3) Acknowledgment that the global climate computer models are tuned to match the climate results on the ground claimed by the catastrophic man-made global warming advocates. This is a very serious charge, since if you have a data set of 100 data pairs, a 100th order polynomial will fit that set exactly. The computer models have thousands of adjustable parameters which provide huge leeway for tuning the desired outputs to past climate results over a few decades. The computer model advocates have explicitly met such criticisms in the past with denials. The fact that the models have claimed to match the results of the last few decades in many cases, but have failed to provide predictive matches to the last 12 years or so, is very telling as well as the admission in the e-mails. One also does not hear of studies for which a given computer model that has been tuned for recent times gives accurate climate results for say the Little Ice Age or the Roman Warm Period.

4) There is an admission that many studies have failed to find the computer model predicted warming of the troposphere at altitudes of 8 to 12 km or more and there is only one questionable study that claims to have observed such a warming. If this computer model prediction is wrong, then the science of the computer models is wrong.

5) There is a claim that the solar incident infra-red radiation is underplayed by the alarmists, who rely on one paper which is contrary to several other published papers. This is important because it is critical to know how much of the incoming solar radiation never reaches the ground due to absorption in the atmosphere. Increased water vapor and CO2 will also reduce incoming solar radiation thereby providing a cooling of the ground temperatures as explained in my analysis in a chapter of Slaying the Sky Dragon - Death of the Greenhouse Gas Theory.

6) Admission that the long term temperature reconstructions by the catastrophic man-made global warming advocates were not on a solid footing. Errors were actually so large that comparisons of such data to computer models was of little help if the errors were acknowledged. The Little Ice Age, the Medieval Warm Period, the cool period of the Dark Ages, the Roman Warming and other periods of natural temperature changes are all awkward for those claiming that the recent warming is both unusual and caused by man's emissions of CO2.

7) Admission that Steve McIntyre may be right about how the statistical handling of the temperature data may have been the artifice source of the hockey stick temperature reconstruction of Mann.

8) Admission that none of the climate computer models performs adequately in predicting sea surface temperatures and water vapor concentrations. This is critical because water covers 71% of the Earth's surface and all of the supposed predictions of CO2 warming actually are supposed to cause more warming due to the inducement of higher water vapor concentrations. The water vapor increase will produce more water vapor warming than the CO2 causes warming by itself according to their theory.

9) There is no need for any one global climate computer model to be correct. Does this not admit that the science is not understood, since otherwise one would give a reason for why that model was incorrect and why its non-compliance with other models or reality was not important? The outlier model might be the only good one, if one does not really understand the science. It is interesting to note that when one of the models is run multiple times, it gives many different answers. One wonders how many outlier results are thrown out because they simply not believed in. Many of the IPCC models were not run enough times to even understand how poor the reproducibility is.

10) There are many discussions of cherry-picking data sets or papers that showed more warming or more harmful effects to demonstrate a more alarming result. This was true of dramatic events such as storms, advice to emphasize iconic animals, plants, and geographic areas, ways to reconstruct past period temperatures, and advice to ignore some climate extremes of the Medieval Warm Period such as droughts.

11) Concerns that the effects of the sun were not given enough strength in the models and if they were, they would greatly reduce the claimed effects of greenhouse gases.

12) Concern that contrary to the models, water vapor over land in the tropics may not have actually increased as CO2 increased.

13) Admission that the melting of the Kilimanjaro glacier was not caused by global warming.

14) Concern that European forests are thriving as CO2 concentrations increase, rather than being harmed by acid rain caused by increased CO2 concentrations.

15) Puzzlement that there is a minimum in the temperature in the lower troposphere which cannot be duplicated in any computer model that allows surface warming.

16) Phil Jones whose paper on the urban heat island effect minimizes the size and variability of such an effect, though studies in the U.S. and China show it to be very large, claims that there is no change in the heat island effect in New York, London, and Vienna in the 20th century! He also claims the oceans have warmed at a rate consistent with the land warming, which is a claim many would say is false.

17) There is more discussion of seeing that only those friendly to the catastrophe hypothesis are chosen for significant positions in the writing of the U.N. IPCC reports and reviewing them.

18) There are more indications that politics is strongly driving the desired scientific outcomes and that those who are not so committed to the political and pro-government stand of the alarmist viewpoint are untrustworthy and to be generally excluded.

19) There is further discussion of the need to hide original and raw data from scientists and the public not deemed to be dependable to the cause even if publications and research based on such data was funded with government money by countries such as the United States and the United Kingdom that have freedom of information acts on the books.

20) There is a claim that officials at the U.S. Department of Energy are complicit in hiding original weather station data. This is important, because the primary claim to warming in the last few decades is mostly supported by land-based data from weather stations. The rural stations do not show such temperature rises as are claimed by various government agencies of the U.S., the United Kingdom, and many other countries around the world, however. The claims of warming are generated by massaged data by interpolation schemes over regions with no weather stations (or whose station data was ignored) or by large corrections made or not made to data from stations affected by urban and suburban sites and with sitings that do not meet required specifications. The urban sites tend to have rising temperatures due to man's local activities and structures. Scientifically, it is very important to be able to examine the raw data and to have independent scientists examine whether any adjustments are performed correctly. Of course, it may well be that an honest scientific assessment would conclude that there is no way to even use such data given the size of the temperature shifts for which one is looking. It is my contention that no data from any station that does not meet specifications should be used and no data from stations affected by urban heat island effects should be used.

21) Claims that the governments want them to tell a very strong story of climate change caused by man with no caveats. The team of advocates has a duty to see to it that this is the case and to serve as active proponents of the political message.

22) Discussions that advocates should talk up the desirability of stable climate and avoid discussing the costs of cutting back on the use of fossil fuels and the sacrifices people would have to make to do so.

I have been pointing out that the science behind catastrophic man-made global warming was largely wrong for years now. One of the most common rebuttals I am given by its proponents is that if the science were so wrong, then many conscientious and eager to prove themselves climate scientists would be aligned with me and making their careers in doing so. Many of these same critics of my viewpoint that the hypothesis of catastrophic man-made global warming science has failed, constantly claim that those who are skeptics and deniers are all in the pay of the fossil fuel companies. That claim is wrong, but catastrophic man-made global warming proponents establish the idea that they think scientists will deliver the desired results of their funders. This may be a projection of their own shortcomings upon others.

Let us use their claim that scientists are so vulnerable and apply it to the many climate scientists who support the hypothesis of catastrophic man-made global warming and ask who funds them. The answer is that they are all funded by governments and the U.N., all of which have a decided interest in having reasons to increase the powers of their governments or the U.N. and increase controls over the activities of individuals and companies. That the government of the U.S. is so biased in favor of this hypothesis and is so determined to declare it settled science, is backed by the e-mail referred to above in which the U.S. Department of Energy was noted to be happy not to make original station data available to scientists not under their funding control. There is huge pressure on all scientists in climate research to provide the results the funding governments want, or their funding will be cut off. There is no comparable replacement source of funds, so almost everyone toes the line or is simply naively influenced by the argument from authority because so many do toe the line.

The U.S. government is doing more harm to science than Stalin did with his Lysenko perversion. Contrary to what government would have you believe, there is no settled climate science on catastrophic man-made global warming, except that any possible warming is greatly exaggerated, as are its consequences. We must always remember that man has always prospered most when the Earth was warm. This has been most clearly the case since the Holocene period began.

Principled Versus Pragmatic Government

2011-11-21T02:03:00.001-05:00

There are essentially two competing choices in government:

1) A government which is highly limited by principle in power and scope to the purpose of protecting the equal, sovereign rights to the individual to life, liberty, property, the ownership of one's own mind and body, and the pursuit of personal happiness. This is the legitimate government envisioned by the Declaration of Independence and the Constitution.

2) A so-called pragmatic government not restricted by principle to a limited scope and with few powers which is inclined to bestow special privileges on special interests. Such a government may be a democracy, an oligarchy, a one-party state, or a dictatorship and it must of necessity trample the rights of the individual because our personal interests are too diverse for government to foster all of our interests. It must pick which interests it will favor and which it will suppress. It violates the principle that government should do no harm. This is the kind of government we now have.

The media generally has failed the People because it does not believe in the principles of limited government and of the equal, sovereign rights of the individual. Rather than being watchdogs of our freedoms, they are mostly advocates of further infringements upon individual rights.

The Democrat Socialist Party scoffs at the very idea the Constitution limits the powers of government and that the Declaration of Independence is even a document with standing in the U.S. Pelosi, Biden, Obama, Waxman, Waters, and many other Democrats have literally confirmed this scoffing attitude with explicit comments.

Many Objectivists and Libertarians are fond of saying the Republicans are just as bad as the Democrats. The Republicans very frequently violate the Constitution, but they do sometimes try to use it to reduce the rate of government expansion and they rarely scoff at it. It is mostly Republicans who have tried to get ObamaCare declared unconstitutional and have tried to defund it in the House of Representatives. Such fairly stout defenders of freedom and individual rights as there are, are in the Republican Party. The valuable Tea Party movement is rightly mostly voting for and supporting Republicans, while trying to reform the party. I can think of no one in the Democrat Party who is a stout defender of freedom beyond a few points of narrow focus, such as opposing DOMA, DADT, and supporting abortion rights. As for Bush being as bad as Obama, that is a gross exaggeration. He was not fiscally responsible, but he was not in a league with Obama in the amount spent and certainly not as bad at just throwing away the money spent.

If we cannot educate the public to demand principled and legitimate government (as defined in the Declaration of Independence), then there is no path to good government. It must of necessity degenerate into special interest politics such as we have now. Those who want to stop the discussion of principles will never matter a wit to substantial improvement in the idea of good government. It can be helpful to get people to listen to principled discussion to point out the absurdities into which pragmatic, special interest government falls and to ridicule it. I do this frequently on my blog. But in the end, no major improvement in government will come about unless the People believe in the equal, sovereign rights of the individual and understand what those rights are.

The special interest nature of our federal government is well-illustrated by some examples in this Washington Examiner editorial, Washington conducts public business for private gain. This paragraph is one of the more interesting from this editorial:

You'd think that Obama would have locked up the environmentalist vote with the billions of tax dollars that he's sent their way already [before denying the Keystone XL Pipeline]. We learned additional details about that corrupt process this week when it was revealed that more than $16 billion of the $20 billion spent by Obama's clean energy loan program went to companies linked to former members of his White House staff, prominent corporate campaign donors, and campaign contribution bundlers. The U.S. Constitution begins with the words "We, the people," and goes on to frame a government that is supposed to be their servant. It's time Washington was reminded of who serves who.

The editorial also addresses the fact that our Congressmen tend to enrich themselves with insider information and the power of their positions. This is the natural state of any government that views itself as pragmatic and does not have any respect for the rights of the individual and the limited government it requires as embodied in the American Principle of our Declaration of Independence and our Constitution.

Obama Begs Asian Nations to Buy American Goods

2011-11-19T19:02:00.001-05:00

Ending his trip to Southeast Asia and his home country of Indonesia, Obama has just given a speech about th many wonderful things he is doing to increase exports that support American jobs. At the end of the speech, he claims he is willing to do everything he can to see to it that American businesses can succeed. This means he should:

1) Greatly lower the corporate tax rate, which is the highest in the developed world.

2) Repeal ObamaCare with its high taxes on health care, its requirements that the young subsidize the old and the healthy subsidize the unhealthy, and its effect of raising health insurance costs so high more and more American companies are no longer providing it as benefit and fewer and fewer people can afford to buy in on their own.

3) Repeal the minimum wage law which keeps under-educated Americans from getting on the job training so they can acquire job skills worthy of higher pay.

4) Stop draining the private sector of its wealth and income to grow the government parasite ever larger.

5) Stop Dodd-Frank and Sarbanes-Oxley which cause American companies so much financial grief.

6) Stop trying to prevent coal mining and the use of coal to provide low cost and dependable electric power.

7) Stop trying to prevent oil and gas field development.

8) Stop preventing the building of oil and gas pipelines which can cheaply deliver their products to industry to make goods for the American economy and for export.

9) Transfer the unpaid tax collecting and filing duties from employers to employees, who then can evaluate the work involved in tax compliance and taxes paid better when they vote.

10) Stop using the government to interfere with freedom of contract in favor of union extortion schemes both in employer-employee agreements and in forcing companies to choose union-controlled states over those which are not union-controlled.

11) Stop mandating that expensive and unreliable so-called green energy must be used for electricity generation, thereby hurting the coal and natural gas industries and every industry and every household that uses energy.

12) Stop subsidizing and requiring the use of ethanol blends in gasoline which drives up the cost of doing business through increased fuel cost, increases our food costs and deprives us of food to export, and leaves consumers with less to spend on other goods and services.

13) Stop the nonsensical EPA declaration that CO2 is a pollutant and the NASA and NOAA claims it is a likely cause of catastrophic man-made global warming.

14) Get the government out of education so we can have the best educated workforce in the world and young people who will not be so indoctrinated into believing that socialism is good and commerce is bad.

15) Reduce FDA, FCC, FAA, SEC, NLRB, OSHA, IRS, and many other agency's direful impact on business efficiency.

16) End the death tax that kills so many small and medium sized American companies or at least sets them back badly upon the death of a primary owner.

17) Reduce the capital gains tax so the the American economy can be sped up and more efficient.

18) Flatten the income tax so personal commercial success is punished less and people have more income to invest in businesses.

19) Stop general government overspending which forces the Federal Reserve to purchase the Federal debt bonds, thereby flooding the economy with money and causing the cost of goods and services to go up.

20) Stop spending more than tax revenues can pay for so that our economy is not hobbled with high taxes to pay interest on the ever-growing government debt.

21) Foster recognition that businessmen are providers of goods and services that the purchasers believe improve their lives, which is why they voluntarily buy them. Thus, businessmen are bringing value to others and doing good. When people do good their government should not be trying to vilify them and punish them.

Do these things and the President of the United States will not be running around the world begging other countries to do business with us. The people who run companies in those countries will be swarming to the U.S. to ask our companies to do business with them. People want to work with the best and we can be the very best if the government gets off our backs.

Private Pipeline Sector Runs Around Obama Block

2011-11-19T01:30:00.001-05:00

In an interesting development following the Obama block on the Keystone XL Pipeline project which was to bring oil from the Alberta tar sands and the North Dakota/Montana Bakken oil shale formation down to Cushing, OK and on to Houston/Port Arthur, TX, two private companies are seeing to it that the pile-up of oil in Cushing has a pipeline route to Houston. The Seaway Pipeline has carried imported oil from Houston up to the pipeline central routing facilities in Cushing, OK for years. That pipeline was owned half by its operator, Enterprise Products Partners, LP of Houston and half by ConocoPhillips. Enterprise Products Partners has long wanted to reverse the direction of flow to carry the comparatively cheap and plentiful oil in Cushing to Houston area refineries which have been hurting for oil due to diminished supply from Venezuela and Mexico. The pile-up of increased American and Canadian oil in Cushing has caused that oil to sell for as much as $28 a barrel less than the world price. ConocoPhillips did not mind this because it operates oil refineries in Oklahoma which were making a fortune on refining the under-priced oil there.

But, ConocoPhillips just sold its 50% ownership in the Seaway Pipeline for $1.15 billion to Enbridge Inc. and the pipeline flow direction will now be turned around. This is part of a massive trend to correct the U.S. pipeline system for the new internal sources of oil and the overall increase in oil production in the U.S. and Canada. Enbridge is spending $300 million to add new pump stations and to modify old ones. By the 2nd quarter of 2012, the pipeline will be pumping 150,000 barrels a day of crude oil from Cushing to Houston.
By mid-2013, the owners believe they may be able to move up to 400,000 barrels of oil a day with pumping improvements. The rejected Keystone XL Pipeline was to carry up to 700,000 barrels of oil a day from Cushing to Houston. The Wall Street Journal specualated on Thursday, 17 November that the reversal of the Seaway Pipeline might remove the commercial justification for the segment of the Keystone XL Pipeline from Cushing to Houston. I believe there will still be good reason to build that additional pipeline segment, at least if the Hardisty, Alberta to Steele City, Nebraska pipeline segment is ever approved. Perhaps a capacity of a bit less than 700,000 barrels a day will make more sense, but the projected 2013 400,000 barrel capacity of the Seaway Pipeline project could easily be matched.

The reason for all this activity is because U.S. oil production, which had been declining steadily since 1985 and generally since 1970, began to increase in 2009. Production bottomed out in 2008 at 5 million barrels of oil a day and has increased by 10% since, despite every effort of the Obama administration to halt new oil production projects. Our exports of refined petroleum products have doubled in the last three years, with us now exporting 2.6 million barrels a day of oil products. We are now exporting 15% of the gasoline and diesel refined in the U.S. The main market for our exported Gulf Coast refined products is the rapidly growing Latin American market.

Meanwhile, Obama has also blocked the development of the Utica Shale Oil Formation in the large Wayne National Forest in Ohio claiming concerns about fracking effects. A mineral lease auction scheduled for December 2012 has been canceled. There are already nearly 1300 oil and gas wells in that forest and the concerns about hydraulic fracturing are highly bogus. But no excuse to prevent private sector job creation is too flimsy for the Obama cutthroats.

Obama Supporter Buffett Benefits from Keystone XL Denial

2011-11-16T01:24:00.001-05:00

Surprise, surprise! Obama supporter Warren Buffett is a huge beneficiary of the Obama denial of the Keystone XL Pipeline, which was to carry Alberta tar sands oil to Gulf Coast oil refineries and siphon off up to 65,000 barrels a day of oil from the Bakken oil shale formation in North Dakota. The Burlington Northern Santa Fe Corporation which runs the BNSF Railway Company became a Berkshire Hathaway, Inc. subsidiary on 12 February 2010 in a huge purchase by Warren Buffett. Between them, the BNSF Railway and the Canadian Pacific Railway are the biggest railway systems able to serve the Bakken Oil Shale Formation with both incoming supplies and moving oil to refineries or to other pipeline terminals. The BNSF Railway through its connections with the Canadian Pacific and Canadian National Railways can also expect considerable business moving the Alberta tar sands oil to U.S. markets. This may be a very lucrative case of crony mercantilism between Obama and one of his biggest supporters.

The map of the BNSF Railway system is shown below:

It is well situated to move crude oil from the Bakken oil shale formation to the Houston, Texas and Port Arthur, Texas area or to the Cushing, Oklahoma super-pipeline terminus. Because it has extensive feedlines to the Canadian Pacific and Canadian National Railways along the North Dakota northern border, it is also well-positioned for considerable traffic from the Alberta tar sands which were the primary reason for the Keystone XL Pipeline. Who knew the the many lines built to move North Dakota wheat to market would one day also be vital for moving oil to market?

Let us get a sense of the size of this business. By the end of this year, there are plans to be drilling 1,800 new wells in the Bakken oil shale formation. Each new well requires 23 rail-cars of drilling pipe, frac sand, clays, and other supplies. At the end of 2010, the daily oil production was already 300,000 barrels and most of it has to be moved by truck to rail-head terminals and then by rail to markets or to pipeline terminals. A 118 car unit train can move 68,000 barrels of oil. It is thought that Bakken oil production may reach 700,000 barrels a day by 2013, so even just a delay on the go-ahead to build the Keystone XL Pipeline until after the 2012 election in 2013 will mean a huge increase in railroad business before the pipeline can be finished. There are projections that Bakken may produce 1 million barrels of oil a day by 2015. Whether the Keystone XL Pipeline is ever built or not, the Buffett-owned BNSF Railway will make good money from both the Bakken and the Alberta Athabasca oilsands.

BNSF Railway is constructing sidings and turnouts and improving its yards along the railways expecting increased Bakken oil shale formation traffic. BNSF is investing $3.5 billion in 2011 to improve its infrastructure. The expenditures are primarily focused on its mid-continent routes, which are the ones needed to move oil from North Dakota to the Gulf Coast. They also move its profitable coal traffic. It was already moving several unit trains a week from the Bakken to Stroud, Oklahoma (near the pipeline center of Cushing, Oklahoma), to Bakersfield, California, to St. James, Louisiana, to New Mexico and to Texas in early 2011. They are spending $450 million to acquire 227 locomotives and another $350 million on freight car and other equipment. Another $300 million will go to terminal, line and intermodal expansion and efficiency projects.

A new multi-user rail terminal is being built in Port Arthur, Texas to allow oil refineries there to be supplied by heavy rail traffic. It is to be opened in the second quarter of 2012 with generous crude-oil storage tank capacity. Oil may also be moved to Corpus Christi, Texas refineries as well. One thing rail transport does is allow more flexibility of destination for oil shipments compared to pipelines. The railroads cost more to move the oil than do pipelines, but they can offer more options to get the oil to where the demand is greatest. They can also ramp up delivery capability much faster than pipelines can because they do not have the long environmental delays! One could say the environmentalists groups are the allies of the railroads. It is also easier to tune the delivery of oil from a field depending upon the cost of production there and the cost of oil on the world market. This is important because Bakken shale oil costs more to extract than say much of the Saudi Arabian oil, so it is conceivable Saudi Arabia might sometime flood the market with cheap oil, so that production of Bakken oil should be cut back. For now, however, Bakken oil is much cheaper than oil on the world market.

The expansion of the railroads is a good thing, but it is not right if one of the considerations in denying the Keystone XL Pipeline construction permits was that the pipeline would hurt Obama's friend Warren Buffett. Given the extent of crony mercantilism in the Obama administration, it is hard not be suspicious.

Democrat Socialism, Energy, and Pipeline Hysteria

2011-11-15T01:13:00.001-05:00

Obama's dictate that the private sector not create 20,000 construction jobs now and up to 465,000 future jobs in the U.S. by denying the Keystone XL pipeline, is a highly enlightening illustration of the environmental and global warming hysteria of many of the supporters of the Democrat Socialist Party. Let us examine this pipeline and energy hysteria more closely and learn.

In 2009, there were 148,622 miles of oil and oil product pipelines in the U.S. There were also 1,539,911 miles of natural gas pipeline in the U.S. The Keystone XL project wanted to add 1,661 miles of oil pipeline to this massive network of pipelines. Some of the major pipelines now in existence are shown in the map below.

The green-coded pipelines are major oil pipelines, the red lines are major gas pipelines, and the blue lines are product pipelines. The Keystone XL pipeline will bring 830,000 barrels a day of Canadian tar sand crude oil from Alberta down through Montana, South Dakota, and Nebraska to link to an already operating 298 mile pipeline segment across Kansas to the important storage and transit center of Cushing, Oklahoma. It will then build a segment from Cushing on to the Gulf Coast oil refineries at Port Arthur and Houston, Texas. These Gulf Coast refineries have been hurting recently due to reduced production of Mexican and Venezuelan oil by the inefficient national oil companies of those countries. This supply of dependable Canadian oil will be a godsend to these important oil refineries. The pipeline would be built at an actual construction cost of $7 billion for the portion in the U.S. by TransCanada to supplement a smaller pipeline capacity of 435,000 barrles a day already in use bringing Canadian tar sands oil to oil refineries at Wood River and Patoka, Illinois near St. Louis with a branch to Cushing, Oklahoma. The Keystone XL and present TransCanada pipelines are shown in the map below:

The red and blue lines are the existing lines, while the dashed lines are the new pipelines to be built. One of the objections to the pipeline is that it crosses the Ogallala Aquifer (misspelled in the US State Dept. map) shown in blue. This aquifer is found in 8 states and is a very important aquifer. If you examine the map of major pipelines above, you will find that a great many pipelines already cross the Ogallala Aquifer. These pipelines were built with older pipeline technology and without anywhere near the critical examination given to the Keystone XL Pipeline project. Most general oil spill concerns by environmentalists would be better directed at the 149,000 miles of older oil pipelines. For instance, many of these pass under riverbeds at a depth of 8 feet, while the Keystone XL Pipeline will be buried 25 feet below riverbeds. The Keystone XL Pipeline will have the latest in protective coatings and be built with more corrosion resistant and stronger steel than many older pipelines.

The single environmentalist objection that may have some merit is that the Keystone XL pipeline will cross the permeable sands of the Sand Hills in Nebraska where the Ogallala Aquifer is particularly shallow and vulnerable. After the Obama administration decision to delay a decision on the pipeline until 2013, TransCanada has just announced that it is considering several route changes to avoid or minimize the transit distance of the pipeline in the Sand Hills. The Sand Hills cover the northern and western areas of Nebraska. At least two of the existing major oil pipelines shown in the upper pipeline map above cross both the Sand Hills and the Ogallala Aquifer under them. If this were a problem, the State Department should have made an early decision against the pipeline and demanded it be rerouted then. If this is a critical environmental matter, the existing pipelines through the Sand Hills and over the Ogallala Aquifer should be shut down.

My expectation is that this is not that critical an environmental matter because there are already huge natural oil and gas deposits in and around the Ogallala Aquifer. Check out the shale oil deposits map below:

We see that the Palo Duro, Niobrara, and Excello/Mulky shale oil deposits are co-located with the Ogallala Aquifer. There are also extensive traditional oil fields in the Texas panhandle and western Oklahoma. The southwestern area of Kansas has many natural gas fields. Oil oozes to the surface in many areas of Texas and Oklahoma and yet the water supplies are rarely contaminated. Many major oil fields are crossed by rivers and yet there is no significant pollution of those rivers. Over-active imaginations can create many nightmare situations, but they actually require more unusual circumstances than one would expect to occur.

While one would hope that at worst a rerouting of the Keystone XL pipeline will still allow it to be built, one can count on the environmentalists to continue their many other objections and to do everything they can to prevent the pipeline. One of their biggest beefs is that they claim that much CO2 is emitted in extracting the bitumen and oil from the tar sands in northern Alberta. Concern about this is based on the fallacious hypothesis that CO2 emissions will result in catastrophic global warming. In any case, improved extraction methods have reduced the emitted CO2 by 38%.

There are other environmental concerns expressed pertaining to water use in Canada, but these are concerns we should leave to the Canadians. In any case, they are going to proceed to develop their tar sands projects and will sell the oil to the Chinese if we refuse it. Still another environmentalist objection to the import of Canadian oil from the tar sands is that it is an obnoxious oil to refine. Our Gulf Coast refineries will be using it to replace Venezuelan oil in large part and Venezuelan oil is also a nasty oil to refine. Our refineries are quite capable of handling nasty oil, while satisfying the EPA.

Among the great advantages of the Keystone XL pipeline is that it skirts the western edge of the Bakken shale oil formation in North Dakota, Montana, and Saskatchewan. It will be able to take on 65,000 barrels a day of the light and sweet crude oil from the Bakken formation. This oil is highly valued by oil refineries since it is very easy to process. There is a very great need to add to the pipeline capacity for transporting our own Bakken shale oil to the refineries of the Gulf Coast. It is estimated that the pipeline will save $36 million to $146 million a year in costs for Bakken oil.

Oil and gas related jobs have risen by almost 200,000 since 2003, making this one of the few bright spots in the U.S. economy. This has happened despite consistent opposition from Democrat Socialist environmental groups. U.S. oil production has risen for the first time since the mid-1980s and natural gas output has far exceeded expectations to the point that natural gas prices are now very low. Gulf Coast refiners would save $473 million a year if only 400,000 barrels a day of oil were delivered to them.

TransCanada has already invested $2 billion in the Keystone XL Pipeline and is suffering from a lack of income from money it has borrowed due to having already waited for 33 months to get approval. The total investment by TransCanada will be $13 billion, but with other related investments by other companies, the total investment may come to $20 billion. The Wall Street Journal reports that there will be 131,000 jobs created during the construction phase with 13,000 working on the actual construction of the pipeline. During the construction phase, state and local tax revenues will increase by $600 million. After construction, the pipeline will increase property tax revenues by $5.2 billion over its lifetime.

The environmentalist objections, to which the Obama administration has acceded, are mostly bogus and wrongheaded. Greater problems exist with already installed pipelines, though such problems are exaggerated. The one problem with some justification is going to be addressed with a route change now, but this was mishandled and could have been dealt with long ago so that jobs would be created now in the private sector. Even this objection to the Sand Hills transit is likely exaggerated and misplaced in that other pipelines with older technology and practices already transit the Sand Hills and the underlying Ogallala Aquifer.

More fundamentally the environmentalists are objecting to the use of inexpensive and reliable energy sources while falsely claiming that we can meet our needs with so-called green energy. Never mind that the so-called green energy is expensive and unreliable and whenever any particular project is considered it almost always meets determined opposition from environmentalists.

Obama denied the TransCanada application to build the Keystone XL pipeline until at least 2013 because the Democrat Socialist Party is fundamentally opposed to man improving his lifestyle and security through his voluntary cooperation with others in the private sector. It demands control of every individual's value choices and the power to squelch their independent choices is maintained by demanding that it micromanage our individual lives. Gaining control of all of our commercial, livelihood activities requires complete control over our use of energy. This is why the EPA, State Department, Dept. of Energy, NOAA, and NASA are all united with environmentalist groups everywhere to keep Americans from having inexpensive and reliable fossil fuel energy by any means possible. This is why, despite constant rhetoric about being focused on creating jobs, this Obama administration is only in the business of killing private sector jobs.

It is by no means clear that the great effort of TransCanada to create many jobs throughout our economy and the Canadian economy will succeed in the end. We are far better off with Canadian oil taking the place of Venezuelan and Saudi Arabian oil from the reliability of supply standpoint. It is much wiser to enrich Canadians than to enrich Hugo Chavez or the Saudi Princes. Besides just being better people, the Canadians will spend much more of their added wealth on American goods and services than will Venezuelans and Saudis.

Our having the option of a larger supply of Canadian oil always gives us the chance of acquiring less expensive oil and that gives us a general advantage throughout our economy. Manufacturing and transportation costs will come down and that will make us much more competitive in international markets. Americans will be able to raise their standard of living due to lower costs, more jobs, and increased exports. These are very serious advantages and we should be adamant in opposing the Democrat Socialist Party in its consistent efforts to deny these advantages to Americans. While many followers of that party are simply thoughtless and ignorant, there are many also who are simply mean-hearted, brutal, and too envious to think straight.

There are plenty of Democrat Socialists who do not have the personal ethics to refrain from doing great damage to their fellow man. Indeed, this knowledge that they lack such personal ethics is part of the reason they project such maliciousness of intent upon everyone in the private sector. Strangely, they block knowledge that if this were the nature of man, then the actions of man in the government sector would be as bad, indeed worse. Because it is mostly Progressive Elitists who are drawn to roles in government, we generally do observe avarice, mean-heartedness, and ruthless suppression of others at the heart of our over-grown and unconstitutional government. Obama is their leader and he must depart in 2012 if our economy and lifestyle are to improve.

Thoughts on Veteran's Day

2011-11-12T04:27:00.001-05:00

I was drafted out of graduate school to serve in the Army during the during the late phase of the Vietnam War. We had not been winning that war early, but were winning in its later phases under General Abrams. Being involved in this war was a strange experience. We had won a war that academia and the media thought we had lost and eventually the American People bought into that wrong assessment. Then we did leave dishonorably, having abandoned the South Vietnamese to the North Vietnamese Army when our Congress shut off all support, but the USSR and China continued support to North Vietnam. Our national interest had not been great enough to get into the war and to use a draft to provide the manpower to fight it, but once you tell a nation you have their back because you believe in freedom and the universal rights of the individual, you do not abandon them in a dark alley surrounded by the enemies of freedom and the individual.

America has not lacked for brave and dedicated men and women to save it from foreign threats to our security. What it has lacked is enough Americans who understand what legitimate government is. Our Declaration of Independence defined that as government that protects the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness. At that time, it was well-understood that this implied property rights, freedom of contract, and the right to earn a living were all secure from government interference. The Constitution was a mandate from the People to the government that it had very limited powers for the purpose of protecting our individual rights and for dealing with foreign governments and persons. Its internal powers were very few and limited to a postal service, post roads, patent protection, copyright protection, and establishing a uniform system of weights and measurements.

Unfortunately, we Americans have corrupted that legitimate concept of government in favor of a tyranny that offers a veneer of material security at the cost of our individual rights. The real battle for our freedom today is not with foreign powers, though that matters, but with our own understanding of why we need limited government and a healthy and vibrant private sector in which we each choose our own values and have the freedom of association to cooperate with whomever we want for the purposes we want on a voluntary basis. Government is always a last resort because government dictates values and suppresses the individual whenever it exceeds the very limited function of protecting the rights of the individual to life, liberty, property, the ownership of one's own mind and body, and the pursuit of individual happiness. Government cannot deal with the complexity and uniqueness of the individual, which is why it can only function usefully to protect our basic rights. It is the private sector that allows us to be who we are and accommodate to the fact that we are all very different, have many needs to cooperate with one another, and have unique hierarchies of personal values and goals. To understand this is to understand the American Principle.

I salute the Americans who have served in our armed forces. But, even more critically, I salute those Americans who understand and stand for, the American Principle. May you ever Stand Sure!

No Decrease in Missing Jobs Over the Last Two Years

2011-11-08T01:55:00.001-05:00

After nearly four years of a recessionary period, the normally reported unemployment rate means very little due to people giving up on finding a job. Of course someone unemployed might become self-employed, but with the many hassles our governments, local, state, and federal have chosen to create for businessmen, not everyone has the stamina, or is it the foolhardiness, to become an employer. Let us check up on the real unemployment situation through October 2011.

Once again, I will calculate the real number of missing jobs in our economy compared to January 2000 when jobs were plentiful and pay and benefits were sufficient to entice many Americans to choose to work. The unemployment rate was then 4.04% and there was a shortage of only 5,689,000 jobs, though much of that was really normal turnover as people chose to change jobs or career paths. The number of missing jobs can be calculated by assuming that 67.49% of Americans would want jobs now if they were available and offered good compensation as they did in January 2000. Due to the bursting of the dot com bubble in the early part of the first decade, by December 2005 the real number of missing jobs had climbed to 6.98% and that rate of missing jobs was almost identically the same when the current recession started. As we shall see, the number of missing jobs soared higher in this recession and the jobs recession has never ended. We are now missing 21,171,000 jobs, which is almost identical to the number of missing jobs in October 2010 and more than the missing job number of November 2009. There has been no progress in decreasing the number of missing jobs in the last year or the last two years.

The real unemployment rate is that given in the last row of the table. In July it was 13.21%, in August it was 13.31%, and in September it was 13.28%. In other words, there was no significant change and no improvement in the jobless rate in those three consecutive months. There appears to be a small improvement in October, though the statistical significance of any one month is usually low. The rate for October 2011 was slightly improved to 13.06%. There are no fewer missing jobs than in October 2010, however. At the October rate of improvement, this jobs recession will never end. This is hardly surprising given that the Obama administration remains as determined as ever to pursue policies contrary to the needs of employers and the economic freedoms they require and have every individual right to require.

Let us examine a chart of the number of missing jobs for the last 11 years:

There are more missing jobs at the start of November 2011 than there were in November 2009. Two more years of Obama and we have only fallen backward on the jobs situation. The man who wants to harm whole American industries such as the coal, oil, and natural gas industries and all those industries dependent upon these industries, knows everything there is to know about how to keep America from recovering from a severe recession. The man who gave us ObamaCare against the People's wishes and against the interests of employers and the man who penalized good financial institutions and most borrowers with Dodd-Frank financial "reform", knows how to squelch investment and employment like no one else. Repeated stimulus efforts, quantitative easings of bad loans or the federal debt, subsidies of weak industries such as the green energy industries, and bailouts of overspent state and local governments have had the certain effect of weakening the private sector at the expense of a parasitic cabal of governments and crony mercantilists.

Americans want to work and to create jobs, but at every turn, government policies are mounting to discourage the creation of jobs. These sorry government policies have proven very effective in creating this jobs stasis. A massive decrease in government regulations, mandates, subsidies, corporate and investment taxes, and spending is the only way out of this mess. Obama and the Democrat Socialists have a big government and anti-private sector agenda which will not allow any jobs creation to occur. The result is exactly what a rational observer would expect: A never-ending jobs recession.

North Dakota Oil, Truckers, Railroads, Jobs

2011-11-02T10:04:00.000-05:00

Government energy policy is presently directed at propping up unsustainable companies such as Solyndra which provide expensive and unreliable so-called green energy. Solyndra and others of these companies subsidized by the government have already failed with massive losses of government loan or loan guarantee money.

Meanwhile, in the private sector, the massive Bakken shale oil formation in North Dakota, Montana, and Saskatchewan is producing oil so cheaply that it is selling for $30 a barrel less than Brent crude, which is used as a world oil market benchmark for light, sweet crude oil. The Bakken crude oil is of high quality and much in demand by refiners. North Dakota's oil output is now 450,000 barrels a day and may double by the 2015. This output is exceeding the capacity of present oil pipelines and more are being built, but will not come on-line until 2013. At that time, production is still expected to exceed pipeline capacity.

The Bakken formation is large and fleets of oil tanker trucks are used to consolidate 70% of the oil from the wells to railroad terminals. This has led to a boom for the railroads between northwest North Dakota and Louisiana. Trucking outfits are booming, oil terminals are being built, and it is expected that two trains, each with about 104 oil tanker cars, will be filled each week. The North Dakota Pipeline Authority thinks it will have 700,000 barrels a day rail terminal capacity by next year.

Moving oil by train, rather than pipeline, adds $5 to $10 per barrel of cost. But, this highly desirable light sweet crude oil is so inexpensive that adding this cost to the price still leaves it in great demand. The demand is so great that trucks, truck drivers, and tank cars are in short supply. Truckers are being supplied with free housing as well as high pay. Local trucker Lunderby Trucking, of Sidney, Montana, grew from 1 truck to 18 in the last year. Lease prices for tank cars have doubled in the last year and a half to about $1,000 a month per car. Tank car manufacturer's have backlogs and no available cars.

Rational people have to wonder why our government threw away more than half a billion dollars on Solyndra so it could expand its production just before it collapsed. Similar large sums are being spent on numerous other so-called green energy company subsidies. Now, this is not a proper function of government and the stupid "investments" are no surprise. But if it were an appropriate function of government to invest in energy production, it would be more rational to help companies produce more pipelines and more tanker cars! Fortunately, we have a private sector, that though robbed of blood by many government parasites, can still perform such functions in a manner to preserve our individual liberties and to provide us with real power, relatively inexpensively and definitely reliably. And because it can, North Dakota has the lowest unemployment rate in the country at 3.5%!

Obama, get out of the way and allow the private sector to provide for our energy!

What Percent are You?

2011-10-20T22:16:00.000-05:00

The Occupy Wall Street crowd claims to stand with the 99% against the 1%. A conservative news service points out that the 1% earn more than $506,000 a year. But when it comes to figuring out legitimate government policy, we are not characterized sufficiently by our income. In fact, our income ought to be as irrelevant as race, religion, sex, or sexuality in government policy. Making it as important as it is commonly made is highly materialistic. Note that it is the socialist left that makes the most of income and in that shows its lack of spirituality and its extreme materialism.

Is it not odd that if a man takes the risks of owning his own company and works 70 hours a week and therefor someday may make a higher income than a man who takes a nice, safe 40 hour a week job as an employee and who watches TV for 30 hours a week, the hardworking businessman is taxed more? The businessman is required to be an unpaid tax collector, is held responsible for all of his employee's safety, is forced to pay for the unemployment of employees whether they ever worked for his company or not, and is supposed to see to it that his company complies with more than 200,000 pages of often-conflicting regulations or suffer crippling fines. The businessman may very well have 45 hours of his life each week taken by force from him for government purposes. The employee is more likely to have only 6 or 8 hours of his life claimed by government each week. These hours taken by force are the equivalent of slavery.

By what right does government enslave one man for many more hours a week than another? Worse yet, the government really only does it for the same reason that Willy Sutton robbed banks. That is where the money is. It just is not easy for the government to figure out how to take anything it wants out of the 30 hours a week our hypothetical employee is watching TV. The government simply wants to steal and it is easy to steal from the hardworking businessman, whether it is his mandated service to the government collecting taxes, complying with regulation, or as safety inspector and provider, or the money he earned with his time. The government is clearly just Willy Sutton.

It is absurd that people spend so much time characterizing themselves in terms of their income. Legitimate government has the sole purpose of protecting the equal, sovereign individual rights to life, liberty, property, and the pursuit of personal happiness. As far as government policy is concerned there are only two numbers that characterize each of us. They are 1 and 0.0000000032. You do know what the later number is, do you not?

Obama Jobs Bill Will Kill Jobs

2011-10-07T21:30:00.000-05:00

The Obama Jobs Bill is supposed to cost $447 billion, create as many as 1.9 million jobs according to economists who have already proven they have no clue, and increase the GDP by 2%, again according to those same clueless economists. Let us examine the effects of the Obama Jobs Bill in a simple and rational manner.

The GDP in 2011 is estimated to be $15.012 trillion. Obama's clueless economists say that his jobs bill will increase the GDP by 2% because simply printing money you do not have always increases the size of the economy. Hmmm....., no wonder many of them keep saying we just need bigger stimulus packages and with an outpouring of enough newly printed dollars, the economy will grow and we will all have dream jobs. If this effect works, then the government should print up $15.012 trillion and the economy will take a Great Leap Forward! Apparently some us are just too timid to do this. But Paul Krugman would be happy to push us into it. OK, so yes, I do not believe this is the way the economy works for a minute, or even a second. But still, it is interesting to examine whether the Obama Jobs Bill makes some kind of sense even on the numbers given by the clueless Obama economists.

First, we need to note that the cost of the bill, $447 billion, is 2.98% of the GDP. That is more than the 2% growth of GDP claimed to result from this expenditure! In fact, we can calculate from these numbers that for every dollar spent by the government in this Obama Jobs Bill $0.33 simply vanishes into thin air. The Obama economists are claiming that this government expenditure is only 2/3 as effective as other money in the economy, which already includes huge inefficiencies due to the cost of overblown governments with their over-compensated employees and all of the mandates and regulations they impose without regard to cost upon the much more efficient private sector.

But, it gets worse. Assuming that, most unbelievably, Obama's Job Bill does create the wishful 1.9 million jobs, each job costs $235,263. This comes from dividing $447 billion by 1.9 million jobs. We can compare this number with the cost of the jobs we presently have. Of course the cost of those jobs is already grossly cranked skyward by the many prior costs of government, so we should remember that real private sector jobs cost less than the amount we are about to calculate because we are including all jobs and that includes all of those very expensive government jobs. At present, each job costs ($15.012 trillion)/(140,335,000 jobs) = $106,973, where the present number of jobs comes from the Bureau of Labor Statistics Unemployment Report for September 2011. So a new Obama job will cost 2.2 times as much as the composite of private sector and government jobs presently costs. Surely, taking 2.2 times as much money out of the private sector as it takes to create a job there and giving it to Obama to create a job is not a good idea. It is a great way to bankrupt America and many of its families.

Now, some economists believe in magic and they will disagree with me on what I am about to point out. When you remove 2.2 times as much from the private sector as it takes for the private sector to create a job, you actually destroy 2.2 jobs for every job you create. Yes, Obama will create jobs with his $447 billion expenditure of our money, but he will kill more than 2.2 jobs in the private sector for every job he will create for his campaign contributors. He will create some union jobs to build and repair infrastructure. He will maintain some teaching positions for the teachers unions in public schools. He will create some temporary green energy jobs, but the collapse of those businesses will still occur soon, as it did with Solyndra and numerous other green jobs companies producing expensive and unreliable energy products. Obama will try to point out the jobs created, so this is what will be seen. What will not be seen, except partially in the rising unemployment statistics, will be the 2.2 minimum number of jobs destroyed in the private sector. Obama is counting on our failing to see those jobs die.

What I am saying is based on recognizing that if government spends money, it is taken out of the private sector one way or another. Generally, it is either taken out in taxes, by borrowing it with the payment of interest paid with future taxes, by simply printing it and diluting the value of all other money and assets, and by imposing mandates upon the private sector that cost them time and money. In this case, Obama wants to raise taxes on the "rich" or companies which will remove money from the private sector in a simple and straightforward way to pay for this turkey bill.

Now I do not believe the Obama Jobs Bill will create 1.9 million jobs at all, even if we do not subtract the jobs killed by Obama. We can easily calculate the number of jobs that will be killed. These jobs are jobs that might well have been jobs long sustained by the private sector and they will be replaced by a smaller number of jobs that will not make economic sense once the immediate government expenditure runs out. The private sector jobs killed will be about $447,000,000,000 / $106,973 = 4,178,625 jobs, or more than 4 million jobs, to be replaced with maybe 1 million jobs for Obama's cronies.

As I said, it gets worse. Creating about 1 million temporary jobs while killing more than 4 million longer term jobs cannot be the act of rational men and women. But it is the way the wrongheaded Obama wants badly to drag the country. It is Obama who will throw most of us off the cliff.

Someone should make an ad of a jackbooted Obama marching shackled American workers to a cliff and then pushing them over the edge, one by one, with the calculations above overprinted on the images of a fascist Obama. This would only be justice to pay back the injustice done to Paul Ryan.

If Jobs are Foremost, This is How the Election Goes

2011-09-19T07:20:00.003-05:00

It is often said that the need to create new jobs is priority one in the minds of Americans. This may be, but it is not obvious how much weight people are really putting on jobs versus other concerns. It also is not entirely obvious how many people correctly charge Obama with policies seriously destructive of jobs and which make it difficult for businessmen to calculate whether it makes sense to make a several year investment in a new hire or not.

I am going to make a quesstimate of what such a functional effect on the vote for a generic Republican presidential candidate might reasonably be and apply that function state by state based on the present unemployment rate to predict the shift in electoral votes from Obama's previous 2008 election result. In that campaign, many Americans bothered to learn little about him and his total commitment to socialism, leftist environmentalism, anti-business bias, and his anti-fossil fuel bias, all of which have proven highly destructive of the economy and jobs. I am proposing that many Americans have awoken to this reality. John McCain mounted a feckless campaign and lost big to Obama in the electoral vote. He lost many states that often vote for the Republican presidential candidate. Of course, some states are full of people who will refuse to blame Obama even now for the jobs situation or people who so share his political philosophy of collectivism and anti-man religious environmentalism that they will be little driven to address the jobs problem.

Let us assume that the strength of the vote switch is proportional to how high the unemployment rate in a state is. In fact, I will assume there is no effect for the purposes of this electoral vote projection if the unemployment rate is below 7%. This is unlikely to be the case, but I want to make a reasonably conservative estimate of the shift in electoral votes. Also, many people who recognize Obama as a jobs problem in the U.S. as a whole will still be more inclined to vote against him out of concern for those many Americans in states less fortunate than their own with respect to jobs. The function I will use is:

[ 1 + 8 (State Unemployment % - 7%)/100 ] (% Vote for McCain)

If the projected percentage of the vote for a state becomes 50%, I shift that state's electoral votes to the generic Republican candidate, unless I judge the state's commitment to socialism to be so strong that I do not believe such a shift will occur. Among the factors I consider in making that assessment are which party now controls the Governor's office and the houses of the state legislature. Some states I believe will shift based on recent voting patterns in response to the Obama presidency and not entirely because of the state unemployment rate. The tables below provide the unemployment rate for August 2011 for each state, whether it has gone up or down in the last year, which party controls the governor's office and the legislature, how the state voted in the 2008 election, what the percentage of the vote for McCain was, and my allotment of the electoral votes each state will have in the 2012 election. The states that shift are in larger font. Those in gray and larger font shift because of high unemployment according to the above function.

I will discuss each state with a shift or which may refuse to switch even though the unemployment rate would cause a shift if the people of that state were not completely wrongheaded.

California: Unemployment is very high in CA and my function says the generic Republican should get 52.5% of the vote. He will not, though he will be very competitive, as California goes. No shift.

Colorado: The function says the Republican will get 50.3% of the vote, but the governor and the state senate are controlled by the Democrats and unemployment in CO is somewhat less than the national average. Colorado is full of religious environmentalists. I am not now willing to predict a shift for Colorado.

Florida: Unemployment is very high in Florida. If those on Social Security and Medicare do not get the wrong idea about Republican intentions on those programs, Florida will shift. Even McCain had 48.4% of the vote in 2008 and the formula based on the 10.7% unemployment says the generic Republican should be able to get 62.7% of the vote! Given that Republicans now control the governorship and both state houses, only a goofball Republican would fail to carry the state.

Indiana: The unemployment rate is less than the national average and McCain got 49.0% of the 2008 vote. The function says the generic Republican gets 55.7% of the vote. Since the governorship and both state houses are controlled by Republicans, Indiana will flip.

Maine: The unemployment rate in self-sufficient Maine is only 7.6%, but the state has recently become solidly Republican. I believe Maine will likely flip, but not only because of unemployment in the state.

Michigan: The unemployment rate of 11.2% is very high and the state has moved solidly Republican because of this already. Michigan should flip, since the formula says the generic Republican gets 54.6% of the vote.

Minnesota: Unemployment is only 7.2% so jobs will not be as strong a factor here as in many states. McCain did get 44.0% of the vote and both state houses are controlled by Republicans now. A reasonable Republican candidate should be able to carry Minnesota.

Nevada: The unemployment rate is the worst in the nation at 13.4%. Nevada was booming before the recession and has totally collapsed. It did vote Harry Reid back in, so I could be wrong about this one. But, the formula says the generic Republican could get 64.6% of the vote on jobs, so he has a very good cushion to lose votes on other issues. Nevada probably flips.

New Hampshire: Unemployment is relatively low in NH at 5.3%, but it is a state of relatively minimalist government with both houses controlled by Republicans. They are tired of the bumbling and big government Obama now and ready for a change. NH flips.

North Carolina: Unemployment is awful at 10.4% and McCain did get 49.5% of the vote. Both houses of the legislature are Republican. There should be no question that NC flips.

Ohio: Unemployment is at the national average of 9.1% and McCain received 47.2% of the vote. The Republicans have gained control of the governor's office and both state houses already. The formula says Ohio gives the generic Obama opponent 55.1% of the vote, so he can afford to lose some votes on other issues. Ohio flips.

Pennsylvania: Unemployment is below the national average, perhaps because of the Republicans having already gained control of the governorship and both state houses. Also, unlike Democrat controlled New York, Pennsylvania is eager to develop the rich gas fields in the massive Marcellus Formation and work on that is already providing significant new jobs. Of course Pennsylvania has also been hurt by Obama's anti-coal policies as well. PA flips, but not quite because of the formula.

Virginia: Unemployment is comparatively low at 6.3%, so Virginia does not flip due to the formula. But McCain did receive 46.4% of the vote here and VA has proven that it is not racist by having voted for Obama. The governor and the lower house are Republican. The state has been very actively fighting the constitutionality of ObamaCare. Virginia has no recent history of being so solidly Democrat Socialist that it will stick with the highly socialist Obama. Virginia corrects its prior mistake.

Wisconsin: The unemployment rate is below the national average at 7.9%, so Wisconsin does not flip merely due to the local unemployment. The flip is because the state has moved Republican generally with the Governor and both houses being Republican.

The end result is that the generic Republican, if he will keep the creation of private sector jobs the primary issue along with opposition to ObamaCare and growing government, will win by an electoral vote of 335 to Obama's 203. My prediction of Maine, Minnesota, and Nevada switching sides in Obama's re-election effort are the most questionable at this time. Giving them back to Obama still has him losing 315 to 223.

Of course, I am assuming a reasonable strength in American's interest in jobs here. It will be interesting to see if I have a good sense of what that interest strength is. I will be most interested in any readers thoughts on this.

GDP and Industrial Output Comparisons by Country

2011-09-07T23:26:00.000-05:00

I needed to find out if China was the number 1 manufacturing nation in the world or was the United States. This proved a bit more difficult question than I thought it would be. But the CIA World Factbook had the information needed to determine this and to calculate the actual value of each of the three sectors into which they divide the GDP for the year 2010. These sectors are Agriculture, Industry, and Services. The results I found for the 7 nations with the largest GDPs expressed in dollars with purchasing power parity are given in the following table:

The answer to my original question is that the value of China's industrial output, which includes mining and construction, is $4.73 trillion, while that for the United States is $3.24 trillion. China's industrial output is 46% greater than that of the United States. No other nation comes close to having so much industrial output as China or the United States. The value of China's agricultural output is also the largest in the world. In this case, it is 6 times that of the United States.

The per capital GDP for the United States is more than 6 times that of China. Germany has the second highest per capita GDP on the list and that of the U.S. is 32% higher. The United Kingdom and Japan both have per capita GDPs very nearly as great as that of Germany. This group has a per capital GDP more than twice that of Russia, whose per capita GDP is more than twice that of China, whose per capita GDP is more than twice that of India.

Obama Kills Jobs and Resuscitates the Great Socialist Recession

2011-09-07T04:21:00.000-05:00

Let us start off with a chart showing the number of jobs missing from our economy since January 2000 in thousands of jobs. The number of missing jobs in January 2000 was equal to the number of unemployed people then who were looking for jobs or in some cases were simply taking some time off between jobs. Jobs were plentiful then and had been for several years, so unemployment was only 4.0%. Because of the boom and bust nature of the economy since then due to the Federal Reserve setting very low interest rates, the deficits run by our governments, increasing regulations and taxes, added energy costs due to drilling prohibitions, recent added uncertainty caused by ObamaCare and Dodd-Frank financial reform, and considerable class warfare and anti-business rhetoric, the number of missing jobs has increased greatly in the course of the last 11 years.

The number of missing jobs is calculated assuming that the same percentage of Americans would work today as did in January 2000 if good jobs were available. The high tech bubble that burst in 2001 and 2002 had already created a situation with about 5 million more missing jobs than we had had at the beginning of the century. In December 2007, the United States had not yet been much affected by the recession due to a sharp increase in the price of oil that was already hurting most other countries of the world. But in 2008, companies began laying off employees and stopped hiring new employees. This never-ending Great Socialist Recession was underway.

Since Obama occupied the White House, there has been no substantial or sustained return to normalcy. The number of missing jobs for the last four months has been almost constant. There was actually a small increase in the number of missing jobs in August, though the statistics are not really good enough to consider that a real effect. What is real is that over the long term now, there has been no improvement. This is not surprising since almost every action the Federal Government and the Federal Reserve have taken was effective in killing jobs, not in creating them. Jobs are conserved in big businesses and many, many jobs are created by small businesses when the government does little to hurt their businesses. The Federal Government and many state governments have worked very hard to create very tough business conditions and much uncertainty when American business already faced a world largely in recession and stiff competition from abroad.

Obama's socialist viewpoint, his servitude to labor unions, and his academic economic advisers with their belief in Keynesian economic theory, led him and the Democrats down a very wrongheaded path. America is in misery because of this wrongheaded understanding of the economy and business by our ever more controlling central planners in Washington. The private sector and Capitalist free market can do much better.

Everything in the Democrat Economic Central Planning Arsenal is a Dud

2011-09-05T04:03:00.000-05:00

The government told us the GDP growth rate in the first quarter was 1.8%, which is not a healthy growth rate at any time and is especially weak if an economy is recovering from a recession. In May, the government increased that reported first quarter growth rate to 1.9%. This was still not good, but it seemed to leave the door open to optimism that while recovery was slower than in other recessions, it would occur. Then, the bottom fell out. The first quarter GDP growth was revised downward to 0.4% and the second quarter GDP growth was said to be an anemic 1.3%, which has just been revised down to 1.0%.

Jobs growth is not keeping up with the growth in population. The annual Consumer Price Index (CPI) stands at 3.6% and is running much higher in the last half year. The average American worker workweek decreased by 0.1 hours and earnings fell by $0.03, which is no way to keep up with the inflation. Labor productivity has very unusually been falling lately as well. These factors bode ill for further hiring.

The rest of the world economy is not in good shape either, so there is no chance that exports will do much to change the bleak picture of the American economy. The Purchasing Managers' Index (PMI), a measure of business purchasing activity, fell to a two-year low in August to 49.0. Numbers below 50.0 mean contraction of business activity is going on. Among the European countries with reduced activity are Great Britain, France, Spain, Italy, Ireland, and Greece. The positive PMI's of Germany, Sweden, and Switzerland dropped. The PMI of Japan is at a 3-month low and Taiwan's PMI is very negative at 45.2, its lowest value since January 2009. Canada's GDP contracted, largely due to a 2.1% drop in exports. The leading retailer in Australia expects falling sales. China has a PMI on the edge of contraction and its exports to the U.S. have fallen. The world economy is staggering.

In the U.S., the favorite Democrat central planning tools of stimulus spending and quantitative easing, or creating money from thin air, have not worked. What a surprise! Despite the GDP growth of the first half of the year being only 0.7%, the White House is telling us that GDP growth for the year will be 1.7%. Wow, what a howler that is! This means they are predicting growth in the second half of this year at an annual rate of 2.7%. I suppose they think that growth will occur because businessmen and consumers are trusting that Obama's speech on his economic recovery plans this week will solve all of our problems! For that to be so, all Americans would have to regress to the point that they believed that he could stop the oceans from rising and cure all of the diseases of the world, as many did when they first voted for him. I think many even of those favorable voters have learned something since! Even if that were the case, that growth which has not been evident through August, would have to occur entirely in the last 4 months of the year.

Let us examine a few issues with the stimulus approach loved by socialists. The CBO, not really a very reliable source, recently released a report saying that the $787 billion American Reinvestment and Recovery Act has really cost us a $825 billion increase in debt. They claim that they cannot figure out how many jobs were created by it, but it was somewhere between 1.4 million and an unbelievably generous 4 million. I do not think they seriously try to estimate the number of jobs lost due to the bill. So let us divide $825 billion by 1.4 million jobs and we find each job cost $589,300. While some investment is needed to create meaningful jobs, that is enough money to pay someone the median income of $46,300 for 12.7 years! I could readily provide several scientists with jobs with that amount of money, but the federal government is always incompetent and inefficient! While I do not believe there is even a 1% chance that the stimulus bill created 4 million jobs, even if it did, each job would have cost $206,250 which would have allowed me to provide at least 1.5 long-term new jobs in my laboratory instead of a mythical job.

The CBO report claims that printing up $0.825 trillion in a $15 trillion economy added between 0.8% and 2.5% to the GDP in real, inflation-adjusted growth. Printing this amount of money diluted the value of all money by at least 5.5% since 0.825/15 = 0.055. One could argue that the dilution of money value is proportional to the smaller value of money in circulation, making the dilution much greater than this. The act of printing that money did nothing to add to productivity so its effects upon production are transitory. Worse yet, that monetary dilution devalued all property, including the already depressed housing market, and all commodities, such as oil, cotton, corn, wood, and metals. Despite these huge negative effects, the CBO tells us that the expenditure increased the GDP by something in the range from 0.8% to a totally unbelievable 2.5%. Well, this is another instance of the very bad track record of the CBO showing its lack of understanding of economics or its adherence to rules which do not correspond to reality.

The CBO then goes on to say that direct government purchases of goods and services have a multiplier effect of 1.0 to 2.5 for every dollar spent! Well that is very interesting. If that were so then the stimulus bill expenditure of $825 billion would have increased the GDP by between 5.5% and 13.75%! Clearly, direct expenditures by government have no advantageous multiplier effect. In fact, we can calculate the effect from their own numbers for the GDP growth they claim for the stimulus bill. 0.8/5.5 = 0.145 for the lower bound multiplier and the upper bound multiplier would be 2.5/5.5 = 0.45. These calculated multipliers ranging from 0.14 to a clearly too high 0.45 are way below 1.0, which is more like what one expects from an incompetent and inefficient government with no real interest in human productivity.

Alan Reynolds, an unusually insightful economist, has written an excellent article entitled The Fed vs. the Recovery, which first appeared in the Wall Street Journal on 26 August 2011. It is on the CATO Institute website here. He says:

In demand-side theorizing, monetary stimulus means the Fed buys more bonds. The Treasury has certainly been selling a lot of bonds, and the Fed has been buying (monetizing) a huge share of those bonds. That helped push the broad M2 money supply up at a 6.8% rate over the past six months. Yet the only thing we have to show for all that stimulus over the past year has been rapid inflation of producer prices and a simultaneous slowdown in the growth of the private economy. Consumer price inflation also accelerated to 5.2% in the first quarter and 4.1% in the second, from just 1.4% in the third quarter of 2010.

He notes that industrial supplies and materials account for 34.5% of our imported goods so far this year and capital equipment and parts add another 23% of imports. Because of the second quantitative easing (QE2) which began in November 2010 and ended in June of 2011, the value of the dollar fell about 15% relative to the Euro. The Economist's commodity-price index went up 50.9% in a year in dollars, but 22.8% in Euros. Our import prices rose by a 15.1% annual rate and our export prices rose by an annual 11.4% over the last three quarters under QE2. These effects reduced the growth of real GDP.

Alan Reynolds notes that

The net effect was to reduce the profitability of manufacturing and distributing products in the United States, and therefore to shift such activities (and jobs) to other countries which were less handicapped by the dollar's weakness.

Fortunately for the S&P 500 companies, 46% for their sales came from other countries! As a result, their operating earnings per share rose from $20.40 a year earlier to $24.86 by June 2011. Thanks to our government's policy of printing money, this did most Americans little good.

One of the commodities whose price was driven up by QE2 with important and devastating consequences was that of oil. As I have pointed out many times (thanks to reading Alan Reynolds), every postwar recession except that of 1960 has been triggered by a sudden increase in the price of oil. From August 2007 to July 2008 we had such an oil price spike as the value of the dollar fell and oil prices doubled. We had another large oil price increase due to the dollar losing value from late August 2010 when Bernanke announced QE2 until the end of April 2011. The price of oil increased from $72.91 to $112.30, an increase of 54%. Just the price of oil increasing suddenly has a very negative impact on our economy. This is aggravated by our refusal to allow reasonable increases in domestic production, which makes us more vulnerable to fluctuations in the value of the dollar relative to other currencies.

Both the Stimulus and the Quantitative Easing efforts have depressed the growth of the GDP and resulted in giving companies every incentive to hire aboard and every disincentive for hiring at home. Meanwhile, the regulatory, tax, anti-business, promotion of labor cost increases, and anti-energy policies and rhetoric of the Obama cabal has been added to the wrongheaded policies of the Federal Reserve to put us into a never-ending recession.

Is the U.S. More Socialist than Scandinavia?

2011-09-04T03:26:00.000-05:00

It is in that we have a more progressive overall tax system than the Scandinavian countries of Denmark, Norway, and Sweden do.

In Denmark, the poorest 30% pay 14.1% of all taxes. In the United States, the poorest 30% pay only 6.1% of taxes. In Denmark, the richest 30% pay 48.7% of all taxes. But in the United States, the richest 30% are soaked for 65.3% of all taxes.

Our poorest 30% in the U.S. pay only 43% of the portion of all taxes paid by the poorest 30% in Denmark, which most Americans assume is much more socialist than we are. Meanwhile, our richest 30% pay 34% more of the total tax burden than do the richest 30% in Denmark. These are not small differences in the degree of our socialism. They are Titanic, with Titanic consequences. We are more into the envy of class warfare than are the Scandinavians!

The United States has one of the most progressive tax systems in the world. None of the Scandinavian countries are as bad at soaking their richer citizens and at giving their poorer citizens a pass in taking responsibility for the costs of the very government programs on which they have an equal vote. Americans are clearly living the socialist dream that those with the greatest income will carry those with less income. We are living by the socialist mantra that each shall provide to the rulers according to their means. The rulers will then use the money to subsidize those they who will support them politically with votes or money and to provide distracting circuses.

As with all countries that have tried to live by socialist principles, we are finding that many of the more able or willing to produce are having second thoughts. We are finding that some of the more able and responsible shrug and retire early. Or that some simply slowdown and hold their cards until such blithering fools as Obama and Harry Reid are removed from their positions in the 2012 elections. The majority of businessmen are in such a holding phase just now. Our economy is in the doldrums as a result and we will not see any growth either until after the November 2012 elections with an Obama loss or until it is absolutely clear that he will lose. Atlas has Shrugged and is waiting to see if he should put the World back on his shoulder at a later time.

The tax comparisons come from Government vs. Markets: The Changing Economic Role of the State (2011) by Vito Tanzi. Tanzi is a senior economic official of the IMF. The tax burden numbers for Denmark and the United States are given by Richard W. Rahn from an article published in the Washington Times on 31 August 2011. That article also appears on the CATO Institute website here.

Socialized Medicine and a Doctor's Moral Obligation

2011-08-17T00:54:00.000-05:00

A friend asked this question:

One of the arguments I have heard from proponents of socialized medicine is that it is immoral to stand by while someone dies, and therefore society is obligated to help when someone is facing a life threatening illness but can't afford the treatment. Although there is much to refute in this type of statement, I am wondering about the more difficult refutation. As a personal decision of each doctor, is it rational to make the decision to deny treatment based upon the fact of a patient's inability to pay?

The moral argument against socialized medicine, or ObamaCare in particular, is based on our equal, sovereign individual rights. It is not dependent upon whether a particular doctor decides that he must act to save a life independent of remuneration or not. It is an important moral principle that he is free to either be benevolent or not be benevolent. Now, I do believe benevolence is an important virtue, but benevolence is virtuous in the context that the person helped has value to the doctor. Benevolence is not about self-sacrifice, since that would hardly be benevolent to oneself.

If the person has an entitlement mentality, then the doctor generally has no rational reason to help that person without remuneration. It is perfectly moral for him to walk away. In the context of a society of largely productive and benevolent people, a doctor may be rationally inclined to provide help to those who cannot afford to pay for their care, especially if they have become ill or hurt through no great fault of their own. But, even that depends on context, such as the expense the doctor will have in helping him and whether his helping the unfortunate person means that he is not able to help someone else who can pay. He is not obliged to save the poor man, while letting the financially prepared man die! If he gives too much of his time to helping the poor, he may not be able to generate enough income to buy the medical equipment that will enable him to save many lives in the future or he may simply go out of business. The doctor must make difficult moral decisions based on a very complex context. Some may appear to make a greater effort in benevolent acts than others, but still may not be saving the most lives possible.

Rational men are going to balance these difficult decisions differently and we should be careful in our appraisals of their morality. A doctor may be willing to give his services free in a given case, but he may be unable to convince a nurse and other assistants to give their time free. Or the hospital may be unwilling to make an operating room available. Now the proponent of socialized medicine will want to use force to make all of these needed experts and facilities available, but this is a violation of everyone's rights and cannot be tolerated in a civilized society.

My grandfather was a physician in the Great Depression. He was a surgeon who operated in the Mayo Clinic and all of the hospitals of Minneapolis and St. Paul. He did a very unusual number of operations on people who could not pay for them. But, people were different back then. A farmer might not have any money, but he would give Harry Christianson a chicken, which to the farmer was his fortune. Then very likely for 20 years after, when he could, he would stop by grandpa's home and leave a bag of potatoes or a bushel of corn. This was very welcome when rationing was going on in WWII for instance. Harry and his wife Bess always had free food and there was so much that Bess and her daughter Betty organized ways to get it into the hands of those in need in the city. One man decided he would paint grandpa's house in payment for an operation, but while he was painting the upper part of the exterior, union thugs knocked him off the ladder and shattered his leg. The man was not a union painter. He was just a farmer who wanted to pay a debt he believed he had. Harry and Bess put him up in one of their rooms until he was healed. The union later burned down their home because they did this.

So this is another important issue of context. There is value in helping people who put value on the help they receive. There is value in helping people who fundamentally believe that one should trade values for value.

There is little value in helping the ungrateful, however. Any deserving person, any person whose welfare one has reason to care about, will recognize the value they have received and will not presume that they have the rights of a master, while the doctor who worked so hard to develop his healing skills and knowledge is treated as his slave. A doctor or any other service provider has the right to choose his own values and to pursue his own happiness in terms of his values.

The need of a poor person does not deprive him of this equal individual right to pursue his happiness. Every man, whether poor or rich, whether a professional or a low-skilled worker, has this magnificent right to pursue his happiness. No one has the right to dictate the values or the moral code which will define what his happiness will be. All that can be required of another is that they are not allowed to initiate the use of force as a means to pursue their happiness.

This is very adequate for each of us when we exercise our freedoms and act within the private sector of our society. In the private sector we have a wealth of potential opportunities to cooperate with others whose values are sufficiently similar to ours or in some way complementary so that each of us can pursue our goals defined by our individually chosen values. When our values are not approved of by others, they are free to choose not to associate with us. This is the realm of the voluntary and is relished by those who want rich choices and who abhor being forced to bend to the will of others.

In contrast to this natural realm of freedom, we have the realm of the government. The principal property of government is its monopoly on the use of force in a society. Because a wise society seeks to minimize the use of force and seeks to maximize individual freedom of choice and association with others, such a society has a minimal government. Such a limited and legitimate government uses force only for the purpose of protecting the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness.

When government attempts to do more, it must necessarily do violence to the rights of the individual as it imposes values and moral codes upon the People. With this loss of freedom to choose one's values, one loses many of the freedoms to use one's own mind. One loses the choice of one's own goals. With the loss of one's own goals, one loses all hope. It is no accident that unfree societies become depressed societies with large increases in drug use, excessive alcohol use, and increased numbers of suicides. Big governments do much harm to individuals and are notable in the brutally of their violence against their people should any insist on exercising their sovereign rights. We see the party of biggest government verging close to a desire to let loose the hounds of hell upon the Tea Party people for just this reason. Over and over they have tried to label the Tea Party people who simply want to preserve some of their individual rights as terrorists and subversives. This makes the brutal nature of unlimited government all the more clear in our time.

Actions Speak Louder than Words: Obama Hates Small Business

2011-08-15T01:46:00.000-05:00

For each of the last five months, the National Federation of Independent Businesses (NFIB) has found that the business optimism of small business owners has fallen. With First Quarter 2011 GDP growth dropped to 0.4% and Second Quarter GDP growth presently said to be 1.3%, some earlier optimism that this never-ending Great Socialist Recession was showing some signs of recovery has vanished. Indeed, it is not even clear that if price inflation were taken into account properly that the so-called growth of the first two quarters of this year was not really a contraction of the economy. We may very well actually have had the second dip of this recession already. The Manufacturing Index has also been very disappointing. Real estate values show no sign of recovery and consumer spending is still limping along.

Every time Obama and the Democrats push to provide extended unemployment benefits to the unemployed, the states have to continue using much higher than normal unemployment tax rates on the employees of businesses. My company's rate in 2010 and 2011 is 7.33 times higher than it was 2008, despite our never having let an employee go who was eligible to collect unemployment insurance benefits. This is not an incentive to small businesses to hire more employees and makes it harder to keep the employees they have. Being forced to let a good employee go is definitely an optimism killer when you are running a small business.

Small businesses are also hit by the increased costs and bureaucracy they will have to expect with ObamaCare. The Dodd-Frank financial industry reform bill has especially cut them off from the big lenders with assets in excess of $100 billion. The increased regulatory burdens imposed by Obama's EPA, FDA, FTC, DOD, FDIC, Consumer Protection Agency, the NLRB, and the restrictions on oil and gas drilling have been hardest on small businesses who cannot afford legions of lawyers to deal with the government bureaucracy. When the FDA or DOD require a business to become ISO-certified as proof of quality controls, that cost is proportionally much greater on a small business than on a larger business. This is a very real discrimination against small businesses and often has only cosmetic effects on real quality controls since the business owner and upper management in a small firm are much more likely to be on top of quality issues than the corresponding management is in a big business. New FDA oversight of small food retailers and producers is another major cost escalator for many small businesses. Since few people were dying of food poisoning, there is no significant benefit to this new Obama cost.

Falling demand has been the biggest problem for small businesses which are less likely to participate heavily in the export markets as the large multinational companies do. There are better opportunities for profits and sales abroad in many areas than here in the U.S., thanks to the Obama administration economy-wrecking policies. Small business owners are also very worried about the uncertainties caused by excessive government spending and the rapid increase in the national debt. The more spending government does, the more it interferes with business activity. Since 2001, the GDP has grown by 46%, but the national debt has grown by 146%! The Federal Reserve bought about three-quarters of U.S. Treasury Bonds in 2009 and 2010, thereby increasing its balance sheet from $896 billion in August 2007 at the start of the housing bubble collapse to $2.9 trillion now. This is clearly not sustainable, yet there is no end in sight to this method of "covering" the absurd spending of the government. The excessive spending and debt both cause pressure of increased taxes or inflation in the near future. Business taxes are already much too high.

While only about 8% of small businesses name access to credit as their primary problem in NFIB surveys, it is clear that the credit needs of many small businesses are not being met. Interest rates were increased on many lines of credit, business loans, and business credit cards. 40% of small businesses attempting to borrow in 2009 were able to meet their credit needs, 10% had most of their needs met, 21% had some, and 23% had none of their credit needs met. With the gathering worries of satisfying the Dodd-Frank finance reform bill, this situation is becoming worse as this recession drags on and on and on. Small businesses commonly do not have the resources to last through multiple years of recession. Banks are especially refusing to lend money to fill in cash flow problems.

Small business owners generally own real estate. In the NFIB 2009 study, 95% had real estate. The fact that most real estate has lost considerable value has deprived many small business owners of the collateral they would commonly use to secure credit. 13% of small business owners had at least one property worth less than what they owed on it. The loss of property values has left many small businesses much more vulnerable.

Into this sorry picture of woes for small businesses, the Obama administration FDIC has been squeezing banks to loan less money to small businesses, which it regards as less credit worthy as a group. On that they may be right, but as is the rule with government, the assessment is a one-size-fits-all assessment. Main Street Bank of Kingwood, Texas specializes in small business loans. Main Street Bank has a $175 million loan portfolio and 90% of it goes to small businesses. Most of these businesses have annual revenue less than $1 million. The average loan size is $100,000. Main Street had a profit of $1 million in the Second Quarter and wrote off 1.25% of its loans as bad. The failure rate of loans in the FDIC insured banks in the First Quarter was 1.82%. The FDIC has not released the bad loan rate for the Second Quarter yet. Government is slow.

Despite the success of Main Street Bank in its small business loan strategy, the FDIC slapped it in July 2010 with an order to increase its capital and reduce the proportion of its small business loans from 90% to 25%. The bank was also ordered to hire another bank executive. It had to sell a business and shrink its loan portfolio to meet the increased capitalization requirement. This increase in capitalization was a large one, from 9.5% in June 2010 to 17.3% in June 2011. As a result of this FDIC interference in their business, Main Street Bank is working hard to turn in its bank charter. A new company is being set up, Ascentium Capital, which will have backing from a private group of investors and will no longer take customer deposits. This business will not be regulated and will be able to continue to specialize in small business loans. They plan to increase the loan portfolio to $500 million.

The reduction from 90% of Main Street Bank loans to 25% for small businesses, removed $114 million of small business credit from the market. Now imagine this kind of thing happening all over the country as the FDIC goes from bank to bank and prescribes lowered small business loan exposure. The impact on small business credit will be huge. This is very important, because a large fraction of American workers are employed by small firms and much innovation occurs in these companies. A lack of access to credit during an extended recession makes these myriad small businesses more likely to fail. The Obama administration policy is clearly to subsidize and bailout big businesses, but to slash and plunder small businesses.

Interestingly enough, the Small Business Administration has been repeatedly cited for guaranteeing lenders loans at 85% of the loan for which the lenders are considered to be at high risk in 80% of SBA 7(a) loans. Their loan failures run many times higher than those of Main Street Bank! While their loans go to only 0.2% of small businesses, they have an outlandish failure rate of 19.4%. Perhaps the Obama crew should be more concerned with controlling this loan failure rate than that of a private bank which knows its business very well.

That tendency to plunder small business could not be made more clear than by Obama's constant effort to raise taxes on those earning more than something between $200,000 and $250,000 a year. His efforts to widen the death tax is another indicator of his evil intentions with respect to small businesses. It is politically much easier to plunder small businesses than it is to tackle big businesses with their many savvy lawyers and lobbyists. It is also easier to over-regulate small businesses. Socialists do not like business owners and managers. They are equated with labor exploiters, no matter how many goods and services they produce for free consumers and no matter how many jobs they may provide. Obama and his crew of insiders are nothing if they are not true socialists. Small businesses are made to pay a heavy price as a result of their present power.

A Glacial July Employment Growth

2011-08-07T03:48:00.000-05:00

Amid the chaos and the great effort of our federal government to sabotage the private sector, that often heroic and under-appreciated sector of our society struggled to create a few jobs. The number of missing jobs fell from 13.30% to 13.21%. This continues the pattern throughout the Great Socialist Recession of worsening and then briefly bettering job growth, but with the job creation never vigorous.

The number of missing jobs decreased by 132,000 jobs in July. At this rate of net job creation, the number of missing jobs will be as few as the 11,023,000 of December 2007 in a mere 78.4 months or 6.5 years. Of course, that assumes that even this anemic rate of job creation can be sustained. Between now and the 2012 election, I doubt that it will be.

The job statistics table is given below. The missing jobs are calculated in comparison to January 2000 when there are plenty of good jobs available for those who wanted to work. At that time, 67.49% of the total non-institutional civilian working age population was working or looking for work. The unemployment rate was only 4.04% then. Many of the unemployed were actually just switching jobs with a little time off in between. How we long for those times!

I would expect the August jobs report to show some deterioration based on the fact that from the time a company decides to hire someone to the time they have and that person starts work, is usually a number of weeks. Four weeks prior to mid-July was a time when the growth in GDP in the First Quarter was still thought to be 1.9%, not the second revision downward to 0.4%. The Second Quarter disappointing growth rate of 1.3% was also unknown. That was also a time when many major corporations, many of whom are doing better than most small businesses, were reporting fairly good earnings, largely made abroad. The effort of Obama and the Democrats to once again raise taxes in the debt ceiling negotiations and their winning of a nearly blank check to continue mad government spending levels, will further discourage business activity. Many a small businessman has simply decided to wait until after the 2012 election to see if there will be any hope for expansion of their business.

Obama's continued talk of creating jobs with high speed trains, green energy projects, electric cars, stimulus spending on infrastructure, extended unemployment benefits, and job training programs is just a continuation of ruinous transfers of wealth from the private sector to the government sector. The actions are all job-destroyers.

It is not a help to businesses to hire if extending jobless benefits means that states will continue the high unemployment insurance rates charged to companies on every employee they have. Because of these unemployment funds, my company tax rate went up by a factor of 7.33 in 2009 and has continued there since. This is not the way to encourage companies to hire more people. But it is among Obama's crazy prescriptions.

Obama Cruelly Threatens to Withhold Social Security Payments

2011-07-15T07:27:00.000-05:00

There is no cruelty to match that of a frustrated socialist yearning for control over the People. Obama has told tens of millions of very frightened seniors on Social Security that if the Republicans do not cave-in and give him a blank check to continue spending massive amounts of taxpayer money and then add much more to the national debt, he may not send out Social Security checks in August. This is probably an empty threat, but that does not diminish the brutality of it.

By any rational analysis, it is also an absurd threat. In 2010, Social Security income was $677.1 billion according to the Social Security Fund Trustee's Report. Social Security outgo was $584.9 billion, which means it had a surplus of income over outgo of $92.2 billion. That surplus was used to help fund the massive deficit spending on all other government programs, as the Social Security surplus has been used for decades. Because of this, of the $677.1 billion of income, $108.2 billion is interest on government bonds the Social Security Trust Fund bought to help the government finance its deficits in the general fund for decades.

The Obama administration wants to keep spending money it does not have on such things as

the expenses of setting up the bureaucracy and rules for ObamaCare,
setting up the bureaucracy and rules for the Dodd-Frank finance "reform",
paying ethanol, windmill, electric vehicle, solar, and other "green" energy subsidies,
paying higher electric and gasoline bills because it is foolishly convinced by its own propaganda that man is causing a catastrophic global warming,
paying hordes of scientists to prove this false catastrophic man-made global warming hypothesis,
persecuting business with reinvigorated threats of anti-trust actions,
putting more people on Medicaid and Medicare,
paying bloated union wages on federal contracts,
using the Labor Department to provide site requirements to companies for their expansions while considering only Union Shop states,
using the Justice Department to promulgate injustice against the states and the people and discrimination against those not in government-favored minorities,
funding universities that long ago became bloated with government money and stopped educating students,
promulgating tens of thousands of new regulations which serve no useful purpose but to increase the power of bureaucrats over the People who do not have the time to read the regulations,
and providing funding to the United Nations, the IMF, the World Bank and many other international institutions that do not like the U.S. and hate our Constitution and concept of individual rights.

Apparently, Obama is now telling us that he is so unwilling to stop such foolish spending that he is going to transfer more than the surplus in the Social Security Fund income out to cover these other expenses. It is his decision to do this which will prevent him from sending out the August Social Security checks! Actually, I do not think the law will even allow him to do this, but then he is accustomed to ignoring the law, so that does not mean he will not do it.

Let us suppose that he chooses not to use the federal income from income taxes, corporate taxes, capital gains taxes, tariffs, gasoline and cigarette taxes, and many other taxes to pay the $108 billion owed the Social Security Fund in current interest payments. In other words, he might make payments on interest to the Chinese and to investors, but not to the Social Security Fund. The Social Security surplus of $92.2 billion would then be turned into a small deficit of $16.0 billion. If he then did not send out that $16.0 billion, but did send out the remaining $568.9 billion of checks, this would mean that 2.8% of Social Security payments would not go out. But, there is no way that $16 billion shortfall due to the default on the interest payment would not be made up by any President not grasping at power as a lust-driven would-be dictator.

Obama's threat really has struck terror into the hearts of many Americans on Social Security. This was a totally irresponsible and pernicious act on the part of this cruel and evil man. It seems to take such people to be the strongest advocates of socialism. Despite its pretenses of caring for the needs of some of the People, those who pursue this so-called ideal as a career are never actually caring people.

This entire fuss about the debt ceiling is due to the failure of the Senate to produce a budget for over two years. The House would not produce one either until the Republicans took it over. But, the Senate and the President have ignored their budget. Since no agreement has been reached on what the government will spend in 2012, there is no basis for an agreement on what spending cuts will be made to reduce the deficit to some manageable proportion of our GDP. All we know is that the record over the last three years was for the government to spend an average of more than 24% of GDP, while before 2008, the spending was below 20% of GDP. Obama and the Democrats appear to want to continue spending much more than 20% of GDP even though that will mean huge on-going deficits. Apparently, they intend that this funding will be the result of many more continuing resolutions on spending, so they will never have to recognize that the welfare and crony mercantilist government they want is not sustainable. They can ignore the failure of big government socialism as long as they do not have to produce an actual budget. Unless, of course, we collapse as Greece is and Italy may be on the verge of doing.

A 4% of GDP reduction in government spending is more than a $600 billion reduction per year. It is clearly easy for the government to function at its 2007 spending levels, so there is no excuse for spending cuts that are not in the $600 to $700 billion per year range relative to the spending of this year and the two previous years.

California Cities Cool in Last Decade

2011-07-11T00:43:00.001-05:00

Meteorologist Jan Null compared the temperature and precipitation records of the National Climatic Data Center for many California cities for the earlier period of 1971-2000 to the period from 1981-2010. The later period generally was cooler, with increased precipitation. The temperature records of rural areas commonly do not show the temperature increases commonly seen in cities due to the urban heat island effect. When even the temperature of cities is going down on most of our West Coast, this is a dramatic event. It must have been an especially unwelcome outcome for Jan Null, who is an ardent catastrophic man-made global warming booster. The results of his study were published in the San Francisco newspaper The Chronicle on 6 July with a very nice graphic by Todd Trumbull.

Null claimed that man-made global warming caused the warming in Redding and Fresno and the warmth there caused cool air to be drawn in from the sea to cool the coastal cities. Why they would have a cooling effect on Los Angeles and San Diego is surely unclear. Indeed, warm temperatures in the Central Valley usually are caused by high pressure systems that actually cause winds along the coast to go out to sea and the warming of the coastal areas. Null was apparently desperate to null out the use of his analysis of the data as a refutation of man-made global warming.

One also has to wonder why the data sets used have a 20-year period of overlap. That 20-year overlap with only 10 years on the earlier end or on the later end, should cause any net cooling effect from 2001 to 2010 compared to the start period for the last cycle of warming claimed generally from 1971 to 1980 to be minimized. Perhaps that was the point of the long overlap.

Given California's problems with insufficient water supply, the increased precipitation in most of the areas ought to be a positive thing, rather than a catastrophe. I will not claim the drop in temperatures is a good thing, but it sure does take some wind out of the sails of the catastrophic man-made global warming alarmists who are always using temperature increases, either real or due to urban heat island effects, as evidence that CO2 emissions are going to kill the planet.

Actually, if the increased precipitation is raising the humidity enough, it is possible that the lowered temperatures do not actually mean a reduction of heat energy. This is because more humid air can hold a lot more energy at a given temperature than drier air. But, the man-made global warming alarmists do not take note of this when they use any warming of air to claim that it was caused by man's CO2 emissions.

The Obama Jobs Catastrophe Continues in June

2011-07-09T01:46:00.000-05:00

Once again this June's unemployment numbers, offer no indication that the very high employment rates of the last three and a half years are abating or improving. Despite the wild-eyed claims of the Obama administration, the Stimulus Bills and the drunken spending of the federal government over this period has resulted in no jobs growth improvements. Combining these wasteful transfers of wealth from the private sector to the control of the government with the expenses and uncertainties of ObamaCare, the Dodd-Frank finance reform bill, the concerted efforts to force us to go abroad more and more for oil and gas while leaving extensive fields undeveloped at home and rejecting Canadian offers of tar sand oil, the efforts to bankrupt all of the coal-fired electric plants, the increased threat of anti-trust lawsuits, the developed world's highest corporate tax rate, a Justice Department bent only upon injustice, mandates for the use of unreliable and very expensive energy at unattainable levels in the near future, and myriad other anti-business and anti-earning-a-living efforts, has had just the impact on employment anyone not brain-dead would expect.

The employment numbers for June 2011 are shown in the table below based on the more job-inclusive household survey data, which is not here seasonally adjusted. The Jun 2011 data is best compared to the July 2010 data to see if there has been any improvement in jobs creation over the past year under Obama's watch.

In making that comparison, the unemployment rate seems to have fallen from 13.75% in July 2010 to the June 2011 rate of 9.32%. Unfortunately, this is only because many more people have given up on finding employment in that time. It is more significant to note that 140,134,000 people were employed full-time in July 2010, while only 140,129,000 were employed in June 2011. This is an actual decrease in the number of Americans employed by 5,000. That is not a significant decrease, unless you take it in the context that the civilian working age population increased by 1.6 million people in that time! A stagnant economy at least creates jobs enough to employ those of the growing population who want to work. The effects of the socialist policies to remove vast wealth and decision-making power from the private sector to the government have produced an economy that cannot even keep up with population growth, let alone actually make progress on recovering from the Great Socialist Recession.

Based on January 2000 when the economy was robust and the existence of good jobs enticed many Americans to take jobs and the unemployment rate was a meaningful 4.0%, we can calculate how many jobs we would need now to have a similar good job economy. The number of missing jobs now is 21,502,000, which is 1,084,000 more missing jobs than in July 2010. One would have to say that Obama's so-called effort to "create jobs" is actually a job-destruction effort, which is very effective in doing that. After any normal recession, the private sector makes adjustments and comes roaring back. Obama has strangled the lion's roar.

An unemployment rate of 13.3% based on the number of missing jobs is a much more realistic unemployment rate than the 9.2% rate given by the Bureau of Labor Statistics of the Obama administration. To that we have to add the 8.9 million employed only part time for economic reasons, according to the BLS. They want full-time jobs, but cannot find them. This makes a full-time job shortage of at least 18.8%. This still does not count the many millions of Americans working at jobs for which they are educationally and by experience over-qualified.

As has been historical demonstrated over and over, socialism is a disaster for people who want to earn a decent living, over and above the value many of us attach to our liberties and other aspects of being able to manage our own lives.

American Exceptionalism in the Moral Foundation of the Declaration of Independence

2011-07-05T02:39:00.000-05:00

The United States of America is unusual in that it became a nation comparatively recently and its People have maintained a similar philosophy of government, at least implicitly, throughout its lifetime. For decades, however, the Progressive Elitists have been working hard to change that philosophy to one more like that of most nation-states and their societies. What is the keystone of the American philosophy of government and why would Progressive Elitists want to change it?

The Declaration of Independence clearly spelled out the central fact of the exceptional American Principle of Government. Without this great and noble document, our Constitution cannot be viewed in its proper context and becomes a much weakened limit on the scope and powers of government. The United States of America were declared independent of Great Britain on 4 July 1776 with a very exceptional purpose in the annals of nations. Other nations simply had a government controlled by aristocrats, commonly in an alliance with high-level clergy, who were empowered to protect the people and take care of them, at least in theory. Our first founding document, The Declaration of Independence, clearly and emphatically states that a legitimate government is the tool of the People as the holders of sovereign, equal individual rights to protect and defend their rights. This is the first part of the exceptional American Principle of Government.

Let us read this straight from the Declaration of Independence:

WE hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness -- That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient Causes; and accordingly all Experience hath shewn, that Mankind are more disposed to suffer, while Evils are surfferable, than to right themselves by abolishing the Forms to which they are accustomed. But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security.

Legitimate government secures our individual unalienable rights. Government cannot take our rights away from us and it certainly cannot give them to us. Our rights are the result of our nature as thinking individuals who must use our independent minds to survive and to choose the values that we will act to gain or to keep. At that time, it was assumed that the nature of man was given to man by a god, so therefore God was the giver of rights. Prior to the French and Indian War, or the Seven Years War in Europe, Americans had long been neglected by the government of Great Britain. They had developed their own legislatures and had taxed themselves very lightly under local governments of very limited scope for a long time. When Great Britain awoke to the fact that the Colonies had become rather well off and could be taxed to help pay off the huge war debt from the Seven Years War, they levied new taxes and sent of a swarm of new officers to the Colonies to tell Americans what they could and could not do. By the standards of Americans then, the government of Great Britain had become illegitimate because it was violating the individual rights of the People.

The Constitution was ordained and established by the People as our second form of government in 1789 after they had found that the first form of government under the Articles of Confederation was somewhat too weak. The People wanted a federal government more capable of providing defense, without too heavy a dependence upon the states. They found it necessary to prevent the states from violating the property rights of the People and from prohibiting or impeding their trading with one another in commerce. They needed a government more capable of dealing with foreign powers. They needed a government to help them establish courts to handle disputes across state lines, nationwide postal service with post roads, patent laws, provide a common coinage, and common weights and measures so that the People in the various states might have some basic rules and means to develop more commerce with one another.

This was still a government of very limited scope and with a few, carefully enumerated powers. This was not a government that gave the People certain rights. It was the People, with their rights already in hand, who ordained and established the government. That government had such limited powers precisely because the People knew that strong governments with wide-ranging powers become the greatest threat to individual rights. Such governments always seek to expand their powers. The People knew from history that freedom was lost in Greece and in Rome, for instance, to governments which had acquired too much power. They knew of many other abuses of government power from British history. The Americans were fortunate to know these things and fortunate to generally have escaped the indoctrination of government-run schools.

The Constitution has its moral foundation in the Declaration of Independence. The Constitution had to provide for a government with no more than minimal powers and scope or the government operating under it would necessarily become an instrument to violate the rights of the individual to Life, Liberty, and the Pursuit of Happiness. This is the second part of the exceptional American Principle of Government, which was explained in the Declaration of Independence somewhat and enacted in the Constitution. This must happen because the Rule of Law must apply to all, but few laws can be written to accommodate the highly differentiated and complex natures of thinking Men. The Rule of Law requires that every law apply equally to every Man.

There are only a few laws that can comply with this requirement, however. For instance, a law might say that no Man may initiate the use of force against another. Such a law is consistent with the General Welfare since it is necessary for the protection of each and every Man's rights. But once government takes on powers beyond the protection of the rights of every man, then every law becomes one to promote a special interest rather than the General Welfare. For instance, a law of the form: Every Man with an income greater than $250,000 will pay a higher tax rate on his income than any Man with a lower income, is a special interest law, which violates the General Welfare by only addressing the welfare of those making less than $250,000 of income a year. A law that requires a doctor to treat a patient who does not have enough money to pay for his treatment is another such special interest law which does not satisfy the condition that it provide for the General Welfare. The doctor's right to his own Life and how he will spend the hours of it is violated. He is not at Liberty to Pursue his own Happiness under such law. This is a clear violation of the doctor's equal and sovereign individual rights. The requirement by law that one must purchase a health insurance plan approved by government is a clear violation of the right of every Man to own his own life and to manage his own health care needs. Some, for instance, might rationally be wealthy enough to be self-insured. Others might have no need for a low-deductible policy or for mental health care. Some may not need pre-natal care. Individuals have differing needs and their values will differ accordingly. Government laws under progressive governments deny these basic facts of reality.

The Constitution recognizes the importance of the Rule of Law applying equally to everyone many times. It refers to the General Welfare as a requirement that must be provided for whenever any of the limited powers of government are executed. The government is authorized to build military facilities, but it is not authorized to have the Speaker of the House give the construction contract to his son-in-law at three times the lowest responsible bid cost. For him to do so, would be a violation of the General Welfare and of the Rule of Law. The many laws that apply to all Americans except the members of Congress and/or their staff, are another example of special interest law in violation of the General Welfare and the Rule of Law. Similarly, the award of government contracts only to those paying union wages is another obvious violation of the moral rule stated in the Declaration of Independence.

There is a presumption of liberty for the individual in both the Declaration of Independence and the Constitution. The long list of grievances against the interferences of Great Britain make this clear in the Declaration of Independence. The entire effort to limit the powers and scope of government in the Constitution makes this clear in that document. The long list of rights the government acknowledged in the Bill of Rights is another recognition of this fact, especially given the 9th Amendment which says:

The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.

This amendment clearly states that the government is not the source of individual rights. The government has the duty to recognize and honor the unalienable rights of the every individual to Life, Liberty, and the Pursuit of Happiness. The Declaration of Independence even implied that there were other rights not covered by that very broad combination of Life, Liberty, and the Pursuit of Happiness when it precedes that list of rights with "among these are." I am not sure what rights are not covered by that list, which does cover many rights not listed in the Bill of Rights, but this is another strong example of the presumption of liberty which legitimate government must not violate.

The Declaration of Independence is a critically foundational document of the exceptional American Principle of Government. Its moral principles provide the real backbone to the Constitution. If one can eliminate the Declaration of Independence from our understanding of our moral duty as citizens and as a definition of legitimate government, then the Constitution is greatly weakened and becomes more subject to changing interpretations and tortured mutations of constitutional law and precedent.

The central purpose of the Progressive Elitist is to make government much more powerful and to put it to the endless task of providing goodies for an endless list of special interests. That list presently includes government employees, labor unions, big financial and car outfits with special protection by government against their bad business decisions, trial lawyers, government-run school teachers, non-competitive energy providers, ethanol refiners and blenders, farmers with subsidized crops, tariff-protected industries, low income housing users, high income housing owners who want green space, zoning laws, and building codes to keep lower income people away from their neighborhoods, and the unemployed who like sitting at home on unemployment benefits. None of this is consistent with the General Welfare or the Rule of Law. It is just faction against faction to win special interests at the expense of violating the individual rights of others.

Obama very clearly explained that he does not like the Constitution which is a barrier to his central purpose of redistributing the wealth by taking some of the People's time, money, and property and giving it to others of his choosing. Vice President Biden explicitly stated that there are no such things as Natural Rights. Rights are given to People by the government he says. Of course, this means that People do not have unalienable rights. If the Declaration of Independence is wrong about that, then it is also perhaps wrong in claiming that the People have equal rights. It is certainly wrong in the minds of such Progressive Elitists for the Declaration of Independence to define legitimate government as that government that protects the equal rights of the individual to Life, Liberty, and the Pursuit of Happiness. These two men are very aware that the Declaration of Independence and the Constitution form a very strong front against their idea of government. Indeed, Progressive Elitists very often claim the Declaration of Independence has no standing in the law. How odd a claim this is given that it is the moral foundation upon which the Constitution rests. But, as with a fortress, the Constitution is no stronger than its foundation.

The 9th Amendment has been virtually struck from the Constitution by Progressive judges. Even the explicitly enumerated rights of the individual in the Bill of Rights have been split into categories which deserve strong protection and those which are mere after-thoughts. Any right to pursue one's happiness through commerce is now completely subject to the whim of the government. That means that the People have lost all of their economic rights, which most people spend many hours a day pursuing. Clearly, such rights must be denied by a government that presumes to choose the People's values and to micromanage their lives with Central Planners. This is the goal of the Progressive Elitists. Obama is particularly derogatory about people who pursue their happiness in part by making money or creating wealth. This predilection against commerce explains why he has proven so effective in destroying the jobs many Americans once had in the private sector.

Note also that the Declaration of Independence says the People have a moral duty to change the form of their government if it becomes illegitimate by violating their rights. This is a very scary idea for a Progressive Elitist who desperately wants to dictate our values to us and force us to live in accordance with those mandated values. He believes the People are generally unable to wisely choose their values and are not up to managing their own lives well. He lacks the faith of the Declaration of Independence in the People.

It is interesting in this light to note the study by two Harvard University professors, David Yanagizawa-Drott and Andreas Madestam in which they found that

The political right has been more successful in appropriating American patriotism and its symbols during the 20th century. Survey evidence also confirms that Republicans consider themselves more patriotic than Democrats. According to this interpretation, there is a political congruence between the patriotism promoted on Fourth of July and the values associated with the Republican party. Fourth of July celebrations in Republican dominated counties may thus be more politically biased events that socialize children into Republicans.

There are plenty of Progressive Elitists in the Republican Party, but they tend to be less radical than those in the Democrat Party and fewer in percentage. The impact of 4th of July parades on the People that pushes them toward the Republicans is due to there being less resistance among Republicans to the ideas of our Declaration of Independence. These ideas are still more in sync with those of the Tea Party. It is these ideas that make Americans exceptional. The Democrats have a great deal of difficulty seeing American principles as exceptional because they have dismissed all of our American principles and hold none that are unique to America. Their core values all hinge on an aristocracy of college-indoctrinated elitists running the country by controlling its all-powerful government. This is a variant of the Medieval concept of government that long-preceded the Scottish and French Enlightenment philosophy found in the Declaration of Independence. The peasants in their society are the many who received just enough indoctrination in the government-run schools that they will be docile in obeying the government they are told has only their best interest at heart. Such docile peasants bear no resemblance to the Americans of our founding period.

It is a fine thing to remember the great deeds of our veterans on the 4th of July, but let us also remember that we are celebrating the great and critically important ideas of the Declaration of Independence on that wonderful day. They are the moral foundation of our Constitution and they inform of us of when our government is legitimate and when it is our moral duty to reform it. It is clear that our present government is not legitimate and that we must reform it. We must carry this realization with us into the election of 2012 and do our duty as defined by the most exceptional and moral American Principle of Government. It is time to stand for that American Principle of Government as the Winter Soldiers did in our Great American Revolution.

The Hidden Grimness of the State Unemployment Numbers

2011-07-03T02:11:00.000-05:00

The government's Bureau of Labor Statistics (BLS) has released the state by state unemployment figures for May 2011 and compared them to May 2010. In the 15 states they reported a significant change in jobs, they reported lower unemployment rates. Changes in jobs in the other 35 states were not significant according to the BLS and will not be discussed here. A critical review of the numbers shows this interpretation of the unemployment situation to be the work of flim-flam artists.

Perhaps this should not surprise us in view of the control over the Dept. of Labor exercised by labor unions and the partisanship widely on the loose in the Obama administration. The reality of the state by state review here is a grim one, but one with some useful information for job seekers. Of course this analysis is also important for anyone deceived by the impression that the jobs situation is slowly improving. It is actually getting worse. At the national level I showed this to be the case here, noting that there are 693,000 more missing jobs in May 2011 than there were in May 2010. There is no job creation adequate to keep up with the population growth of the nation.

The BLS reported that 665,400 more people were employed in May 2011 compared to May 2010 in these 15 states. They reported that 87,300 more people were employed in California in May 2011 than in May 2010. They used seasonally adjusted job numbers, but that should not matter given that they were comparing a May to a May. I decided to check whether the same result would be found using the Work Force numbers and the Unemployed numbers which were not seasonally adjusted. Since the Work Force is the sum of the Employed and the Unemployed (as recognized by the BLS), one can subtract the Unemployed from the Work Force and find the seasonally unadjusted Employed numbers for each state. One wonders why the Employed numbers are not given directly if one expects transparency. Transparency, much promised by Obama, is the last thing one gets from Obama and his followers.

So, what do we find for the jobs added in California over the last year? We find that there are 40,100 fewer people employed, not 87,300 more people employed. The state of Washington is another for which positive change in net jobs is reported as 19,600, but there was actually a loss of 32,100 jobs from May to May! Overall, in the 15 states the BLS says added 665,400 jobs, only 333,100 were actually added. This is almost exactly half the reported number of jobs added. Of the 15 states reported to have lower unemployment, only 3 created as many jobs as the BLS said they did. Examine the numbers in the table below:

The next to the last column provides the change in the Civilian Labor Force. In any case in which the number is negative, people have either given up looking for employment or they have left the state, presumably for employment or in the hope of employment elsewhere. In 9 of the 15 states in which Obama's BLS has claimed an improvement in the unemployment rate, this number is negative. The only large positive number belongs to the state of Texas. Nebraska's positive number is significant given the small population of the state. But, note that California lost 149,500 people in its workforce, which means the situation in California is particularly grim. The loss of 58,500 people in the workforce in Washington and of 76,600 in Michigan are also very grim signs. Illinois, Pennsylvania, and Oklahoma also had large losses. For the 15 states that supposedly had improvements in their unemployment rates, there was a net reduction in the civilian labor force of 247,000 people.

Of course this could mean our population is shrinking, but that is most unlikely. What it means in net is that people have given up on finding a job and the BLS no longer counts them in the workforce. If they are no longer in the workforce, then they do not count in the calculation of the unemployment rate. State by state, it could mean that people simply moved out of a state. But if this list really has all of the states in it with statistically significant changes in jobs and they are all reported as positive changes, then it would be very odd of people to migrate to those states which are statistically known not to be creating jobs. No, it is clear that the effect is that the unemployed have lost all Hope under the regime of this most hyped Hope President.

At this point, you might be thinking that the Obama administration just exaggerated the job additions by a factor of two, but there was still a bit of improvement in the job situation. If so, you have missed a very important consideration. From 2000 to 2010, our population grew at an average rate of 0.94% a year. Assuming that each state on our list of 15 significant job growth states according to the BLS grew at the national average, each of those states would have to add 0.0094 times the number of employed people in May 2010 just to provide the jobs needed to keep up with the growing population. I calculated that number in the last column. California needed 150,196 added jobs to tread water, but it lost 40,100 jobs to fall behind by 190,296 jobs. The state of Washington needed to add a net of 30,042, but it lost 32,100 to fall behind by a total of 62,142 jobs. Failures such as these are why the jobs situation for the young is particularly awful.

Only 6 of the 15 states the BLS told us had an improving unemployment situation have created more jobs than they needed to to stay even with expected population growth. They are, with the number of jobs they added above the number needed to accommodate average population growth:

Ohio, 21,807 jobs
Oregon, 16,076 jobs
Texas, 9,439 jobs
Nebraska, 4,480 jobs
North Dakota, 1,418 jobs
Wyoming, 38 jobs

It should be noted that Wisconsin almost met its goal to keep up with normal population growth.

First of all, noting that we were missing 21,484,000 jobs in May 2011, these six states creating more jobs than they need to keep up with population growth actually have very few jobs to meet the demand for jobs. In addition, these states have their own unemployed. But, if you are able to relocate to a state where the job situation is not hopeless, you may want to consider these states. The North Dakota and Wyoming job markets are very small, so you should go to one of the top four states on the list baring unusual job preferences and skills. Ohio and Oregon are somewhat surprising. Everyone knows that Texas has been a job creator, but once you discount the false claim by the BLS that Texas created 205,400 jobs from May to May with the actual number of 114,300 jobs, the Texas phenomena is reduced to its being one of the few states to simply keep up with expected average population growth in job creation.

Now you can appreciate how truly ludicrous it is for Obama and his administration and his Democrat allies to make the claim that they are making progress on reducing the horrific unemployment. It is their determined anti-business and anti-wealth-creation mindset that has kept us from recovering from this Great Socialist Recession and kept business from hiring. Obama and those who share his socialist viewpoint have made a lifetime point of not understanding business and economics because they believe creating money is immoral. But, earning money by offering others the values they want in the private sector is both moral and necessary. The results of the Obama vendetta against people earning a livelihood have been brutal to the General Welfare in the extreme. Not surprisingly, they do not want us to understand just how brutal they have been.

We must make every effort to remember these painful facts throughout this coming election cycle and work hard at explaining the reality to others. If we are not successful, Obama and his Democrat allies will continue to wreck havoc on the People of the United States.

More Taxes to Pay the National Debt?

2011-06-24T23:51:00.000-05:00

Do we need higher taxes and fewer tax deductions to pay the deficit of $1.597 trillion this year? According to the Office of Management and Budget, the federal government will spend $3.771 trillion this year, which is an increase of $1.043 trillion of spending since 2007. This is a 38.23% increase in spending in 2011 compared to 2007! The spending increase since the 2008 Democrat Congress budget is 32.2%.

The deficit ballooned because of this spending increase coupled with a smaller $393 billion loss of tax revenue because Americans have been made much poorer now in comparison with 2007. Many see that as the result of government shackling the private sector with higher taxes, many more regulations, the threat of still more draconian administrative regulations, the increasing requirements and expenses of ObamaCare, and the massive printing of money. The result has been a massive transfer of wealth from the jobs-creating private sector to the jobs-devouring government sector.

If we were to start repaying this national debt today over a 30-year period in equal payments, our annual payment would be $900 billion. Note that is almost all of the massive spending increase that has caused our present debt woes. If we are to come up with an extra $900 billion per year to pay our debts, we already face a frightening task. Perhaps it is so frightening that few people are willing to face the crisis at all. If we ignore the debt until 2012, but then start to make repayments, the long-term interest rate of 5% is likely to have returned and the annual principal and interest payment will be about $2 trillion! Imagine making debt payments equal to 73% of the total spending of 2007. Can you imagine squeezing defense spending, medicare, medicaid, the administration of ObamaCare, and Social Security into 27% of the budget?

We must make a choice. We must either increase taxes and slightly decrease spending as the Democrats want to do, or we must greatly decrease spending and allow the economy to grow with modest tax decreases as the Republicans mostly want to do.

Tim Geithner, the Treasury Secretary, just told the House Small Business Committee on 22 June that the Obama administration wants to squeeze another $1 trillion out of people earning more than $250,000 a year over the next 10 years. Most of these people are small business owners. They are precisely those small business owners who are making enough money that they can hire more people. Nonetheless, Geithner maintains that cutting spending by $1 trillion would have a more negative impact on the economy than will the tax increase on the "rich." Like most people, he is ignorant of the effect this will have on company owners choosing to invest in new production-enhancing, and thus job-creating, equipment. He does not think about the need to buy more building space to put more production capability and employees into. Finally, he is not thinking about the fact that few employees are sufficiently productive soon after being hired to carry their own weight. Money has to be set aside to pay them while they get enough on-the-job training to become profit centers. Expanding a business is commonly a very expensive proposition. Adding one person in a small business is a big incremental step in terms of the necessary addition to company income. Rational businessmen do not expand a business without a strong sense that they will be able to make a decent profit for their risks and effort in doing so.

ObamaCare and the Dodd-Frank financial reform act raised taxes. The inheritance tax was brought back by the Democrats as a special scourge of small businesses. While most other developed countries have learned the advantages to reducing the corporate tax rate, the U.S. has not. It now has the highest corporate taxes in the developed world, since Japan recently reduced its previously equally high corporate taxes. We are also one of the few countries that taxes earnings a company makes in another country. This causes U.S. companies to invest those earnings in other countries rather than in the U.S. Our tax policy encourages them to create more jobs abroad than at home.

As a result, more and more companies financed by Americans are being started in other countries. Many American companies are re-incorporating in other countries with lower taxes. Favorites for such purposes are Luxembourg, Bermuda, and the Cayman Islands. In 2008, there were 3 U.S. initial public offerings (IPOs) by companies incorporated in tax-haven countries for every 10 that were incorporated in the U.S. Ten years ago, only 1% of U.S. IPOs were incorporated in either the Cayman Islands or Bermuda. In 2010, 26% of them were! So far in 2011, 21% of new IPOs have been incorporated in these island tax-havens.

In 2004, Congress acted to limit incorporations in tax-haven countries. Companies with a substantial change of ownership could re-incorporate in a tax-haven country, however. This actually encouraged the sale of many companies. The IRS changed the rule to require a complete buyout in 2009.

The venerable American company Samsonite was taken over by CVC Capital Partners and is now incorporated in Luxembourg, but headquartered in Hong Kong. Asia is now its primary market. The semiconductor spin-off of H-P, Avago Technologies Ltd., was bought out by Kohlberg Kravis Roberts & Co. and is now incorporated in Singapore, though its headquarters is in San Jose, CA. It now has built extensive operations in Singapore. Freescale Semiconductor Holdings I Ltd. went public in the U.S. last year after a buyout from Motorola Inc. which used to own it, but now it is incorporated in Bermuda. It still has extensive operations in Austin, Texas. U.S. investors in 2009 had so many securities holdings in Cayman Island companies that they are the fourth highest total for any country in the world!

Most other developed countries have learned either from the disasters of their own adoption of socialism and the anti-business mentality or from watching the deleterious effects of socialism in other countries, that economic growth will be stunted by soak-the-rich and squeeze businesses schemes to fund the welfare state. Many of those countries are stuck with the welfare state, but have learned that it cannot be sustained at all without a growing economy. The American Democrat Socialist Party has not learned this lesson. RINOs in the Republican Party have not learned it very well either. As a result, we are growing at a much slower rate than many countries around the world now. We used to talk about the Old Men of Europe. Well, we are becoming the Old Man of the World.

This is totally unnecessary. We have only to unshackle business and stop penalizing the so-called wealthy or the small businessman to completely change this around. The Democrats have made it perfectly clear through Obama, Biden, Geithner, Reid and Pelosi that they have learned nothing. Chris Van Hollen, a particularly wrongheaded Democrat from wrongheaded Maryland, is a Democrat negotiator in the Biden deficit-reduction talks and has said that Democrat principles require a tax increase on the wealthy and business owners. He is accompanied on the Democrat side by the radical James Clyburn of South Carolina. It is no wonder that Eric Cantor, the Republican House Majority Leader, and Senate Minority Whip Jon Kyl were compelled to leave the Biden talks. It had become too ridiculous to work toward a compromise with these ignorant job-killers and company-killers from the Obama administration and the Democrat sides of Congress. Earlier, Tom Coburn, Senator of Oklahoma, had similarly given up hope of a rational outcome from talks in another set of negotiators known as the Group of Six. I have to applaud these sensible Republicans.

When the lemmings swarm over the cliff edge, sensible men refuse to follow them. Actually, I have heard that lemmings are more sensible than Democrats. They really do not rush over the cliff. That is just a fable for them, but it is the everyday purpose of our Democrat political leadership.

USDA Makes Heterosexism Ugly

2011-06-22T20:11:00.001-05:00

Most of us did not know that heterosexism does not describe those who practice or advocate the desirability of heterosexuality. No, according to the US Department of Agriculture (USDA) and Sec.Tom Vilsack, it means the belief that marriage can only be between one man and one woman.

I am trying to figure out where this idea comes from. Does liberalism mean that only one man and one woman can enjoy the benefits of a liberal society? Perhaps it does now, when liberalism seems to mean that one great socialist leader and his First Lady will rule the country and choose everyone's values and impose them on everyone using the force of government. This was not the origin of the term liberalism, however. Libertarianism still means that one favors liberty for all and conservatism still means one favors many traditional values, so most isms do not have a parallel to this new word heterosexism.

Why is it that sexism does not mean that one believes in the desirability of sex or that one enjoys sex? No, in our strange new world, sexism means one is biased against those of one sex or another. In this vane, one would think that heterosexism would mean that one was biased against heterosexual activities. But no, heterosexists are according to the USDA advocates of heterosexuality. This would be in keeping with the traditional use of words such as liberalism, socialism, conservatism, and libertarianism, rather than the screwy use of the word sexism. But, the USDA says that heterosexism is not just in favor of heterosexuality, but that its essence is the denial of marriage to those who are not heterosexual. I do not know why attitudes toward the marriage rights of others must be wrapped up in this term at all. This is very strange.

But applying this rule to other words that ought to be of the same family, leads us to the conclusion that homosexism is the denial of marriage rights to those who are not of the same sex. Bisexism is the denial of marriage rights to those who are heterosexual and to those who are homosexual.

The USDA is re-educating its employees against biases directed at those who are not heterosexual. Of course, any government agency has no business being biased on the basis of sexuality in its hiring and promotions. The USDA is going beyond this to attack certain ideas about marriage though. Given that the U.S. Supreme Court has not yet ruled that states cannot discriminate in favor of heterosexuality in marriage, it seems a bit premature for the USDA to be framing those who oppose marriage rights for those who are not heterosexual as bigots. Mind you, I think such people are bigots, but the government's courts and Congressional law have made no such determination. The Obama administration is all in favor of discriminating against those who believe marriage should be reserved to one man and one woman, however.

Furthermore, the USDA does not make marriage laws, so it is pretty much irrelevant whether some of its employees believe marriage should be limited to one man and one woman. Any effort to dictate that they cannot think this is an attack on the religious beliefs that many people hold and is as clearly wrong as would be USDA discrimination against the hiring of homosexuals or its attempt to re-educate them to become heterosexual once hired.

This USDA effort is in the context of a diversity and inclusion program. It is being pushed forward by the Office of Personnel Management as a model for all of the other agencies of the federal government. It will then be pushed upon the states and upon all government contractors. In practice, such diversity training and incentives result in managers preferentially hiring and promoting two-fers. They will be rewarded for hiring or
promoting lesbian women and homosexual Black men, while discriminating against heterosexual white males and even those who are only one-fers, such as heterosexual Black males or white females. This leads to what ought to be seen as clearly unlawful and immoral discrimination.

To overcome the fact that this is such transparent wrongful behavior, it is useful to actually denigrate the word heterosexual. It has to be converted into a put-down. This has been done with white male as in "The Founders were just a bunch of white males, so their work was full of evil and discrimination. Therefore we can dismiss the Constitution in its entirety, not to mention the Declaration of Independence." The strangely defined word heterosexism helps to give the word heterosexuality a very negative connotation. Defining heterosexism as evil and as a denial specifically of marriage rights helps to accomplish this important goal of the Progressive Elitists.

It will be interesting to observe in time if one sense of the meaning of Progressive Elitism becomes the belief that only Progressive Elitists are allowed to marry. When that starts to happen, will most Americans see that as a new form of bigotry? Or will they just accept the idea as a return to the aristocracy's natural rights such as they enjoyed in the Dark Ages and Medieval times? After all, the Progressive Elitist believes most Americans are too stupid to choose their own values and to manage their own lives. It is clear that they already think of themselves as the educated aristocracy who by right take care of the dumb and uneducated peasants, who should be treated just a little bit better than the pigs. Maybe. Many environmentalists and animal rights advocates among the Progressive Elitists believe most of the peasants should not be treated as well as the pigs or the snail darter.

As I have discussed many times, the government ought not to be in the marriage business. If marriage is a spiritual union of two or more people, then it belongs in the private sector. Government should only offer domestic partnership contracts and these should no more limit the partners than a small business contract does. These domestic partnerships should be completely non-discriminatory, so long as the partners are only consenting adults. See my prior discussions on the right to form domestic partnerships without government discrimination here, here, here, and here. Marriage or domestic partnerships are surely relationships in which one should be completely free to exercise one's right to the freedom of association.

Government Motors Urges Us to Drive 193 MPH

2011-06-21T18:29:00.000-05:00

How odd it is that after decades of the federal government twisting the arms, legs, and other appendages of state governments to lower their speed limits on the Interstate Highway System and on US Highways, Government Motors is now aggressively marketing a Cadillac that achieves speeds of 193 mph on the highway. Yes, it has wiper blades designed not to lift off of the windshield at that speed says the oft-repeated TV ad.

In this day of the Nanny State, when warning labels proclaim that only professional riders should ride small bicycles built for young children, this would seem a surprising turn of events at first glance. But upon reflection, we remember that the cigarette tax is a good part of the reason that cigarettes have not been banned. The state and federal governments make big money from the sale cigarettes. If marijuana had been similarly taxed, it would not be banned today. Now that the federal government has a direct and very substantial financial interest in Government Motors, it is hardly surprising that GM is now free to advocate a car designed to achieve speeds of 193 mph. If that helps sales by creating a new, less stodgy, image for Cadillac, then the Nanny State training wheels need not be attached.

So, the old argument that high speeds are not an efficient use of fuel and therefore endanger national security by forcing us to buy oil from the OPEC nations who do not like us, is now set aside in the interest of making Cadillac seem sexier. The argument that high speeds are dangerous and should be prohibited, is now inverted into one that implies that driving at dangerous high speeds is sexy. And everyone knows that sex sells cars.

The fact that the government gave GM up to a $45 billion tax break by allowing it to continue to write off any current and future profits against losses prior to its reorganization is an ongoing embarrassment the government is trying hard to hide. It has given GM a further domestic tax break of about $14 billion. On top of that, the government still owns 26.5% of GM stock and wants to unload that well prior to the upcoming 2012 election. It is estimated the loss upon the sale of the stock will be between $10 and $25 billion, where the upper estimate is based on the sale of so much stock no one much wants dragging the price way down. These are the real costs of the GM bailout.

Of course all these losses do not stop Obama from bragging about how the government will get all of its money back on its GM investment. Perhaps his whopper will be a lot less apparent to most of the People most of the time if a sexy Cadillac can be driven at 193 mph! That should make GM stock much more valuable in a hurry. This administration needs to leave GM behind long before the 2012 election so its losses will be old news by then.

Deficit Pushes Senate to End Ethanol Thieving of Taxpayers

2011-06-19T03:59:00.000-05:00

The monumental deficit has pushed the Senate to repeal the $5 billion of tax credits and subsidies per year for corn growers, ethanol refiners, and gasoline blenders. A tariff of $0.54 per gallon on imported ethanol would also be eliminated. 38 Democrats, 2 independents, and 33 Republicans voted to end these pointless subsidies which had wrongly been sold as a path to cleaner skies, energy independence, and a means to reduce CO2 emissions. I have long pointed at these subsidies, along with the mandate for ethanol production still required by the insane Renewable Fuel Standard law, as a clear sign of Congressional and Presidential perfidy and a determination to rob the taxpayers blind for naked political power. For more than 30 years, the attitude was clearly let the General Welfare be damned as the votes of special interest groups were bought.

The repeal bill was sponsored by Senators Tom Coburn of Oklahoma and Dianne Feinstein of California. 14 Republicans and 13 Democrats opposed the 73-27 vote repeal action. Obama and his Sec. of Agriculture, Tom Vilsack, still oppose the end of these deleterious subsidies, claiming they are needed to reach Obama's imagined plan to reduce oil imports by one-third by 2025. The House has not yet voted on ending these ethanol subsidies and will reject the Senate bill because tax bills are constitutionally required to be initiated in the House of Representatives. Fortunately, the ethanol subsidies will expire at the end of this year unless the House and Senate renew them. This Senate vote makes it unlikely that it will renew this special interest travesty.

The ethanol subsidy is a $0.45/gallon of ethanol tax credit given against the excise tax of $0.184 per gallon of gasoline paid by gasoline blenders such as Valero and Marathon Oil. This allows the blenders to pay more for corn ethanol made by such companies as Archer-Daniels-Midland and to compete for corn used as food or as livestock feed.

The overall effect of a repeal of the subsidies upon food and feed prices will be minimal, since the mandate for ethanol use in fuel by the Renewable Fuel Standard law passed by the last Democrat Congress requires 12.6 billion gallons of ethanol use in fuel this year and up to 15 billion gallons in 2015. By 2022, 36 billion gallons of so-called renewable fuel must be blended into gasoline, though only 15 billion gallons of that can be conventional corn-derived ethanol. The remainder is somehow magically supposed to come from other low-carbon biofuels, such as switchgrass, which as yet produce a negligible 3 to 4 million gallons a year of ethanol or fuel in expensive pilot plants.

This mandate and the subsidies have caused the price of corn to be over $7/bushel all spring, which is twice the price of a year ago. The subsidy and the high price of oil has caused blenders to use a billion gallons more corn ethanol than they were required to use. This put still more pressure on corn, corn products, and meat products. On Friday, buyers bought corn in the Toledo, Ohio grain trading hub at $7.35 per bushel. A desperate turkey grower even offered $8.37/bushel of corn and got few offers of corn at that price. Corn supplies are expected to be at a 15-year low in late August. This may force some makers of corn-derived ethanol to shut down their plants.

The impact of ethanol from corn on the market and on some states can be judged from the graphic below from the 17 June Wall Street Journal:

Note that the food, seed, and industrial use of corn has grown very little since 2000 and the use in feed and residual use has shrunk since 2005 due to the increased cost of corn brought on by the huge increase in ethanol production since about 1998. Iowa, the first major event for presidential candidates produces 21% of all U.S. ethanol, which is more than twice the production of any other state. It is no accident that so much of the Iowa corn production is bought for the purpose of ethanol production. The subsidy takers know how to put the political pressure on. About 5 billion bushels of corn, or 40% of all corn production, is used to produce ethanol. The great growth in corn production that has resulted has displaced other food crops and led to price increases severe enough that the World Bank and other international institutions have called for an end to corn ethanol subsidies.

The end effect due to the continuing ethanol in fuel mandate will be continued very high corn prices. The income tax taxpayer will be relieved of a burden, but that burden will be shifted to the consumer. It is better that the burden be on the consumer, which is a much broader base of people than the minority who pay federal income taxes. It would be better yet if we removed the renewable fuel mandate and simply allowed the free market to figure out which fuel resources will be used. Obama's centrally-planned economy will be a disaster just as all prior central planning has historically led to catastrophe. The last place a catastrophe will come from will be man-made global warming due to CO2 emissions.

Continued High Unemployment -- A Manufactured Crisis to be Exploited

2011-06-04T19:33:00.000-05:00

The on-going recession began in mid-2008 due to a housing bubble and financial instability brought on by the federal government's and Federal Reserve's easy money policies, which had been pricked by the needle of the 2007 sharp increase in energy prices. Throughout the recession, which according to government numbers is falsely said to have ended in mid-2009, the government has continued to pursue the easy money policies that caused the recession. What is more, it has selectively decided that some individuals and companies will not pay the price for bad decisions they may have made, albeit with much encouragement from the government. This has heaped all of the costs of the recession on those who bore no or little responsibility for the recession or on a few responsible actors the government does not like for one reason or another.

To be more precise, the economy was rebounding from the recession in the latter part of 2009 and in early 2010. But then ObamaCare and the Dodd-Frank financial "reform" bills were passed and the Democrats clearly wanted massive tax increases. These actions and many strange and arbitrary regulations created an avalanche of business uncertainty to add to the lingering uncertainty of the earlier bailouts and company asset thefts by the government. The second dip of the recession started in the latter half of 2010. Then, once again, perhaps due to the extension of many of the Bush tax cuts, the economy showed some signs of recovery in the first quarter of this year. But, continuing government ineptitude mixed with deliberate destruction of the private sector, caused the second quarter of this year to slip back into recession mode again. This fact was hidden by the unrealistic measures of price inflation, which ignored large fuel and food price increases and over-emphasized some improvements in technology values. Apparent increases in GDP were likely just artifacts of the understated inflationary effect on goods and services of the huge stimulus spending and the two Quantitative Easings.

Each month, I calculate the real unemployment rate and the number of missing jobs in comparison to January 2000 when most anyone who wanted a good job could find one. In the belief that were good jobs available, as large a fraction of the population would be wanting to work today, one can calculate the needed jobs and the missing jobs. The latest numbers based on the Bureau of Labor Statistics unemployment report for May 2011 follow:

There actually was a nanoscale improvement in the number of missing jobs relative to April 2011. The bad news is that the improvement in jobs creation ought to be much, much better at this time after the mid-2008 start of the recession if we were really seeing any improvement of the economy. There were 693,000 more missing jobs in May 2011 than there were in May 2010! A new crop of high school and college graduates is emerging and there are no jobs for them. This is now a three-year old recession! Recessions of the private sector never last this long. Only government can make such an extended recession. This is truly the Great Socialist Recession.

We are mired in the doldrums and there is no wind in sight. The business community expects the Obama administration and the Democrats to continue making systematically awful choices with respect to the business of business and job creation. It is true that Congress is doing less harm since the Republicans gained control of the House, but that has only invigorated the administration's determination to cause as much harm as possible through executive branch agencies. Some of this is incompetence in business and economic matters, but some is very likely an effort to simply make many Americans dependent upon big government. The plan is to make many individuals so destitute that they will think government is their only salvation. It is to put many companies so at risk in the hands of regulators that they will bow and scrape before government to save their heads from the chopping block.

What is better than a crisis of no growth, inflation, and joblessness for government to aggrandize its power? This is well-understood by those many Democrat Socialists who hunger always to expand the scope and power of government, while making the private sector tremble in fear. They well remember how the Great Depression grew government and gave the Democrats the initiative in politics for decades. Some of the most influential Democrats are hoping the present crisis will give them the same power, if only they can make this recession into a long-lasting depression or at least something close to one. These supreme power-lusting Democrat Socialist leaders are a minority of the party, but they are in control of the party policy. The Great Socialist Recession is very unlikely to end until Obama is no longer occupying the White House and the Democrats no longer control the Senate.

NASA Finally Produces A Realistic Energy Budget for the Earth

2011-05-26T20:06:00.000-05:00

The Atmospheric Science Data Center of NASA has finally produced a realistic energy budget for the Earth. There is no back-radiation in this diagram due to greenhouse gases, or really due to infra-red absorbing gases, such as water vapor, CO2, and methane. The new NASA energy budget is:

Note how remarkably different this is from the Kiehl-Trenberth diagrams NASA has previously been using:

I have discredited the Kiehl-Trenberth diagram in this post.

While the new NASA energy budget is much improved and has no back-radiation component, the web site I linked to above still talks briefly about greenhouse gases and some back-radiation effect. As I have noted, any such effect is small and can only happen in a way to briefly slow the cooling of the Earth as solar insolation is being reduced from its maximum effect in the afternoon of a day. Even then, infra-red absorption of incoming radiation from the sun may be greater than any back-radiation effect until evening. The overall effect of IR-absorbing gases is a cooling effect as I have previously claimed it was.

Let us consider the new NASA Earth Energy Budget numbers. The first thing to note is that the infra-red radiation from the ground is only 21% of the incoming radiation from the sun. In the Kiehl-Trenberth diagram, the energy flux of out-going infra-red radiation (396 W/m^2) is actually greater than the total incoming solar radiation flux (341 W/m^2) and much, much greater than the energy absorbed by the surface from the sun (161 W/m^2). This is patent nonsense. Energy must be conserved and it is in the new diagram.

As I have claimed, the net effect of infra-red absorbing or greenhouse gases is that they absorb more energy from the incoming solar radiation through the course of the day than they absorb from the out-going infra-red radiation from the surface of the Earth. In the new NASA diagram, the total radiation absorbed by the infra-red absorbing gases is 16% + 3% (clouds) = 19%. Of the 21% of infra-red radiation emitted from the surface, only 15% is absorbed in the atmosphere. Thus, the net absorption of incoming solar radiation at 19%, is 1.27 times greater than the net absorption of energy emitted by radiation from the ground. This means the net cooling effect is at least 1.27 times greater than any warming effect could be.

Another point of great interest is that the new NASA diagram gets the fraction of the cooling of the surface of the Earth by infra-red radiation about right. The fraction of surface cooling by infra-red radiation from the surface is 21% / 51% = 0.41. This agrees with some calculations I have done based on molecular collision frequencies at the altitude in the atmosphere at which radiation competes evenly with molecular transport or movement. The temperature of the Earth seen from space as a black body radiator is 255 K. This is the temperature of the standard atmosphere at an altitude of 5 Km. The altitude at which radiation cooling in the atmosphere is equal to the cooling caused by thermals, conduction, and the transport of water vapor is then a bit lower and proves to be about 4 Km.

Water vapor is the best long wavelength IR absorber and it is the best emitter of IR energy, but before it can commonly emit the energy it has absorbed from IR radiation, even it will likely suffer numerous gas collisions with much of its excess molecular energy being transferred in those collisions to the molecules which collide with the water molecule. Nitrogen molecules are the most likely molecules to take up much of the energy from the water molecule, since nitrogen is 78.08% of the atmosphere. Oxygen molecules are the next most likely colliders at 20.95% and then argon atoms at 0.93%. Together, these three gases account for 99.97% of the U.S. Standard Atmosphere. None of these gas molecules are very efficient IR absorbers in the long wavelength spectrum.

At sea level, the mean gas velocity is 459 m/s, the mean free path or distance between collisions is only 6.6 x 10^-8 m or 66 nm, and the collision frequency is 6.9 billion/s. At an altitude of about 4000 m, the radiative transfer of energy competes about evenly with transfer by collisions. At that altitude, the frequency of gas molecule collisions is about 4.4 billion/s. We can use the equivalency of energy transfer by radiation and gas molecule collisions at the 4000 meter altitude to estimate the fraction of energy transfer by radiation of the total of energy transferred by radiation plus gas molecule collisions. At sea level, energy transfer by radiation is equivalent to about 4.4 x 10⁹ collisions per second, so the fraction of energy transferred by radiation is about 4.4/(4.4 + 6.9) = 0.39 of the total by gas molecule collisions and radiation. This suggests that about 1.5 times as much energy is transferred by gas collisions as by radiation at sea level. Note that this number is in good agreement with the fraction of the energy 0.41 given in the new NASA diagram.

This phenomenal number of atmospheric molecular collisions spreads the IR energy absorbed by a water molecule or a CO₂ molecule from the ground long wavelength IR emissions to the dominant nitrogen and oxygen molecules very, very quickly. At an altitude of 5 km, the collision frequency is still 3.9 billion/s and at 10 km altitude it is 2.1 billion/s. If a water molecule is to radiate energy away as IR emissions, it must do so very quickly! If it were able to emit IR very quickly, then the atmosphere would cool down very quickly and effectively at night. Indeed, cooling at high elevations in mountains by radiative cooling is more effective than cooling from sea level because less of the radiative energy of the ground is spread to many nitrogen and oxygen gas molecules which then tend to hold the energy near the ground.

Back radiation to the ground from an infra-red absorbing molecule such as water or CO2 is thus not a likely event. To this, we must add the very important caveat that the Earth's surface can only re-absorb that energy if it has cooled since the emission of the radiation occurred. Given the very short time scale between emission of radiation from the Earth and the re-emission from an atmospheric molecule such as CO2 or water, any such cooling is trivial. Radiation from molecules in equilibrium with the cooler temperatures found as one goes higher into the atmosphere will not be absorbed at all, since infra-red radiation only flows from warmer to cooler bodies. The reverse does not happen. This is a law of thermodynamics often violated by greenhouse gas global warming alarmists. Thus, any back-radiation effects were always trivial and more than compensated by the cooling effect of infra-red gases absorbing solar radiation before it could reach the surface of the Earth.

The Right to Work: The Economic Advantage

2011-05-23T07:21:00.000-05:00

22 states are Right to Work states in which unions cannot make it a condition of work for a worker to join the labor union or pay some fee assessed by the union based on what it claims is its value to the nonmember worker. Right to Work states since 1990 have demonstrated much greater economic performance in jobs creation and in the growth of state GDP. Here are the comparisons between highly unionized and union shop states vs. the least unionized and Right to Work states:

The 22 Right to Work states have produced more new private sector jobs than the more populated 28 states fostering the union shop. The Right to Work states created new jobs in the critical private sector at a rate 2.3 times that of the Union Shop states. The least unionized states are increasing their state GDPs at much higher rates than the most unionized states.

Richard Vedder of Ohio University noted in a Cato Journal publication (Winter 2010) that:

In 1970, 28.5 percent of Americans lived in right-to-work states; by 2008, the proportion had risen to nearly 40 percent (to over 121 million). The population living in right-to-work states more than doubled, compared with a modest 25.7 percent increase in non right-to-work states. Moreover, only a small proportion (about 15 percent) of the increase in the proportion of Americans in right-to-work states is due to states newly enacting right-to-work laws. Indeed, in the last 20 years, only one state (Oklahoma) has adopted a new right-to-work law. Most of the
population gains arose from greater population increases in right-to-work states.

Professor Vedder made a mistake in his comment about the affect of Oklahoma becoming a Right to Work state in 2001. Oklahoma only had a population of 3.687 million in 2009. Using that figure rather than a slightly lower population in 2008, Oklahoma's conversion only produced about 10% of the increase in the proportion of the U.S. population in Right to Work states.

Between 2000 and 2008, 4.7 million Americans moved from Union Shop states to Right to Work states. Moreover, a larger fraction of the population chooses to work in the Right to Work states than in the Union Shop states. The only four states with over 70% of the working age population working in 2007 were Right to Work states. The national average then was 63%. People in Right to Work states appear to prefer working more than those in Union Shop states. Greater freedom of association on the job should make work more appealing. That higher work force participation may also be due to the fact that people in the Right to Work states had a 10% greater growth in personal income between 1993 and 2009. They also gave rise to the creation of 60% of all new businesses, despite having only about 40% of the population at the end of that time period and less earlier.

Public opinion has swung strongly against the unions being empowered to put workers under pressure to join a union as a condition of employment. Only 11.9% of the work force is now union and the private sector workforce union rate is only 6.9%. Legislation to become a Right to Work state is being considered in Wisconsin, Indiana, New Hampshire, and Missouri among other states. For fear of the union hubbub and a desire to emphasize state debt control, Gov. Mitch Daniels decided that the Right to Work bill that had passed the Indiana state lower legislative branch was not a priority. So it is on hold.

Missouri which was heavily unionized (25%) in 1978 when it last considered becoming a Right to Work state, was only 11.2% union in 2010. If you count only those who are actually working, only 9.9% are union members. In other words, if you are a union member, you are more likely than others to be unemployed. Missouri is largely surrounded by Right to Work states, such as Iowa, Kansas, Oklahoma, Arkansas, and Tennessee. Only Illinois and Kentucky of its neighbors are Union Shop states. The legislature is lining up in favor of becoming a Right to Work state, though the Democrat Governor is expected to veto such a bill. It is being considered for a statewide referendum to get around that. Testimony by a company site consultant that 75% of the companies coming to him say they would prefer a site in a Right to Work state and 50% say they will not consider a site in a Union Shop state at all, had a telling effect upon the Republican committee heads.

Unions like to point out that family incomes are higher in Union Shop states, but when union dues are subtracted and the lower cost of living of Right to Work states is taken into account, family income is actually higher in the Right to Work states. Clearly, the trend is solidly in their direction. Business growth and jobs creation in the Right to Work states and out-migration from the Union Shop states will continue to put pressure on the Union Shop states to allow more freedom of association in employment. Of course, many will long continue to be held hostage by unions, but they will pay a huge price.

Slothful IRS Reduces Consequences of Exceeding Debt Limit

2011-05-22T02:01:00.001-05:00

Treasury Secretary Timothy Geithner has told us that the government has a few tricks it can use so that even though the government debt exceeds the debt limit, the government will not have to shut down until early August. One major reason is not discussed.

The IRS is running late this year on refunding excess taxes paid. Part of the reason for this is that Congress and Obama did not manage to work out an agreement and sign it into law to prevent a drastic raise in taxes until 17 December of 2010. In addition to changes that affected future payroll withholdings, some changes required retroactive changes to 2010 tax forms, which delayed the start of filing for many people. Among these,

Taxpayers were allowed to continue choosing to either deduct state income taxes or the state sales tax. This affected the 50 million filers who itemize deductions.
A change was made in who was affected by the Alternative Minimum Tax or AMT, which also affected those who itemize deductions.
Teachers who claim the $250 deduction for money spent on classroom supplies which had been scheduled to expire.
Qualified college expenses could allow a deduction of up to $4,000 which had been scheduled to expire.

Consequently, the IRS was going to be jammed more than usual due to these late changes. There is, however, another problem the IRS has on top of this one.

The first Democrat-controlled Congress of four years ago decided that the IRS should provide loans to first-time home buyers at no interest. A million home buyers took advantage of this program, so that IRS computers are taking in monthly mortgage payments in addition to handling the usual business payroll tax deposits and trying to get the many refunds out to taxpayers. The IRS is running seriously behind. This is the normal problem of poor central planning that we have come to understand is central to big government.

But, government has also earned our cynicism. Could it be that this is also a good excuse for getting refunds, which averaged $2,324 in 2007, back to taxpayers late? During the period between now and August, the longer it takes for the IRS to refund excess tax payments, the easier it will be to avoid the consequences of having exceeded the debt limit. The delays on many tax refunds are expected to be 4 months. Four months from 18 April will be 18 August. This is very convenient for our overspending government. Is it possible the IRS and its tax-dodging leader, the Secretary of the Treasury Timothy Geithner, are taking advantage to the fullest of such excuses? This would help to allow the administration to continue its free-spending ways unabated until August.

Making ObamaCare a Power-Luster's Dream

2011-05-18T23:50:00.000-05:00

As the 137 agencies and panels are set up and start issuing their many rulings on who will receive health care and who will not and at what cost, the total package of power manipulations of our lives by bureaucrats and politicians will become more clear. But we have already seen states and certain health care operations acquire special treatment for political reasons in the maneuvers to get the votes to pass the unread, unconstitutional legislation in a most unseemly rush to exert the power of the Democrat Socialist Party.

Since that time, we have seen the Obama Department of Health and Human Services grant 1,372 waivers of a provision of ObamaCare. These waivers are for one year of the medical expense limit requirements, which are higher than those many company or union health plans now offer. They can be applied for annually through 2014. These waivers have been granted to hundreds of union locals, despite the unions being the most vociferous of ObamaCare supporters when it was being considered in Congress. Apparently many union locals changed their minds when they had a chance to actually read it afterward. Or were the unions assured ahead of time that they would be granted such waivers as they wanted, seeing as how they were such munificent contributors to the election of the Democrat Socialists? It is hard to know with this most open and transparent group of political operatives who were running the show in the 2010 Congress and the Obama gang. Oh, did I say open and transparent? Sorry that must have stuck in my mind from the election campaign that put these Democrat Socialists in control of our government and they thought of our lives. I meant to say in this closed, deep-caved, murky regime of moles and voles.

These waivers now cover 3.1 million people. The Daily Caller reports that:

Of the 204 new Obamacare waivers President Barack Obama’s administration approved in April, 38 are for fancy eateries, hip nightclubs and decadent hotels in House Minority Leader Nancy Pelosi’s Northern California district.

That’s in addition to the 27 new waivers for health care or drug companies and the 31 new union waivers Obama’s Department of Health and Human Services approved.

Now there are 435 Congressional districts and each has about the same number of Americans in the district. If 204 waivers were granted equally among these districts, the distribution should average 0.47 per district. But, somehow, surely just a statistical anomaly, the district of Nancy Pelosi, the ObamaCare prime mover through the House of Representatives, just happened to get 38 waivers or 81 times her district's equal share of waivers. God must be loading the dice when he sees that the good people of Pelosi's district are so willing to delegate powers to the federal government that they elected this good, god-favored woman to Congress. But I, not being much of a god-fearer, must note that this is a severe injustice in a nation of sovereign, equal individuals with full rights to life, liberty, property, the ownership of their minds and bodies, and the pursuit of their personal happiness. This is the hand of tyranny and it should be no more tolerated than when that hand was the actually lighter hand of King George III. Under Democrat Socialist rule, there is no such thing as equal individual rights. No, those are traded for status as either a crony to a powerful politician or the status of the Forgotten Man. Most of us are forgotten. I certainly am, unless I am on their enemies list.

One of the remarkable things about the companies getting waivers from Nancy Pelosi's district is that they were expensive, high-end restaurants, hotels, spas, night clubs, and car dealerships. Apparently many other Congressional districts did not get so many waivers because they just do not have enough wealthy business establishments to compete with Pelosi's San Francisco crony mercantilism companies. Unless maybe, just maybe, these businesses have special tutoring in how to take advantage of the overly complex and overly belligerent Washington power brokerage system that ordinary Americans will never figure out. Of course, a call from the office of Nancy Pelosi to HHS head Kathleen Sebelius in her murky subterranean den probably does not hurt either.

NLRB - From Unconstitutional to Wildly Unconstitutional

2011-05-17T01:13:00.001-05:00

The National Labor Relations Board (NLRB) has ordered that people with objections to its actions taken against Boeing be quiet and not voice those objections. I am today asserting my constitutional right to think, to freedom of conscience, to freedom of speech, and to freedom of the press. The letter of intimidation came from the General Counsel of the NLRB, Lafe Solomon, who is an Obama appointee. Obama also stacked the NRLB with Craig Becker, the former associate general counsel for SEIU and the AFL-CIO, with a Congressional recess appointment. Having delivered little to the unions with legislation in Congress, Obama is trying to deliver the goodies through Executive Branch agencies even if it means the public has to be intimidated out of exercising their right to freedom of speech.

The NLRB has no legitimate power under our Constitution to violate employee-employer contracts and it certainly does not have the right to declare that a company must maintain all of its production activities in one state just because that suits a particular union. Yet, the NLRB has tried to force Boeing to build a third new production line for the 787 Dreamliner in Washington state, where it built its first production line. Boeing has nearly finished a second production line in South Carolina and it only needs two production lines. The International Association of Mechanics (IAM) and the union-owned NLRB are claiming that Boeing built the second production line in the right-to-work state of South Carolina in retaliation against the many strikes they have had in Washington state. In reality, the second production line is being built at an ex-Vought site bought by Boeing. The employees at the site were briefly members of the IAM, but decertified it as their representative when they decided that the IAM did not have their best interest at heart. The IAM and the NLRB are retaliating against that facility in South Carolina as a result.

The NRLB is embarrassed by the weakness of its case. Whenever the government has reason to be embarrassed and the public has or will likely catch on to that fact, the government either hides the facts and the data from the People or it tells them that they cannot talk about it. Big government always has many reasons to be embarrassed, so censorship and secrecy have always been a consequence of a big and intrusive government. After all, no one has ever heard of an effective central planner micromanaging the lives of hundreds of millions of complex and richly differentiated individuals. It does not happen in the real world.

Speculators are Good in a Free Market

2011-05-15T09:24:00.000-05:00

When I was a sophomore at Brown University in 1966-1967, I sat in on the first semester economics course and then took a test to get credit for the course. I then took the second semester as a regular course. The course was taught by a Brown Ph.D. graduate student and in a lecture he made it clear that he did not like speculators and that he did not understand their essential role in a free market economy. I explained it to him after class, making myself late for my next class. To this day, few people understand the critical and good role that speculators perform. They are presently being blamed by Obama, Bill O'Reilly, and many others for the increasing price of gasoline at the pump.

Obama claims that there is plenty of oil available and the price of gasoline should not be so high. But, he says the mean, cold-hearted, selfish speculators are driving the cost of oil up and therefor the cost of gasoline is going up. There are indeed times when speculators do drive the cost of oil up. There are also times when they drive the cost down. The total longer term average of their effect on the price of oil is probably a downward effect. Let us consider why this is the case.

If you look at the market for a given product, you see the free market price of that product now fairly readily, if you have a free market. What is harder to figure out is what the future price of that product will be. Let us take the case of oil, since that is the present example of most interest. Let us suppose even that Obama is right that there is enough oil now to meet the present demand for oil in the sense that the supply and the demand do not dictate a price increase. Is it perhaps the case that speculators are driving the price up? It may very well be the case. Yes, even Obama can be partly right every now and then. Even though he has no understanding of economics and business at all, he is sometimes partly right about something in some moment of time. What he is most likely wrong about is his assessment that the rising price is entirely caused by speculators and that their contribution is bad.

The speculators are bidding up the price of oil because they think that we will before very long face a situation in which the supply of oil will not be enough to satisfy the future demand for it without the price going up more even than the speculators are bidding it up to now. The speculator makes money only if he is right in his assessment of the future supply and the future demand. If he is wrong, he will lose his shirt.

So, speculators have recently bid up the cost of oil by buying it. Why might they do this? First, the world economy has been in a severe recession with a slow recovery, so present demand is still suppressed. Countries such as India, China, and Brazil have had rapidly growing economies in recent times, which may surge ahead as the world gets over the recession. Many people in under-developed countries have been improving their standard of living and are using more energy. World trade will grow and the transportation of goods will increase. Meanwhile, OPEC has been limiting its production of oil. The national oil companies that control the vast majority of the world's presently developed oil fields are very inefficient oil producers. Will they be able and inclined to increase production by enough to keep prices near present levels as economies continue to recover from the recession? There is also a loss of production of oil in Libya and some legitimate concern that the unrest in the Middle East may lead to other disruptions of oil production in other countries.

Even the rather free market oil companies are not able to increase oil production by much, because many countries are closed off to them and because the U.S. will not allow them to develop new oil fields offshore or on any of the vast federal lands. Even on private land, they are often prevented from oil field development by lawsuits. At the moment, there are also some oil refineries being threatened by production problems by the flooding of the Mississippi River. In addition, speculators are predicting the future value of the dollar. Will it continue to drop as the Federal Reserve continues to print money? Perhaps the speculators think oil production will not therefor increase enough as demand increases to keep prices at present levels or at those that speculators are bidding the price up to currently. Perhaps they are betting -- almost surely correctly -- that the value of the dollar will continue to shrink.

Let us suppose that the speculators are thinking this way and they have bid up the price of oil. When that future time comes and many people are desperate for oil and its products such as gasoline and plastics, the present production oil of that future time would be bid up to very high prices by consumers. It is then that the speculators let the oil they have been holding back onto the market. The supply of oil is then increased and the price is driven down. The speculator makes a profit if he was right about the future direction and rates of supply and demand changes and the value of the dollar. If we deny him his profit, he has no reason to take the risk of acting on his judgment to try to smooth out price fluctuations. The speculator takes advantage of price fluctuations to make a profit. But, his act to make a profit, provides more supply when supply is low or demand is high, so his action reduces the price fluctuations that would otherwise occur.

In an act of idiocy, Congress made it illegal to speculate on the price of onions. As a result, the price of onions fluctuates much more than most agricultural products. Its price fluctuations were used as an illustration of what happens when speculators are removed from a market by a recent John Stossel program on Fox Business News. He also discussed oil and onion prices in a column. The horrible onion price fluctuation history goes back to 1958. Because of the ban on onion speculation, onion prices recently went up by 36%, worse than the price increases on oil.

The present price of oil is not up just due to speculators in any case. Much of the rise is due to the declining value of the dollar. Obama and the big spending government thugs want badly to distract us from this effect. They also want to distract us from the effects that past oil field development restrictions have had on oil prices, because they wish to continue those restrictions. The loss of a large part of the Libyan oil production also causes world prices on oil to be bid up for its present effect on supply and demand. Some states, desperate for more tax revenue, have also increased the gasoline tax. The continued requirements for ethanol in gasoline and the increase of mixes to 15% ethanol causes the price of gasoline to go up as well. All of these problems are caused by governments and our government wants our attention to be on speculators, not on it. In similar past times, the government has investigated the role of speculators about 30 times and they never find anything substantial in the investigations. These hearings are dog and pony show distractions just as Senator Hatch complained this last week.

I made the claim that the average effect of oil speculation is probably one of decreasing the cost. Why would this be the case? When the price of oil is low, many oil producers will cut back their higher cost production wells. For instance, there are oil pumps all over the U.S. that pump oil only a few hours a day or less, as oil slowly seeps into the pump area from porous rock. Delivering this small quantity of oil to market can be a bit expensive and the maintenance of the pumps which work such a small fraction of the time is high. They simply get shut down when the price of oil goes way down. Minimum oil production costs and then refining costs for gasoline will set something of a floor for how low oil and gasoline prices can go. On the up side, however, there are many critical uses of oil and gasoline that make it possible for the price to go very high when demand becomes very great and the supply becomes too little. Many a driver will still pay for gasoline to drive to work. Many an American would pay $8 a gallon if he had to. Many would pay $10/gallon. Sudden decreases in supply or of demand could result in huge upward price spikes.

Yes, these price increases will bring on increased production. For enough money, OPEC will crank up their production somewhat. Those hour a day pumps will surely be turned back on. Political pressure on the U.S. government will force it to allow some new oil field development. While some deep water offshore oil fields will take 10 years of development, there are shallow off-shore and land sources that can be developed much faster. There are old depleted oil fields in which more expensive oil recovery measures can be justified and more oil can be squeezed from them. Greater effort can be made in refineries to break down large oil molecules to squeeze out more gasoline. Things can be done to bring down the high prices, but many of them take time to occur. Over shorter periods, prices can spike upward badly. These deleterious effects are mitigated by the much maligned speculators. Speculators are our friends. Governments, both the U.S. and the OPEC governments, are our enemy.

Senate Bill to Remove 200 Senate Confirmations Confirms Excessive Size of Government

2011-05-15T07:06:00.001-05:00

Senate Bill 679 is a bipartisan effort to reduce the role of the Senate in confirming presidential appointments to Executive branch offices. It is called the Presidential Appointment Efficiency and Streamlining Act of 2011. The Senate has proven unable to keep up with its essential function as a check to the growth of Presidential power and has fallen badly behind on its vetting and confirmation responsibilities. Given the outrageous and cancerous growth of government, this is to be expected.

Under Kennedy the Senate had 286 positions to confirm. At the end of the Clinton presidency, the Senate had 914 positions to confirm. It now has 1,409 appointments on which to exercise its overview function. It is clear, as S679 maintains, that the Senate cannot do a reasonable job of confirming 1,409 positions. So S679 wants to remove about 200 positions from those needing confirmation.

The Constitution allows the Congress to make a law to vest the appointment of such inferior Officers, as they think proper, in the President alone, .... So the question here is whether the 200 Officers the S679 bill decides to let the President alone vest in office are inferior or not. I expect that most of them are inferior, but not necessarily in the sense of minor Offices.

I expect that Congress has passed laws previously vesting appointments solely with the President, to the courts, and to the Heads of Departments in numerous cases. After all, the Senate is only confirming about 1,409 employee positions in the federal government out of about 2,824,000 civilian positions and out of about 2,445,000 active military positions. [It is interesting that the government tells us how many people were employed in April 2011, but it can only tell us how many government employees there were in 2008 or 2009. Do they have some multiplying swarms of officers let loose upon the land and the People to hide?]

The expansion of government far beyond its constitutional scope and its exercise of powers not given to it by the Constitution is the cause of the Senate's inability to check on the wisdom of the presidential appointments. That growth has made it impossible for the government to rationally manage its operations. The President, the Senate, the House, and the Supreme Court are all overwhelmed with responsibilities that no mortal men can perform reasonably.

We have a massive failure of wisdom, which was wonderfully plentiful among the Framers of our Constitution. Such wisdom is sadly lacking in most of the politicians running our government today. Among the 200 positions S679 would end the Senate confirmation duty for there are surely many that are exercising powers not given them by the Constitution and which are therefore very critical offices very much in need of any checks they might be given. But, the Senate cannot do its job. The Senate should understand that this is a substantial reason why government should not be this huge and act to drastically cut its size. Instead, it wants to cut its responsibilities.

If we assume that all of the $3.4562 trillion spent in 2010 went through the hands of these 1,409 top appointees, they are in control of an average of $2.453 billion of taxpayer money. Maybe some of the 1,409 Senate confirmations influence the spending of much less of this money than the average, but it does seem a bad idea that someone controlling the spending of a substantial part of $1 billion has no vetting from Congress. Worse than the spending is the assumption of unconstitutional powers and the trampling of individual rights which these officers of the federal government are allowed to do, and do with little oversight even. I seriously doubt that reducing the Senate's overview of 200 of these 1,409 positions will not result in much irrational spending and many additional unconstitutional acts by the Executive branch of the government. Yet, at present, the Senate cannot focus properly on what may very well be the more important 1,209 positions.

This is an excellent case of the government causing a problem and then acting unwisely to fix the problem it has created. It has grown too big due to taking on many powers not given to it by the Constitution and therefor powers that were reserved to the People or the States. Because it has grown excessively and wantonly, it cannot fulfill its responsibility to check Presidential appointments to offices that wield great power, and in many instances, tyrannical power, over the People and the States. So it responds with S679 to shirk its overview responsibility. This confirms the generally dim view most Americans have of the Senate.

Government is all about the use of force. Because of this, it attracts people into its principal offices who love wielding force. In other words, it attracts bullies and thugs. Such people never willing give up power because it is the right thing to do. They only understand a superior force, which is still to be found in our ballot boxes, though not for much longer if we do not consistently use that power to force these thugs out of office. Unfortunately, the chief thug has a unbelievably high 42% approval rating. The thugs and con men are not doing too badly politically. 42% of the people conned can be a serious impediment to down-sizing our bubble government. It would be best to down-size it before it bursts, but this is going to be a closely run affair.

The following Senators are co-sponsors of S679:

Sen. Lamar Alexander (R-Tenn.), Sen. Jeff Bingaman (D-N.M.), Sen. Richard Blumenthal (D-Conn.), Sen. Scott Brown (R-Mass.), Sen. Thomas Carper (D-Del.), Sen. Susan Collins (R-Maine), Sen. Richard Durbin (D-Ill.), Sen. Mike Johanns (R-Neb.), Sen. Jon Kyl (R-Ariz.), Sen. Joseph Lieberman (I-Conn.), Sen. Richard Lugar (R-Ind.), Sen. Mitch McConnell (R-Ky.), Sen. John Reed (D-R.I.), Sen. Harry Reid (D-Nev.), and Sen. Sheldon Whitehouse (D-R.I.).

There might be some excuse for any Senators on this list who are serious government down-sizers who wanted to clear their dockets for some serious cutting of spending and the bureaucracy. Such a Senator might be able to eliminate 200 top positions easily and could then be justified in being in favor of S679. I see no such Senator on this list, however.

Sometimes it gets a little crazy in Africa

2011-05-11T22:47:00.000-05:00

Zimbabwe issued the highest denomination currency ever and in 2009 it would not buy a bus ticket in its own capital. These bills are no longer in use as currency in Zimbabwe. Zimbabwe gave up on adding more zeroes to its currency before 2009 was over, but the bills are now worth something to currency collectors. The bills are selling on the Internet for more than 15 times what they were worth in circulation. They are now worth about $5 American as a collector's item.

Since the Democrats will not cut back on their spending and taxation will never provide them as much as they want to spend, I wonder when the American highest denomination bills will hit $100,000, then $1,000,000, then $10,000,000? Look at the growth of our money supply since 2000 compared to its growth in prior times in the plot below:

The rate of expansion of the M2 money supply from 2000 to 2010 was at a rate of about $380 billion per year. M2 was very nearly twice as large at the end of 2010 as it was in 2000. As long as most of M2 is held abroad by people and countries who think the American dollar is reasonably sound, this may be less than totally catastrophic. But, but, but, if those holding these dollars lose confidence in the dollar and start dumping it in panic, the jig is up. We may then see that $100,000 bill, with a $1,000,000 bill fast on its heels.

13.47% Unemployment with Glacially Slow Improvement

2011-05-08T08:17:00.000-05:00

The so-called unemployment rate of 8.66%, without seasonal adjustment, or the 9.0% unemployment rate with seasonal adjustment, remains virtually meaningless. As I do most months, I will calculate the number of missing jobs based on the percentage of Americans who wanted to work when jobs were plentiful and desirable in January 2000. The result is that the real unemployment rate in April 2011 is 13.47%, which is down from March 2011 when it was 13.86%. In January 2011, it was still worse at 14.59%. We are presently missing 21,739,000 jobs. This is 868,000 more missing jobs than in April of 2010. Clearly, while the recent real unemployment rate is falling, it is doing so with glacial slowness and our jobs recession is still very much bearing down on us.

The graph of missing jobs going back to November 2009 is updated below:

We made progress to some degree in job creation because the U.S. manufacturing base is doing relatively well compared to the rest of the world. We are very competitive. Take a look at this chart from the JPMorgan Global PMI Report of 3 May in which values over 50 represent expansion:

As we see, U.S. manufacturing output dipped lower at the end of 2008 and the start of 2009 than that of China, the U.K., and the Eurozone, though not so deep as Japan. Since then, U.S. manufacturing output has rebounded strongly, despite the federal government's best efforts to squeeze it dry with excessive regulations and taxes. We now have the highest corporate taxes in the developed world. Corporate taxes are particularly onerous as a double tax, since shareholders are taxed again on their dividends and any capital gains and prices of sold goods and services are raised to consumers. Despite this, American manufacturers are making an heroic effort, which is much under-appreciated. U.S. manufacturing output fell in April relative to March, but we are still beating the Eurozone, China, and Japan. This is why manufacturing employment rose by 29,000 in April. The drop in the manufacturing output in April may have been due to a lack of parts from Japan and sharp increases in many commodity prices in April. Monetary tightening in China contributed to the downturn there.

The manufacturing employment index from the JPMorgan report is also interesting, with values greater than 50 indicating expansion again:

Manufacturing unemployment took a deeper dip in the U.S. than anywhere in this Great Socialist Recession, but since early 2010, U.S. manufacturers have beaten the Eurozone, China, and Japan in increasing manufacturing employment. This has been done because U.S. manufacturers have been increasing the productivity per employee and increasing exports. The manufacturing export index is shown below:

Note that the manufacturing export index for the U.S. did not dip as low as those for China, the Eurozone, and Japan at the worst of the recession and that we now and recently have been beating out the Eurozone by a hair and China and Japan more handily. Some of this expansion, however, is driven by the lower value of the dollar. Caterpillar Inc. is selling construction equipment abroad at record rates, especially excavators and underground mining trucks. Heavy spending on infrastructure in Latin America and Asia is especially a factor in these sales. About 90% of their large mining trucks are exported. In the U.S., severe environmental regulations and constant lawsuits are crimping our mining operations despite strong demand for metals and materials. Since the low point in employment in mining in October 2009, employment has increased by 107,000 jobs in mining. Crown Equipment Corp. manufactures forklifts and is reporting strong sales abroad as well.

Construction spending is also increasing in the U.S. It increased by 1.4% in March. The increase in the private sector was higher at 2.2%. Construction employment was unchanged in April, however. It has been very flat since early 2010. In April, retail trade employment increased by 57,000, professional and business services by 51,000, leisure and hospitality by 46,000, and health care by 37,000 jobs. The information, financial, and transportation and warehousing industries remained unchanged in employment numbers. Fortunately, the number employed in state and local governments decreased somewhat.

First quarter 2011 output per hour worked productivity was 1.3% higher than it had been in the first quarter of 2010, but this continued a trend since the first quarter of 2010 of smaller and smaller productivity gains. Companies are struggling to increase productivity further with the already very lean workforces they have.

Many of 49% of Americans are Slaves,

2011-05-06T22:01:00.002-05:00

while 51% are wastrels responsible for massive government spending they pay no income tax to fund. Yes, in 2009, the number of Americans not paying income taxes to the federal government became a 51% majority. For them, it does not matter how wasteful government spending is, because it is not their money. They can and do ask, "Why should I care what it costs, I do not pay for it." Obama has succeeded in creating a majority of recipients of his redistributionist theft. It gets worse, since some of those 49% who pay some income tax, actually do get more in government goodies than the amount they pay in taxes.

For instance, according to the Bureau of Labor Statistics, there were 1,909,000 civilian federal employees in November 2008, excluding the postal employees. With their generally high salaries and extremely good benefits, they can be said to mostly be receiving more in government payments than they are paying in taxes. It is interesting to note that the Bureau of Labor Statistics provides data on total employment in April 2011, but only provides the number of federal employees as recently as November 2008. Do you suppose they do not want the taxpayer to easily find out how bloated the federal bureaucracy truly is? On top of this, I have seen numbers for January 2009 civilian federal employees without security clearances reported to be 2,748,978. The CIA, NSA, and other complete federal agencies were left out of that 2.7 million number. This number may include the postal employees. Does the federal government have as much trouble keeping track of how many employees it has as it does of how much land, how many buildings, and how much equipment it has? I would not be surprised.

Then there are also those many businessmen so cozy with the government who are collecting subsidies and who benefit from mandates, such as those to use ethanol, wind energy, solar energy, and partially electric cars. There are also crony mercantilists benefiting from many regulations designed to bury their competition, especially that of small businesses, under a mountain of government requirements and paperwork. These people are often called crony capitalists, but that is a contradiction of terms. Crony mercantilists have been around as long as there have been governed nation-states, which long predates the day of the capitalists with their philosophy of open markets and freedom of choice. Capitalism is the manifestation of the equal, sovereign individual right to associate with whom one wants for the purposes of one's choosing.

Just recently, every business in America doing any business with FDA-regulated companies or with FAA and DOD regulated aerospace companies has been hit with a blizzard of quality assurance paperwork and the pressure is mounting for every company to become International Standards Organization (ISO) certified at huge expense both initially and in an on-going way. This is expensive for large companies and will be the death of many a small company. The small company that always had to try harder to provide good service or quality products will now be killed in many cases in the name of increased quality. Ha. We will see what the monopoly of the few companies that can bear the expense of this extra-governmental regulation required by government agencies will provide in future quality! Every lab will have calibrated equipment, but will pay no attention to correctly interpreting the data provide to obtain the real properties of the materials investigated. There will be no quality in the end product analytical report, but every laboratory will be a quality lab because ISO says they are. As Ayn Rand noted long ago, regulation by government sets up lowest common denominator requirements and no company thereafter has as much pressure as before to exceed those low requirements. But, many a tired, old, and large company is very happy with such regulations, whether set by the government or by a one-world organization such as ISO. ISO also serves the function of providing import protection to Europe primarily, but secondarily to the U.S., Canada, and Japan.

If you wonder why it is so hard to reduce the size of government or to reduce its out-of-control spending, this is why. There are too few people paying taxes and many too many people getting payments, subsidies, and protection from effort. The many have truly enslaved the productive and wealth-creating few. But it is these few who create the jobs. As our society has become most determined to enslave and whip these few, they have responded by laying off many of the employees they can no longer support and by refusing to hire more new employees even as they struggle to increase productivity while robbed of the capital with which to do it.

AIG Bets on Shortened Life Spans

2011-04-27T02:11:00.000-05:00

AIG was rescued by the federal government and the Federal Reserve Bank in the bailout binge early in the Great Socialist Recession with $182.5 billion of taxpayer money. It faces a very uncertain time in its very broad insurance business due to many factors. Among these are:

It is still struggling to pay the government back.
The never-ending recession is still reducing its income.
Insured property values are depressed and no one knows when they might improve.
ObamaCare may or may not remain as written.
Many of the most important provisions of ObamaCare are regulations and rules to be written by about 140 agencies and panels.
Will the fewer and larger health insurance companies that will likely result with ObamaCare have as much need for re-insurance from AIG as the smaller, more balkanized insurance companies of today do?
The present administration is solidly anti-business and constantly advocating increased business taxes and regulations.
If ObamaCare becomes fully activated, how fast will medical care become degraded and how much will the lives of the primary insurance holders be shortened?

There does appear to be one business on which AIG will likely be able to make a profit. It has a growing business in buying older people's life insurance policies. The business is called life settlements. If an older person wants the value of his paid-in life insurance, he can sell it to AIG and AIG will continue to make his insurance payments with AIG as the new beneficiary. If the older person dies while the life insurance policy is in effect, AIG gets a big payout. AIG wins on this if it can discount the paid-in amount in buying the insurance contract or figure out who is likely to die earlier than the insurance company that initially sold them the policy thought they were going to die. This means they can look at whether someone has come to suffer a disease that is likely to shorten their lives.

The life settlement business becomes easier if ObamaCare is put into effect. If ObamaCare works as advertised, some poor people would receive better medical care, while most middle class and wealthier people will find doctor's and hospitals with aging equipment, reduced innovations, less time for them, and a near-slave mentality brought on by being increasingly underpaid and increasing bossed around by thuggish government bureaucrats. The middle class and the wealthier hold most life insurance policy value and their lives are clearly going to be shortened relative to the reasonable expectation when they bought their life insurance policies. Worsening medical care under ObamaCare will help AIG to make a profit on its developing life settlement business. Ironically, this will help AIG pay back the taxpayers who rescued it.

In 2006, the future death benefits of its life settlements business were $3.7 billion with 1,799 contracts. In 2010, this business had grown to $17.7 billion in future death benefits and 5,673 contracts. Just as AIG has bundled mortgages to make mortgage bonds, AIG would like to do the same with these life settlement contracts. Unfortunately, in March, Standard & Poor's refused to put a risk evaluation on such bonds, stating the difficulty of estimating the life expectancies of insured individuals. Wow! Life insurance companies have been doing this quite well for decades, but now we suddenly find that this can no longer be done? What is up? The answer is that the uncertainty is caused by ObamaCare. Most of the people want it changed so some changes may be made, it has been ruled both unconstitutional and constitutional, the changes of the health care system are radical, most medical experts understand that it will reduce the quality of medical care with rationing and underpayments of doctors and hospitals, the bureaucracy rules are not written yet, the state programs are not set up, and the rate of life expectancy deterioration is not yet known.

But, despite all this uncertainty, AIG can safely buy up insurance policies issued before ObamaCare was passed against the will of the people and make a profit on those policies. They are only betting that those people will not live as long as was expected before ObamaCare came along to shorten our lives. Any half rational adult should be able to see that. Meanwhile, pity the life insurance companies will have to pay out benefits due to deaths that will occur earlier than expected due to ObamaCare. This will surely reduce their profits and cause many such life insurance companies to go belly-up. That in turn will leave many life insurance holders with insurance policies unable to pay out their death benefits. ObamaCare and so many other Obama policies are proving to be most disruptive by virtue of creating debilitating business uncertainties.

The Union that did not Represent its Members

2011-04-24T01:18:00.000-05:00

Unions that do not represent the interests of their members are common. This is fundamentally why union membership in the private sector has fallen to only 6.9% in 2010 according to the Bureau of Labor Statistics. The many grossly underfunded union pension funds are another clear proof that the unions pay little attention to the best interests of their members. The International Association of Machinists (IAM) is involved with the recent Boeing altercation in which they and the National Labor Relations Board (NLRB) claim Boeing built a production line in the Right to Work state of South Carolina in retaliation for a strike in Washington state by the IAM. It used to represent the employees at the facility in South Carolina, as well as those in Washington. It is interesting to see why the South Carolina machinists decertified the IAM.

In 2007, when Vought Aircraft Industries, Inc. owned the facility in North Charleston, South Carolina, the IAM narrowly won an election to represent 200 employees there. Vought was a Boeing parts supplier and the IAM strike against Boeing forced Vought to close the South Carolina plant temporarily. The new IAM members were laid off. Meanwhile, the IAM and Vought spent a year discussing the new labor contract. The employees were grumbling and there was indication that a decertification attempt was underway. The IAM quickly put an offer of Vought to a vote, though this surprised Vought which was working up better offers. Apparently, the IAM wanted some contract to lock in the new members in South Carolina no matter what. Some employees were unaware of the emergency vote on 7 November 2008 set up by the IAM just as Vought was. The IAM announced that an overwhelming 92% of membership had approved the new contract. After some investigation, it was found that of the 200 affected employees, only 13 had voted. Twelve members out of 200 had committed everyone to a new labor contract. Many of the relatively new labor union members complained that the 1.5% wage increases would not cover the increased union dues and inflation.

In July 2009, Boeing announced it was buying the South Carolina facility from Vought and completed the purchase that month. The employees filed to decertify the IAM that month also. The IAM was thrown out because the workers had concluded that it was not interested in their best interest. Subsequently, the IAM is furious that Boeing is building a second 787 Dreamliner production line in this South Carolina facility using the now 1000 employees there who are no longer union members. The Obama-packed NLRB is backing the union vendetta both against Boeing and these dissatisfied former union members.