Is it bad when an American company invests abroad?

First of all, if a company invests abroad, it probably believes it is good for its objectives. Second, it is likely to be beneficial to the country in which they make the investment since it means an influx of money for building new facilities or renting them, more jobs, and easier access to quality goods and services. But does it produce more good than bad for Americans? Such questions are not always easy to answer and may be unanswerable, which is why it is best to simply decide such things on the basis of leaving as much to individual choice as possible. Nonetheless, sometimes the answer is relatively straightforward, as it is in this case.

As I have noted a number of times, we have an idiocentric corporate tax policy which provides a strong incentive for American companies to invest more abroad and less in the U.S. Of course, it would generally be best for Americans if they were able to invest more rather than less in the U.S., which is why it is critically important that the U.S. corporate tax rate be greatly reduced. The example of Ireland has made it clear that a much lower rate will actually be likely to produce more revenue to government, so the extraordinarily high corporate tax rate in the U.S. is only punitive to U.S. corporations and to many individual Americans. It is also a case of government cutting off its own nose to spit itself. In sum, it is truly and completely idiocentric policy.

I am in the early stage of reading what is rapidly becoming a fascinating book. It is Global Tax Revolution, The Rise of Tax Competition and the Battle to Defend It by Chris Edwards and Daniel J. Mitchell. It was published by the Cato Institute of Washington, D.C. in 2008. The information below comes from this book.

But, when a U.S. company invests abroad now under whatever incentives it has, what is the result? First, it is not the case that most of this investment is in countries with very low wages. On the contrary, the U.S. Bureau of Economic Analysis data says that 81% of the production of all U.S.-owned foreign affiliates is in high-income countries and 77% of U.S. direct investment is also. Britain, Canada, and the Netherlands are the three top countries for U.S. foreign investment. In comparison, investments in China represented only 1% of total U.S. foreign direct investment in 2006.

In 2007, Ford Motor Company invested in a second major automobile assembly plant in China and added to production in India, each at an expense of about $500 million. In each case, the resulting production is expected to be consumed by the country in which the plant was built. These plants and expansions were for the purpose of gaining more of the home market in each country. In general, the purpose of U.S. company foreign direct investment is to generate more global sales and to gain an increasing portion of growing and strong markets in other countries. 90% of the sales of U.S. foreign affiliates are in foreign markets, with only 10% of these sales being due to imports of these products into the U.S.

U.S. multinational corporations exported 54% of all U.S. exports in 2005. The effect of this has been determined by The Organization for Economic Cooperation and Development, which claims that every dollar of outward foreign direct investment by a country results in $2 of additional exports from that country. Foreign investment of a U.S. company commonly results in an expansion of the U.S. operations of that company. As a company's foreign sales increase, that company's headquarters operations will commonly increase and these are often high-paying jobs. Another major beneficiary operation is R&D, which again is an operation with many high-paying jobs.

Most U.S. multinational corporation jobs are in the U.S. In 2005, it was 86% of those jobs. These multinational companies performed 79% of all U.S. business R&D, according to government statistics. I personally know that these statistics underestimate the R&D performed by small companies, which in general are not going to do the paperwork from which the government derives such statistics. However, it remains true that multinationals do a very large portion of U.S. business R&D. It is also the case that as U.S. multinational companies have increased sales abroad, their U.S. R&D jobs have increased greatly.

Intel is an interesting example. 84% of its revenues came from abroad in 2006, but more than half of its 94,000 employees are in the U.S. 4/5 of its R&D is done in the U.S., however. 12 of 16 semiconductor plants are in the U.S., with the rest in Ireland, Israel, and soon to be in China. Dow Chemical is the second largest chemical company in the world, after the German BASF. 63% of revenues come from abroad. Dow operates 150 manufacturing facilities in 37 countries, but 55% of its assets are in the U.S. and half of its employees are also here. It has 5,600 people in R&D, with 67% of them in the U.S.

So, the lesson is that the greater a U.S. multinational company's sales and operations abroad, the more high-paying and even total jobs they generate in the U.S. They also generally increase their net investment in facilities. Overall, Americans clearly do benefit from their ability to trade with people overseas.

A Request for an Overview Discussion of the Financial Meltdown

I have received a request that I provide an overview discussion of what I believe caused the home mortgage and financial crisis we suffered. Robert G. Curry wrote:

I wonder if you have given some thought to the causes of the current financial meltdown. The history leading up to what happened this year, etc.

Have you covered any of this on your blog?

It would be informative to be able to get an overall picture of the actions from the Carter years to the present of who did what, and who's primarily to blame, both through actions or neglect of action, for the meltdown.

How did we get from the so called "Fair Housing Act," through the "No Red Lining," to the "NINJA" loans, to the packaging of junk mortgages as A rated bonds, to the insuring of those bonds by the people at AIG, to the bailouts?

My response to Robert was:

I have discussed it a number of times, but not as comprehensively as you are suggesting I do. Partly, this is because it is a complex history. Partly, because the time period from Sep through Dec is our busy season in my laboratory, though all of 2008 was very busy for me. But, there is also a very critical component to the housing and financial meltdown which is due to problems caused by local and state governments in addition to the unhealthy contributions to the problem made by the Federal government. This really complicates the issue. I have addressed some of the local problems in a few posts as well.

When you look at where the mortgage defaults have occurred, you find that they are very far from an even distribution across the country. Mostly, the problem spiked in those areas where local and state government have such restrictive policies on home-building that home prices have become inaffordable for most people who in other parts of the country could readily buy a home with their income. In California, the average home buyer is paying 8 times his income to buy a home, when paying more than about 2.5 times your annual income for a home makes you a sub-prime borrower. We can argue that the average home buyer in California has no business buying a home, but human nature being what it is, they still badly want a home. In large part, the fact that homes cost so much in California is because of local and state government policies. For the most part, this is the pattern of where mortgage defaults are occurring. In Nevada the problem is that the Federal government owns 84.5% of the state and land around Las Vegas is not available because it is penned in by Federal land. Florida is another area with a spike of failures, where apparently there is a lot of speculation in homes based on quick improvements and rolling over the homes. This may have other explanations, maybe just that a lot of baby boomers are retiring or will soon and home values may have been rising due to their plans to move there upon retirement and it became an easy money fad to buy homes in anticipation of an easy resale at a higher price. Ohio and Michigan have elevated mortgage failures due in part to the very bad business climate in those states, which is causing them to lose jobs badly.

Because of these local issues, many people have put more and more pressure on Congress for affordable housing. In effect, many present home owners in local areas were happy with the rising home values due to government restrictions and maybe did like less traffic on the roads, lower taxes due to having fewer public schools to build, and more parks, but others wanted housing they could afford and some of the home owners are probably feeling guilty for favoring restrictions that they must realize are causing homes to be unaffordable. Congress does nothing to address the local building restrictions, so they have done as much as they can to press the envelope on lowering the costs of home mortgages. Many of the problem programs you named resulted in good part in response to some very vicious local housing affordability issues.

Of course, this then becomes a good lesson in how excessive government meddling in economic matters and in matters of property, causes all sorts of problems, the attempted responses to which cause still more problems.

Robert has a grasp of much of the path taken at the national level to attempt to make housing more affordable. He understands that this process began long ago and has resulted in a major problem for the economy. I was on the verge some time ago of addressing this side of the problem more thoroughly, but upon looking into it, it became clear that it was even more complex even on the federal affordable housing side of the issue than I had thought. It was going to take some real effort to sort it all out. In the process of looking into that, I realized that a good part of the reason pressure was put on the federal government to make home mortgages more available and less expensive was due to problems already caused by local and state governments which made housing in some substantial parts of the country ridiculously expensive.

There is a push-pull problem here of massive proportions. Government creates a bad problem, then government responds to the screams of pain that result by appearing to address the problems at least in part. Only then it is found to have planted many dozen rattlesnakes into our prairie dog colony. We suffer a financial meltdown and Wall Street and the banks become beggars who are put on the dole. Meanwhile, many home buyers are still sub-prime borrowers and they now cannot get loans. The home building and real estate industries then suffer, but mostly in those areas where most homes are very expensive for most potential buyers.

Meanwhile, the local and state governments are still very happy to follow policies that greatly increase the cost of housing in many communities. There is little movement on their part to address the prime reason for the housing and, ultimately, the banking and financial institution problems. Zoning restrictions, green park policies, antiquated and expensive building codes, excessive federal land ownership, disallowing pre-assembled housing so more local tradesmen will be hired, requiring excessively large home lots, high-handed and unavailable county building inspectors, and many more policies that cause home prices to be much higher than they need to be remain very popular in many communities.

So, as incensed as I am about the many bad choices made by the federal government regarding their powers to influence and control the lending institutions and to put pressure on them to follow unwise and risky lending policies, I do not want us to lose focus on the most fundamental of the originating problems. We allow local and state governments, with some assistance from the federal government, to infringe upon our property rights and thereby to deny many of us the much improved housing that we, in our pursuit of happiness, could have otherwise attained.

Something to Celebrate in 2009: Global Warming Thesis Falls to Its Knees

While the first year of the presidency of B.O. will be loaded with attempts to bribe U.S. industries into new dependency upon the government trough and a take-over of large chunks of the medical insurance industry and of medical health services, there is an important bit of good news. The claim that the world will soon suffer catastrophic harm due to man-made global warming is likely to continue to lose credibility.

There has been no warming since 1998, when a strong Gulf Stream current and the El Nino cyclical warming in the Pacific caused a very warm year. The cycles of the ocean currents are complex and are not part of the UN IPPC oft-cited global temperature prediction programs. These programs do not provide for the variation of the sun's radiation which correlates with its sunspot activity. Indeed, 69% of the global warming of the last two decades of the 20th century may be due to an increase in radiation from the sun, which would provide a very reasonable explanation for the known temperature increase on several of the other planets of our solar system. We should also bear in mind that the heat capacity of the oceans is hugely greater than that of the atmosphere. Consequently, the current cycles of the oceans play a major role in the decades long cycles of warming and cooling. Variations in the Gulf Stream and the El Nino and El Nina cycles are very important. So to is the 70 to 80 year cycle of the meridional overturning circulation (MOC), which sometimes brings warm water into the northeast Atlantic.

Other natural factors are finally beginning to get some recognition. The role of cosmic radiation in providing nucleation sites for the formation of water droplets to create cloud cover has recently been recognized. We have long been without any supermajor volcanic explosions that have put sun-reflecting dust into the upper atmosphere, which allows for warmer climates. In 2007, it was also claimed in a paper in the Quarterly Journal of the HMS that increased CO2 in the atmosphere leads to less water in the atmosphere and water is a more important greenhouse gas than CO2 is. Thus, it claims there is no positive feedback leading to increasing temperatures, as has often been claimed by the global warming alarmists.

Perhaps the most important decades long climate temperature cycle is the 22-year cycle in the solar radiation and magnetic field linkage. This produced the warming cycle from about 1975 to 1998 and the earlier warming cycle from 1925 to 1947. The longer term important cycle is the glacial and interglacial periods, with the present period likely still in a warming phase following the last glacial cool period.

The 2007 UN IPCC report claimed we would see a 0.3 degree Centigrade temperature increase in a decade due to increasing CO2 in the atmosphere. Well, there has been an increase of 15 ppm from 1998 to 2007 and there was no temperature increase at all. In fact, 2007 itself was a very cold year. Now in 2008, the atmospheric CO2 concentration is about 5% greater than it was in 1998, and still there is no warming. Various scientists have now claimed that there will be no warming until about 2015, due either to sunspot activity cycles or the cycles of ocean currents.

The global climate temperature models of the UN IPCC reports have never been able to predict the temperature into the future, or for that matter the temperature of periods long ago, but inferred from the ice records and by other means. These computer models are known to be completely inadequate for making predictions. What they are is a test of our state of knowledge of the climate and they show us that what we know is still very inadequate. I think they also show that the U.N. is also being selective in what part of our knowledge of the climate causing factors is included in the models. Selective can be good, but the U.N. is being driven by politics in its selection process, rather than by science.

Increasing numbers of scientists have publicly refuted the idea that it is established that CO2 emitted by man into the atmosphere has caused global warming and that any such warming would be catastrophically bad for man and the earth. More than 31,000 scientists have signed the Oregon Institute of Science and Medicine petition taking the stance that man-made global warming is not established to be the case by science. Of these scientists, more than 9,000 have Ph.D. degrees. Yours truly has recently sent in his signed statement to be added to the petition. Only 52 scientists had a hand in writing the UN IPCC Summary for Policy Makers.

The scientific case for anthropomorphic global warming is falling apart. It is to be hoped that this will impede the politicians from creating catastrophic cap-and-trade and anti-energy legislation. Many politicians are hoping to use the supposed catastrophe of man-made global warming to force people throughout the world to accept rule from international bodies such as the United Nations. Global energy usage restrictions and taxes are envisioned. We must be diligent in making it known that the science of the climate is not sufficiently known to justify this grab for power. In fact, what is known tends to enforce the idea that natural forces have much more effect upon the climate than do man's activities.

Vicious, Pointless Idiocentricity

I have often written about idiotic and wrong-headed politicians and those who join them and encourage them as unthinking fans. We saw a great many Americans arduously pursue and promote a socialist community rabble-rouser from the streets of Chicago who rose meteorically through the highly tainted Chicago and Illinois political scenes to become the most socialist U. S. Senator, in the belief that he was going to provide real change, presumably beneficial change. Now he is the President Elect and filling his appointments with Democratic hacks, just as anyone should have expected he would.

Yet, this man advocates labor union control of businesses, minimum wage laws, rent controls, government control of many industries, bankrupting coal companies and electric utilities, increased personal and investment and business taxes, forcing people to acquire medical insurance they do not need and want, public propaganda "education", and running the money printing presses to provide trillions of dollars to certain favored companies at the expense of the rest of us. This is a consistent picture of some combination of wrong-headedness, stupidity, and a fraudulent quest for ruthless power. Let us coin a new concept to cover all these bases, though with an emphasis upon cluelessness. Such a man is idiocentric, meaning that almost every evaluation he makes of a complex issue is wrong.

Steve Forbes, a very good commentator on things economic and business, points out in his Fact and Comment section of the 12 January 2009 issue of Forbes that the U.S. has the 2nd highest corporate income tax in the world. As I have pointed out before, it is essentially tied with Japan's corporate tax rate. Of course, the growth of the Japanese economy has long been very poor. Most other countries have realized that we live in a world economy and that capital and often human ability have the means to travel from country to country seeking the most favorable returns. As a result, most countries have very significantly reduced their corporate tax rates. Ireland has led the pack.

The U. S. federal corporate tax is 35% and local government taxes average about 5%. In Ireland, the corporate tax rate is 12.5%! Now, our idiocentric contingent immediately conclude that corporations in the U.S. will pay a much larger part of the GDP per year in taxes since their corporate tax rate is three times as high. Nonsense. Look at the facts! Oh, wait a minute, that is something the idiocentrics will never do. But let us do so and let us then hold their noises in the real horses manure of the real world. Of which there will be a lot more if they succeed in reducing energy use as much as they claim they wish to.

Corporate Taxes as a % of GDP

Year, U.S., Ireland

2003, 1.2%, 3.7%

2004, 1.6%, 3.6%

2005, 2.3%, 3.4%

2006, 2.7%, 3.8%

2007, 2.7%, 3.4%

So, the U. S. corporations pay substantially less corporate tax as a % of the GDP than do corporations in Ireland, despite a tax rate three times as high. How can this be so? Well, because the tax rate is so high, corporations lobby Congress very hard and very effectively for many special interest tax breaks. They then twist and convolute their operations to take advantage of those tax breaks. This involves a great effort on the part of management and it is time which is not going into improving products and services, into designing better manufacturing facilities, into training employees, and into acquiring investment capital. As a result, these companies grow more slowly and hire fewer people. In addition, they prefer to invest more of their capital in plants overseas where the taxes are lower and where labor unions are not so likely to horn in on the management of the company. This is where they will hire many people and spend money on training them in new skills. Then, insofar as they can, they shift as much of their profit as they can to these lower tax-rate out-of-country locations.

Meanwhile, in Ireland there are few or no tax breaks, but a very low corporate tax rate that applies to all income. There companies can concentrate on their own operations and on maximizing their profits with much, much greater freedom of choice and action. As a result, they make good profits and are not afraid to declare some profit. The tax payment is reasonable, so there is no need to pretzelize the company operations to fit an arbitrary and complex tax code. Businessmen are free to make better products, deliver better services, and hire more people.

This is not so complex. It is not quantum relativity. It is mostly commonsense. We pursue a corporate tax policy born not of a desire to produce the means to pay for necessary government services, but one born simply from a desire to hurt corporations. That this hurts all Americans, is not perceived. So, we are governed by the idiocentrics, chosen by an unthinking democratic horde, who allow the idiocentric politicians to define their "educations".

Actually, many of the idiocentrics who lead us are probably sufficiently cunning that they are aware of these smelly facts from the viewpoint of their socialist committment, but they do not care. It is the majority of our democratic mob who are the truly idiocentric, and these politicians pander to their ignorance. What they want is clear: It is power, absolutely corrupting power. In the interest of acquiring this power, they are whores for hire. No, that is not fair to whores, who are more honest and who do offer something of value to their customers. No, we cannot compare the politician's profession to any comparable other profession. They set all the standards for fraudulent behavior. They are chameleon masters posing as the idiocentrics most voters are content for them to be.

And, all too often, American voters set the standard for idiocentricity. Of course, they are hardly uniquely idiocentric in this world. They are the ones I have to put up with, however. Look what they have done to those of us who love our individuality and who truly value our right to life, liberty, and the pursuit of happiness.

Australia Backs Off Extreme Energy Cut-Backs

Australian Prime Minister Kevin Rudd has issued a plan to cut greenhouse gas emissions by as little as 5% by 2020. A government commission had recommended a 25 to 40% cut! The 5% cut is only a quarter of what the European Union claims it will cut, since it has gone for the cute 20% cut in 2020. Environmentalists are generally very unhappy with this decision.

In light of the facts that the globe is no longer warming and has not done so since about 1998, that there is still no evidence that increasing CO2 emissions caused the global warming for two decades in the late 20th century, that Australia has the world's largest coal industry, and we are in a global economic downturn, a rational evaluator would have to wonder why Australia is committing to any promise of greenhouse gas reductions.

Kevin Rudd gained office as a strong supporter of global warming alarmism. His first official act was to accept the Kyoto accord. His present plan would have Australia make cuts as large as 15% should other major greenhouse gas emitters such as India and China accept large cuts at the UN-sponsored meeting scheduled for Copenhagen late in 2009. All evidence now is that India and China will do no such self-destructive and totally pointless thing.

Australia presently is one of the world's highest per capita greenhouse gas emitters. It exports enough coal to provide Indonesia, New Zealand, and Singapore with all of their electricity production. 83% of Australia's electricity is produced from coal-fired power plants.

India Disputes Man-Made Global Warming Alarmism

Back in June 2008, India produced its National Action Plan on Climate Change in which it disputed the UN IPCC and Al Gore claim that man has caused global warming and it will become a disaster. Sensibly, India believes it is important to save its people from poverty and to join the developed nations such as the United States of America in producing the per capita CO2 emissions that translate into the good life. Indian scientists looked for reasons for concern in the actual climate of India and found nothing unusually alarming. They found no evidence for man-made warming.

Indian scientists noted that in a century, the average surface temperature had risen 0.4 degree, but did not think that reason for alarm. They examined the quantity of rain, floods, droughts, and the growth and recession of Himalayan glaciers. Al Gore specifically claimed that the recession of Himalayan glaciers was catastrophic. The Indian scientists found that some glaciers were retreating, but that others were advancing. They concluded that a number of hypotheses about why some were advancing and some were retreating simply needed yet to be evaluated.

V. K. Raina is India's leading glaciologist and he says only 5o of 9,575 glaciers in India have been studied carefully. However, nearly 200 years of general data seems to indicate to him that nothing abnormal has occurred with respect to the Himalayan glaciers. He believes that a few sensationalists are hyping the retreat of some glaciers to cause alarm.

The President of the Geological Society of India, B. P. Radhakrishna, believes that global warming has occurred as part of the natural glacial-interglacial cycle of the earth. He believes that man can and will adapt to such changes of the earth's climate as will naturally occur. He does not believe man can control the climate by reducing CO2 emissions.

Even the Indian engineer and economist Rajendra Pachauri, the UN IPCC Chairman has said that he will look into the "apparent temperature plateau so far this century."

I believe there are some wise men in India.

Obama is Yellow

While we know Obama to be a committed socialist, he has pretended to move toward the center politically upon winning the Democrat nomination and then still further on winning the national election. He will work to promote much of his socialist plan surreptitiously. This is much more to his liking than a head-to-head battle of ideas.

Obama has often claimed that he is strong because he rose in the rough and tumble of Chicago and Illinois politics. Of course, we know that that rough and tumble nature does not mean that they play basketball with little attention to fouls or that they play tackle football without pads. It means that they are as corrupt as politics can be anywhere in the United States. Only Louisiana is commonly mentioned as a rival in corruption. It is amid such squalor of morals that Obama chose to pursue a political career and to align himself with politicians and backers such as Blagojevich, Rezko, Rev. Wright, Bill Ayers, and the Illinois senate president Emil Jones. These are not good men. Far from it, they are extremely flawed men and Obama is at home with them.

Obama clearly found it hard to condemn the corruption of Gov. Blagojevich. He and his incoming White House Chief of Staff Rahm Emanuel worked closely with Blagojevich six years ago to plot out his successful campaign for the Illinois governorship. Though there were many reports of corruption and violations of the law in the first Blagojevich term, Obama supported him for re-election. He won, but it was not long before the Speaker of the Illinois House of Representatives called for his impeachment. The kingpin of Obama's successful race for the U.S. Senate, Illinois Senate President Emil Jones, opposed the impeachment of a sitting Democrat governor on the grounds that he was a Democrat. Obama remained silent.

Now that Blagojevich has been arrested, Obama first tried to remain silent. Only after a public hew and cry arose did he finally call for Blagojevich to resign. This reminds one of the process when public indignation grew to Rev. Wright's recorded "God Damn America" speech. At first Obama was unwilling to reprimand his 20-year long spiritual father, but managed to do so when the public indignation reached a sufficiently high level. Obama is consistently a man good at playing the part of being self-assured in the way he presents himself when not under much public pressure, but who reveals his constant vacuity of self when the going gets rough. It is also clear that he has no compunction to actually act morally, though he has some wish to appear to be a moral man. What this man consistently lacks is moral courage.

If he had arisen to the Presidency as a moral reformer who was clearly appalled at the corruption of Chicago and Illinois politics and who had the courage to fight it, he would have earned some respect. Instead, he ignored the many cesspools around him and failed the people of Chicago and Illinois. Now, we must be prepared for him to fail as President of the United States. No one can succeed in this office who has no moral courage.

C. Edmund Wright - Blame me for job losses

The fascist left always assumes that private patsies will create jobs which they will be able to claim that they, the politicians, created. C. Edmund Wright points out in "Blame me for the job losses" that the massive loss of 533,000 jobs in November is evidence that small business owners are tiring of being patsies who cast pearls at the feet of the socialist swine politicians. The backbreaking taxes and regulations anticipated from an Illinois politician-run White House and a massively socialist Congress are having a very negative impact already on business. Small business owners, who actually are the ones who create most jobs, have stopped hiring and started firing employees. Some are simply going out of business. Wright is one of those going out of business. This is a well-written article. Go read it, please.

Be fearful, because many an Atlas is now shrugging the burden he has so long struggled to hold securely on his shoulders, while most Americans not only assumed that they have a right to a job, but that it is perfectly fine for them to kick Atlas, who creates the jobs, in the shins. If the world falls on the heads of the shin kickers, who do they have to blame but themselves?

Obama May Be Considered Natural Born

There is an article at the blog American Thinker by Randall Hoven which seems to clarify the legal issues involved in whether Obama is "natural born." It is entitled, "Natural Born Pickle." It seems that it will be reasonable for a Federal court to rule that Obama is natural born. Of course, this ruling has yet to be made and it should be carefully considered by a court.

Is Obama Constitutionally Qualified to Become President?

There is an effort to question whether Obama meets the Constitutional requirement of birth in the United States of America to become President. I do not know whether he does or not, but if we take our Constitution seriously, we should insist that it be clear that he does, if he is to be sworn in as President. National Review Online and Robert Tracinski think it is simply a failure to accept the outcome of the election to think this is a matter of consequence. I, however, do not think of elections and majority rule as the primary principle of good government. The primary principle of good government is that it protects the rights of the individual, as our Constitution was designed to do. If we do not take its requirement for birth in the United States as a matter of critical importance, then we would be fully consistent in ignoring its concept of limited government also. We would be consistent in interpreting the power to regulate interstate commerce as meaning that the federal government can restrict the individual's right to trade with others. We would be consistent with the interpretation that government needs only claim it is passing a law or regulation for the benefit of the general welfare and this allows it to do anything it pleases.

Of course, we are in the nasty situation that federal government power is virtually without limits due to a highly corrupt interpretation of what the general welfare means in the context of the Constitution and due to a failure to understand the intent of the regulation of interstate commerce clause. So, in this context of ignoring the principles of good government which the Constitution was attempting to put in place, it is hardly surprising that few people care whether Obama meets the Constitutional requirements to become President or not. We already know that because he believes in "positive rights" and thinks the Constitution is faulty in not recognizing such rights, that he will not uphold his oath of office "to preserve, protect, and defend the Consitution." In addition, we may never know whether he was born in the United States, as required by the Constitution.

We have degenerated into a nation ruled not by the principles of good government as the protector of individual rights, but one ruled by ignorant mob rule. A mob rules that chooses and wishes to be ignorant.

Arnold Schwarzenegger needs only to run for President and win a plurity of votes and he also can become President. Clearly, it does not matter that he was born in Austria. Of course, if he did win the election on the Republican ticket, the Democrats would be most vociferous in bringing court actions to claim he was Constitutionally unqualified for office.

Russian Chaos

Russia continues to fall into hard times as oil prices have plummeted. Even more serious for its future is the fact that its government is now a fascist kleptocracy with deep roots in communism. Its stock market has crashed worse than almost any other nation's stock market. The business climate is very harsh, with the government finding reasons to take over almost any business which has become big under private management. It has become clear that not only is Russia a risky place to invest money, but that success guarantees that one will become a target of a very corrupt government. Success means that one's enterprise will become a carcass in very short order.

Russia is a sort of Illinois-style government given time to become fully evolved! Obama is spreading this Illinois disease to the federal government, by furthering fascism, communism, and Rezko-style political favoritism. If Americans do not rebel against this trend, we will soon have our own Putin.

Obama: Proud Illinois Politician

Obama frequently speaks about how proud he is that he rose in politics in the rough and tumble political environment of Chicago. We have long known that Chicago politics was heavily tainted with corruption and some of Obama's past relationships in politics were with such people as the convicted Antonin Rezko, the racist, public fund-dispensing Rev. Wright, and the Weatherman terrorist Bill Ayers. Chicago politics tends to set the trend for politics in Illinois state politics generally. Gov. Blagojevich has now been arrested for misuse of state power for corrupt purposes, which means that he has gone way beyond the accepted levels of corruption and abuse of power. He appears to have made an extensive practice of arranging to deliver state contracts and state commision positions to those who provided him or his wife with sufficient bribe money. He was trying to sell an appointment to fill the Senate seat being vacated by B.O. In the last 35 years, three previous Illinois governors have been convicted of felonies and sentenced to prison while in office. Blagojevich may become the 4th governor to be convicted of a felony.

Interestingly, in 1965, when I was a freshman at Brown University, I had to attend a series of lectures given by luminaries brought in for the purpose of apparently enlarging our view of the world. Brown University was particularly proud of a Brown University graduate who became a judge in Illinois and was then Governor of Illinois. This man was Otto Kerner and he did give a fairly interesting talk. In 1969, my senior year, he was the first of this series of three Illinois governors to be convicted of a felony and sentenced to prison. He was caught because the manager of two race tracks had bribed him with stock and then deducted the expense on her taxes as a necessary and usual business expense in the state of Illinois.

Obama's training as a Chicago and Illinois politician is definitely worthy of serious concern. What special skills does he bring to the Presidency as a result of this training? He must be watched carefully both as a socialist and as someone well-trained in corruption. These two always seem to go together very well. Apparently, absolute power still corrupts absolutely.

A Fuel-Producing Fungus

While I am very much inclined to think that we will remain very dependent upon fossil fuels for the next several decades, I have nothing at all against the development of alternative sources of energy, provided they are not heavily subsidized by government. OK, I used the word "heavily", since I might allow a short-term light subsidy if one could be quite sure that the new energy source would significantly decrease our energy dependence. So far no candidate alternative energy source seems to have arisen to meet that criterion. This is based purely on considerations of defense policy.

The topic here is that it has been discovered by Gary Strobel and colleagues of Montana State University that a fungus which grows in the Ulmo tree of the Patagonian rainforest of South America produces a brew of hydrocarbons similar to diesel fuel. This may make it possible to use the fungus, G. roseum, to make fuel from biomass consisting of cellulose, hemicellulose, and lignin directly. Presently, enzymes called cellulases are used to convert cellulose to sugar, which is then fermented by microbes into ethanol.

Of course, even if the fungus does prove economically effective in converting the 400 million tons of plant stalk waste per year into fuel, this is a fuel which will fuel the Global Warming Holocaust Believers fears. It will burn to produce carbon dioxide, just as we produce carbon dioxide from the fuel we burn in our bodies and just as fossil fuel combustion does also. It appears we will never be able to use it after all!

A Measure of Government Robbery

I recently received a copy of the Merrill Lynch Advisor with a chart in it comparing the value of $10,000 invested in early January 1997 in each of 30-year Treasury bonds, the S&P 500 stocks, the MSCI World Index of stocks, and the MSCI Emerging Market Index of stocks. The 30-year Treasury bonds were worth $26,488 on 7 October 2008. But, the S&P 500 stocks were only worth $13,449; the MSCI World Index stocks were only worth $12,673; and the MSCI Emerging Market Index stocks were only worth $13,837. This data is actually from Bloomberg Financial Markets.

Until late 2001, the S&P Index stocks were worth more than the Treasury bonds. Since that time, the Treasury bonds have been a better investment, though the S&P almost caught up again with them in 2007. Since then, the value of stocks has taken a horrible hit thanks to erratic and irrational government policies on many fronts and the promises of a president-elect and a Democrat Congress with an enlarged majority.

The fact that Treasury bonds have proven so much better than stocks is an indicator of how much wealth the Federal government has transferred from the private sector to government and of how shaky government policy has made investments in the private sector. The private sector requires an environment in which the law is rather rational and known and its enforcement is reasonable. When whole industries are threatened by a president-elect with bankruptcy, many industries are begging Washington for handouts while others are to be sucked dry with tax increases, some unknown fraction of the richer population is to be saddled with backbreaking taxes, and humans are held hostage to all other animals and to cockeyed theories that the burning of fossil fuels will overheat the planet, only the Master of the Universe appears a safe investment. That, of course, is our tyrannical federal government.

So, my freedom-loving friends, you are challenged by this dilemna: If you ever want to retire, you must buy Treasury bonds, but to do so is to feed the brutal, bloodthirsty beast. I will just have to work until I drop.

An Individual Rights Champion of Note

Recently I reviewed Gen LaGreca's novel Noble Vision, which I love, and she was very gracious in taking note of my review. Upon receiving her note, I decided to try to find anything else she had written. It turns out that she had written an article in the March issue of The New Individualist called "The Self-Help Guide to Living in a Free Society." I came across several other essays which you can find on-line.

The first I read was "The Declaration of Independence 2008." I had actually thought of writing such a piece at one time, so I was eager to see what she had done with this idea. Well, as I expected based on her novel, what she did was write a very strong statement declaring the sovereignty of the individual with his inalienable rights arising from his nature, not from government. She made it clear that property rights are among our individual rights, though it is very difficult for me to perceive how Americans have come to view property rights as not fully implied by the rights to life, liberty, and the pursuit of happiness. It seems clear to me that each of this triumvirate actually implies the right to property. However, rational thought does not come easily to many Americans nowadays and seems not to come at all to many others. Gen goes on to enumerate the many ways that our governments, federal, state, and local, have taken to violating the rights of the individual, rather than serving the sole function of good government, which is to protect individual rights. She decries special interest group politics, entitlements, dependence, and the many conflicts that excessive government has brought about. Her list of grievances against tyranny makes the list against King George III in the Declaration of Independence of 1776 look puny, as I was sure my list would should I have written it. She leaves no doubt that we live under tyrannical rule.

Gen pointed me to her newest essay, "Why we MUST Invoke Our Individual Rights - Now." This, like her Declaration of Independence, is written in a muscular and certain style, which I love. Over and over, I have asserted my rights as an individual in this blog and I have given the reasons why it should be critically important, especially for thinking people, that each of us do so. Gen uses a great many of the arguments I have made, but I really admire the way she has assembled so many thoughts about liberty and its needs in one essay. And her unequivocal willingness to be a leader of the Knights of Liberty against the Dark Side forces of statism is a delight.

Gen says, "America is a nation whose government is on the ascent and whose people, consequently, are on the descent." She also notes that government "pens its people up like chickens in a coop, waiting to feed at the welfare state's trough", rather than treating them like "the American eagle, flying proud and free."

She explains the Meaning of Our Individual Rights by elaborating on the following:

1. Our Rights are Unalienable
2. Our Rights are Rights to Take Action
3. The Pursuit of One's Own Happiness is a Right
4. The Majority Cannot Violate the Rights of the Individual
5. There are No Rights of Groups
6. Our Rights Include the Right to Property
7. Our Rights Include the Right to Intellectual and Spiritual Independence
8. Our Rights Rest on Reason
9. Our Rights are Violated Only by Force
10. Government's Sole Job is to Protect Individual Rights

In her discussion of each of these points, she uses some very interesting quotes from various of the Founders. She also points to Obama's statement, as I have done, that he simply does not believe in the U. S. Constitution since it stands opposed to the concept of "positive rights" under which some of us are obliged to serve others and government is to force us to do so.

Gen then lists "Six Strategies for Using Individual Rights in the Fight for Freedom." These are presented to spell the word "RIGHTS":

1. R = Reason with Moral Principles, Not Just Practicality
2. I = Invoke Private Solutions to Life's Problems
3. G = Get Behind Capitalism
4. H = Hammer the Government for Using Force Against Innocent Citizens
5. T = Talk Straight and Unmask the Enemy's Evasions
6. S = Stand as One People Against the State, Not as Pressure Groups Against One Another

I believe this blog has a very good record on each of these six points. If any reader believes otherwise, please let me know. In any case, I fully endorse Gen LaGreca's points and her advice for defending the rights of the individual. We think very much alike on these matters.

There are few champions among the Knights of Liberty it is more of an honor to go into battle with against the Dark Forces of statist tyranny than Gen LaGreca. She is most welcome at my side on the field of battle and she is proven trustworthy enough to cover my back in the blackest alley filled with brutal socialist thugs. Of course, I am most committed to covering her back as well. A man stands up for the few people he can admire and love without reservation.

Federal Regulations - Cure for Economic Ills?

In 1949, after 150 years of Federal government, we had about 20,000 pages of federal regulations. By the year 2000, we had about 120,000 pages of federal regulations. Now, in 2008, we have over 200,000 pages of federal regulations. In the first 150 years this is an average of 133 pages a year of added regulations. In the next 51 years, the federal regulatory burden of pages was increased at the much higher rate of 1961 pages per year. In the eight years since 2000, the number of added pages per year has averaged 10,000 pages/year. I suppose that this means that our Congress is composed of men who are now 10,000/133 times or 75 times smarter than the Congressmen who started our republic! Isn't it good to be ruled by such supremely intelligent people?

Now of course, all of my readers, being much brighter people than the average person, know all of these regulations and are fully capable of living their lives in accordance with them. We know this because it would clearly make no sense to expect people to obey laws that they do not know. Since our Congressmen have never read the laws they have voted for, we can assume that they do not know these laws. We also are aware of this because they are constantly being found to be violators of the laws. But the people are held responsible for knowing these laws. Since the federal agencies can only offer the citizen contradictory advice on what the laws mean, we cannot turn to them. In many cases we could turn to the federal courts which have made many rulings on these regulations, but this means that we have a lot more reading to do and then we still have to figure out what that means too. But, we ordinary citizens have copious free time to devote to this exercise. Unlike our Congress, whose full time job is the making of laws, we somehow have the time to read all of these laws, agency documents, and court decisions. We the people are clearly all geniuses! Isn't it wonderful that our Congress thinks so highly of us!

Now, being geniuses, of course it dawns on us that those who do not read the laws they pass and do not know the law have no business forcing the rest of us to live by their rules. This is like being put back in high school where most of us had teachers who were no better than average students in high school who nonetheless set the rules. How fun was that? How great to be treated like children by teachers who had returned to the only place they ever felt comfortable, namely the over-controlled environment of high school.

Our ever-dependable Mainstream Media constantly barrages us genius citizens with injunctions to have Congress create still more laws and regulations. What does that say for their intelligence?

Our university professorial class agitate for more laws and regulations by eliminating free speech from the universities and using their class lecterns to issue socialist propaganda which it takes many of our youth 10 years of being in the real world before they can see how false it is. But what does this call by professors for more and more laws say about their intelligence?

In particular, Congress, the MSM, and a host of professors are all calling for still more regulations to deal with the slowdown in our economy brought on by endlessly invasive and foolish laws already on the books. Of course, these disparate calls for more interference in our complex economy and with the complex lives of those citizens we have already established to be geniuses, is sowing much confusion and uncertainty. Even our genius citizens cannot figure out how to proceed in growing our economy and investing for the future under these conditions.

How did we invert the pyramid of ability in which the few imbeciles rule the many geniuses? Is this way of governing odd or what? Perhaps some one of you MSM, Congressional, or professor types can actually provide some kind of rational explanation for your fascination with ruling the lives of geniuses with myriad one-size-fits-all life-recipes? This writer naively believes that if you would use the force of government to rule the lives of others, especially your betters in intelligence, you have a severe requirement to prove the wisdom of your laws. You should also be aware of what they are.

Gen LaGreca - Noble Vision

I started reading Gen LaGreca's novel Noble Vision this last weekend. Due to being overloaded with work in the laboratory that I needed to finish prior to leaving very early Wednesday morning to visit Tulsa to be at my Mom's for Thanksgiving, I only managed to read about 40 pages before leaving. But that was plenty enough to convince me to take the novel with me and read it at the airport, on the plane, and once in Tulsa.

I worked through the night in my lab and got as much done as I could, before heading to the airport. I was dead tired once on the plane, but Noble Vision was much too interesting to go to sleep on the plane. Awhile after arriving at Mom's home, I took a two-hour nap and then got up and spent some time with the Tulsa family contingent and my visiting Greensboro, NC sister and her two daughters. In the evening, being a bit tired, I went to bed early and thought I would read a bit to relax before sleeping. I took Gen LaGreca to bed and read and read with great pleasure through the night. I am a slow reader. I like to process everything I read very carefully. If something is worth reading, it is worth reading well. In this case, the noble vision of Gen LaGreca was worth savoring, which I did until a bit past dawn. I dosed briefly a few times when my eyes lost their ability to focus, but I must have been dreaming about the novel because I never stayed asleep long. As soon as my eyes were salved enough to go on, I woke up and continued reading.

Noble Vision is a love story with very evil villains who seek to separate a man, David Lang, from his impassioned love of neurosurgery by forcing him into selfless service to the public. Of course, these evil socialists are really more interested in having David beg them for the right to practice his very demanding profession and to force him to compromise his ethics and his competence. They are aware that the system which provides free healthcare can do so only by arbitrarily cutting off services which the free market would be willing to provide to many who are in need of these services. Yet, they persist in backing a failing New York universal healthcare system called CareFree.

A lovely lady, Nicole Hudson, has become an inspiring ballet dancer despite a grueling childhood of poverty and depredation due to her determination from age six to become a ballet dancer. She has brought a reassuring joy with her exuberant, heroic dancing into David's life as he reels from the ugly senselessness of the brutally bureaucratic state medical system. David also chose his life work when he was a child admiring his father's work as a neurosurgeon. David has been struggling to prove that it is possible to get the brain and the spinal system to regenerate functioning nerves, which many decades of prior research has concluded cannot be done. But David, with a heroic dedication to his work both in the laboratory and in the operating room, needs to see others equally dedicated to their work, rather than the constant parade of those who have given up their dreams. His doctor wife and his father are among those who have made compromises with the CareFree healthcare system and become its advocates.

This system does not want David to succeed in developing techniques to regenerate nerve functions, because the procedure is likely to be expensive and add to the many innovations of new technology which will cost too much when offered free to everyone. Free care is, of course, used unwisely, because it is free. So everyone with even the most remote possibility of benefit from a free procedure wants it. Imagine being the heroic neurosurgeon whose own wife and father wish to put ignorant bureaucrats in charge of a brilliant and highly motivated neurosurgeon! I sure can, since nothing more infuriates me than those who would substitute their judgment for my own in my living my life and my solving materials problems.

Unknown to her, Nicole becomes his solace. But, then tragedy strikes and Nicole is injured and blinded. David becomes her doctor and is the only man alive who can possibly bring back her sight and make it possible for her to return to the inspired dancing she loves. But, at every turn, and I do mean at every turn, CareFree tries to keep David from saving the career, and really the life, of this wonderful lady. He in turn fights back fiercely, inspired by his own dedication to his life's work, by his commitment to his ethics, and by a growing love of Nicole. The odds must look hopeless to any objective observer, but then life is not worth living if you give up the fight.

Gen LaGreca has written a truly inspiring story of people rationally dedicated to making the world a better place for human life. This is a story of people who face terrible odds to try to claim joy in their own lives. This is the story of Nicole who several times tells David that joy does not belong only on the stage, but in real life. This is the story of David who asks "What's left of people after they give up the best within them?" This is a question I remember answering many times as a child. Of course, we also know that Ayn Rand posed and answered this question.

As you read Gen LaGreca, it is clear that she is an admirer of Ayn Rand. Certain phrases are familiar. Some readers may fault her for not having a completely unique expression of her ideas, but my take on this is that she has developed some very fine characters and she is telling a very good story. She has tackled an important conflict of our times in the battle between the individual and the socialist state and handled it remarkably well. Besides, Ayn Rand expressed so much of the heroic individual so well that it is probably foolish not to borrow some of her best expressions just as it would be foolish to insist that every human reinvent the wheel or the uses of fire.

I very appropriately began writing this late Thanksgiving evening. It is now well into the wee hours of Friday, but still this review is dedicated with my heartfelt and mind-felt thanks to Gen LaGreca for the joy this, her first novel, brought to me. I also wish to thank all the doctors, engineers, scientists, dancers, artists, writers, nurses, teachers, and others of many professions who are rationally dedicated to their constructive and voluntary work. Shame should be heaped upon those who would impose their foolish wills upon these dedicated, hardworking heroes of our world with the use of brutal force. I will not let you keep David from saving Nicole without my joining the fight! Such tragedy is too much to bear.

One of the things I like about Gen LaGreca's novel Noble Vision is that while David faces terrible odds, there are people who line up on his side. Several people have to make a choice to do the ethical thing or to betray their values and some do the right thing. So David is not entirely alone. This is still the way things are in America. There are too few people who will consistently do the right thing, but there are enough that our heroes should not have to be entirely alone and unsupported. If you are one of the heroes, it is important that you recognize and give your support to others who are also. Please do not underestimate the importance of gestures such as a smile, a simple thank you, or a hug and a kiss. Your fellow heroes deserve to know that they have allies.

Ladies, please do not underestimate how important it is for a man to feel your appreciation. With it, we are stronger, not to mention happier. For my part, I cannot tell you how often the smile of a woman has given me more energy and joy. Perhaps it is often the same for a woman when a man indicates his appreciation, though many a woman is so suspicious as to completely undermine a good man's effort to be supportive. A certain studied innocence may be a tool for a lot of good. It is a poor life that is filled with cynicism. To be happy and to live in a world in which happiness is the norm, we must banish such cynicism. You will have an easier time doing so after you have read Gen LaGreca's Noble Vision.

Washington Teachers Union Opposes School Reform

Of course, it is news to no one that the Washington Teachers Union (WTU) opposes the reform of the nation's lowest performing school district. The WTU is the principal reason why this school system which is spending as much or more money per student as any school district in the nation is so miserable in performing the only function that matters: educating students.

New Orleans put most of its 78 public schools into a special Recovery School District after Hurricane Katrina. Now, about half of its schools are charter schools and the district has no union contract. The American Federation of Teachers, which strongly backed Obama, has vigorously opposed the reform efforts in New Orleans. Mayor Adrian Fenty and Schools Chancellor Michelle Rhee of Washington, D.C., have become thoroughly fed-up with the WTU opposing school reforms and the elimination of awful teachers. They are considering restoring the school district's power to create nonunionized charter schools. They may declare the school system in a state of emergency in order to end the need to bargain with the WTU.

Obama has praised their efforts, but will be in the middle between them and the teacher's unions to whom he owes his election. It will be very interesting to see if he helps Fenty and Rhee or if he opposes their efforts behind closed doors. Union leaders regard the chances of the district getting a state of emergency ruling from the federal government to be very remote, given what Obama owes them. They do have some concern that the district might be able to regain its power to charter schools, however.

Rhee has proposed that teachers be more directly accountable for student performance and will offer them much higher salaries in exchange for weaker tenure rules. The 4,000 member WTU has refused to bring her contract offer to a vote. Rhee thinks the teachers will vote for it if they are allow to do so. Apparently the WTU also thinks the teachers might vote for the higher salary and more accountability contract also! It is delicious to see these Democrats fighting so much among themselves.

Fenty is the second D.C. mayor to seriously wrestle with school reform. It is good that D.C. voters have come to care about school reform. The District of Columbia is more heavily Democrat than any state. So this sets up conflict between Democrat politicians and the teachers unions. If the reform ever occurs and if D.C. students ever gain enough self-confidence to believe that they are capable of managing their own lives, it will be interesting to see if many of them start to fall away from the dependency offered them by the Democrats.

A Government-Troubled Economy

Government is the problem, it is not the solution.

For some time the housing industry has been in trouble. What caused those problems? The cost of lumber has been high for a long time due to heavy world-wide demand for lumber as much of the world has latched onto America's coattails and been carried along into relative prosperity and development. This has led to great increases in the price of steel, concrete, and copper, among many other things. Nonetheless, the housing industry has not been in trouble in much of the U.S., despite these cost factors being universal. Why not? Because the principal reason for the housing crunch has been that many communities have limited housing development in the name of planned growth and in order to maintain undeveloped, green areas. In these areas, and a few areas where the federal government owns all of the available land and makes it unavailable, the cost of housing has simply become prohibitive for people to buy homes. When it is recommended that people commit to a purchase price for a home of no more than 2.5 times their annual family income, but the average home costs 8 times their family income as it does in California, one has a recipe for disaster for the housing industry and those who stretch reality to try to acquire a home anyway.

Such situations brought pressure to bear on Congress to make homes more affordable. Congress was largely of a mind to support local community and state restrictions on home building, but needed to appear to care about the desire of middle class and upper lower class families for a home of their own. After all, this is a very real part of the American Dream. So, Congress used the Community Reinvestment Act to force banks to make mortgage loans to people who would not otherwise qualify for a loan. They used Fanny Mae and Freddy Mac to make it so the original mortgage loaners could unload their risky loans to others. They encouraged the Federal Reserve to keep interest rates down to help make home mortgages more affordable as well and what else was the Fed to do if it was to keep the housing industry afloat anyway? So, in consequence, we had not only a housing industry in trouble in those areas of the country with highly restrictive new housing development, but also many mortgage lenders, banks, government-sponsored corporations (Fanny and Freddy), and securities and investment firms in major trouble.

The auto industry has been sick for a very long time. For a long time, that industry has been under a huge burden laid on it by the United Auto Workers, which government rules for unionization and company actions when it has been unionized very much helped bring about. Of course, some other industries are also badly hurt by labor unions. Then the auto industry was further burdened with CAFE, which requires each auto company to make a set of vehicles whose average fuel efficiency is below a limit set by Congress. Basically, American companies really began losing out to the Japanese and other foreign car makers when this became the law of the land. We were used to cheap gasoline, and in comparative terms we still are. So, American companies never had as much incentive to make cars that were as highly fuel efficient as the foreign car makers. This was really what opened the door for the foreign car makers into the American market. For decades, American car makers have been forced to make money-losing small cars to meet the CAFE mandate. The tens of billions of dollars lost in this way had a multiplying effect upon the car makers to minimize innovation and the development new technology and quality manufacturing methods. Government destroyed the auto industry, with some help from bad management. Of course, when it is clear to good managers that government has it in for an industry, they steer clear of that industry. After all, the best managers are no dummies.

In addition, we have the highest corporate income taxes in the world, save those of Japan where they are equally high. This discourages American companies from bringing profits made abroad home. It encourages them to build more plants abroad and fewer at home. Most countries throughout the world have been reducing their corporate income taxes, but we have not and BO says that he will not do so in his administration. So, we raise the costs for American corporations and make it harder for them to export goods. Our policy is that they should export jobs and capital instead. Except the government pretends otherwise. The government lives in LA LA land. No, I am wrong. The government largely knows what it is doing. It thinks we life in LA LA land and will never catch on to the fraud they are putting over on us.

Then, as I have recently discussed, the government has monopolized a huge fraction of the land, especially in the West. As our population has grown and as we have used more of the resources available in our privately owned lands, these Western federally owned lands have become more and more valuable. Still, the government holds on to these lands and is constantly trying to remove more and more land from private ownership and productive use. This crimps the economy.

The government mandates for ethanol production have resulted in the misuse of much of our privately held and potentially productive farmland. There is no net energy produced by ethanol production and it simply causes less food to be produced and thereby raises our food prices. As more of our income goes to meeting our food needs, less goes to other industries and they start to hurt. American agriculture is the most productive in the world and will do well without ethanol subsidies. With these subsidies, we raise taxes for everyone, including the other industries who will only be hurt by diverting money to farmers and ethanol distillers.

The government has made it exceedingly difficult for companies to drill for oil in the U. S. and in our off-shore areas. They have made it hard to produce natural gas in many areas. They also make it hard to mine coal, use nuclear power, and frequently to deliver electric power, especially from coal-fired power plants.

Government has given over the education of our children to the teachers labor unions. These most socialist unions now pound American youth with socialist propaganda and teach them to hate making money (creating wealth) and industry. They also fail to teach them the skills they will need as productive employees, such as rational thinking skills.

So, governments have done great damage to our economy by damaging the housing industry, lenders and bankers, investors, the auto industry, other industries saddled with blood-sucking labor unions, the electric power companies, all corporations competing on a global basis, the oil and natural gas industries, the nuclear power industry, coal mines, and all companies who wish to hire young employees with critical thinking skills.

But, this does not yet give us the full scope of how government is the source of the troubles in our economy. Not yet even close!

Companies and industries must look to the future and plan how to use their employee's time, invest their capital, figure out what new products are needed, train employees to do the work they will need to do in the future, find ways to improve present products and to transport them efficiently, and figure out where to build facilities and how to heat, air-condition, and light them. Companies and industries must plan to survive. But, governments are insidious in popping surprises upon companies and industries that wreck their planning and development processes. Companies no sooner make an investment than Congress, state legislatures, and local politicians change the rules and turn their investments into losses.

The Federal government is doing just this on all sorts of fronts. With the Bush tax cuts scheduled to come to an end in 2010, the Democrat Congress is surely going to raise many taxes, especially on the wealthy who invest much of their money and on corporations. But, no one knows what the new taxes will be. Consequently, if they invest money, will the new taxes insure that they will have a bad investment? Under such conditions, people sit on their money, which is exactly what the politicians are presently complaining that they are doing. I sure am sitting on my lab's income at this time.

BO has said that he is going to bankrupt the coal-fired power plants. As I have noted several times, coal-fired power plants produce 50% of the U.S. electric power. Does this mean that we are about to lose 50% of all American electric power? If so, the coal mines, the trains that carry coal, the coal-fired power plants, the electric utilities, and all companies that use electricity are going to be hurting. Every blackout at my lab creates havoc. Vacuum pumps stop and air is sucked into some vacuum systems. All data collection stops and some long experimental runs are ruined and may take days of work to reproduce. Many industries have to undergo long processes to restart production when power is lost. At the moment of power shutdown some products are ruined. Power outages are much more serious for many businesses than they are for households. Of course long power outages at home cause concern for our two freezers and about loss of food in them. Frequently power outages and power fluctuations also increase the failures of electronics at home or in the workplace.

What will future energy costs mean for business? The imposition of cap and trade restrictions on the use of fossil fuels will have huge, unknown implications for the cost of making goods, transporting them, will in many cases determine which goods should be made, and will perhaps keep some employees from coming to work. Trained, critical employees will be lost if they live too far from the workplace. Plants may have to be moved to reduce transportation costs or to have more reliable electric power. Of course, many jobs will be exported to India and China where cap and trade does not exist.

As BO induces much of American youth to go to work on road and bridge-building, they will not be available to other industries. BO's service leagues will take still more young people out of the workforce. Labor costs will go up. Industry cannot yet know how much they will go up. Uncertainty again.

BO and Congress are determined to make it easy for labor unions to coerce workers into signing union election cards. Many more businesses will be saddled with unions. How badly will this cost the business in higher wages, less labor force flexibility, and less labor productivity?

What will BO and the Congress impose as costs for a nationalized health insurance and health system upon companies and wealthy individuals? Will this force companies to let employees go? Will this force them to export jobs aboard? Or to build new plants that use more robots and fewer people? Or redesign product to be made by more machines and fewer people?

Many privately held companies will be ruined when the death tax is reinstituted by BO and the Democrat Congress. Many companies will have to be sold to pay taxes. Many will have to be shutdown, since no buyer will be available. Many businesses will either be sold before 2010 or will be shutdown before then to take advantage of the higher threshold for the death tax that will be available before then.

Many capital investments will be cashed out before BO and the Democrat Congress raise the capital gains tax. Many investments will not be made because it is not yet certain what the capital gains tax will be.

Many individual taxpayers do not know what their tax burden will soon be. They think it will go up and will go up considerably. They know that someone has to pay for the bailout, the youth leagues, the welfare checks posing as tax rebates, the building of roads and bridges in accelerated rates, the payouts to the teachers unions, the bailout of the United Auto Workers Union, the subsidies for inefficient alternative fuels, and the nationalized health care and health insurance system coming. So, they are sitting on cash and are unwilling to invest it.

The trillion dollar bailout has failed to save the lenders, the banks, and Fanny and Freddy, and the investment firms. New winners and new losers are being picked by the politicians and bureaucrats daily. No one can figure out if they will be a winner or a loser, but most understand that there will be many more losers than winners. With this uncertainty, who wants to make an aggressive and forward-looking business decision. With no decisions, less and less money will be made, fewer goods will be delivered, and fewer services will be offered and fewer purchased. The economy slows down more due to uncertainty than due to any other cause, because uncertainty stops everyone in their tracks. Everyone feels as though they are in a minefield, so no one wants to make a step for fear of stepping on a mine. This is exactly the response to be expected.

Yes, the economy is hurting. Governments sure have worked overtime to put it in that world of hurt. Government is the problem, not the solution. We need a determined return to the concept of limited government, of Constitutional government.

Chief Global Warming Scaremonger

Dr. James Hansen started the global warming hysteria with his testimony before a U.S. Senate committee chaired by Al Gore in 1988. He now runs NASA's Goddard Institute for Space Studies (GISS), which is one of four agencies responsible for monitoring global temperatures. In fact, GISS temperature numbers are the most frequently reported since they are consistently higher temperatures than those of the other three groups reporting global temperatures to the UN's Intergovernmental Panel on Climate Change (IPCC). His friend, Dr. Rajendra Pachauri, is chairman of the IPCC. Dr. Pachauri is a former railway engineer with no prior background in climate science.

Dr. Hansen was forced by US meteorologist Anthony Watts and by the Canadian mathematician Steve McIntyre (who debunked the infamous "hockey stick" temperature graph) in 2007 to admit that his US surface temperatures claiming that the 1990s were the hottest decade of the 1900s were wrong. The 1930s were hotter. This is the man who has called for criminal prosecution of those who speak out against the idea that we are facing a man-made global warming catastrophe. He supported Greenpeace activists who damaged a coal-fired power station in England, while claiming that the power plant did more damage than the Greenpeace terrorists did.

So, what is Dr. Hansen up to most recently? Well, earlier this month his GISS released temperature maps showing that much of Russia was 10 degrees hotter than usual in the month of October. Meanwhile, China's official news agency had reported that Tibet had suffered the worst snowstorm ever in October and reports of unusually low temperatures and early snowstorms for the Alps, New Zealand, China, and the American Great Plains were filed in October. The National Oceanic and Atmospheric Administration claimed there were 63 local snowfall records in October, along with 115 lowest-ever temperatures for the month. They said October was the 70th warmest October in 114 years. Note that that makes it cooler than the average for 114 years, most of whose cooler Octobers should have been before the popular claim that the Earth is getting ever warmer.

So how did GISS have such high temperatures for much of Russia? It turns out that it was because they used September numbers both for September and for October! September is usually a warmer month than is October. Their initial response to being found wanting on this once again by Steve McIntyre and Anthony Watts was to claim that they had found a hot-spot in the Arctic. Odd, given that satellite images showed the Arctic ice to have recovered from the summer melt at a rate 30% faster than it had in 2007, which was a year of globally lowered temperatures!

Meanwhile, IPCC Chairman Dr. Pachauri, gave a talk in Australia at a university saying that global temperatures are rising very much faster than ever. Behind him was a temperature graph showing that temperatures have not risen in years, despite rising atmospheric CO2, and that they have dropped since 2007.

These are the fearless leaders who would clamp Cap and Trade limits on the use of fossil fuels on us and wreck our economies. They would yoke us to expensive, dangerous, and inconvenient electric cars, leave us shivering in our homes and offices, and leave us without electricity to light the dark, operate our laboratory equipment, and even to recharge those damned electric vehicles. What is the real agenda that causes them to distort the climate record and work so hard to bring misery to the people of this planet Earth? I think it is a love of socialism and a hatred for individualism.

Coming Federal Land Grab

Harry Reid, Senate Majority Leader, intends to pass the Omnibus Public Land Management Act of 2008 in the lame duck session of Congress. As I recently noted, the federal government already owns ridiculously large amounts of U.S. land. See my post of 17 November 2008. This Omnibus ( I am beginning to associate this word with rampant socialism, as I do the word solidarity.) Public Land Management Act will put further restrictions on property ownership and will make it still harder to explore for oil on American soil. How do they get away with such nonsense?

This lard-filled act will put further controls on privately owned land and property. It will buy up still more land to be added to the more than 650 million acres of land the government already mismanages. The act will put aside land for more wild and scenic rivers, create new heritage areas with property use restrictions, and put more land into wilderness areas, along with about 100 additional land-use restriction programs. It will spend $4 billion on pork-barrel spending projects. Of course, it will also create many jobs for more government bureaucrats and require private citizens to file a blizzard of applications to bureaus and offices simply to use their own land and properties.

Who knows what further attacks upon property are hidden in its more than 1,000 pages? We can be sure that Congress does not know and that the courts will be discovering additional federal powers for decades among its pages.

The removal of more land and resources from productive use and the further empowerment of government is to be dreaded by all who believe in the American concept of the sovereign individual.

It Depends on What the Meaning of Change Is

Obama, or BO as Prof. David Mayer has dubbed him, is bringing promised change to Washington. It turns out that his idea of change is a return to the old discredited redistributionist socialism of the past, managed almost entirely by bureaucrats and politicians of the Clinton Administration.

The only real change is that it will be harder for Democrats to rally behind the charge that America is hopelessly racist. Given that so many people of European, Asian, and Hispanic descent voted for BO, we ought finally to be able to judge people only by their character, ability, and accomplishments at last. No longer should it be considered racist to do so. Finally, we may be able to enforce the 14th Amendment to the Constitution, particularly as regards equal protection of the laws. No longer should there be race-based college admissions quotas and hirings for jobs. No longer should conspiracy theories claiming that whitey is somehow responsible for the terrible public schools of Washington, D.C., and other cities such as Baltimore and Cleveland with similarly miserable schools, be given any credence.

So, we can expect as vigorous an effort against terrorists as we had during the Clinton Administration. We will return to the level of response seen for the first attack on the World Trade Center, the attacks on the two U.S. embassies in Eastern Africa, and the attack on the U.S.S. Cole. We will see BO's promised closing of Gitmo. Will the troops be trained to give Miranda Rights statements to the prisioners they take? Perhaps they will have to shoot all prisoners for fear they will simply be released later by the courts. These troops had better be good, because Barney Franks says the Defense budget will be 25% smaller. This is change we can believe in!

Among the domestic policy changes, the most prominent is a return to the higher tax rates to be levied upon the upper middle class and the rich which we used to have. These rates have been shown to be so high that they greatly change people's behavior to one of extreme tax avoidance. These higher rates are simply punitive and do not serve the purpose of increasing federal tax revenues. They will decrease federal tax revenues, while also forcing many of our hardest working and most creative and innovative people into modes of activity which are much less productive. This will lead to the levels of unemployment such redistributionist schemes have generally created in Europe. America, the land of the free and the home of the brave, is to follow the leadership of Socialist Europe. This is the change we can believe in!

We can also expect punitive carbon taxes on coal-fired electric plants, on coal mines, on steel plants, the railroads that haul coal and oil, on natural gas-fired electric plants, on oil refineries, and on trucking firms hauling coal, oil, or gasoline. These industries are to be kicked in the teeth. BO says he is going to put all of the coal-fired electric plants into bankruptcy! This in the name of global warming caused by man-made CO2 emissions as we slip into the next Little Ice Age. This is the change we can believe in!

Meanwhile, the United Auto Workers Union will be given a bailout. These semi-skilled workers will be among those who will receive the money stolen from many others of us, those with no pull in Washington. They and legions of people who will not pay their debts will leach a hefty portion of the blood from many of us. Not being able to pay your mortgage or your credit card debt will entitle you to be receiver of stolen goods provided by the kind-hearted BO. That he will threaten the use of brutal and overwhelming force to collect the goodies to be redistributed will be ignored. This is the change we can believe in!

Young workers, those not in the legions of low-paid government service corps modelled after Hitler Youth and the Brownshirts, will ultimately be groaning under the weight of higher taxes to support the retiring Baby Boomers on their cush retirements under Social Security. These Baby Boomers will do no work from age 67 to age 89, on average. Twenty-two years of leisure at the expense of the younger generations. This is the change we can believe in!

The United Nations will be given total control of the seas and will be acceded the right to tax all countries in the world. The United Nations will determine what rights the individual has and condemn any nation with a different concept of individual rights. The United Nations will designate nations with different concepts of rights to be, let me guess, fascist nations. The United Nations will require massive redistributions of income and wealth within all nations and between all nations. This is change we can believe in!

Excessive Federal Land Ownership

The map above shows the fraction of each state owned by the federal government. It is clear that federal land ownership, especially in the West, is excessive. The federal government owns 84.5% of Nevada. For all intents and purposes, Nevada is really a little state. In fact, so much of the state is owned by the federal government, that people in Reno have difficulty finding land on which to build a home. As a result, home prices are unreasonably high there. Meanwhile, the federal government is under-utilizing the land.

Since the federal government has just taken on more than a trillion dollars of additional debt with the failing bailout, this would be a great opportunity for it to sell most of its land holdings to reduce its debt and as a strong stimulant for the economy. Putting most of the federal lands into private hands would ensure their more productive use. Property owners would also have much greater reason to improve and safeguard their property than the federal government does. A great deal of oil and natural gas field development could then take place. Private individuals would find ways to put land to use better for ranching, farming, housing, retail, and lumbering as it best makes sense. Private investment has always been superior to communist ownership of property in common.

The states listed in the order of the most federal ownership are:

Nevada 84.5%
Alaska 69.1
Utah 57.4
Oregon 53.1
Idaho 50.2
Arizona 48.1
California 45.3
Wyoming 42.3
New Mexico 41.8
Colorado 36.6
Washington 30.3
Montana 29.9
Hawaii 19.4
New Hampshire 13.4
North Carolina 11.8
Michigan 10.0
Virginia 9.9
Florida 8.2
Vermont 7.5
West Virginia 7.4
Mississippi 7.3
Arkansas 7.2
South Dakota 6.2
Wisconsin 5.6
Minnesota 5.6
Kentucky 5.4
Louisiana 5.1

Five states are mostly under communist ownership. Sixteen states are 10% or more owned under the communist system of common land ownership, in which no one really owns anything. Another 11 states are deprived of more than 5% of their land, making a total of 27 states in which the federal government owns 5.1% or more of the land.

The states with the lowest federal land ownership are:

Rhode Island 0.4%
Connecticut 0.4
New York 0.5
Iowa 0.5

Thanks to Paul Cohen for sending this map to me.

Europe's Climate Change Leadership

In March 2007, the European Union pledged that by 2020 it would cut carbon emissions by at least 20% from 1990 levels, get 20% of its energy from renewable sources, and make energy efficiency improvements of 20%. Apparently, it was thought to be politically cute to aim for a series of 20% goals for 2020! Better to be cute than rational in politics.

My 14 November 2008 post addressed Europe's leadership also based on a commentary by Driessen. An article in The Economist in the 4 October 2008 issue adds some information on this issue. It says almost every European country is now complaining about their agreement. Britain says it cannot meet the renewable energy goal and Ireland wants protection for its grass-fed cows which emit large volumes of methane. But, most plaintively, the countries of Eastern Europe are worried and upset by these accords.

Poland gets over 90% of its electricity from coal-fired plants. They hope to replace the present power plants with clean coal technology and nuclear power in time, but they are worried about the intermediate timescale. UBS produced a report in February 2008 that the tax on carbon will be so high that 43% of Europe's coal-fired power plants will switch to natural gas. Well, Poland has huge coal reserves, but it has to import natural gas mostly from Russia! So, for understandable reasons of national security, it is very loathe to become dependent upon Russia for its ability to generate electricity. Slovakia, Bulgaria, Romania, and Hungary joined Poland on 26 September to sign a joint declaration that the European climate change program would greatly increase their dependence on some countries for their natural gas supply. Apparently they did not have the gumption to state that it was Russia they were worried about.

The Eastern European countries have good reason to worry. In March 2007, the EU pledged "solidarity", a word so associated with socialism that it makes my stomach crawl, should energy supplies be cut-off. They called for increasing the energy supplier vendors and the Nabucco pipeline to bring gas from the Caspian Sea area without passing through Russian control. But, EU countries are individually making deals to undermine Nabucco, such as Germany supporting the Nord Stream gas pipeline deal with Gazprom. Europe's backbone was found to be a flimsy reed during the war in Georgia, with Russia's role as energy supplier being a part of the reason for European accommodation.

Russia is clearly doing everything it can to make Europe its energy hostage. Russia is investing in new pipelines to deliver gas to Europe. It is even trying to control a pipeline from Nigeria to Europe. It is also building a nuclear power plant in its little Kaliningrad enclave, the same one it is putting missiles in aimed at Europe, which is too big for Kaliningrad's needs. They plan to sell carbon-free electricity to Poland, Lithuania, and other nearby countries. Russia is clearly using energy as a means to control and intimidate Europe.

It sure would make more sense for Europe to take its chances that a little more CO2 will do less harm than being beholdened to Russia. If the earth should warm a few tenths of a degree, this would simply be the equivalent of moving a few miles to the south, while Russian control would be as chilling as moving to the North Pole.

Hijacking Marriage

In the 2008 election cycle, bans defining marriage as only between a man and a woman were passed in California, Arizona, and Florida. The fact that this happened and did so by a wide margin, is touted as proving that the people are center-right in their beliefs, despite the fact that they voted to make a committed socialist our next President.

I do not find this reassuring for several reasons. Why?

• Marriage is a highly spiritual and complex bond of love, friendship, loyalty, partnership, and sexuality between individuals, which draws strongly on their minds and conscience.
• Government is not competent to manage and judge such complex interpersonal and spiritual relationships as marriage.
• Government is the use of force and force is not the means to deal with marriages.
• Government does and should offer legal contracts which are really civil union contracts, despite being fallaciously called marriage contracts.
• Because government civil union legal contracts are called marriages, many people concede to government control of the spiritual content of marriages and do not attend to providing that spiritual content in their own marriages.
• People with beliefs about what marriage should be, including those with such religious beliefs, want government to impose those beliefs on others because we fallaciously call the legal contracts of civil union by the name marriage.

So, we have the strange phenomena of religious people and others who believe that marriage has great spiritual content, conceding control of that spiritual content implicitly to government. Many of these people want marriage restrictions to be placed on all according to their beliefs, in violation of the freedom of conscience of individuals who do not share their belief. They are making a huge concession to socialism here in which they violate the religious and freedom of conscience rights of others, violate others' rights of association, and generally deny others control of their own lives, their bodies, and their pursuit of happiness. They put government in the position of making some of the most spiritual and intimate decisions one can conceive of in the management of people's lives.

The left views attempts of the right to impose their various religious views with respect to marriage, sex, time of personhood, and the creation of life upon everyone through the use of government force as terribly wrong. Yet religious socialists, like Obama, use the religious teachings such as the obligation to be one's brothers keeper and the story of the Good Sumaritan as the very basis for government redistribution of income and wealth. Religion and other dogmas are constantly clamoring to use governments to force everyone else into living their lives in accordance with their particular beliefs. This is seriously wrong.

The Constitution was wisely constructed to place severe limits upon the role of government in order that individuals would have maximal choice and control in the management of their own lives. Government surely has no business being in the marriage business. It does have reason to be in the civil union legal contract business, so that those who wish to enter into such contracts will be able to control such things as joint property ownership, medical decisions, and providing for children. But, this should not be confused with marriage. Marriage should be left explicitly to the conscience of the directly involved individuals. If marriage draws largely on religion for its spiritual content for them, this is their choice. If it draws such content from their own souls, this is their choice. This is not a choice for government, not even one chosen by a majoritarian principal. In such intimate and personal matters as marriage, a majoritarian government is nothing but a brutal tyranny.

The important issue in every political issue is whether the rights of the individual are honored and the sovereignty of the individual is respected. People are more able to manage their own lives well than government is. Government is brutal force and as such it is the problem, not the solution. Keep government out of marriage.

Require government not to discriminate between individuals in performing its limited functions. In particular, government has no business discriminating against all combinations of people wishing the advantages of a civil union other than that of one man and one woman. Government's role in civil union contracts is like that in a business partnership. We do not have a rule that a business partnership must consist of one man and one woman. There are plenty of examples in which a business partnership consists of two men or of two women. There are cases in which it involves six men or three men and three women. Government does not decide who can form a business partnership by examining the partner's gender or by restrictions to pairs. The civil union contract offered by government is an equivalent of another kind of business partnership and should be treated in a similar manner.

Allow the individuals involved to manage their own lives and maintain the freedom to manage your own life according to your conscience. If you concede the determination of who can be in a civil union contract and who cannot to government, then there is nothing that government cannot stick its nose into. If you wish to maintain spiritual content in your marriage, do not concede control of marriage to government. Keep marriage strictly in the private and personal realm of our lives. If we are to do this, then we must insist upon a strict distinction between marriage and government legal contracts for civil unions.