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.