Oil Company Profits

We all have heard the Democratic politicians complaining about the ‘obscene’ profits oil companies make and how they want to take those profits away from them. Now, let’s examine the facts behind those profits. According to Tax Foundation data, U.S. oil companies cleared $630 billion after taxes while paying $518 billion in federal and state corporate taxes at an average rate of 45% from 1977 to 2004. Over the same period, an additional $1.34 trillion in excise fuel taxes was collected from consumers by the oil companies and turned over to various governments.

Where did those profits go? The vast bulk of that money is plowed back into research, development, exploration and drilling to keep the oil flowing. A very small percentage of it is distributed to stockholders who have risked their capital to build an enterprise that provides an essential good — the lifeblood of our economy. Far from imposing a hardship on the economy, oil company profits increase the wealth of those same shareholders, many of whom are everyday Americans feeling the bite of high gasoline prices.

What would happen if the federal government took away the bulk of those profits through increased taxes? There would be less money left for oil companies to explore and drill for oil. Consequently, there will be less oil produced domestically. That needed oil would come to us through increased imports. Those increases in imported oil, in essence, an increase in the total world demand for oil without a corresponding increase in the supply of oil, would necessarily drive oil prices higher, probably much higher. The goal of achieving energy independence would be even further from our grasp than it is today.

Affirmative Action and Discrimination

Ask any two people to define affirmative action and you will likely receive different definitions. Some will define (and even justify) it as reverse discrimination and/or quota system to move one less qualified minority person to a school, job, or promotion over more qualified non-minority people. The leader of the Civil Rights movement, Dr. Martin Luther King, rightly urged America to eliminate all discrimination. He never supported reverse discrimination. To do so would have been to accept discrimination – a direct contradiction of what he sought. I think that most Americans have accepted his vision in regards to discrimination. A society cannot get rid of discrimination by promoting discrimination.

So what is or should be the definition of affirmative action? All individuals have their strengths and weaknesses. An affirmative action program should neutrally addresses a person’s weaknesses (through training, classes, etc) whether that person is a minority or not. That helps the person qualify for educational advancment and/or gain the skills needed for job advancement. It helps the person, the school, the business, and society and discriminates against no one.

Diversity has become a popular goal, especially for large corporations and government agencies. At its heart, the corporation or government agency wishes to reflect the racial, ethnic, and religious mix of society within its employees in total and also in different hierarchal job positions. As a directional goal, it is a good goal. However, to measure diversity success only by statistically matching the number of minority and non-minority employees of a company or career field to actual population goals is impossible and invites the usage of reverse discrimination and/or quotas. Statistically impossible, because no career field, be it teachers, civil engineers, factory workers, airline pilots, firemen, etc. have a total population of qualified and/or interested people that reflect exactly the national or local proportions of every minority and non-minority group. For instance if only 5% of the Afro-American population are civil engineers, it is impossible to attain the roughly 11% employment of Afro-Americans as civil engineers needed to match Afro-American’s make up of the total population. Likewise, if Afro Americans make up 20% of the total qualified pool of teachers, it is impossible and undesireable to force teacher employment to only reflect 11% of the teacher population.

Often forgotten in the diversity debate is individuality. People, even people within the same ‘group’ are individuals first. One person may be analytically gifted, while another person may be more gifted in interpersonal communications, or certain technical skills, or creative/innovative skills, etc.. Now that we have become a nation of too many lawsuits, most Human Resource departments of large corporations are headed by lawyers. Interpersonal communication skills have become more highly valued than ever by human resource departments in the hiring and promotional processes because those skills are not only valuable in business generally, but also good in reducing the incidence of lawsuits. Some people are easily offended by just a word or two phrased differently than they like. A tell it like it is analytical person can unknowingly or unwittingly offend others too sensitive to learn/appreciate what that person has to offer to them and to the company. Diversity of personality is less and less tolerated and/or rewarded in the corporate world. So even if they achieve the ‘minority’ diversity they seek, what often occurs is that there is a preponderance of people with interpersonal skills and less of others without the same degree of that skill. Frequently, these skilled communication types lack the technical skills needed to execute optimum performance. The ones with the technical skills have much to contribute and belong at every level of the organization, but are often excluded due to weaker communication skills. The lack of badly needed skills by many of the good communication type people can and does ultimately hurt corporate performance. It is also highly discriminatory.

Environmental and Global Warming Issues

Global warming is a matter of science, not politics. Science is a never ending series of postulating theories, testing those theories, and then having other scientists freely test, challenge, and try to prove the original theory right or wrong. Unfortunately, politicians, pushed by a few zealots of the environmental movement, have not only declared global warming as a fact that cannot be denied, but also declared carbon emissions as its factual cause, plus are giving warnings about significantly rising temperatures to occur in a short period of time. These predictions may or may not be true. The scientific experts disagree on all points. However, politicians are shutting out the ones who disagree with their predetermined conclusions on global warming from the debate and from funding. Drastic measures with huge and adverse economic impacts to America are being proposed for an effect that may actually be negligible regarding the environment. In reality, if there is a significant impact of carbon emissions in the future, it is likely to come from economic development in India and China, whose combined population is roughly eight times larger than the U.S.. For example, China is opening a new coal fired electric plant on average every week. Both nations are rapidly adding motorized vehicles where few previously existed. Anything we do is unlikely to counteract this growth in carbon emissions.

Also, lost in the debate on global warming is that the sun is the most important element in global warming. Some scientists are observing a decline in the repetitive 11year cycle of sunspots. The last time this happened, about 1650, brought 65 years of cold summers and frigid winters, causing massive crop failures and famine. We may have more cause to fear a repeat of this is near, rather than global warming.

Now, whether or not there is or will be global warming, most of us would agree that reducing carbon emissions would be a good result. We need to do that intelligently at a realistic pace without crippling our economic future. We need to be honest about energy alternatives. First of all, no matter how fast we develop alternative energy solutions, the need for oil and gas as an energy source will be here for decades, possibly centuries. The current alternative energy solutions are not robust enough to replace oil and gas and coal for all our energy needs. Even if in the (probably far distant) future, newer, sufficiently robust energy technologies are developed and just as importantly are actually affordable, it will take decades to retrofit existing power plants, homes, businesses, and cars to utilize such a new technology. In the meantime, carbon fuel sources must necessarily continue to be utilized.

Let’s talk about the current alternative energy sources available today. The favorite one seems to be ethanol. Ethanol is a fraud. It takes a gallon of oil to develop a gallon of ethanol. No gain here. In fact, the energy from a gallon of ethanol produces less power than a gallon of oil, so the net effect is a loss. The loss multiplies even further, because extra precious resources of land and water are needed to produce ethanol and we can not afford to waste those resources. The original ethanol studies failed to take into account that the extra land taken out of its current use to produce ethanol absorbed vast amounts of carbon dioxide. Newer studies indicate that the expanded usage of ethanol, through the diversion of lands from their current usage, will actually double greenhouse gas emissions resulting in greater global warming! Additionally, the supply of agricultural products needed for ethanol production such as corn are driving up feed prices for farm animals which then drives up the price for meat and milk products. This hurts the poor the most including the poor in America and is likely to drive up famine and deaths in developing poor nations, especially Africa. We need to come clean with Ethanol, despite the Agricultural lobby, and recognize that it will not help our environmental issues at all.

By Federal law, in a few years all of us will have to utilize the new energy saving light bulbs that contain traces of mercury! Mercury is one of the most dangerous substances on earth. It is illegal to put these broken or dead light bulbs in landfills. Therefore it is illegal for you to throw them in the trash. You are required to bring them to a hazardous waste facility. Who in their right mind really believes that every American will actually do this? The inconvenience to travel to one of these places, especially if you don’t have cars and the simplicity of throwing it in the trash and let someone else worry about it is too easy a choice for many people. It will happen – a lot! Unless this crazy law is repealed, there is going to be widespread, dangerous, and irreversible pollution of our land. It was on TV news the other night about a woman who dropped and therefore broke one of these light bulbs. Since she has kids, she was very concerned about the mercury and called a government agency to find out what to do. They referred her to a hazardous waste clean up company. That company wanted $2,000 to clean up her broken light bulb. Who can afford that? Finally, lighting appliances that take small (e.g. candle shape/size) bulbs cannot be replaced with equivalent mercury bulbs. You will have to throw them out – including expensive dining room chandeliers if you have them. What were our politicians smoking when they passed this law?

Windmills are also popular as an alternative energy source idea, but represent 3% of our nations energy supply and are not likely to be practical on a wide scale. Besides wind farms being downright ugly to look at, especially on mountains, one commercial windmill kills an average of 10,000 birds annually as they fly right through the blades which are invisible when turning vigorously. Maybe practical on a farm or ranch, but if you or your neighbor has one and you live in a typical subdivision on a small plot of land, good luck getting any sleep. Windmills are noisy. Also, tens of billions of dollars will need to be invested in new transmission lines to carry the energy produced from commercial windmills.

Solar power, though not yet efficient and cheap enough, has made good strides in becoming practical and newer ideas are being tested that might yet prove feasible. It may even be possible to get rid of those ugly solar panels on the top of home roofs and incorporate them in the future in your roof shingles. Sun farms for power utilities actually exist, but more strides are needed to make them practical. Solar power, however, remains an alternative energy source with reasonable potential to keep investing in it. That brings up a major point that so many seem to forget. If and when, a future technological advance makes an alternative energy source cheap and practical, we won’t need the government to push it on us. The free market will pounce on it because you and I will act in our own self interest to purchase them, generating the profit motive for companies to provide them.

Hydrogen fueled cars are a dream vision of the future to resolve energy and environmental issues, but the technology needed to make it affordable is likely decades away, if ever. This idea therefore needs to stay in the dream category, not anywhere near a practical solution for likely many decades. Battery run or assisted engines are here, but without government and industry subsidies, they too are not affordable. Even if developed to be affordable someday in the future, the impact on the environment to extract the components needed for the battery is very extensively damaging to the environment. Solving one problem to create another one is not the way to go.

A few natural gas cars are here, but again, though cleaner than gasoline, is still an unaffordable, carbon emission energy. “Clean” diesel gas (prior to this, diesel was truly a dirty fuel) is apparently an affordable reality now and though carbon emitting is worth pursuing. It is not the final solution and hopefully by now, we all realize that a final solution is yet unknown. However, it behooves us to pursue technologies to “clean” our other carbon emitting fuels because we and the rest of the world are going to be dependent on them for at least another hundred years. Also, keep in mind population growth. Even if the U.S. reduced its per capita energy consumption by 33% within 50 years, a major, possibly impossible achievement, our energy needs would be the same as today because our population would also have grown by the same 33%.

Fusion energy (mirroring the process used by the sun) to run electric power plants is another dream technology that again is decades if not centuries away from being practical. Nuclear energy is practical now for our electric power plants and has been sabotaged by a few zealot environmentalists and their mouthpiece, the Democratic Party. It gives us everything we want – affordable, non-carbon emitting energy. It also gives us something we don’t want – dangerous waste products that must be reliably stored for thousands of years. Also the fear of a nuclear meltdown at a power plant. However, these issues are resolvable. France gets all of it electric power from nuclear powered plants and have much less territory to store the waste than us. We have safe, mountainous areas to store and guard the spent fuel safely. The “not in my backyard” political issue has stopped our government from doing what is right in that regard. So instead, we have multiple, less safe storage sights in many “backyards” that are harder to safely guard and maintain. Also, technology to use the heat from spent fuels to produce more energy has become economically and technically practical with the end result of having a tiny fraction of nuclear waste to store compared to the past. U.S. nuclear plants have an excellent safety record (including the Three Mile Island power plant, most notable for what did not happen). New nuclear power plants have even better safe guards due to improved technology.

Mass public transit exists today and some wish to expand upon it. As with most any government sponsored program, it has more misses than hits. It works well in heavily concentrated areas such as the island of Manhattan in New York City with only a few bridges and tunnels available to reach a very high concentration of businesses and the huge work force that must travel to their jobs there. In more ‘suburban” cities, such as Dallas, business locations are more spread out and though mass transit exists, many of the buses and trains run nearly empty. We waste resources building ‘feel good’ mass transit systems that do not address the systemic issues. It would often be better to give businesses tax incentives to allow office workers to work one or more days at home. With the internet and phone services available today, this becomes a practical approach to reduce energy needs.

What about the low tech solutions available today to reduce energy usage? How many homes and apartments are under-insulated, have windows and doors in need of caulking? Can we embark the utility companies to identify through energy usage those energy inefficient homes plus offer the right incentives to successfully make those homes efficient? Let’s not forget putting timers on water heaters, a huge source of energy usage. Too few people use them. Even fewer turn off their water heaters completely when away on vacation or business. Water heaters do not need to be on 24/7. Even simple things like closing draperies and blinds during winter cold or extreme summer heat can be very helpful since windows are the least energy efficient areas of any house, no matter how modern the window is. Thermostats with automatic timers to use less energy when not there (e.g. at work or school) and less energy at night (use a blanket and keep the thermostat cooler in winter) are practical solutions for today that need to be maximized.

Finally, let’s not forget the importance of energy independence for both our economy and our national security. It’s been given lip service for decades by our politicians, yet our dependence on other, mostly hostile nations for our energy needs has grown steadily. It doesn’t have to be that way. Why are we giving foreign nations 700 billion dollars annually to purchase oil when we can produce all the oil we need in America. That 700 billion dollars would not only cut in half our trade deficit, but since the money would be spent in America, it would produce a lot of good jobs for Americans. We have more oil locked up off our oceanic, continental shelves than the total oil reserves of Saudi Arabia. At least enough oil for all our energy needs for the next 100 years. We have the means to safely extract it. Despite the protest wailings of a few zealot environmentalists, there has only been one major oil rig environmental spill (by BP with over 700 violations that were ignored), despite decades of ocean drilling, including the hurricane plagued Gulf of Mexico and the perilous North Seas near England. There have been oil environmental several ship disasters transporting our oil from thousands of miles away. This is a no brainer. It’s time to do this! These rigs would be far enough away from shore so that due to the curvature of the earth, they won’t even be seen from the shoreline.

It is also estimated that we have two trillion barrels of oil (several times the oil reserves of Saudi Arabia) locked up in rock shale. We have the means to extract it and it has become affordable due to improved fracking technologies. Despite what you hear from the fanatical wing of the environmental movement, fracking has beed done safely since the 1940s.

We haven’t built a new oil refinery plant since the 1970s because of environmental and not in my backyard protests. Consequently, we cannot refine all the oil we use and depend on other nations to help us. It is plain wrong to export our environmental issues and our energy dependence to other nations. We need to build the plants we need to refine the oil we use. In addition, we need to get rid of the system of oil ‘boutiques’ by region. If you don’t know, the government mandates oil to be refined differently for different regions of the country to target their environmental issues. So if one region of the nation has a shortage of oil and another has a surplus, that surplus cannot be transported to and used by the area of the country needing it. It is patently dumb and drives up the cost of gasoline.

Fascists Hiding in Clear View

In an article in the Feb 3, 2008 Dallas Morning News, titled “Philosophy of Failure” (section P - Points) by Stefan Theil, “French and German students are being indoctrinated to believe that capitalism is immoral”. Germany’s new Chancellor, Angela Merkel who promised free market reforms has instead “imposed a new ‘rich person’s tax’, has tightened labor market rules, and promised renewed efforts to ‘regulate’ globalization”. In France, students are taught that “Economic growth imposes a hectic form of life, producing overwork, stress, nervous depression, cardiovascular disease and, according to some, even the development of cancer”. That same text claims that the last 20 years have “doubled wealth, doubled unemployment, poverty and exclusion, whose ill effects constitute the background for a profound social change.” Now for the really scary part from that text, “ an awareness of the limits of growth and the risks posed to humanity [by economic growth], any future prosperity depends on the regulation of capitalism on a planetary scale.” Uh- does anyone read Communism in that statement? In 10th grade, Germany teaches its students what to do about unemployment. Nothing said about job creation or starting businesses. Instead, it encourages them to organize self-help groups and join weekly anti-reform protests “in the tradition of the {formerly Communistic} East German Monday demonstrations”. “When French students graduate, they learn the benefits of a ‘Tobin Tax’ on the movement of global capital.” Essentially, “Europeans learn that companies destroy jobs while government policy creates them. Employers exploit while the states protect. Free markets offer chaos while government regulation brings order. Globalization is destructive, if not catastrophic. Business is a zero sum game, the source of a litany of modern social problems.”

With this attitude, it is no surprise that France and Germany have persistently, high unemployment, low innovation and entrepreneurship. However, there are many more implications. Their aversion to globalization could lead to trade barriers and those would negatively impact our own economy. It should never be forgotten that the worldwide enactment of trade barriers in the late 20s and early 30s turned a recession into a very long lasting Depression. Also, as their economies continue to stagnate, it can fuel social unrest that eventually could lead to revolution. May sound like only a remote possibility, but let us never forget that the only two World Wars the Earth has faced started in Europe. It cost us plenty of blood and money to bail them out. Furthermore, it was Europe’s military weakness and foolish lack of will to enforce its own peace treaties that enabled Germany to start WWII. Today, Europe is again militarily weak and doesn’t have the will to enforce UN agreements or supply troops to fight today’s battles against terrorists, content to leave it to the USA and criticize us to boot.

The danger doesn’t end in Europe. Liberal activists and zealots that could never win political victories to establish communistic or socialistic governments here, have instead targeted news media (TV, newspapers, magazines) and universities in an attempt to cultivate an increase in social attitudes leading to the false belief in the evils or capitalism and corporations. The major news organizations consists of journalists who have been surveyed to ascertain that their voting preferences are about 95% Democratic. No balance of views there. For the most part, University professors who do not kow-tow to liberalist viewpoints fail to gain tenure and fail to gain promotions. In other words, the push is on here, in a more subtle way, by the believers in socialism, communism, political correctness, and all things liberal to push America into the politics of failure so unwisely practiced by most of Western Europe. They avoid using the clear words of socialism and communism that lead to immediate rejection by most of us, but their goal is the same. They are patient. Be ever on guard. Your freedom and your economic welfare are at stake.

Note – suggest reading my 4/16/2008 post on Capitalism.

My Pet Peeves

1. DVDs that only play in wide screen. My TV picture becomes 40-50% smaller as a result. I hate it. I don’t believe the bull about “art” as the reason. 99.9% of all movies don’t come close to being art. They are entertainment for the moment. Soon to be forgotten forever.

2. Restaurants that leave the tail shell on shrimp. You have to get them off in hot soups, sauces, and all kinds of food. It’s a nuisance, can be messy, and certainly is unattractive to watch or perform.

3. Traffic lights that turn from yellow to red too fast. Most are fine, but lately lights are being moved from the center of the intersection to the end of the intersection. For a six lane road with additional left turn lanes, there could easily be 80 feet or more from entering the intersection to reaching the light. Even when you cannot brake in time to stop before the intersection (which means you need to get through the intersection to avoid getting hit), the light can turn red before you drive through it at posted speeds. That’s a safety issue. No one should deliberately run a red light, but if you are so close to an intersection when the light turns yellow that it’s impossible to stop before the intersection, there should be enough time to drive through the intersection at posted speeds before the light turns red. Also, do not like worrying that my fast stop for a red light so as not to be caught by the camera threatens me with being rear ended by the vehicle behind me.

4. Professionals who don’t take responsibility for their own mistakes. Give you an example. I had a tooth that was previously given a crown by the dentist that decayed because according to the dentist, there was too much space between the crown and the tooth allowing bacteria to easily get in. Well who put the crown in and therefore made the mistake of leaving too much space? The dentist of course. So did he take responsibility for his mistake and replace it for free? No. I had to pay what the insurance company did not cover plus suffer the discomfort that came with the decay and the dental work. My appeals including those in writing were never responded to.

5. The inane, repeated usage by parents of the “good job” compliment to every minute action taken by their children. I know you’re trying to build the child’s self confidence and that is important, but when it is for every little thing and when it’s not balanced by constructive criticism where appropriate, these children are in for a big shock when they enter the real world of college or business. Articles I’ve read indicate how woefully unprepared they are for the reality of failure and/or criticism. Failure/criticism should help us grow, but for children over nurtured by their parents to think they are something very special, they may not be able to handle real life failures/criticisms very well. Rebounding from failure is every bit as important a trait children need as is building self confidence.

6. Parents who refuse to utilize corporal punishment when it’s needed.

7. People who believe that measured corporal punishment is child abuse. . The idiots that call cops in non child abuse situations where measured, controlled corporal punishment has been administered belong in jail.

8. Phone solicitations.

9. Email solicitations.

10. A Federal tax code that taxes all my net capital gains in any given year, but only allows me to deduct a maximum of $3,000 per year in net losses to reduce gross income. I’ll be dead before the net loss carryover from year to year is actually reduced to zero. So will some of you.

11. Estate (death) taxes. Doubly so on IRAs and 401Ks where your children under age 59 ½ must not only pay the estate taxes by selling the inherited retirement funds to raise the money but also pay ‘early’ penalty fees plus income taxes on the withdrawals needed to pay the Estate tax. What’s left could be only one quarter of the original gross amount actually inherited.

12. Tax cuts that expire.

13. University and Colleges that promote liberal politics to their students and force professors to hoe the liberal line to gain tenure and promotions. You are supposed to teach students to think for themselves, not enslave students and professors in one philosophy.

14. Political correctness. Is this finally dead or is the replacement euphenism now “inappropriate”? ‘One thought is right’ pronouncements smack at our freedom of speech.

15. Celebrities who make political statements and the news media that publish it. Most celebrities, whether actors, musicians, or sports figures, do not have the educational ‘heft’, nor business background, nor real world experience of earning a living the hard way like most of us to add anything correct or meaningful to a political conversation or idea. They really do live in ‘La La Land’. Without their celebrity status, no one would publish their thoughts (or lack thereof). Put a sock in it!

16. Hollywood and TV movies that portray America, American corporations and executives as the ‘bad guys’ and terrorists and dictators as the ‘good guys’. Once upon a time, Hollywood used to understand right from wrong. No longer.

17. Hollywood movies that portray premarital and/or perverse sex (including gay sex and lifestyles) as ‘normal’. Listen, if gay lifestyles/relationships are ‘normal’, the human race would have ceased to exist eons ago. Now if you are reading this, don’t over-react. Violence against gays (or anyone else you disapprove of) is and should remain a huge crime. Don’t do it!

18. Comedians who cannot tell a joke without cursing.

19. Churches that tell you how much money or percent of income you should give to charity. One had the gall to give me a percent (20%) and emphasize it should be calculated against gross pay and not net pay after taxes (in other words, they wanted about a third of my actual net income). Maybe they should go out and earn a living in the real world first for 10 years before they are allowed to run a church..

20. Religious leaders that steal or just pay themselves exorbitant salaries and benefits.

21. Religious leaders that have sex with children (and/or their parishioners).

22. Religious leaders that seem to delight that some/many people will/should go to an eternal, burning, painful hell. I could never understand how people refuse to accept atrocities on earth, but delight in the punishment of others in hell. Any earthly atrocity (and I abhor them and believe in punishment including death) you can imagine is a ‘picnic’ compared to the religious vision of what hell is. How can you abhor atrocities on earth and approve of it in the after-life?

23. Politicians who loudly claim they want America to be energy independent, then do everything in their power to stop it from happening by blocking legislation allowing domestic drilling where big oil discoveries are likely to be such as in our oceans’ continental shelves, in Alaska, in our rock shale, and in our Federal lands. In case you haven’t noticed, the overwhelming majority of these politicians are Democrats and they have been blocking oil development at these sites for 30 years. Saudi Arabia, Venezuela, Nigeria, and the rest of our foreign suppliers of oil are indeed very grateful to Democrats for making them rich at our expense.

24. Individuals who are too stupid to realize the truth of point 23 plus fail to recognize the great expansion in worldwide demand for oil without a corresponding increase in the oil supply reserves and continue to falsely blame ‘Big Oil’ for our high energy prices.

25. Democrats who falsely promote the false slogan that the Republican Party is the party for the rich as they invent more ways to take more taxes from the poor and middle class.

26. People who don’t show up on time (or anywhere close to on time) and do it repeatedly but never let you know in advance that there’s a problem.

27. People with cell phones who answer them at movies, plays, and restaurants so that they disturb others trying to have a good time.

28. People with cell phones who use them while driving and consequently are distracted enough to drive poorly and/or dangerously.

29. Waiters who allow me to completely finish my drink before refilling the glass.

30. Judges usurping the powers of our legislators by making and/or overriding new laws instead of interpreting current laws.

Ideas on Religious Issues

1. Much of the world’s violence today centers on hatreds among Muslims, Jews, and Christians. Yet, when you extract the most important beliefs of these religions, they are essentially identical. One God created the universe and all the people and creatures that occupy it; God should be loved and worshipped; people should make sacrifices to honor God. All three religions believe in those most important tenants of their religion. The way worship and sacrifices are performed differ in style, but that does not subtract from the value of these different religions. So when a terrorist kills in the name of his/her religion, imagine the questions God might ask them in their next life. These might include “why did you kill these people that believed in me?…loved and worshipped me?…..honored me with personal sacrifices? Does a terrorist actually believe he has a satisfactory answer for those questions?

2. Evolution versus Creationist theory. Religion is based on faith, not science. Creationist theory which teaches that God created all creatures and people as they are today or if extinct, as they were when they were alive and there has never been evolution is a matter of faith. There is no science behind it. To call it science cheapens the faith of those who believe in Creationism. Religion needs to keep out of science. Look at the Catholic Church imprisonment of Galileo centuries ago because he believed that the earth was round and (heretically) circled the sun. Most scientists believe in God. Their study of science only reinforces their faith. Who are we to tell God that he only could have created us and the creatures of the earth as we always were and never have allowed evolution? What sets man apart from all other living creatures is that God infused each of us with a soul that brings life after death. If he chose to wait until a creature evolved who was worthy of that blessing, he could have done it that way. Right now, scientific theory strongly backs up evolution. If evolution is someday proven to be a fact and not a theory, it takes nothing away from God nor the soul he has infused us with.

Having said that, religion should not be taught as Science, especially in our schools, as it is being attempted. Also, if there is no evolution, Creationists need to explain how, since we are all descended from one man and woman of the same race and color (since Eve was taken and made from the body of Adam per the Bible), Adam and Eve, man has ‘evolved’ to have color and facial differences – White, black, Chinese, Japanese, Korean, Indian, Eskimo, pygmies, etc.. If there is no evolution, then wouldn’t we all have the same color and facial features. We know that all these races and colors are the same human race, by their identical DNA, by the fact that we all have similar blood types that can be safely transfused between the races, and by the fact of our common high intelligence.

3. The age of the earth. Some people believe in the strict interpretation of the Bible; some who believe think much of the Bible is figurative, not literal. Those who believe literally in the Bible believe it sets the age of the earth and the entire universe at less than 7,000 years old. That means dinosaurs lived with man and not millions of years ago despite scientific carbon dating. That means all the stars we see now are less than 7,000 years old. How do you explain that some stars that are millions and even billions of light years away are able to be seen. That should be impossible if they have only been in existence less than 7,000 years. Maybe that means that the usage of “day” in the six days that God created the universe and all its inhabitants in the Bible was merely a term that ancient man could better understand than “light years”. Could ancient man have understood the complexities of the science that God may have utilized to create the universe? Should God have infused ancient man with this knowledge or leave it as one of the many things man needed to learn on his own? Most importantly, shouldn’t religion spend its efforts on the morality needed to live a life worthy of the rest of mankind and most importantly God, rather than enter into scientific debates? Isn’t there a great need for that now?

4. Why did God, through human surrogates, write the Bible? Two major reasons come to mind. Establishment of the fact that there is only one God and God is the creator of the universe and everything in it. Secondly, establishment of moral values and laws for mankind to live by. Take those moral values and lessons literally from the Bible. It seems unlikely that God created the Bible as a science book. He left it to man and man’s intelligence to find out on his own how to develop tools, engines, electricity, fossil fuel extraction and usage, clothes, shelter, agriculture, cars, planes, mathematics, etc.. Why would he then give us a detailed account of the science of creation? Wouldn’t he leave it to us to discover for ourselves, just as he did for everything else? And if he did give us all those scientific details and there enormous timelines in the Bible, could early man have really comprehended it? Is it no wonder that the details of creation in the Bible may have purposely been meant to be ‘figurative’ in scope except for the cause of it all – God himself? He may have wanted us to use the intelligence he gave us to make these discoveries as he did with all the other discoveries man has found and is still finding. It gives purpose to life.

5. Gay Marriage.
If being gay was merely a lifestyle ‘choice’ and all of mankind chose it, then mankind would cease to exist in a little over a hundred years. That alone should indicate that gay sex and therefore marriage is a perversion. It is not in the interest of society to endorse gay marriage because in effect it would be endorsing its own extinction. The sanctity and values of marriage should not be diminished by making gay marriage or unions a legal institution. At the same time, other important points need to be made. There should be no violence against gay people. That is totally immoral and intolerable. There should be no discrimination in terms of jobs, housing, voting, etc.. Also, whether homo or heterosexual, can’t we all “go back to the closet”? Our children are learning much too much about sex at too early an age. Some experiment with sex before the age of 10! Part of the reason is they are exposed to so much talk and video about sex and they are naturally curious. It isn’t fair to them. Keep your sex life private no matter what you are.

Crime Reduction

I’ve read somewhere that the definition of insanity is repeating the same behavior but expecting a different result. I think that perfectly describes where we have been with our efforts to reduce crime over the decades. A new, radically different approach is needed. Criminals are no longer are afraid of going to jail. The system is broke! It’s costing us a ton of money and misery to be both the victims of crime and financially responsible for the court and jail costs of the criminals. I’ve read years ago that we spend an average of a million dollars to execute one prisoner (court costs and appeals, jail time for years or decades, etc.). What follows are some ideas to fix the problem:

1. Three strikes and you’re dead.
It is unbelievable that there are so many criminals with 10-20 crimes or more and they are still released and out on the streets. Does anyone believe these people will ever be re-habilitated? Does anyone think they are afraid of going back to jail? Why must law abiding citizens be afraid of crime and criminals have no fear? That truly is insane. We need to put the fear back into the criminals who commit crime or think of committing crime. Somehow, that fear has been lost. Why should we forever suffer the consequences and expense of crime? ….In the hopes that maybe one out of a hundred criminals will eventually rehabilitate? Even 10 out of 100. After the third serious crime, execute them and figure out a way to stop the endless appeal system available to death penalty criminals. I’m all for putting in more safeguards for avoiding the conviction of the innocent as long as there are effective means of eliminating the career criminals.

2. If you are old enough to commit the crime, you are old enough to suffer the full adult punishment for the crime. Kids kill adults or other kids and by 21 or 18, many are set free. Gangs especially use that loophole (more about gangs next) over and over again to keep their leaders out of jail. If you are old enough to commit a crime, then to have executed it you’ve proven that you are old enough to know what it is you are doing and to know that it is wrong.

3. Declare war on gangs (similar to the war on terror), get the resources needed to do it, plus the laws necessary to make it work, then execute the plan. The plan must include very severe punishments that can be tied to many gang members (I believe this is called ‘conspiracy’). Just as we do with gangster mobs with our racketeering laws that target all mob assets, apply the same principles to gangs. Make it illegal to recruit children under 18 into gangs. Before the smart lawyers try to get around that by challenging the legal definition of a gang, have laws that require any organization for which children under 18 are allowed to get a parental consent form (consider one that is notarized). This is not radical. Every legitimate organization involving children does this. Require liability insurance. Again, legitimate organizations do this. Penalties for not doing this or for forgeries must be severe. Prosecute adults who knowingly give consent to organizations involved in criminal activities. Do not allow gang colors to be worn (some towns have done this with great success).

4. Protect the children.
Do everything reasonable to make then safe from gang pressure or fear that only the gang can love and protect them. Stop putting welfare families in public housing. Give them subsidies for rent across the entire apartment geography of the town or city instead so that the families and especially their children will live in an environment where most people are not on welfare. Let them see another, better way of life as the ‘norm’. Prosecute landlords who discriminate against honest welfare families. Let schools offer free meals for breakfast and lunch plus a going home healthy snack and/or take home meal to all who want it. Hungry children or people are desperate and it isn’t fair to contend with that when you are a child. In the end, it’s a lot cheaper than dealing with crime and/or drop outs. In fact, do not allow a child under 18 to drop out of school. Just making a decision like that is absolute proof that the person is too immature to make the decision. Send the trouble makers to special schools if you must to avoid disrupting the learning of those who want to get an education. Children of parents who do not take care of them (e.g. alcoholics, drug users, criminals, etc.) need to have their parental rights terminated and the children placed in another home permanently. Parents should also have real fear of the consequences if they do not take care of their kids (I’m talking about criminal negligence of children, not people struggling to make ends meet and put food on the table who work or actively seek work if able).

5. Criminal Prosecution and Incarceration
Pleading to a lesser crime or reduced sentence is not a bad idea if it doesn’t become a ‘joke’. Some leeway is needed, but the range should be reasonable and narrowly defined by law (e.g. no trading 5 years for 25 years in jail). Saving court costs and appeals has a monetary value to society. Changing your plea from innocent to guilty can (but not necessarily) have a moral value to the criminal if it is taken seriously. Precautions must be taken at the same time to protect the truly innocent who cop a plea because they do not think their innocence can be proven. Those that are the real experts on that issue need to figure how to do that at reasonable cost. Parole is also not a bad idea for good behavior for some crimes, but it too should be defined by law and be reasonably restrictive. In other words, if you get 30 years, you should not be parolled after three years. At most, a 25 –33% reduction. It should be more than good behavior involved. Education while in prison is a form of rehabilitation and employment. Those who get the best parole deals should not only have good behavior but show that they worked to gain the knowledge and skills to support themselves without crime. Likewise, if they are released and commit crimes again, their punishments need to be more severe for having taken advantage of the parole system without giving society the benefit of their projected rehabilitation.

6. Murder someone and you die.
Whether or not a murder was pre-meditated, the effect on the victim is still the same. The victim is not any less dead because the murder was not pre-meditated. The victim’s family isn’t any better off because the murder was not pre-meditated.

7. Public Executions
The death penalty is anestecized today. Hardly anyone sees it or more importantly learns to fear it. The impact upon daily lives and the criminal fear factor from execution is negligible. Execute criminals publicly, preferably at the scene of their crimes. Those who do not want to watch can elect not to. Make it available to TV stations and the Internet. In that way, the youngsters and adults thinking about crime or already into petty crime might have second thoughts. At least they might gain some fear.

8. Attempted Murderers do not get a second chance at murder.
Penalty should be lifetime in jail without the possibility of parole. This penalty should also encompass all who commit crimes with the usage or threat of usage of a lethal weapon (gun, knife, bomb, pitchfork, baseball bat, etc.). A person who uses such weapons in the commission of a crime implies that they will murder the victim if the victim doesn’t do what the criminal wants. That threat is an obvious attempted murder.

9. Politicians may not grant pardons.
It is absolutely ridiculous that criminals who have been tried and found guilty of a crime through our court systems can be pardoned by a state Governor or the President. Especially in the case of a murderer, the upcoming penalty can become a political event/circus in the U.S. and around the world as opponents of our current laws try to subvert the legal results of our justice system. If you are a citizen who disagrees with current laws, then that’s what voting booths are for in a democracy like ours. Punishment of crimes should not be subject to political whims or pressure.

10. Minor mistakes in criminal trial procedures that have no impact on the actual (not legal) guilt or innocence of the accused should not be accepted as a basis for a new trial. Decisions on the procedural questions should be made by the original judge whenever possible since no other judge has the intimate knowledge of the facts presented in the trial.

11. Jails must be transformed into safe havens for rehabilitation.
Today, jails are a dangerous place of rape, violence, intimidation, gangs, code of silence on crimes committed, etc.. Rehabilitation cannot be facilitated well under such circumstances. Criminals in jail can even utilize the phones or the internet to commit fraud, identity theft, and other crimes. All of this has to be stopped. Goes back to putting fear back into the minds of criminals. Criminals need to have a healthy fear of incarceration when they get out of jail. Crimes committed in jail must be prosecuted as crimes and must count against the three strikes and you’re dead rule. Every inch of the place, including bathrooms and showers must be under surveillance cameras including cameras that can ‘see’ in the dark. Precautions must be taken to ensure the film is not misused in a criminal manner. Over time, jails need to progress to single occupant rooms (to minimize rape potential). The ‘rights’ of criminals in jail need to be clearly defined. TV, phone, and internet privileges are not, for instance, criminal rights. Neither is throwing feces on walls or at officers (that’s a crime). What is a crime in society is also a crime in prison and needs to be handled in a similar manner. Zero tolerance. Rioting in jails should be punishable by death plus it is okay for police to shoot to kill to quell a riot (a riot is nothing more than attempted murder). Starting a fire in jail is also attempted murder. Tattoos, often a symbol of gang loyalty and violence, is not a right in jail and therefore tattoos added while incarcerated should be treated as a crime. It is a form of intimidation.

12. The assets of convicted criminals must be forfeited to government to help compensate victims and pay for incarceration costs. When criminals have families, reasonable rules need to be established so as not to throw them into poverty for crimes they did not commit.

War and Peace – Ideas, Thoughts, Analysis

1. Whether or not you are for or against a particular war, you share one view – peace. Neither the combatants of war, nor the nations that send their people to war want a war without end. The end of war, by any logical definition, is peace. However, how you arrive at that peace will usually have a significant impact on whether there will be another war and how long that ‘next’ war will last. If the end of war brings long term humiliation and/or injustice to the country in which the war was fought and lost, the war really hasn’t ended permanently. There will be at some future time another war fought unless the humiliation and injustice ends. World War I was a perfect example of this. Germany lost and was made to pay huge reparations over time that humiliated its people and caused them to suffer. It is not surprising that the German people followed the evil tyrant, Adolph Hitler, because he appealed to their sense of pride and restored it. He also started World War II. Germany lost again. This time, the U.S. through the Marshal Plan, rebuilt the economies of both our World War II allies and our combatants, including Germany and Japan. Now both are American allies and the likelihood of war with them is extremely unlikely. Iraq was another example of winning a war but establishing a peace that could not last. After winning the first war, we left the evil dictator Saddam Hussein in charge. The Iraq people suffered immensely and another war ensued. You can believe that there would have been no war if not for the U.S., but the only difference would have been the timing and the combatants. Sooner or later, there would have been another war.

2. Since the Vietnam War, wars have emerged as a two prong fight. One is military; the other is political. After the Tet Offensive of 1968 occurred, two important events followed. The North Vietnam military was handed a stunning, costly, and terrible military defeat. It was so bad, North Vietnam seriously considered suing for peace. The second thing that occurred was that Americans were stunned that the North Vietnamese could militarily penetrate so much of South Vietnam. Many Americans and particularly the news media saw this as a watershed event that meant that eventually, in their belief, the war would end in defeat. Therefore, better to cut and run, then stay the course. North Vietnam was quick to pick up on this. For the first time, they realized that their war goals could be attained “politically” by feeding the image many Americans had of the war as hopeless. Their political ploy worked. America withdrew and the North was then able to conquer South Vietnam.

3. What does this mean for the current Iraq war and future wars?
Unfortunately for America, this political strategy for winning a war that could not be won by military means was observed by our enemies and potential enemies. It was reinforced when Russia fought a war in Afghanistan for 10 years and withdrew without a victory. The overwhelming liberal news media in America, intentionally or not, supports the political strategy of our enemies through its coverage and especially playing up the ‘body counts’. Now, don’t misinterpret what I’m saying here. I am a Vietnam veteran and abhor every American war death and wounded casualty. However, wars cannot be fought without blood shed. The current war in Iraq is being won militarily despite the horrors of the terrorists there. It is being lost politically. Partly, this is because of the lessons about the American politics of the Vietnam war that was observed and learned by the terrorists. If they prolong it long enough, they believe we will leave. Given the coverage of the news media and those Americans that disapprove or protest the war, they may be right. 4000 Americans dead is painful, but what did you expect? It took 5 years for that many to die. We lost that many in one day several times in WW II. We lost 3,000 civilians in one day, when the terrorists flew planes into buildings on 9/11. We did not lose our nerve in WWII. Why are we losing it now? Guaranteed that the cut and run strategy of Vietnam has caused more to die in this war. If we cut and run again, you can guarantee more dead if there is a next American war. Bottom line, if you want less American deaths in a war, we have to prove that we will never cut and run from a war again. Otherwise, we have laid the foundation for all future enemies of America to defeat us over and over again. We simply cannot afford nor tolerate that!

4. Terrorists and Weapons of Mass Destruction
It is the dream of Al Queda to procure and deploy nuclear or other weapons of mass destruction against the United States. In the Cold War, there was an implied but unofficial understanding between the U.S., Russia, and China that any attempt to use nuclear weapons by either side would be met with overwhelming nuclear force in return. In essence, everyone would be destroyed. The policy was labeled Mutually Assure Destruction or MAD. It was literally insane for one nation to attack another with weapons of mass destruction. It worked marvelously well to prevent nuclear war and World War. We need to publicly remind the world, but especially the terrorists that the policy of MAD still exists and will be carried out by the U.S. if so attacked. Furthermore, though we may not be able to prevent such an attack, we would know who perpetrated the attack, the location of the attackers whether government or terrorist, the nations who helped either through their government’s financial, logistical, or weapons aid, or through their people through their ‘charitable’ donations to terrorist groups either directly or through organizations known to funnel such money to these groups. Announce that if the U.S. or its allies are attacked, MAD will apply to them so that all of these groups and nations will be immediately and completely annihilated from the face of the Earth. To these groups and nations, tell them that we feel it is important that they know the consequences of such aggression against us so that they can decide in perfect clarity the future actions they take or don’t take against us. Let them hate us if they are so inclined. More importantly let them understand our ‘response’ policy toward nuclear or biological warfare waged against us or our allies. The whole world would ultimately benefit by this knowledge.

Government Pensions and other Benefits

Municipal workers in major cities (e.g. New York, Boston, etc), whether they be police, fire, sanitation, or transit workers have pension programs that are unmatched in private industry. Those of us who work in private industry actually pay for those pensions. Workers, including management workers at every level, after 20 years, can retire with full pension benefits, usually at 50% pay for the rest of their lives. Those pensions, unlike private industry which normally starts full pensions at age 65, are paid immediately no matter what the age of a retiree. A person, starting their job at age 18, can retire at age 38 and collect their pension. Some double dip and take another city job for 20 years and collect a second pension. Their pensions, unlike private industry, are indexed to inflation and therefore go up each year by the rate of inflation. The pension is based on the last year’s pay including overtime. Both management and non-management get paid for overtime. Private industry commonly uses a five year average which lowers the annual income on which a pension is based. It is common practice for municipal workers to be given unlimited overtime work the last year, often doubling their normal annual income. Therefore, their 50% pension benefit actually becomes their normal annual salary. This is unheard of in private industry (because any company who tries that will soon become bankrupt). Management workers including the ‘top guy’ also get paid overtime (again unheard of in private industry) and also often pad their retirements through working as much overtime as they can the final year. Apparently, there are no controls on overtime worked and paid in big city municipals (I do not know if state workers have similar benefits) as there would be in private industry as this would be a serious budget matter for a corporation. Also, workers can accumulate unused sick days throughout their working life (again, nearly unheard of as a private industry practice). Some accumulate more that a year’s worth of sick days to collect a huge check at retirement ($50,000 to $100,000 is not that unusual and some checks have exceeded $200,000).

How are benefits like this possible? Municipal unions negotiate with city governments. In other words, the politicians who run city government and therefore need the votes of the city union members and their families negotiate these contracts. Talk about a conflict of interest! It should be illegal. Not only do you get these outrageous pensions, but often wages far exceed the going market price (e.g. compare a municipal sanitation worker’s wages and benefits to private industry). City unions have the right to strike or if they don’t (e.g. fire and police) use tactics as massive sick ins to achieve the impact of a strike). They have extensive and unacceptable impacts on citizens by the nature of their work by using the strike weapon or call in sick tactic. In other words, bargaining power is not evenly matched between municipal workers and its citizens.

Now, before going forward, I don’t want any of the above to lead anyone to ‘demonize’ municipal workers. The vast majority are very good people trying to support themselves and their families as best they can. You cannot blame them for trying to get as good a deal as possible for themselves and their families. Cost of living is higher in metropolitan areas and their normal wages are not going to make them rich. Much of the blame needs to go to ourselves and our politicians for not having the backbone to match municipal benefits to normal private industry standards.

The current system of pensions and benefits are unfunded. The future liabilities to pay these benefits far exceeds the anticipated tax revenues needed to pay them out. This brings up a dual concern for both workers and citizens. Citizens (only 20% of whom work for companies that pay pensions) will have to ante up such huge increases in taxes that their standard of living will significantly diminish (e.g. give up your house and move to an apartment; or give up that apartment and move out of state or to a smaller house or apartment; spend less on other necessities or ‘wants). There’s also a possibility that cities may have to mimic the airlines who have gone bankrupt and defaulted on their pensions with court approval). Nobody wins in this scenario. Not the citizen; not the municipal worker.

Solutions are daunting. Hiring through a bid process private industry companies for transportation and sanitation is one place to start. If possible, expand this to other city jobs, especially administrative. Also, it is obvious that municipal pensions and benefits need to reflect the policies of private industry. However, what city union will voluntarily give up the benefits its members enjoy. I would venture to predict none. I think the bankruptcy option eventually will become the solution. I think we need to hasten that day by imposing federal laws forcing all levels of government to pay for future pensions now through cash investments into independently monitored funds at sufficient levels to pay for future benefits. Currently, these pensions are way under funded by trillions of dollars combined. they amount to a ticking finacial time bomb that will not only result in the default of these pensions someday, but the total financial demise of America. By enacting laws forcing public pensions to be funded just as we do for corporate private pensions, the true costs of these public pensions will be known today along with our ability to afford or not afford them. We cannot depend on the inherent conflicts of interest between politicians and union members (who are also city voters) at the bargaining table to fix this problem.

Health Care

Just as competition drives costs down in other areas, it should do the same in health care. For insurance, state and federal government too often interfere with private industry by specifying requirements (e.g. must cover pregnancy, must cover office visits, etc.). Though well meaning, it forces people to buy more insurance coverage than they need. That drives prices up. Let the marketplace determine what medical coverage to offer. There will be more choices and better prices.

More difficult are hospital and surgery costs, especially for emergency care. When you are taken by ambulance to a hospital because you are critically ill, you are brought to the hospital the ambulance crew thinks is best and close for your condition. It is impractical for you to ‘shop around’ for best prices on the hospital cost, surgical costs if needed, even the ambulance ride cost. You are at the mercy of all those providers and locally, they pretty much have a monopoly (never a good thing) on your health situation. To some degree, your medical insurance if you have it can help limit your liability and introduce some competition on costs. Most insurance companies have a policy of paying ‘fair and reasonable’ rates for your medical services. If they have a contract that the hospital and surgeon can’t charge more than those rates, you have some protection. Otherwise, you must make up the difference and it may be much more than the 20% of the bill you thought you had to cover.

Woe to the person with no insurance. I only learned this first hand recently when my mother was taken to a hospital and diagnosed with brain cancer. Hospital bills averaged 25-$40,000 per week ($150,000 total for four weeks). That didn’t include the surgeons and assistant surgeon’s fee. $45,000 for a 90 minute operation just for the main surgeon (who does several in a single day; think about this, he could make a million dollars a month or more if he actually collected that amount).

As a Medicare and Blue Cross patient, the normal and reasonable amounts they combined covered amounted to a little over 10% of the total bills. I sweated bullets because the hospital had required me to guarantee her bills would be paid as a condition of admission since she was in no condition to sign for herself. What I found out much later is that Medicare contracts doctors and hospitals to accept their fair and normal rates and not charge the patients any more than that. They forgave almost 90% of the total bill.

Imagine the poor families without that kind of contracted limit (e.g. no insurance, or weak insurance)! How can the same medical service be legally allowed to vary by a factor of 10 times on price?! The price of a medical service should be the same for all patients regardless of insurance type or no insurance. It ought to be the law. I believe it is the law for most any other product or service (for example, two woman buy the same dress at the same store on the same day, pay the same price). Then maybe when normal and ordinary expenses were negotiated between the medical community, government, and private industry, real competitive pricing might occur. I’m not advocating fixed pricing because that just creates shortages in medical services as is common in Europe. There needs to be real price negotiation taking place leading to the same price charged for the same service to all patients.

Any discussion about medical costs needs to address the issue of legal costs. Doctors pay huge liability insurance expenses because the alternative is financial ruin. Doctors in high risks fields such as pregnancy and delivery pay so much insurance that many are dropping out, unable to pay the premiums. Those costs, necessarily are passed to us. Yes, we need to weed out and stop incompetent doctors from practicing medicine. Self-policing by doctors has not worked well and needs to be addressed. However, multi-million dollar awards also do great harm to all of us as those expenses are passed down to us plus ‘defensive’ medicine practices are increased, not for our health benefit, but for legal defense reasons, further increasing medical costs. We have to start thinking of doctors as infallible and able to figure out every subtle or complex medical issue perfectly. Nobody is or can be that good. We need to limit legal suits plus also introduce penalties for frivolous suits that should never have been filed to bring balance and reasonability back into play for this issue.

Much of the health care discussion revolves around socialized medicine as practiced in Europe and Canada. Unfortunately, they are no panacea for our problems. They amount to price controls which due to the enforced low cost results in over usage – that is high demand for medical services because the user has no financial incentive to self regulate his/her trips to the doctor or hospital for every minor ailment. What’s the problem with that? The problem is the supply side of medical services. Less financial incentive to practice medicine leads to less doctors and nurses and therefore shortages in their ranks so that there are not enough of them to render all the services requested. Consequently, patients can wait for months for needed operations that are not immediately life threatening, often in pain. Even prescription drugs can be in short supply as drug companies cannot recoup their research costs due to fixed governmental pricing. If we follow suit and fix prescription prices, there would likely not be enough worldwide profit for drug companies to continue to develop, test, and introduce new drugs (average cost about a billion dollars for each drug) to help all of us live longer and healthier. Finally, let’s not forget that medical services in Europe and Canada are not free. They pay incredibly high taxes as a result and so would we if we model ourselves after them. There is no free lunch here!

Another part of the health care discussion involves government taking over for the medical insurance industry. Government already interferes at both the federal and state levels through mandated insurance requirements preventing those with less insurance needs to buy more insurance than they need, raising costs. Also, government never ran anything more efficiently or cheaper than private industry. Private industry has the incentive of going out of business to run their business efficiently. Government has no such problem and therefore no incentive to run an effective, efficient operation. In fact, government employees are financially incented to run the biggest, costliest operations they can to qualify for higher job levels and pay.

The best action government could take would be to repeal all the mandated medical insurance requirements and stay out of it completely. If it proves politically unstoppable to keep government out of the medical insurance business, then it should concentrate only on the catastrophic end of the business. For example, if government was responsible for medical expenses above say $100,000, then that would become the limit of coverage for private insurance companies which should lead to a reduction of insurance rates for all of us. Again, this is not free. We collectively have to pay for the government’s insurance expenses through taxes. In any case, rather than have the government start with total medical coverage, let it start small and affordable and possibly work up to higher coverage incrementally in later years. That’s a whole lot smarter than creating huge, unfunded future liabilities such as the government has today with Medicare, Medicaid, and the senior drug prescription program. Currently, no one has a plan to fix/fund them and finding a viable solution my prove impossible and/or very financially painful for all of us

Cost Of War Or Price Of Freedom?

Publication: IBD; Date:2008 Apr 18; Section:Issues & Insights; Page Number: A1
PERSPECTIVE

Cost Of War Or Price Of Freedom?

LAWRENCE KUDLOW
Surprise, surprise. Having failed to puncture Gen. David Petraeus’ story about great improvements on the ground in Iraq, liberals are now saying the cost of the Iraq War has somehow undermined the economy — even caused the current slowdown. What complete nonsense. First point: The United States has spent roughly $750 billion for the five-year war. Sure, that’s a lot of money. But the total cost works out to 1% of the $63 trillion gross domestic product over that time period. It’s minuscule. But here’s the real question we ought to be asking: What is the cost of freedom? While the left refuses to acknowledge it, the U.S. homeland has not been attacked since Sept. 11. Right there is a big economic plus. Since President Bush went on the offensive and took the battle to Iraq, al-Qaida and other extremist terrorist groups have been utterly routed by U.S. forces. But in tying the jihadists down on their home turf, and keeping them from mounting another coordinated attack on the United States, our economy has benefited incalculably. Then again, the antiwar forces might want to recall John F. Kennedy’s inaugural address, in which he called on Americans to “let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to ensure the survival and the success of liberty.” Do these folks actually think 1% of GDP is too large a price, too heavy a burden? I sure hope not. The leader of the “Iraq is sinking the economy” school is Joseph Stiglitz, a former Nobel Prize winner who worked for President Clinton and now teaches at Columbia University. Even Stiglitz admitted to me in a recent interview that the United States can afford the Iraq War. His real agenda, however, is to cut Iraqi funds and defense spending in general in order to launch a Keynesian bigspending campaign here at home. Of course, the liberal government-spending appetite is insatiable during wartime or peacetime. And for nearly three decades voters have rejected it, opting instead for the low tax rates that spur economic growth while allowing them to keep their money. And by the way, despite the current slowdown, the U.S. economy has performed remarkably well during the five years of the Iraq War. Real GDP has increased by 16%, or 3% annually. The unemployment rate has hovered below a historically low 5% for quite some time. Nearly 10 million jobs have been created. Household net worth has increased by $20 trillion. Industrial production has expanded by 13.5%. Even home prices, despite the current correction, have increased by 20%. Lest we forget, anti-freedom, anti-capitalism jihadists were attempting to drive a dagger through our economy. That was the point of hitting the World Trade Center, wasn’t it? But they failed miserably to stop the rising tide of free-market capitalism throughout the world. Global GDP growth has averaged nearly 5% annually in the last five years. The capitalization of the world’s stock market has increased 159% — or $35 trillion. New emerging-market economies have seen their stock markets collectively rise by 223%. Incidentally, the Congressional Budget Office estimated that if troops in Iraq were reduced to 75,000 by 2013, war costs would amount to just over $1 trillion for the entire period — roughly one-half of 1% of $177 trillion in newly created GDP. Still a tiny amount. And how can anybody truly approximate the cost of permitting Saddam Hussein to remain in power? In 2006, several economists at the University of Chicago estimated that in certain scenarios, the containment of Saddam might have produced security costs that are similar to the actual expenses of the Iraq War. But what of the benefits of removing the totalitarian Iraqi dictator? How are we calculating those? It was Saddam who launched a 10-year war against Iran, invaded Kuwait, and gassed and killed hundreds of thousands of his own people. And it could well have been Saddam who blew up the entire Middle East had he been left in power. Where is the liberal price-out of the potential consequences of not going to war? And should the Iraqi surge continue to safeguard an American ally and promote the kind of 7% economic growth that is now occurring in Iraq, how does one estimate the economic benefits to that nation, the region, the United States and the rest of the world? Liberals like Stiglitz have blinders on when it comes to the strategic course of U.S. civilian and military operations in Iraq, Afghanistan and elsewhere. They’re only willing to evaluate the negatives, rather than think through the positives. This is called single-entry bookkeeping. It makes for bad economics and even worse national security.

Better Off From Free Trade? Absolutely!

Publication: IBD; Date:2008 Apr 17; Section:Issues & Insights; Page Number: A1
PERSPECTIVE

Better Off From Free Trade? Absolutely

WALTER E. WILLIAMS
Presidential candidates Hillary Clinton and Barack Obama, pandering to antitrade activists, suggest that should they become president, they will restrict trade agreements. Before you buy into their promised paradise, there are a few trade questions you might consider. Suppose you were choosing a country to live in. Which country would you prefer: a country that has the world champing at the bit to put its money into or one where the world is unwilling to invest? Let’s look at the numbers. The U.S. is the world’s largest recipient of foreign direct investment. In 2004, foreigners owned $5.5 trillion in U.S. assets and had $2.3 trillion in sales. They produced $515 billion of goods and services, accounting for 5.7% of total U.S. private output, and employed 5.1 million workers — or 4.7% of the U.S. work force — in 2004. In 2006 alone, foreign investors spent $184 billion investing in U.S. businesses and real estate, the highest amount foreign investors have spent since 2000. My question to Clinton, Obama and the anti-trade lobby is: Would Americans be better off if there were no foreign investment in our country? Between 1996 and 2006, about 15 million jobs were lost each year and 17 million created. That’s an annual net creation of 2 million jobs. Roughly 3% of the jobs lost were a result of foreign competition. Most were lost because of technology, domestic competition and changes in consumer tastes. Some of the gain in jobs is a result of “insourcing.” Foreign companies such as Nissan, Honda, Nokia and Novartis set up plants, hire American workers and pay wages higher than the national average. According to Dartmouth College professor Matthew Slaughter, “insourced” jobs pay 32% higher than the U.S. average. So here’s my question to anti-traders: If outsourcing is harmful to the U.S., it must also be harmful to European countries and Japan. Would you advise them to take their jobs back home? Wal-Mart has become the whipping boy for political demagogues, unions and antitraders. I suggest that they have the wrong target. The correct target is revealed by answering the question: “Why does Wal-Mart exist and prosper?” Wal-Mart exists and prospers because tens of millions of Americans find Wal-Mart to be a suitable source of goods and services. Clinton, Obama, unions and anti-traders should direct their outrage and condemnation at the tens of millions of Americans who shop there and keep it in business. There’s great angst over the loss of manufacturing jobs. The number of U.S. manufacturing jobs has fallen, and it’s mainly a result of technological innovation — and it’s a worldwide phenomenon. Daniel W. Drezner, professor of political science at the University of Chicago, notes that U.S. manufacturing employment between 1995 and 2002 fell by 11%. Globally, manufacturing job loss averaged 11%. China lost 15% of its manufacturing jobs, 4.5 million manufacturing jobs, compared with the loss of 3.1 million in the U.S. Job loss is the trend among the top 10 manufacturing countries that produce 75% of the world’s manufacturing output (the U.S., Japan, Germany, China, Britain, France, Italy, Korea, Canada and Mexico). But guess what: Manufacturing output rose 30% globally during the same period, and 100% in the U.S. from 1987 to today. Technological progress and innovation is the primary cause for the decrease in manufacturing jobs. Should we save manufacturing jobs by outlawing labor-saving equipment and technology? Economist Joseph Schumpeter referred to this process witnessed in market economies as “creative destruction,” where technology, innovation and trade destroy some jobs while creating others. While the process works hardships on some people, any attempt to impede the process will make all of us worse off. Williams is a syndicated columnist and John M. Olin Distinguished Professor of Economics at George Mason University.

The Business Cycle

Everyone would like the nation’s economic results to constantly average a good growth rate year after year. However, that’s not possible. When times have been ‘good’ for a while, the seeds for a drop in economic performance are naturally occurring. As business profits increase and home prices rise in good times, more people and companies have entered the industries with increased opportunities. Initially, the effect is good – providing more jobs, new companies, higher household incomes and wealth, etc..

However, until ‘too many’ (a number that can’t be predicted so that it could be avoided) people invest in companies, jobs, technology, homes, etc., it is unclear at what point these investments need to stop to be ‘in balance’. Therefore, at some point, a surplus is created (that is, supply exceeds demand). In other words, the economy has too much ‘wasted’ resources in place to continue at its old growth pace. Price reductions and job loss are the natural economic tools to correct this imbalance over time.

While that can be personally and financially painful (more for a few, than for all), the seeds to correct and reverse the downturn are already being planted. People who previously could not afford to buy a home can eventually afford to buy them at lower prices and probably lower interest rates (since inflationary pressures are dwindling with lower demand), raising their standard of living. Others, who could not afford to start a new business that they previously wanted to create or expand their current business, now have lower rents and possibly lower wages to help them get started and some will take the plunge, creating new jobs. In some cases, the job losses of some industries, because they are no longer needed to the same level as before, will become permanent losses.

That still can be good as most of those human resources are eventually redirected into new and/or growing industries. For example, we lost hundreds of thousands of phone operators in the 1990s when cell phones became popular. However, the new industry for cell phones created more jobs and better jobs than before (in addition to becoming a much wanted and purchased consumer item that delivered valued consumer benefits). This increase in economic activity will grow over time and the good times will be returned. It can be messy – destroying jobs that need to be destroyed and moving people into industries and jobs that need them which in total increases nearly everyone’s standard of living. That’s the business cycle working to produce higher standards of living and doing it better in a free capital market than in any other economic system.

Capitalism

We live in a free market economy. Prices of goods and services are determined by supply and demand. That type of system is called capitalism. Countries that employ a true captilalistic economic system enjoy the highest standards of living in the world. The reason is that free markets balance supply and demand. Those individuals or companies that ‘waste resources’ (i.e. produce goods and services in greater quantities or poorer quality than people want to purchase at a given price) suffer through less or no profits or profit losses and eventually go out of business if the situation is not corrected. They have to lower prices to sell what won’t sell until eventually, if at all, demand finally equals supply.

Those that give people what they want in the right quantities and qualities profit (i.e. are rewarded) if they keep their costs in line. If instead, they charge too much to customers or deliberately get ‘greedy’ with their prices to increase their profits, that profit factor acts as an incentive to other individuals or companies to enter the market. That increases supply, which in turn lowers prices to levels that will inspire additional demand from consumers to snatch up the available supply.

In other words, capitalism gives people what they want efficiently, at the right price, and with the least amount of cost and waste. The complete opposite of the capitalist economic system is communism. Communism controls one or more of the three variables of a free market system, supply, demand (e.g. through rationing), and prices (including wages). Waste is subsidized by the government and companies are not penalized for it. Therefore, less of wanted or needed merchandise is available to the citizens and their standard of living suffers. There is no effective worker motivation to do well in their jobs or to innovate and/or start new businesses. This also lowers the standard of living and quality of life.

However, totally free markets really do not exist. Even in free markets, governments, in the cause of social justice or other reasons, impose varying restrictions and even trade barriers. For instance, to protect an industry (e.g. agriculture). This throws supply and demand (and thus prices) out of whack. We are no longer efficient. Instead we are wasteful and lower our standard of living as we pay more than would be the case under free markets. That extra money we pay means less money to spend on other goods and services, or savings, and we are poorer for it as less of those goods and services are produced and ultimately less people are needed/hired in those industries, raising the nation’s unemployment rate.

The government, labor unions, and liberals only sees and cares about the industries and jobs it protects. In the aggregate we are worst off. Fortunately, we do this a lot less than the Europeans who suffer from high unemployment and much lower standards or living than us. In effect, governments are enforcing a dosage of communism on capitalism. That guarantees waste and higher prices (e.g. farmers are paid more for their milk and/or produce though government price supports than a free market would pay, so that consumers also must pay more to buy it while at the same time, the government must pay to store the surplus, wasting more resources). We all suffer economically for it as less money to purchase other goods and services are available to us after paying those higher prices.

Sadly, the poor are hurt the most since they have little or no discretionary income to absorb the higher prices for basics such as milk and produce. In the meantime, agricultural corporations are the beneficiaries. The romantic notion of helping the small farmer is a fabrication since in reality, the number and more importantly the percentage of agriculture they represent is nearly non-existent in reality. If the small farmer needs help, he/she needs to become more efficient or go out of business, not be subsidized. His/her labor can be more beneficial if employed elsewhere.

History Lesson – Democrat or Republican?

Subject: Taxes (from an email forwarded to me)

I just can't wait to start paying more taxes!!!

Are you Democrat or Republican?

As Joe Friday used to say "Just the facts, ma'am, just the facts".

Whether you are a Democrat, Republican or Independent..... these are the facts .....

Taxes under Clinton 1999//Taxes under Bush 2008

Single making 30K - tax $8,400// Single making 30K - tax $4,500
Single making 50K - tax $14,000//Single making 50K - tax $12,500
Single making 75K - tax $23,250// Single making 75K -tax- $18,750

Married making 60K - tax $16,800// Married making 60K- tax
$14,500
Married making 75K - tax $21,000// Married making 75K - tax $18,750
Married making 125K - tax $38,750// Married making 125K - tax $31,250

If you want to know just how effective the mainstream media is, it is amazing how many people that fall into the categories above think Bush is screwing them and Bill Clinton was the greatest President ever. If any democrat is elected, ALL of them say they will repeal the Bush tax cuts and a good portion of the people that fall into the categories above can't wait for it to happen. This is like the movie The Sting with Paul Newman; you scam somebody out of some money and they don't even know what happened.

Your Social Security

Just in case some of you young whippersnappers (& some older ones) didn't know this. It's easy to check out, if you don't believe it. Be sure and show it to your kids. They need a little history lesson on what's what and it doesn't matter whether you are Democrat of Republican. Facts are Facts!!!

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be Completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the independent "Trust Fund" rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away" -- you may be interested in the following:

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Q: Which Political Party took Social Security from the independent "Trust Fund" and put it into the general fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House and Senate.
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Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

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Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the U S.

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AND MY FAVORITE:

Q: Which Political Party decided to start giving annuity payments to immigrants?

A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

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Then, after violating the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away! And the worst part about it is uninformed citizens believe it!

If enough people receive this, maybe a seed of awareness will be planted and maybe changes will evolve. Maybe not; some Democrats are awfully sure of what isn't so. But it's worth a try. How many people can YOU send this to? Actions speak louder than bumper stickers.

AND CONGRESS GIVES THEMSELVES 100% RETIREMENT FOR ONLY SERVING ONE TERM!!!

A government big enough to give you everything you want, is strong enough to take everything you have. - Thomas Jefferson

Federal Reserve Policy and Actions

By controlling the money supply and setting key interest rates, the Federal Reserve has a huge impact on the economy. It probably has more influence on the economy than the President, especially one that hasn’t been lowering or raising taxes, which also have huge impacts on the economy. (In effect its actions, though not all powerful, have a huge impact on both job creation/destruction and inflation).

Higher interest rates reduce economic incentive to borrow money for houses, cars, factories, stores, etc.. This depression of demand for products and services means we need less people employed to provide these goods and services. Keeping people employed who aren’t needed leads to lower profits and possibly bankruptcy, so layoffs grow and new hires shrink. This accelerates the lack of demand for products and services so that the providers/employers of them have little or no power to raise prices. This dampens price inflation, a necessary step to avoid a spiral of high inflation that can hurt the economy more than it helps. High inflation eventually puts prices of goods and services out of reach of more people, dampening demand and causing unemployment to rise and real wealth to fall.

When the economy is ‘too strong’ the Fed will attempt to raise interest rates to reduce the threat of inflation (note – also read my thoughts on the business cycle to understand the problem with an economy that has become too strong). Conversely, when the economy is too weak, the Fed will attempt to lower interest rates/increase money supply to stimulate the economy to grow. However, the impact of interest rates and money supply take six to twelve months and longer to show their full impact. There are other decisions besides interest rates to consider when businesses try to increase investment or people to buy houses, cars, etc.. Also, many loans already exist and may be immune to incentive to refinance at changed interest rates.

The delay between Fed action and its impact on the economy makes things very tricky for the Fed. It needs to look at current economic conditions which may not be where they want it to be yet and judge whether past Fed actions will get it there without further interference or whether additional steps need to be taken. It is easy to over shoot in either direction. The Fed has been exhibiting a bias to fight inflation above its other goal of high employment. This has led to recessions and forced the Fed to reverse course. Unfortunately, a reversal takes a year or more to get to where it’s needed.

It can be argued that the Fed has not paid sufficient attention to sustained growth in job productivity (i.e. if productivity is up say 4%, a 4% rise in wages is neutral, not inflationary) plus the favorable impact of reduced trade barriers (that force most businesses to become more competitive in price). In other words, the inflation bias has been too strong and the fight for full employment too weak.

Strategically, whenever the Fed targets something as out of whack (e.g. the stock market or housing as it has recently), the tools at its disposal (interest rates/money supply) are too wide impacting to target the ‘bubble’ it seeks to eliminate. It impacts the whole economy and is therefore too powerful a weapon to utilize to control only a segment of the economy. The damage caused is far reaching and can sometimes take years to undo.

Taxes

Less taxes collected by government, mathematically works out to more income for workers and their families. More money for us means more money spent on products and services. That translates into more jobs. More jobs start the cycle of more money for workers and families again. In other words, there is a positive multiplier effect. We saw this with the Kennedy tax cuts of the 1960s, the Reagan tax cuts in the 1980s and we saw it again with the Bush tax cuts of the last decade despite inheriting a recession and the financial impacts of 9/11.

Despite Katrina and Rita hurricanes that destroyed whole cities, despite the very expensive war on terror, the U.S. economy has been humming along at 3 to 3.5% growth rates for a long time. (Refer to my explanation of the Business Cycle- for an understanding of why this growth rate cannot stay constant forever and is in fact, currently stalling, but will be temporary).

When taxes are raised, we all have less money to spend, which means less products bought, and therefore fewer workers needed. The unemployment rate goes up and the cycle starts again. That’s right, increased taxes is a negative drag to the economy and it too has a multiplier effect. Don’t believe me, then look at the Western European countries with high tax rates and their double digit unemployment and stagnant economic growth.

Now look at the Eastern European countries plus England, who have cut their taxes to low rates and are surging economically. Need more proof. Look at the Great Depression of the 1930s. Governments tried to fix a recession by raising taxes to balance the budget and imposing trade restrictions. What happened? Greater taxes reduced spending and capital for investment, feeding the negative multiplier effect of these type of actions. Trade restrictions, adopted wholesale and at the same time by many countries including America to ‘protect’ domestic jobs instead destroyed immediately the domestic jobs dedicated to exports for all those nations. No jobs were gained from other nations because the domestic capital to create those industries “helped by the trade barriers” did not exist anymore.

Also, if there were capital available, it would take years to build the infrastructure (without any money coming in during construction) before the first job in that industry could be gained. Even if this could have happened (which it didn’t), all of us would have paid higher prices for those products and services, meaning we would have less money to spend on other products and services. Those people in the other fields where that money would have been spent would have lost their jobs and that would have again steam rolled another negative multiplier effect on the economy.

The Impact of Tax Cuts on Government Revenues:

We’ve all seen the statement that “Tax cuts reduce government revenues and increase budget deficits” –The Big Lie! That statement, in my opinion, is one of the worst, bald faced, self serving lies, perpetrated by the Democratic Party, that has ever been presented to the American public. It sounds logical which is why they use it, but the facts don’t support it. Facts are ultimately what matters. If you only look at the annual change in tax revenues after an income tax cut has occurred, you will see tremendous, often double digit growth in tax revenues collected by the government that continues for years. The extra revenue is generated due to job and income growth that occurs as a direct result of the tax cuts.

Then why, you ask, do federal budget deficits often increase after taxes have been cut? It’s simple. Now look at government spending after a tax cut. Amazingly, it too increases at tremendous rates, even greater than the rate of those big tax revenue increases. That’s the long and short of it. To make matters worse, at the state and local levels, whenever the ‘good times’ bring in revenue increases, instead of returning the surplus to the taxpayers or saving it for a ‘rainy day’, they too increase spending. Inevitably, (may be a few years in the future), the economy slows (see my piece on the business cycle), and federal, state, and local governments start to see large deficits with no easy solutions in sight. Our politicians, whether Democrats or Republicans, have demonstrated an insatiable appetite for government spending. They want to present to us ‘locals’ who elect them the ‘government goodies’ they ‘got for us’ as a reason to reelect them. Seemingly that works well because incumbents are generally hard to defeat in an election.

The second big lie also perpetrated by the Democratic party who truly covet spending the money you and I earn is the labeling of current, planned annual spending increases as spending ‘cuts’ because two or more years ago, the plan was to spend even more. To give some analogies, could a big corporation who increases spending from $100 million dollars last year to $105 million this year, state that they cut spending because two years ago they actually planned to spend $110 million? Of course not!

Also, if you are earning $30,000 a year and you were hoping for a $2,000 raise, but only received a $1,000 raise, would you think that your wages were cut? Of course not! However, according to the Democrats, those would be cuts. It’s just plain stupid and an insult to our intelligence to label spending increases over the previous year as spending cuts. Tell you the truth, the federal government needs to have some years in which spending actually is less than the previous year. You’d be surprised at how fast deficits would shrink and then grow to surpluses. Companies in financial trouble do this all the time. Why can’t the government, when in a financial mess, exercise the same discipline?