Getting it Right - Welcome

The goal of this blog is to publish my thoughts on a variety of economic and political topics in the hopes that people who find them educational or beneficial will utilize them and/or forward to others who might find them interesting and/or worthwhile to promote to others, possibly including politicians who can push some of these ideas to fruition. The topics in my blog are meant to be of value on a long term basis, not a daily diary or political issue of the day log. If the information posted is useful to you, by all means utilize it and/or forward it as you see fit. If not useful, then merely ignore it. There are no universally agreed upon truisms and too little tolerance between some of those with opposing viewpoints to successfully convince the people with hardened opinions to move away from them. I am an analytical type person who will try to be as factual as I am able.

I disdain the current popularity of name calling and condemnation of viewpoints with no factual alternatives or logical solutions given that I see so often. If you don't have a solution based on fact and logic, then opt out of the discussion because you have nothing to contribute. My background is a degree in Economics from the University of Michigan and 39 years working in middle management jobs for a major retailer. My opinions are forged on the personal experence of life, family, friends, and work as well as triumphs and mistakes that I have made and hopefully learned from. My hope is that this blog helps you.

My first topic will be about personal finance. I chose that one first because most of us work long and hard just to survive but not all of us realize our dreams of becoming financially independent from the labors of our work. Much of our political votes/thinking also focus on the economy and in particular how well we are personally doing financially.

It is relatively simple, without sacrificing the enjoyment of living for 'today' and even at moderate incomes, to retire as a millionaire or multi-millionaire, if you focus on that goal consistently from a young age. It is also simple to ensure that your child or grandchild retires rich. It merely requires a one time gift of just $2,000 invested wisely and the passage of time. Please read my first post on this blog to learn more.


An index/schedule of past and future posts and their dates will always be updated so that it becomes the first post that you see below. If the date of a post that you wish to read is preceded by the word "Posted", then find it below or click on the title in the Blog archive to review.

Blog Archive

Saturday, August 30, 2008

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.

Wednesday, August 13, 2008

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.