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Friday, April 29, 2011

Budget Deficit Reality

     The latest talks on the budget would be comical, if it was not so sad.  The Republicans want to cut all the programs for the poor and I guess dump them on the street so they can arrest them, throw them in jail. Which would create jobs by hiring guards to keep them in jail.  Our founding fathers and the writers of the time did care about the poor.  Thomas Paine in the books Common Sense and The Rights of Man argued it was societies responsibility to take care of the poor and elderly.  Benjamin Franklin and Thomas Jefferson echoed Paine's concern, argueing the welfare of the citizens was the responsibility of the government.  Most of these men were Deists, meaning they believed in God but not necessarly in organized religion.  However their sentiments reflected the Biblical arguments of caring for the poor.   While most people believe that Sodom and Gomorrah were destroyed for their homosexuality, that is not the case.  The Bible makes clear that they were destroyed because of their intolerance and unwillingness to care for the poor and needy.  If you do not believe me read Ezekiel 16: 46-51 with special attention to verses 49 and 50. 
      The programs for helping the poor, needy and elderly are not what is breaking the back of the government.  Social Security is a self funded program and it may need minor adjustments and bigger  deductions to meet its long term commitments, it basically works.  Medicare and Medicaid need reform and to be better monitored and  administered.  The real problem though is the predatory practices of the insurance companies.  They are what is driving up the prices.  Companies that charge obscene amounts for services and medicines do not help either.
       Health care providers like Doctors, Nurses who take the Hippocratic Oath and Hospitals that are run as nonpofits need to be exempt from the extortion practiced by insurance companies and lawyers who consider getting sick or accidental mistreatment as a sort of Medical Lottery System.  If all medicines were deregulated the average person would not need to spend their life savings for treatment. The money spent on doctors and hospitals to take care of things that the average person knows how to take care of themselves is ridiculous. If you have a terminal illness and want only to ease your pain till you die, it is not an option.  You have to deal with insurance and medical business's who are only in it for the money.  Having lived overseas and experienced how meds are dispensed it is almost criminal the way Americans are ripped off.  In Panama if you had the money and could say the name properly in Spanish you could buy almost any med you wanted.  Was that the way it was supposed to be.  I do not know.  However in Germany, my Korean girlfriend lived and worked in Germany and could give shots and do many things the German nurses could not do.  The state had created a problem that created jobs for thousands of foreign nurses.  The United States medical system is headed the same way.  The government tries to scare us into submission and has created a law enforcement empire that is at best incompetent, cause it certainly is not working.  The government would have you believe if they legalized the use of all drugs America would overdose in mass.  I do not use drugs, other than those prescribed, I do not drink and I do not smoke.  Am I going to start just cause they make it legal.  I do not think so.  I do not think other Americans will either.  Certainly some people will, the difference is they can be taxed and the government can make sure the drugs are safe instead of endorsing murder which is what the present system does.  People really need to take a look at how the government is using the system simply to control the masses, not to protect or ensure the safety of the public.
       Getting back to the budget, the only way to increase revenue, is raise taxes for the idiots on capitol hill who have not figured that out.  Or to cut expenditures and there are many ways that can be accomplished.  Reducing our dependence on foreign oil would help America's foreign trade deficit.  In a couple of my other posts I explain ways the government could cut the use of oil.  Simply by using the oil we do use, more effectively.  America wastes tremendous amounts of energy that could be better managed.  Most power plants let the heat they produce go up the chimney as waste.  It could be put to use in dozens of ways. It could heat greenhouses. Algae farms could take waste from sewage plants and grow enough algae to meet most of America's energy needs.  Converting vehicles to diesels which emit far less toxic emissions than gas powered vehicles. Powering with biodiesel is a new technology that works.  It just needs to be applied.  It would not take one acre out of food crop production.  The plants can be built in areas that are unsuitable for farming.  It takes America getting involved for it to happen.  It is a new technology, but the technology is already available and these plants could create jobs.  Jobs in the construction of them and jobs in the operation of the plants.  The waste heat energy from power plants could also be used to heat ponds and make fish growing profitable, healthy and again save energy as these products do not have to be trucked from one end of the country to another.
     I could go on and on but that is not the point.  We need people to get active.  Energy conversion programs can be created now.  They can create jobs now.  Not tomorrow,  not next year, not after America goes bankrupt.  Now!!!!  The technology exitsts a fuel tax could pay the way to real energy independence,   America just has to want to do it.  Your questions, suggestions and comments are not only welcome.  They are invited.  I will try to answer any questions I can.  Thanks for reading and good luck.

MONEY: Business:Pricing, Dealing With Taxes and the IRS

     Having started a business years ago with the money in my pocket and no working capital it is easy to get in trouble.  The first thing you need to do is get a Tax ID number and no that is not a social security number.  It is a number that must be put on all your paperwork dealing with the IRS and is kind of important.  I did not find out about all this till I was three years in debt to the IRS.  Putting off paying the tax on your income is not a good idea.  Two reasons that might make you understand why I say that.  One is that the government fines you $500 for failure to file, and also $500 for failure to pay your taxes.  These fines apply regardless of what you earned and yes the IRS charges you interest on the sum from the time (year) it was due.  So it can add up.  If you are serious about starting a business keep all your receipts and find a good but reasonable book keeper.  They are not hard to find.  It may save you a lot of money in the long run.
     The second is that the IRS is more than willing to work with you if you are serious about doing your taxes.  I went to a local IRS office and they helped me get my ducks in a row.  The government is not some evil empire dedicated to breaking you.  They are dedicated to helping keep the government running and they know that keeping businesses running does just that.  Once you have figured out how much you owe if any.  Believe it or not you may be due some money back.  The IRS will ask you how you want to pay.  They will set up a payment plan for you.  Remember your goal is to get out of debt.  The main thing is to pay what you say you can pay.   I sat my plan up for $500 a month and paid on it for several years, but I did pay it off and got my business on its feet.  I could have said $100 a month and made it easier on myself as a friend of  mine did.  However you will be paying interest on the unpaid balance and to me the goal was to get it over with.
    Finally when you are setting prices for your services and you decide to undercut the market you are only hurting yourself.  People who sell things like hearing aids, dentures, glasses, landscaping and roofing may seem to charge high prices.  They have been in the business long enough to know how much they have to charge to make ends meet.  Selling your product below market values is not good business.  You would be better to charge full market and contend your service is better or worth it.   Cutting rates means you will probably not survive the off season.  Some business's are seasonal and you have to put back for the dry spells.  Others sell products or services that last for long periods and repeat business is not something you can look forward to.  The years I was in business I never withheld help from someone new to the business. My view was that our paths would cross, but often it did not matter because our goals were different.  One person might want to get home.  The other wants to get to another area for a load that will get them home, but with more money in their pocket.  I do not really remember butting heads with anyone I helped.  It is just how business works.  Everyone finds there own way to find jobs and stay working.  If you spend your time following the competition and trying to get his work the only thing you will do is probably starve yourself to death. Over the years I had competition actually throw work my way when they had more than they could handle and I usually did likewise.  That is how everyone survives. Cutting others throats to get a job only makes it harder on yourself in the long run.  Any questions, comments or suggestions are welcome and I will try to help anyway I can.  Good Luck

Friday, April 22, 2011

MONEY: Finding A House, Working Smarter, Not Harder

How do you work smarter and not harder, make your money work  for you and stay out of debt.  The next paragraph is from an E-mail to my niece.  I think the advice could apply to anyone trying to find a home. The second part has more details on buying a piece of property at tax sale.
   
Hi Again, Thought I explained enough in the blog, maybe I need to revue it.  Basically take the time to drive around on country roads or pay attention when you happen to be out in the country.  Your looking for houses that look like they are not being kept up, mowed or basically look abandoned.  Stop and ask the neighboring houses what they know on the house.  Sometimes out of state people buy farms for investments and never go visit them.  To them it is a tax thing.  Other times it belongs to a local person or farmer and they are living elsewhere for whatever reason.  Sometimes it was a family members house and they don't want anyone to live there because of the memories.  You can usually turn this type around if you mention all the hard work the person put into building it and that it is sad to let it go.  Anyhow once you find out who owns it, then you try to cut a deal.  Maybe you can cut yards, or feed livestock, fix fence, drive a tractor, basically try to sell it as a deal that you can work out the rent.  Make sure you pay yourself good.  Figure $15 to $20 an hour and guess what the rent would be.  If it would be like $500 a month, then you agree to work 30 to 35 hours a month. That is just six to eight hours a week to have a place to live.  The rest of the time is yours to do with as you please.  You need to please make money so you have independence. If they include the utilities give a little more.  Basically it takes being bold enough to ask.  Most will say no, but your only looking for one to say yes.  You can run a classified saying you want a place in the country and will work for rent.  Just whatever you agree to, make sure you give 120% on your end.  Make them happy and it can last a long time.  Sometimes they just need somebody to take care of it temporary till they can find a buyer for a deceased persons house. If the people like you and that you take care of the property you may be able to turn it into a nothing down contract.  Do not be pushy, but if you decide to turn it into a contract.  Make it in writing.  I recently finished paying off a contract that was done on a handshake.  I had my receipts and tax papers, but no written contract.  When we agreed to the contract we were in our late forties and going to live forever.  Randy, my friend, moved out of the area, divorced and remarried and moved again.  Then he came down with cancer.  His wife at the time he died was very nice in honoring the contract.  The local lawyer made me produce paperwork to prove we had an agreement.  Remember it was his word and mine and he was dead.  Fortunately I had copies of all our correspondence and the fact was clear that I had agreed to pay it off, but had problems following thru because of his illness.  It was a stupid thing to do, but we did it.  We had been talking how in the old days things were done on a handshake and so we agreed to do it that way.  Let me say this, I was lucky to be dealing with reasonable people it could have turned out bad, very bad.  You can find them in town the same way.  It just takes being bold.  Just make sure they have your name and address in case they change their mind or think of somebody who might be able to help you. Make sure they know you are not destitute, that you have a property, but you just need to get on your feet so you can fix it up.  If they let you have a garden space you can make some good money and cut your food bill.  It takes being motivated enough to pursue it and don't forget to ask the Lord to prepare your path and open the hearts and doors.  It can work believe me.  Read Joshua 1:8 in the King James.  Who does the Lord say will make things happen.  You will, you have to get up and do it.  Hope that helps....Keep me informed how it goes.  If nothing else you could then get a renter who can fix the house on Bates for their rent.  When they are done you can start getting some rent or move back in yourself.  As far as your house you should talk to some habitat for humanity people and see what they can do to help you.  It is a thought.  Later, pray it works for you, Turtle
    Another way to get a house cheap is to get one at a tax sale. Different states and local laws vary, but basically you make a bid on a property and pay any back taxes that are owed.  At the end of a year, two years in some states. The property becomes yours if the original owner fails to come forward.  That is free and clear and no liens on the property.  Some are in good condition and some are falling down.  Your job is to do the research required.  You can go to the auditor or assessors office and usually find out the name of the owner.  Then you can get on the computer or go door to door in the neighborhood and find out what you can about the home.  Try to find one with no mortgage on it.  The bank usually waits till the last minute and then exercises their lien.  The neat thing is that in most states you get back the money you paid with interest and you can usually add on a small administrative fee for your work.  The trick is to find the property that you have no competitors on and that no one is going to contest the sale with you.  If they do redeem the property your usually not out anything.  You just have to find another property at the next tax sale and start over.  If you can find a property of an old person, who is deceased, with no heirs, which is more common than you would think.  You may get a house for a few hundred dollars or under a thousand anyhow.  You are the one who has to do the detective work and find out the information. Once you get a house, you can fix it up, move in or sell it.  Whichever is the most beneficial to you.  It is a neat way to get started in the property rental game.  You can rent properties for years and then sell them.  The rent is your income and the sales money can become your retirement fund.  My daughter usually starts a contract with a renter for an extra months rent.  They agree on a price, the interest and the term of the loan and draw up a contract.  The neat thing about doing this it that the renter is then the buyer.  Any maintenance, taxes and other upkeep become the buyers reponsibility.  If you have virtually nothing in the house and sell it for a profit at the local market value it does not take many house to generate a comfortable income.  A couple houses into it and you can hire the work done instead of doing it yourself.  The main thing is you need to learn how and what to look for when buying a property. How to do a good inspection or a reasonable person to do it for you.  You do not want to buy another persons headaches.  Remember I am writing this mainly for the person who is unemployed and needs a place to stay, but it can be turned into a business by about anybody who is willing to put in the effort. The down side of renting is that when something goes wrong you are the one the renter calls.  So you need to make sure you are able to meet the responsibility.  How much you can do yourself and save money depends on the local zoning board and rules.  Small towns in the country tend to be more liberal and let you do more.  However property values are also usually less and it may be harder to get renters for houses.  The trick is to make money but offer a good enough deal that people prefer to rent from you. Your renters will find you renters if you are and do.
    One last option which is tricky, but can get you into a home cheap is find someone who has a house they want to unload cheap.  Especially someone who just wants out of their situation.  This usually works for a person who has a job and can afford the payment, but you have to be very careful and you have to make arrangements for the payments to get to the bank or loan holder.  I have seen people get in a house this way and then get thrown out on their ear.  They were paying the person they made the deal with, but the person they made the deal with just pocketed the money and ran our on them. Being careful is the key word.  You can help yourself, but you can burn yourself also. 
  Any comments, questions and opinions are welcome and will be answered to the best of my ability. Thanks for taking the time to read my blog, I hope it helps you.

Thursday, April 21, 2011

Just Who Is Going To Pay The National Debt

       With the National Debt at about $36,000 dollars for every man, woman and child in America.  That applies to the homeless living in card board boxes, the elderly in nursing homes.  The youth who are not old enough to work.  Oh yes lets not forget the fourteen million or so who are unemployed and the over two million who are in prison or jail.  How much can we expect the twelve to twenty million illegal aliens to kick in.   When you consider all those people are contibuting nothing or very little to their share of the debt it puts an even bigger burden on those who are paying the debt. 
       The real sad part is that no one wants to raise taxes and actually do something about the debt.  They would rather cut expenses with one hand and keep spending with the other.  Someway, somehow, somebody has to step up to the plate and start paying something on the debt or we are looking at the total collapse of American financial system.  There will be nobody bailing out anybody when that comes.  Any business that is not sound needs to collapse.  It is not fair to sound business's and taxpayers to have to take on a burden for someone who was incompetent, greedy or blind to the cost of their ignorant decisions.
      Maybe the complete collapse is the only thing that will bring home the reality that there is a very major problem.  We are dealing with numbers that can not even be calculated on the average calculator.  It would take a fifteen diget calculator to even do any serious estimating of the debt.  The interest is accumulating faster than it is being paid at present rates.  The debt keeps climbing and regardless if the government wants to admit it, inflation is real and it is here.  If you are a worrier, coffee has gone from $9 a pound to almost $15.  Tomatos are so expensive some restaurants have signs up that you do not get the tomato unless you specifically request it.  Others are charging for it.  Gold has crossed the $1500 an ounce mark.  That shows the fear in the world markets.
      Everybody and anybody knows these things.  The problem is what is being done to fix the problem.  Panels, commission, and surveys are nice, what America needs is action.  We need a President.  We need one who will bite the bullet stand up and start a gas tax to start creating jobs, to start fixing the infrastructure and make sure that money goes directly to the states and not into any more of Washington's Black Holes they want to call a budget.  A fuel tax, call it, "An Energy Independence Tax" will hurt, but it is what is needed to start the healing.  The President needs to explain that to the American people and ask them to get behind him.  If they don't I guarantee he will not want the job next time around.  By the time of the 2012 election if something is not done now and I mean soon.  The whole world will follow America into a financial abyss of our own making.  You see the countries collapsing in the Middle East and you say, it can not happen here.  I agree.  Here it will be twice as violent and twice as ugly and it will turn into total anarchy because no one can agree on anything.
     You can think I am full of it.  Read the first paragraph again and think about what it says. Then ask yourself. Who is going to fix it?  It sure does not look like the present batch of politicians have any stomach for it.  They are stalling and the time for stalling is over.  We are one economic hiccup from sliding into a bottomless abyss.
      Let me close by saying have a nice day, and write your President "NOW" and say tax us now and save our country, cause if he doesn't their may not be a next President.
Comments, opinions, and ideas are welcome.  I have thick skin. Say what you think on the issues.

Tuesday, April 19, 2011

The Real Death Blow of 9/11

      America after 9/11 lashed out to get even with the perpetrators that caused the harm to America.   The leadership who lead that retaliation was not only incompetent, but also ignorant of the cost of their mindless attacks.   If America put half as much time and half as much planning into the retaliation for 9/11 as the terrorists who committed the atrocities, revenge would have been successful long ago.  That is not the case though.  America pursued its usual method of swatting flies with sledge hammers that accomplishes little, other than pissing off the flies.
      Had America taken the time researched and planned a methodical retaliation with spies and planning as thorough as the attackers.  Osama bin Laden would have woke up dead long ago.  America could have opted for the big impression and dropped a massive nuclear bomb.  It was the perfect place for such a retaliation.  It was remote, it was isolated and had minimal human occupation.  It would have sent a clear message and America could have saved billions and billions of dollars. 
      A lesser but just as effective way would have been to take the time to infiltrate al Quada. Then after having pinpointed bin Laden's exact location, without warning or any notification of foreign powers.   America could have unleashed a rain of Cruise missiles and carpet bombing that might have had a far better chance of succeeding than the method finally employed by the military.
      However the administration incharge at the time, and that is using the term            "in charge" very loosely, had other objectives that had nothing to do with the attack on 9/11.  Their focus was on a percieved threat that had nothing to do with al Qaeda and everything to do with the dollar and its relationship to the lifeblood of America, oil.
      Fidel Castro of Cuba and all the other Axis of Evil countries had started a program that threatened America far worse than al Qaeda.  They were converting their currencies to Euros and buying and selling in Euros.  Saddam Hussein was selling his oil to Europe for Euros instead of dollars.  Thanks to the UN.  This threatened the dominance of the dollar on world markets.  They can argue all the reasons they want for the Market Collapse, in 2008, but it was all triggered by the price of oil and its price against the dollar on world markets. Simply following the price of oil from 2003 to 2008 will reveal the significance of the price of gas in causing the overall collapse.
      As world markets heal and other countries start buying more oil the pressure will be put on the dollar again.  The dollar has to compete with the Euro in world oil markets.  With America's sick economy many of the speculators will tend to bail out to safer markets and it starts another run.   The combined instability in the Middle East and uncertainty of the American economy are creating uncertainty in the markets and investors are looking for safer ground.  The price of Gold is a very good indicator of how unsure the markets are.  All it will take is one good hiccup to bring down the whole house of cards.  The American people do not want to hear of bailing out nobody and especially no banks or business that profits from its incompetence.
     America's politicians keep talking and arguing about the long term cost.  It is the here and now that is the problem that has to be dealt with.  The Republicans have not got a clue how to deal with the problem.  Spending has to be cut they are sure of that and that is a good step in the right direction, but the only way to eliminate debt is to pay it down and that takes money.  Money comes from taxes. Yes, believe it or not somebody actually has to pay real money to get rid of debt.  You can not spend your war out of it.  America needs a jobs program to rebuild infrastructure,  it can be done with a real gas tax.  Nobody wants to hear a dollar a gallon, but they will like the alternative even less. America needs to get off the roller coaster and be able to tell countries that hate us to take a hike.  A gas tax is real money that is not borrowed and does not increase the national debt and most important goes straight to the states and the Fed can not touch it.  A real tax increase needs to be phased in across the board and yes those who make more need to pay more.  All the loopholes and deductions need to be eliminated and every person and corportion needs to pay their fair share.  When a company like GE makes billions and pays nothing, there is a problem and it needs fixed and it needs fixed now.  Not tomorrow, not next month or next year.  It needs to be addressed now.  Inflation is already at hand.  The government can deny it and say it does not exist, but when I check out at the grocery store or buy a tank of gas my wallet says they are full of hot air.
    They can have all the panels, studies and surveys they like.  The problem is real and needs to be addressed now.  They spent us into this mess and unfortunately the gutless jerks are the same ones who have to get America out of this abyss they have gotten the country into.  My personal feeling is that with fourteen million people unemployed and ready to fall off unemployment the slide to the bottom is imminent if not already beyond hope of stopping.
     In the Great Depression unemployment hit 25%.  The market fell 89% from its high to its low.  That would be a market level of about 1490 in this day and age.  If unemployment hits 25% the government will be severely short of money.  They can print as much as they like, but it will become like Germany in the 1930's depression era.  It would take a whole wheelbarrow of money to buy a loaf of bread.  That is when society becomes a bartering and trading system.  That is gloom and doom, but my grandparents said that is how they survived.  People in big cities are really in for hard times.  The thing that will hurt worst in this day and time is the lack of Christian values.  People will start taking what they want or need.  Back in the recession of 81 to 83 farmers around where I live had cows stolen right out of their fields at night.  We are probably not as far from that as I would like to hope.  If something is not done soon it will make the Great Depression look like a cake walk.  The only thing that will carry most people through a severe depression is being debt free.  If you are debt free you can use what you have as you need to.  So tighten your belt and hold on, it may be a wild ride.

Why An Economic Collapse is Inevitable

    With Oil price going thru the roof again.  It might make some wonder if we are headed  for another crash.  Especially with the stock market surging up and down like it is on a roller coaster.  Prior to the Subprime meltdown unemployment in America was at an annual average of 4.6 for 2006 and 2007.  In 2003 oil was about 27.69 a barrel and it moved up $37.66 in 03.  The rise kept on and in 05 and 06 the price went to over $50 a barrel.  This price rise put the people who were living at the edge of their income over an invisible ledge.  Suddenly they were faced with making decisions.  Would they eat, buy gas to go to work or pay for the house.  Their income would not do all three.  They did what most people would do.  They chose to eat and work. Speculators who had pushed the market to its limits suddenly had loans that were no longer performing as they had forecast. Panic started and banks and finance companies started trying to rein in the losses which simply caused more and more of the failures.
       As they say,  "The rest is history." The question is, "Is history about to repeat itself."  My view is yes.  With almost fourteen million people on unemployment and living on the edge, the job market growing very sluggishly and the Federal Government on the edge of Bankruptcy it is hard to have a positive attitude.
      The Politicians are dithering at best.  They want to make cuts, but are in total disagreement over what should be cut.  The Republicans want to cut off unemployment and are to stupid to realize it will just push many people over the edge.  Their argument that the government can not afford it is sound.  However the government can not afford not to either.  Republicans are also obsessed with not raising taxes.  Well the only way to get out of debt is to either pay it off, which requires money, which the government gets from taxes.  Or to cut spending, which is good as long as it does not increase the shortage of government funds.  People not working do not pay taxes.
       What is needed is a way to create jobs that does not increase the national debt.  As oil is over $100 a barrel and prices are surging the last thing anyone wants to hear is that we need a major tax increase on gas.  However if that increase goes directly to the states. The key is keeping the Feds hands off the money. It creates an instant fund to create jobs and start rebuilding infrastructure. It could be called an "Energy Independence Tax."  This is something that can be done immediately, if something is not done immediately we will be in a depression that is going to make the one in the 30's look like a cakewalk.  Yes it would be painful, but not half as painful as a depression.  It would buy time for the politicians to fix the broken system.  They keep talking about long term solutions and do not realize the problem is in the here and now.   If they try to wait for the long term solution the government will be totally bankrupt.   
      The first thing that needs to be done is freeze spending at present levels and then look for serious cuts.  How about bringing troops home from Germany, Korea and other overseas sites and bringing the expenditures to maintain those troops into the American economy.  Leaving troops in Iraq should not even be an option.  It is time for Iraq to stand up and take charge of themselves. We removed their WMD and he is dead. Their other problems they need to deal with.
      In Afghanistan we need to let the Afghans know we are the ones who helped them beat the Russians and that we left once and we are ready to do so again.  If the Afghans are half as honorable as the writer of the book "Charlie Wilson's War" implies they are.  They simply need to be told that they are being use by al Qaeda and that they have been played as pawns.  They will take care of the al Qaeda problem themselves. The Taliban are nothing but thugs and thieves and they are the Afghan peoples problem to deal with.  The Taliban are simply idiots who allowed themselves to be used. They are not a threat to America. Once they find they have been used they will turn on al Qaeda like a pack of wolves.  Then we can bring those troops home also.  That will save billions and let the world take care of its own problems for awhile.
     There are many solutions that could help, like going to a four day week.  It would save tons of energy and create jobs.  Some of my other blogs cover these ideas and believe me, while they are radical, they can be implemented and the technology is already here.
    If something is not done and the fourteen million who are getting unemployment start to loose their homes.  The housing market will go for another big slide and as people tighten their belts the markets will freeze up again and we will be headed for the bottom. In the Great Depression the market lost 89% of its value.  From its all time high the bottom today would be around 1490 points. It took three and a half years from top to bottom back then.  We are not quite that far into this one yet.  That is scary, but the sad truth is it could happen.  Back then the government pulled America through, but this time it is the government that is bankrupt.  As millions more loose their jobs the governments income will continue to slip.  They will not be able to pay their bills and if they do it will be with printed money that has no value.  Lets hope they get it together, but you better be preparing for the alternative.  The Politicians just do not get it.

Why America Is Loosing the Industry & Marketing Battle

       A popular movie of a few years back called “The Field of Dreams” had a key line that said, “Build it, they will come” The auto industry needs to take a hard look at that movie and realize in their case the saying is. “Build it, they will buy it.” The auto industry has lost sight of its roots. Henry Ford is supposed to have said. “They can have any color car they want. As long as it is black!” Ford’s philosophy of building cars was to build them as quickly and cheaply as possible. It is a philosophy that is still working. It is the philosophy of Wal-Mart, the largest retailer in America and Mc Donalds
      Wal-Mart is expanding around the whole world with that simple philosophy. Why am I talking about Wal-Mart when this article is about the big three? Really it is pretty simple. It is all about competition. All business is about competition and winning is about knowing how to play the game. Wal-Mart has entered the Chinese market and many others. Yet other American companies are on the verge of collapse. As a retired trucker I have delivered goods to both Wal-Mart and some of their chief competitors. There is no comparison between them and say K-Mart. I know this from my experiences. To make my point a couple quick examples will show what I am talking about.
     One time delivering to a distribution center for K-Mart in the Detroit area a question arose about the product on my truck. First they felt they may not want the product as they might have too much in stock already. The person in charge sent a runner to check and see if they had the product in stock. Twenty minutes later the runner came back. He told the person in charge they had x number of cases of the product. The person in charge then asked if the product was red or blue. The runner left again and after about thirty minutes came back and said they had blue. Fortunately for me, I had red, and they took my load. That killed the better part of hour.
      At a Wal-Mart distribution center it would have been done by radio and maybe took two to three minutes. K-Mart is a union warehouse. Wal-Mart is not a union warehouse. Is it a union problem? I do not think so. It is a management problem. Radios cost, but then again they are cost effective. Wal-Mart could improve in some areas also. I spent my years in the Army working in aerial supply. We supplied by parachute to troops in the field.  Making things happen when and how they are supposed to takes team work. Management and labor need to understand they are teammates not competitors. Good managers are into motivation and innovation. They are not into confrontation and elimination.
       Getting back on track the problems in the automotive industry from my perspective are mainly a management problem. Management makes the leadership decisions and labor is supposed to follow. There is one small problem with the system. Sometimes people working in the industry cannot see the forest for the trees. The focus tends to be on the problems and not on the solutions.

       Before I started hauling for the automotive industry I wondered how the automotive industry could justify selling their products for so much. However by the time I finished hauling automotive parts I wondered how they could sell them so cheap. What changed was my perspective. Originally I was on the outside. After becoming involved with the system, some of the problems were a lot easier to see.

      One of the first things I noticed was that Labor had an attitude that Management’s goal was to get rid of them.  Or at a minimum cut their paychecks and benefits. They did not see management as leaders trying to compete in a very competitive market.  Management was viewed as a threat to their personal security and well being. Management’s attitude seemed to be that labor is a cost to be controlled and eliminated if possible. However without each other nothing gets done and both will become part of the rank and file unemployed.
     With the history behind the automotive industry it is easy to understand some of the points of view. Yet in today’s markets the attitudes need to change.  Labor will not be the only ones without a job. It will be the whole industry and supporting industries. You can not manage or work for a company that ceases to exist. History shows us plainly that companies that do not learn to compete cease to exist. It is the nature of industry. Just as the livery stables, of the past, ceased to exist. So have many car makers. Studebaker, Packard, Hudson and American Motors are just a few examples that have disappeared in my own life time. They could not keep up with the competition. Even the makers who survived have dumped models that either were no longer competitive or did not meet changing market demands. Most people have heard of the Pinto, Vega, Chevette or Maverick just to name a few. Millions of these cars were made but when is the last time you saw one? These last cars were made to meet a market demand created by the Arab Oil Embargo of 1973. They fell apart about as fast as Arab hopes of controlling the worlds oil markets.
      When the crisis of the moment was past attitudes and markets changed back. The demand for the pony cars and barges, my children’s nickname for cars made in the fifties and sixties, resumed. People adapted to the higher fuel prices after the embargo. American production followed what they perceived market demand to be. When another Energy Crisis hit in the late 90’s the foreign manufacturers changed their product lines. American manufacturers felt it was a glitch and that Americans would pay any price for fuel and continued to slop the market with the gas hogs they produced.
      Little did anyone perceive the perfect financial storm brewing just over the horizon. The fact that not one of the major manufacturers understood where the market was headed says a lot about the lack of leadership. Both the American industrial and the financial markets in general missed the boat. To say they were blindsided would be a major understatement. The blinders worn by American automotive management were as effective as the ones worn by horses before the advent of the automobile.
      The arrival in Washington, DC on their private jets, with their hands out, underscored the complete oblivion of management to the reality of the situation. The real sad part is that no one seemed to realize that it was too little to late. Dealerships were and still are flooded with inventory they can not move. They have no alternatives to offer the buying public. A long and perhaps terminal slump is not only possible it is inevitable.
Why is it inevitable? It is because the manufacturers and the financial institutions failed to realize there is one key ingredient in the financial markets they do not understand. The leadership got sidetracked from the idea of making  automobiles. They no longer cared about making money from the manufacturing part of their industry.


      The financial arms of the companies were the part of the company generating the income.  They were not interested in the adage about keeping the customer happy. They were more interested in keeping them fleeced with extended terms and upside down loans. They failed to understand the little guy. They do not understand what greases the wheels of commerce. It is not big business. It is not the bottom line. It is also not slick advertising. It is demand. What they do not understand is that the little guy when it comes to protecting what he has is very conservative, regardless of how liberal of a society we live in.

     When the average little guy feels threatened he is going to hold on to what he has at all costs. So you can proclaim your rosy scenario all you want. Till the little guy feels he has room to breathe he is holding on to what he has. The wheels of commerce will not get greased. Things will slowly grind to a halt. You can talk till your blue in the face. The more you talk the tighter his grip will get. When he sees everybody getting laid off, do not tell him sunny days are just ahead. All anyone can do is wait till the little guy feels secure enough to loosen his grip.

     There is one other factor that the big three do not seem to get. The days of “Buy American” are over. Even some communities are buying foreign cars these days. The attitude moving the market is to buy the best value you can get for your dollar. I was always a “Buy American” person. I spent ten years overseas serving this country and was and am proud to be an American. However I also realize I live in a global market place. Some of the best stuff out there is not American. I have purchased two new cars in my lifetime. A 1992 Dodge Colt which had over 200,000 miles on it when I gave it to my niece. It got awesome mileage and was stone dependable. Many friends and family had purchased and bragged on them.  So why did I buy a 2008 Honda? For the very same reason I bought the Colt.  Good feedback and research that showed 200,000+ was the norm and not the exception. Yet I still consider myself a Ford person and my second car is a Ford. So why didn’t I buy a Ford. The people I know and trust and the research I did told me the longest lasting and most economical, hence the best value, was what I bought. Not necessarily what I wanted. I might like how I look in a tuxedo and it might make me feel good but, it is not very practical for a work outfit.
     So what can be done to save the American automotive industry? Well the status quo definitely is not the answer to the problem. At the start of this article I made a statement of fact. It may have sounded strange but it took working for, or with the automotive industry to say it with all honesty.  Before I hauled automotive parts I could not see how they could justify charging so much for their cars.  However after hauling parts I could not see how they can sell them so cheap. The next couple paragraphs will give people who are not familiar with the industry a little insight that may help them see what I am trying to say.
     My introduction to the automotive industry was hauling brake rotors. It would seem like a very simple part to make. That should be the case but we are dealing with the automotive industry. Therefore nothing is as simple as it should be. My experience started in Danville, Illinois. This is actually the second or third step for the rotor. It depends on how you count steps. The raw materials had to be bought to the facility where I picked up the fresh castings. Step two or three depending how you count handling the raw materials
After several hours of sitting and waiting.   It was my turn to back into the loading dock.  The parts were loaded on my truck. Once loaded I had about six hours to get the parts to the next plant or step in the process.  Which was a heat treatment plant in Lansing, Michigan.  At this point I should explain a concept created by American industry which could be amazing if it worked properly all the time. The concept is “Just in Time” delivery. I would not explain it except to understand the solution you need to know what needs to be fixed.

     Basically it is a concept that inventory should not sit around on shelves or in storage bins. The item should arrive just in time to be processed or utilized. This is based on the concept that inventory is money. Money not being utilized is money wasted. A fine concept until you start moving almost empty trucks to meet unrealistic deadlines. Suddenly you are using three, four or five trucks to do the job one truck could have done. Each truck used adds to the cost because each one costs for its use. This concept is not limited to the automotive industry unfortunately.
     Time to get back on track, upon arrival the parts are unloaded and sent thru a heat treating process which takes several hours. At this point the truck either returns to Danville or moves parts to the next step in processing. To keep me moving they load parts, that have already been processed, onto my truck from a previous delivery. Then I head to Dayton, Ohio to a machining plant. As the point here is to show what happens in the car building process.  I will just explain the transpotation process. In Dayton the parts are machined. The rotors then go to another plant in central Ohio where the machining process is finished. The next step is to go to a plant where parts are added to the rotors to make them ready for assembly. The process nears an end on arrival at the plant where they are mounted on a hub or axle assembly. Finally they are hauled to another plant.  There they are actually built into a hub or axle assembly. The assembled parts are hauled to an auto assembly plant. Finally all the components come together in the form of a finished car. The car is then hauled to a dealership. Each rotor may have one thousand to three thousand miles of travel by the time the process is finished and it reaches a dealership.
    Multiply this process by the multitude of parts on a car.  It could easily have over a hundred thousand miles on it before the dealer gives you the keys. So what is this whole process about? Well principally it is about busting the unions. The whole process could be done at the final assembly plant. That was how Henry Ford intended it to be. The idea of outsourcing the work was definitely not his idea. How do I know this? From studying the issue. When Ford started his company he gave up a ten per cent interest in his company to a couple brothers who ran a machine shop. For two thousand shares he received seven thousand dollars in parts and three thousand dollars in cash. The brothers who helped him get started were known as the Dodge brothers.
    Several years later Ford paid twelve thousand five hundred dollars a share to regain control of that ten percent of his company. Shares he originally gave up for five dollars each. The reason he wanted the control back was that he had built his own machining plant and no longer needed the service of the Dodge brothers. His goal was to cut cost doing everything in house. Of course it is not hard to guess what the Dodge bothers did with their windfall profit. One other point to note is that Ford paid his employees well enough that they would be able to purchase a car of their own. He understood the concept of marketing and what drives it. Something the present leadership has lost sight of.
     It is already effecting people outside the automotive industry. The scrap industry has tanked as the demand for steel and aluminum has dried up. Soda pop cans that were recycling for sixty eight cents a pound are now down to twenty cents a pound. That means the homeless person who takes his bag of cans to turn in and uses the money to buy a five dollar meal at a fast food restaurant is really hurting. Where he had to get seven pounds to eat which is about one hundred and forty cans. Now he has to get twenty five pounds of cans. What makes that worse is that the people who used to pitch their cans are now saving them.
    The problem is not all managements fault. Labor, unions in particular, have short comings also. In the course of my life I held two union jobs. One job in construction and the other in trucking, however my goal was to be self employed, so maybe I have a biased point of view. Fortunately I worked for two smaller union companies with good management who operated with the team concept. Most of the people I worked with had a good American work ethic. Unfortunately the ones who didn’t were usually the most active union supporters. At the construction job I watched a young worker give up an almost twenty dollar an hour job over seventy five cents. The union said he should get twenty five cents more and hour. He stood on his principals. I probably would not remember it except I lived near him and saw the suffering his wife and children went through. Everybody on the job liked the kid including the employer. It was early April and the employer told the kid he had a job all season if he wanted it, but the employer failed to pay him an extra twenty five cents and hour for three hours of running a jack hammer. The kid filed a grievance and got his seventy five cents, but he lost the job. The employer’s attitude was that labor was labor and as a laborer it did not matter what you did as long as you did it. About twenty of us with less principals worked continually till early December. Who was right?
    Living in close proximity to a foreign car plant and knowing many people who have worked there I understand they have their share of problems also. The foreign companies have an anti labor attitude also. However theirs could better be described as a pro company attitude. It is almost a kamikaze attitude toward winning. The congressman who noted that most of the foreign car companies are in the south and the civil war is still going on by different means was not far off the mark. Actually the foreign makers target economically depressed areas with large labor pools. The foreign companies are still at war with us, we beat them militarily but the war is being continued economically and that is the weapon they have chosen to continue the battle. Divide and conquer is one of the oldest rules of warfare. Goliath did not lose to David because he lacked the ability to defeat him. He lost because he did not appreciate the skills of his enemy. Another way of saying it is, “It is not about the size of the dog in the fight, but about the size of the fight in the dog.”
     Economic wars are won by beating your enemy at their own game and taking over the best markets. The absolute best market battlefield in the world is the United States. The proof that it is warfare is the present market situation. If the foreign companies wanted they could buy up the American companies for pennies on the dollar. They do not want them though for two reasons. One is their perception of the problems with the union labor and the other is they would rather put the competition out of business.
    So if the American automobile manufacturers want to survive they had better rethink their game. Building cars with longer tailpipes is not the solution. In France a company is building an air powered car that runs seventy miles per hour with a range of one hundred and twenty miles. It uses no fuel. The power source is compressed air. If that compressor is run buy a bank of batteries, which in turn, are charged by solar panels or windmills a true green machine would is possible.
      All the necessary technology is already available.   America could break its dependence on foreign oil and fight global warming at the same time.  Of course it will take a complete change in attitude of the entire American automotive industry. They will need to rethink the process from building a better product for the money and at a better price. That will take true leadership and insight and a step away from the status quo. The only question is does America have the will to win the fight. If the present attitudes remain the same maybe we will have a chance to discuss it while we are in the soup lines.

      A minor postscript.  Pop cans made it back up to over sixty cents a pound for a while. However as the market is hedging and the question of a double dip hangs in the air.  The price is back down to the forty three cents per pound level.  Guess I will have to get more excercise to fill my bucket and buy dinner.  Hope Congress gets off their hands and do something.  There are plenty of things they could do.  However that would require a display of common will and common sense and those things do not exist in Washington anymore. 

Saturday, April 16, 2011

National Debt What If's and Seven Radical Solutions

     When a government spends so much money every man, woman and child is in debt to the tune of $40,000 even if they are living in a card board box behind an abandoned building, there is a problem.  When the numbers are at a level that you can not even calculate them on the average calculator because, there are not enough digits, it might be a sign of a problem.  The fact that the actions of the incompetent and self serving wannbe politicians, may plunge the whole world into the most dire financial abyss in recorded history is unforgiveable.  That they can stand before the public and ask for reelection shows how deluded they are.  They do not have a clue that their actions may have destroyed the life of America as we know it today.

     Ultimately the whole financial system worldwide is liable to collapse.  States are broke already and crying the blues that they need money. There are solutions.  Nobody may like them but they can help if implemented. The old saying is, "if there is no pain there is no gain," well America and the world are in for a lot of pain regardless of how the situation is dealt with.  The fact that the few who saw what was coming were ignored shows the wreckless discard that has been the standard for the so called leadership.  It has really been a race to get all they could before the hog trough was empty, not caring how or who had to pay the bill when it comes due. 

      Having started several business's and having been through bankruptcy the amount of pain is hard to believe.  My last twenty working years were successful, so things can be turned around.  However it will not be done without sacrifice on everyone's part.  The question is do we want the sacrifice now or down the road.  Down the road will be far more painful than standing up and meeting the challenge head on.

      The first thing that needs to be done is a spending freeze.  In the sixties and seventies that was always the first suggestion.  In the end the spending always resumed.
A Constitutional Amendment is the only way the problem will be permanently solved. It will require the government to live within it's means.  Spending beyond the amount of revenue received would and can not be allowed. If the government desires to spend more it will need to generate more and that is done through tax increases.  The present sytem of using The Federal Reserve like an open ended credit card has to stop.  Sure the government can print more money, but if there are no assets to secure that money it only increases the debt.  The Federal Debt is quickly approaching a point where the amount of debt exceeds all the assets in America.  That is called Bankruptcy.  When that point is reached two things happen.  The government becomes insolvent and nobody wants to lend to a bankrupt who does not have the means to repay their debt, be it a country, business or and individual.  Second insitutions who have lent money to the bankrupt party want their money back and they cease to give any further credit.  If no one will lend you money you have one option.  Live on what you have.  If it is not enough to make ends meet choices will have to be made. Will we cut back on national security and bring all the troops home and let the rest of the world fend for itself.  That is my choice.  The other choice is to cut programs and benefits and let our citizens fend for themselves.
     America likes to call itself a Christian nation, but what I see as the first choices for slashing expenses do not express that at all.  The founding fathers and writers like Thomas Paine, Franklin, and Jefferson all said it was the states duty to help those in need and provide for the elderly.   Not to turn this into a Bible study, but contrary to popular belief Sodom and Gomorrah were not destroyed for their homosexuality. At least Ezekiel 16 verse 49-51 tell a different story. "Behold this was the iniquity of thy sister Sodom, pride, fulness of bread, and abundance of idleness was in her and in her daughters, neither did she strenghten the hand of the poor and needy.  And they were haughty, and committed abomination before me:  therefore I took them away as I saw good."   Jesus said, " The poor you will have with you always."  He did not say anything about having the rich with us always. To end this matter and to show where America really stands I suggest reading the 28th Chapter of Deuteronomy,  It is called the Chapter or Book of Blessings and Cursings.  It shows very clearly what happens to nations that follow God and those that don't.  America was clearly in the do category, but is quickly sliding into the don't category.
     What is my solution? Spend only what you have, reduce expenditures and quit  borrowing money. It sounds simple but it works.  If you go bankrupt that is what you will do whether you want to or not. It is a matter of how you do it that determines if it works. It will take commitment and sacrifice. The alternative is something nobody really wants to experience. It will take the American electorate holding the politicians feet to the fire. It will not be fun. The first step is to freeze the government budget till the plan I am proposing can kick in. If America does not do that, it is all over but the crying. So here is the program.
ALL OF THE FOLLOWING SUGGESTIONS CAN BE IMPLEMENTED WITH EXISTING TECHNOLOGY, HAVING THE WILL TO DO IT, IS THE KEY.

#1 Work toward energy independence, America will be able to say and do what it knows is right without worring about having its oil cut off.  Also those billions of dollars staying in America will reduce the foreign debt...My program is simple.

       It is called “One for 20/80.” Here is how it works. The price of gas is to be raised $1.00 per gallon, or whatever the government deems acceptable. To much you say, well in Europe many countries pay over $7.00 a gallon.   The money is to be given directly to the states it is collected in. The Federal government should have no access to these funds.  Many will say they can not afford a $1 a gallon. Well that is chump change when you look at the long term reality. Sooner or later it will be $6 or $7 a gallon or higher. When I was a kid gas was sixteen or seventeen cents a gallon. Five us pitched in all we had,  we gathered up 87 cents total between the five of us.  That gas ran us around all night.  Laugh if you want, but it was a challenge to come up with the 87 cents between five of us. Prices have gone one way since back then and that is up.
     Getting back on track. The plan is broken down in two parts. Eighty percent for infrastructure repairs and development. It can not be used for the state budgets. The other twenty percent is to be put into programs to reduce energy consumption and develop new alternatives like cheaper renewable energy programs. The up side of this program is that it is financed with real money. Not with borrowed money. As it creates jobs and grows it will stimulate spending. The upside is that it does not increase the debt. Yet it starts stimulating the economy. It gives a way to hold things together till the budget can be dealt with. It also shows the rest of the world the United States is serious about dealing with our problems.  Oklahoma City created a one cent tax and it helped their city, look it up online.
    The second part of the 20/80 program is that the federal government must adopt not only a balanced budget, but it must be debt free by 2080. What it takes in each year must pay off what it owes each year. That is a novel idea. It is far off but it will help keep the politicians focused that they must reduce spending and cut cost.
    This first idea is rather novel. If you have a car that gets fifty miles per gallon you get a one dollar tax break. You say no cars get fifty miles per gallon. Well that is the incentive. If people know they can get it back they will push the car makers to develop cars that can get fifty miles per gallon. How do you control it or prove it. The manufacturers would put a sensor on the speedometer and fuel tank to monitor it. It would be done via a flash drive you plug in your dash and when you pay for your gas the register or pump would calculate if you qualified. They can do almost anything with computers they can do this I am sure. The challenge would be for the engineers to come up with the ideas to do it. Whether it is through gearing or metering fuel it should not be a challenge. The challenge will be to get fifty mile per gallon SUV’s. but we are Americans and we can do it if we put our mind to it. Shut down NASA and tell them when they get to sixty miles per gallon they get their funding back. It will get done quickly then.
    How do we save energy in significant amounts. I have several plans and I am sure millions of other Americans have similar plans. It simply takes focus. The ideas I am proposing are basic common sense. The technology to do them is already available. If something is not done and soon the consequences are going to be staggering in their impact. Later I will give what I see as the cost if it is not done. You can ignore the problem but it is not going to go away. It was 60 to 80 years in the making. It is not going to be fixed with the stroke of a pen. If you do not like the ideas I come up with lets hear yours.

 #2....Make all energy used give its maximum benefit. Quit wasting energy.
   The second one can be done out of the twenty per cent for energy savings. There are power plants all across America. They use tons of energy and most of it goes up the stack and is wasted. Each plant should be refocused to capture all the benefit from energy being used. The heat that goes up and out the smoke stack could be used to heat greenhouses and fish ponds. There are plants are all over America. Large enough green houses in large enough quantity would reduce energy consumption. First it would be maximizing the energy that is used. Secondly it would reduce the need to transport food clear across America. When people are eating vegetables and fruit that is hauled three thousand miles from California or Florida to New York it is a waste. Could we totally eliminate the need to haul it. Not really but it could make a significant dent. That left over heat could be used to heat ponds for fish. This would reduce the need to haul fish thousands of miles from the ocean. It would also reduce the need to have boats burning fuel trying to find contaminated fish in the oceans.

#3 Legalize and Create Sin Taxes on "All Drugs,"  that includes all medicines.
       People are forced to sacrifice all they ever made or had just to end their pain and die with dignity, because of ignorant, unenforceable and outdated laws that try to legislate moraliey.
      This one will go over big. Try and keep an open mind read it all the way through and then chew on it awhile before writing me off as a nut case or pro drugs. I am neither, though some may question on the first. To start with think about this. George Washington and Thomas Jefferson both grew hemp plants on their farms. Why did they do it? Hemp can be made into a wide variety of products like rope. It could replace most of the nylon and other products made from fossil fuels. They can even make bio diesel from hemp. Canvas(root word cannabis, Mr. Webster said that not me) bags and hemp tarps could replace the ones made from fossil fuels. Oh yes, it is biodegradable. The strands of it could be used as filler in most fiberglass products. That would replace a lot of need for fossil fuels. The very respectable Popular Science magazine has an article on a car that the entire body is made from hemp fiber. Check out the March 2011 issue if you do not believe me. The products listed here would not only reduce our dependence on fossil fuels. They would create jobs. Hemp is basically a weed it will grow most anywhere. It could be grown in medians of highways and drainage ditches. That would free up land that is good to grow much needed food crops. The shortage of food world wide demands we find ways to stop using consumable crops to produce bio fuels. It is a misallocation of resources that needs to be addressed just as do the economic and manpower problems that are facing the world as whole.
    Some will say, “Hey it is illegal.” Well legalize it. The whole issue is a moral one. America’s fight over moral injustices started before the country was even born. The Boston Tea Party was about taxation without representation. The Constitution has been changed because of moral injustices several times. Slavery was a moral issue. How can there be 3/5 of a person. It is and was just wrong. Why did they put it in the Constitution. Had they realized the cost in lives to correct that moral issue, would it have made a difference. If they had not compromised there would have been no Constitution and no United States. That is why they put in a way to amend the Constitution. They knew their would be problems down the road. Women’s right to vote was a moral problem. How can people be equal if they do not have equal rights. Oh Yes and what about prohibition. They passed it and then they repealed it. Mistakes are made. Anything that infringes on a persons right to live as they choose is wrong. As long as it does not infringe on others rights. There is a saying I like, "Your rights end, where mine begin." The government allowing their drugs of choice to be legal and discriminating against others is wrong. Prohibition should have proved something to America, but evidently it did not. You can not legislate morality. Native Americans had ceremonies which used some of the banned plants, but now they are liable to jail time if they follow their traditions.
      America calls itself a Christian nation, but it does nothing for many of the people who have problems. Incarcerating them is certainly not the answer. Offering them hope and showing them a better way to live by example is the way to change America. If people raise themselves up to live by a higher standard it will not matter if bad choices are available. If Christians are not going to reach out and help those that need help they should at least not make their lives more miserable by stuffing their hypocritical self righteous ideas on them.
     Why should all drugs be legalized.  First drugs would be clean and not kill as many people. People die from contaminated drugs every year. The dealers put anything they want in the drug to increase their profits. When legalized the government can tax the heck out of it. All the way to the gates of hell. That is just my opinion. The Bible said man has all herbs for his use. Surely God knew some plants could kill man, just as he knew some had medicinal values that would help heal or relieve pain. Figuring out what did and does what is man’s problem. Each person has to make his own choice about drugs.
     Spinach is legal and green and supposedly good for you, but there is no room for it on my plate. What does that first sentence have to do with anything. Well it is all about choices. The government loves to play the fear card. Think about this if you will. Now some people may disagree, but I think most are like me. If they legalize pot tomorrow am I going to go out and buy pot. Not lately. I don’t smoke and am not about to start. I don’t drink or do other drugs either, unless they are prescribed for my health. So why would anyone start just because they made it legal. The only thing making it legal is going to change is that it can be taxed and the price will collapse.  If anybody can grow it why would they pay ridiculous amounts for it.  It is illegal now and it certainly does not seem to be stopping anyone that wants to do it from doing it.  All it is doing, is creating bunches of jobs for prison guards, that I am paying for. It is putting a burden on the medical system that you and I are also paying for. At least if they taxed it the money from the idiots using it could pay the bills instead of expecting me to. Oh yes and what of all the law enforcement people that could chase real criminals. Of course if it did not cost so darn much maybe the dopers would not have to rip off law abiding citizens. Finally if there is no money to be made in it the dealers will have to find other ways to make a living. That would be sad wouldn’t it.
      In closing I would like to put in a funny about a conversation with my grandfather way back in the sixties. He heard me and my cousin arguing about why pot was illegal. We were both fresh back from Vietnam. He put in his two bits. Pot was not illegal till 1934 he told us. He said lots of people smoked it during the Prohibition era. When prohibition ended the alcohol companies were not getting their business back and the booze companies lobbied to make it illegal so they could get their business back. My grandfather was born in 1892 and served in the First World War. He drove a team of mules and hauled supplies to the front. He said they hauled an awful lot of rope to the front. Hemp of course. My grandfather never lied to me that I know of and I believe what he said. It makes sense if you think about it. Hope you enjoyed the side trip with that little side story.
 
#4  The Four Day Week, Save Energy and Create Jobs.
       Another way and more practical for America to save energy and money would be to go to the four day work week. It would create jobs. They could maybe go to ten hour days and keep the forty hour week or maybe cut it to thirty two hours. Think of the savings. Just what would be saved in fuel from parking millions of buses one day a week.
       It could be sold as a benefit. States could argue they do not have to give any raises for a long time. Some people would argue that it would create a child care problem. This will come up again when I get to the internet. Well what would be wrong with a parent staying home and taking care of the children. The median or average income in the United States is supposedly $33,000 dollars. (Which by the way is $400 less than it was twenty years ago. We are making progress aren’t we.) Based on a forty hour week that would be almost $16 an hour. If they raised the minimum wage to that level maybe families could be families again. Latch key kids which live lives with a lack of direction in the home are a lot of what has created the problems we have in American society today. The savings in energy is only one reason to do it.
#5 Home Schooling on the Internet.
       With the arrival of the internet kids can be home schooled on the internet. It is possible. The thing is we have to make that choice. Are we going to wait till gas hits ten dollars a gallon to do it. It would cut down on the need for schools and busing which would save money for the states to pay wages to other employees. Hopefully the jobs created by the “One for 20/80 program” will increase the tax base and take some of the burden off of the states and make them independent of the Federal government. The truth is many parents do not want to stay home with their kids.  The moral collapse in America is partly from all the broken homes.   Many who are married do not want to be married. They are married because it was “the right thing to do”
       Testing systems will need to be set up to make sure students are in fact learning. Kids who do not want to learn are not going to learn whether they are in school or home school. Sports could be changed to community after school systems and done on a volunteer basis. Are we going to balance the budget or create jocks for the professional teams to scrape up and pay ridiculous salaries to.
      #6 Restructure the Heavy Trucking Industry
      Another way to save tons of energy would be to make a lot of the long haul trucks pull tandem trailers. Not the short thirty foot types we normally see in double units. The key would be to use tandem 48 and 53 foot trailers. It is already being done in NY on the turnpikes and in Montana and Oregon. The catch is the state gets a fee for allowing it. The fact that the trucking companies do it proves it will work. In the past I asked Wal-Marts transportation manager why they did not adapt it. The manager replied they do it where they can. Many states do not allow it. It would only work on the interstate highway system. Areas to break the trucks into single units and assemble the doubles would have to be built near the exit and entrance ramps. That equals jobs. Equipment would have to be modified. That equals jobs. The technology is already available. It would just be a matter of implementing it. The present weight restrictions per axle would still be used and would avoid damage to the infrastructure. It interested me when I was trucking. There is a lot of freight that is light enough that even with two trailers the truck would be under the legal maximum for a single unit which is 80,000 pounds. My specialty was kitchen cabinets and other high volume low density freight. A truck fully loaded with two trailers hauling cabinets, desks, tables, appliances and many other things would be under 70,000 pounds. It would reduce the highway congestion. The energy savings would be very significant. The above ideas are just a few ways that energy and costs could be cut.
#7 Exempt Doctors and Nurses Malpractice Claims.
       My final suggestion is another extreme one but it needs to be addressed. The insurance companies and lawyers are what keeps driving up American medical costs. This may sound drastic but think about it. Instead of having a medical lottery which is what we now have. The philosophy being get rich by accident. How about if all medical personnel, mainly doctors and nurses who take a hypocritical oath are exempt from paying taxes on their first million dollars of medically job related income. These people take high risks daily to save lives and swear an oath to save lives. This would create and incentive to dedicate a persons life to helping others. They would also be exempt from being sued. All hospitals should be made non profit businesses so they do not have to profit from peoples misery. The money doctors and nurses make from investments and incidents outside of the medical field would still be open for taxes and lawsuits. Each state would have to establish a review board and if there is a case where the person should be compensated for malpractice or whatever the board will make the award. It will would be based on that persons income and needs to live not on the get rich lawsuit plans. The board would also have the right to remove licenses from people who are criminally negligent. The need for malpractice insurance would be eliminated. Companies that make medicines and supplies would not be exempt from lawsuits.
Saving America is going to take Americans getting involved and doing something about the problems. In studying the Great Depression a couple things came to my attention. The twenty five percent unemployment at its peak did not really bother me. If I have come to where I do not have a job I have always managed to create one to tide me over. The first thing that bothered me is that it took almost three and a half years from the high to the low, we ain’t there yet. Second, when the market fell from its high to its low it lost over 89% of its value, which would make an equivalent market bottom today around 1560. Thirdly back then it was big business and the banks that failed and the government was somewhat solvent. The biggest days loss on the market was almost three times the national debt at that time. The government was solid enough financially to whether the storm. Unfortunately this time it is the government that is bankrupt and everybody else is doomed to follow them into the abyss they have created.

Friday, April 15, 2011

WMD, The Real Truth

WMD, The Real Truth
It’s All Fidel’s Fault
      It seems no matter what President Obama does he can not get the WMD off his back. Even though everyone, the Republicans included, know it is not a problem he created. He only gets the privilege of accepting all the blame, and no I did not vote for him. How the WMD really started can be identified with some research. The real WMD is not defined as Weapon of Mass Destruction. The real definition will be given later. The market crash in 2008 was not the cause of the problem but an effect. Sky high oil prices that preceded the crash were simply the last straw on the camel’s back. The present high oil prices threaten to finish breaking that straw. If it breaks the Great Depression will look like a cake walk in comparison. Finding the source of the WMD requires a short history background which is extremely relevant as it also explains why we are not liked much in the Middle East, going back almost sixty years if not longer. It is almost like the story of David and Goliath from the Bible except in this story the combatants, unwittingly inflict the wounds that destroy themselves as well as their enemies.
     While there are many places one could point a finger. Big Banks, Wall Street, The Federal Reserve System to name a few. My choice is Fidel Castro. Politicians certainly can not be expected to step up to the plate and accept any of the blame. As things have settled down the blame has shifted. It now has come full circle. The problem is the average American. They will not get up off their wallets. They are unwilling to do their duty to their country and spend some money. They are listening to what the president says, but something deeper keeps them from standing up. Is it voices from their past warning them not to. All those stories about the Great Depression their parents and grandparents told them did sink in after all.
      If you bear with me, hopefully, the rabbit trail I am about to take you on will bring us back here. Rabbit trails always end up where they started, that is why hunters use dogs to hunt rabbits. Once the chase commences the hunter just stands still and waits. Shortly the dogs will chase the rabbit back to where it started. Almost all rabbits run in a big circle when chased. The benefit of that is you know what to expect and where to point your gun. So if you bear with me I will get around the trail as fast as possible. If nothing else you may have learned something about hunting rabbits.
     With the world economy in chaos. Two wars going on in Asia. The memory of 9/11 not that distant. A national economy that is shaky at best. The middle east in turmoil. One might ask how we got here. Fingers are pointed every where and at everybody. The real source of the problem goes back a whole lot farther than the crash in 2008. It really goes back to bad decisions, made over a very long period of time and by a whole lot of people. It is like a snow ball rolling down hill and picking up momentum. Of course for a snow ball to start down hill someone usually has to give it a shove and then gravity takes over.
     The one person I can point my finger at is Fidel Castro. When I get done explaining, it is my hope people will understand he did it quite by accident. Castro has been fighting a David and Goliath fight with the United States for many years. It all started because of bad choices by him on a few counts. He had bad timing, a bad location and several bad political choices working against him. At the very height of America’s anti-communist paranoia he chose to try and establish a communist country on America’s doorstep. He even recruited the Russians to help him get the job done. Had he chosen fascism, or even liberation as a cause he would probably have just been ignored. That was not the case though. He chose Communism to thumb his nose at the United States for not helping him become the dictator he always wanted to be. The problem with that was that the Russians were Communists. America was so upset that the CIA sponsored a Cuban liberation movement. It turned out to be a major fiasco called the “Bay of Pigs” which was a CIA backed and failed invasion of Cuba in 1959. Castro fearing America might actually invade, pleaded with the Russians to come and protect him from the big time Yankee Imperialist.
     The Russians saw this as a chance to settle some scores and level the playing field so to speak The United States had helped Britain overthrow the democratically elected government of Iran in 1953 to put a more pro western government in power. Britain was worried that the original Iranian government was to friendly with the Russians. Britain in turn felt this threatened their oil holdings in the Middle East. This was not a problem during World War II as America used Iran for a pathway to get American made weapons and supplies to the Russians.  Who at that time were our allies. This all changed with the end of World War II and the Russians getting their own nuclear weapons. The United States used regional paranoia and the turmoil as an opportunity to put nuclear armed missiles in Turkey aimed at Moscow.
     Needless to say the Russians were not happy with this situation. So when Castro called for their help they were more than willing to do so. They even started placing nuclear missile sites in Cuba in 1961 which ended in the Cuban Missile Crisis in October 1962. It was a case of brinkmanship which was settled through back water channels when Russia agreed to pull the missiles out of Cuba in return for a promise from the United States that we would not invade Cuba. Under the table and behind closed doors America also agreed to pull its nuclear missiles out of Turkey. You have to wonder if the whole thing was not a calculated chess move by Russia to make themselves feel a little safer using Cuba for a pawn.
     Regardless of who did what and why, the end result was a financial embargo and severing of diplomatic relations with Cuba by the United States. It was an action that created much hardship on the Cuban people. We had a physical war with Vietnam at the cost of 58,000 American lives and we have already normalized relations with Vietnam. Yet fifty four years later we are still embargoing Cuba. It is my personal belief if we had normalized relations with Cuba the Communist government would have fallen years ago. We didn’t and it has not. The situation goes on.
     The embargo created severe hardships on Cuba as they had to find other sources of supply. Cuba also had to pay double on all financial deals that they made. If they wanted to buy items in Europe they had to convert their currency to dollars. Dollars are the currency most world bank transactions are done in.  Then the dollars had to be converted into the currency of the country they were dealing with. Basically the same transactions had to be done going the other way also. Each transaction had a fee attached. Cuba had no choice but to use the dollar as a reserve currency. The dollar was the standard reserve currency all countries used after World War II. The dollar determined the value of other nations money when they made purchases or exchanges of currency on world markets. The price of oil was also tied to the value of the dollar. Cuba was not the only country hurt by the dollars dominance. Europeans were also paying the fees to transact international business.
     In the nineteen nineties the European Union came into existence and one of its goals was to liberate their currency and trade from the tyranny of the dollar on world markets. They created the Euro to free their economies from American domination.
    When Castro heard of the Europeans plans to introduce the Euro as currency which could be used for all financial transactions a little light came on.  Fidel leaped at the idea. Castro saw a way out of his double cost on transactions. He was one of the first countries to accept and use the Euro as his countries reserve currency in 1998. The Euro did not officially go into effect till 1999 but Castro was committed. It saved Cuba tons of money. They could finally see a light at the end of the tunnel. It was a way of reducing America’s hold on his country. Castro was quick to share this good news with his strange clique of friends. To get in that circle the rules were and are very simple. Either hate the United States or be hated by the United States. Saddam Hussein of Iraq, Chavez of Venezuela, Iran, Libya, Syria, and North Korea were top friends. They all shared another distinction. They were all on the Axis of Evil list. Depending on which speech you listened to, determined who made the list.
      Saddam Hussein was also on America’s embargo list. Following Fidel’s lead Saddam pulled a fast one by going to the United Nations in October 2000. Saddam secured authorization to exchange his oil for Euros instead of dollars. This set a pattern that was soon followed by Iran, Venezuela and most of the Axis of Evil countries. When Europeans found they could buy oil with out the losses in the exchange markets it gave the Euro a major boost.
      This situation created a problem for America. All of a sudden the dollar was not the only fish in the sea so to speak. Slowly the price of oil started climbing as the dollar had to compete with the Euro on world markets for oil. The “Perfect Storm” was brewing for oil, when Bush and Cheney came to power in America. They were both experienced oil men and could read the writing on the wall. They had to defuse the situation. They just needed and excuse and September 11th, 2001 provided it.  A recent book by retired USMC Lt. Gen. Michael De Long makes it clear Bush and Cheney were much more interested in attacking Iraq than Afghanistan.  Lt. Gen. De Long argues the case for WMD’s was a strong foundation for the attack. However one has to wonder which kind of WMD’s Bush and Cheney were really concerned with.  My argument would be that they agreed more with my definition of WMD’s, which is Wealth Melt Down.
       It is my belief the Bush administration did everything they did with what they considered the best interests of the United States first in their minds.  They understood that if oil prices were not determined by the dollar, the dollar was in danger.  The problem was the damage was done. Getting rid of the Euro was not feasible. (Of course with all the financial turmoil in Europe's financial markets we might want to take a harder look at what is causing the problems.) Taking Iraq was the only way to stall or slow down the problem. One of the first actions taken by the United States after “winning the war” was to put Iraqi oil back on the dollar. The real problem was that other factors had started creeping into the picture.
     Other United States government programs to push home ownership were starting to have issues. The placement of marginally qualified owners into homes they could not really afford started taking its toll. As long as no one rocked the boat everything was okay. The home owners were living at the very edge of their limits. Unfortunately the boat started rocking.
      Over the next couple years as oil prices went up so did bankruptcies. Families that had been living on the edge had to make choices about what to pay. They were not going to quit eating. They were not going to quit driving the cars they also could not afford. Something had to give.  Most chose to stop paying their house payments. The higher the gas prices went the worse the situation got. Suddenly loans that had been sold on international markets started defaulting.
     The snowball was picking up speed. Then the market collapsed and everything started falling apart. The federal government tried to save the situation but to no avail. The damage was done. The slide down hill suddenly turned into an out of control avalanche. The economic collapse now started taking its toll on pension funds and any other investments that had been secured by the shaky mortgages. Companies getting slammed financially started reining things in. Eventually we had over fifteen million people unemployed. The government has done too little and too late to save it all. The jobs are gone. Many are not coming back as the companies they were based on are gone.
     The Fed keeps saying it will all work out. However in reality the stage is set to only get worse. It may have slowed down but that is only temporary. Why do I say that? It is really pretty simple as the people who were the hard working core of America start falling off unemployment another round of foreclosures will start. The government is broke.  It can not afford to keep giving people unemployment. Borrowing the money to pay unemployment will only push the budget and debt beyond legal limits. The government will go bankrupt. The truth is that it already is. If the government does not pay the unemployment the unemployed will start losing their homes and the cycle will continue on down the hill.
      The present situation is tenuous at best. The governments predictions are based on things remaining stable or hopefully getting better. Their plans do not allow for things that will sink all their hopes. The price of oil is going to go up. It will continue to go up because of increased demand as the rest of the world starts recovering and needs more oil. Some other unknown and unforeseen event could create more instability in the oil markets. As a for instance the Arab Spring which happened since I originally started this.  It could be the European financial crisis or instability in the Middle East. Both can effect America and our recovery. America can not borrow its way out of debt. It is going to require action and some tough decisions will have to be made. Fifteen million people unemployed means that fifteen million people are not creating income or paying taxes. That means the debt snowball just got another shove down the hill. Unemployment could go a lot higher in the long run if something is not done. As the housing market continues to collapse so does the tax base that states and the government depend on, As of November 28.6% of homes are underwater.  The problem rolls on. Somebody better come up with some solutions. The Republican plan to cut spending and put even more people out of work is only going to magnify the problem. It certainly will not solve it.
      The rabbit trail is back to its start. Thanks Fidel you may have saved Cuba for a few days. Ultimately though the whole financial system worldwide is liable to collapse. That is good for nobody. States are broke already and crying the blues that they need money. There has to be a solution and I think I have a few. You can read them on my blog by typing "jobs" in the search bar.  Nobody may like them but they can help if implemented. The old saying is, "if there is no pain there is no gain" What is my solution? Pay more, borrow less and cut spending. It is simple but it works. For starters how about freezing spending at present levels. That was always the solution thirty to forty years ago. It just delayed the problem. It is a matter of how you do it that determines if it works. It will take commitment and sacrifice. The alternative is something nobody really wants to experience. It will take the American electorate holding the politicians feet to the fire. It will not be fun. The first step is to freeze the government budget till the plan I am proposing can kick in. If America does not do that, it is all over but the crying