Sunday, December 4, 2011

Draconian EPA Regulations To Cause Rolling Blackouts

Obama is poised to shut down 8% of the coal-fired electrical plants in the country.

8%. Next year.

A disproportionate number of the plants will be in Texas.

When the blackouts occur, who will the left blame? Those evil power companies.

It will be "obvious" to all that they need to be nationalized.

After that happens, we'll never have stable electricity again.

It's yet another milestone on Obama's road to banana republic status...

Saturday, October 15, 2011

The Euro Crisis in a Nutshell

There has been a lot of hand-wringing on why Europe is poised to send the world economy into a tailspin.

Let's cut through the nonsense and tell it like it is.

In a nutshell, a few years ago, the frugal Germans decided to enter into a single currency agreement with the profligate Geeks, in addition to other countries.

The Greeks did what they always do -- spend well beyond their means.

Now the Germans are left holding the bag.

The current crisis is all about the German population not wanting to take responsibility for the mess that their politicians created.

The only way out of this mess is for the German government to own up to their responsibilities and correct their past mistakes. To do this they need to:

1.) Inflate the Euro to bail out the Greeks. Yes, this will cause people in Germany and other Euro countries to take an economic hit, but this is what they signed up for by agreeing to a monetary union with the socialist Greeks.

2.) Get out of the Euro and restore the Mark.

Sadly, the cowardly politicians in Germany are not likely to do either. As a result, the world economy could come collapsing down in a magnitude that we have never seen before.

Friday, September 30, 2011

America's Growing Bromodrosis Crisis

A new study shows that 1/3rd of Americans (more than 33%) have Bromodrosis -- stinky feet. Half of them have extremely stinky feet.

Stinky feet are not only a personal issue. They effect a person's career, social life, and in fact, their very existence.

It's a huge epidemic that is poised to destroy our civilization.

Surveys show that a large segment of Americans are prejudiced against people with stinky feet.

"A lot of people at work have stinky feet," said Lance, a computer programmer from Seattle. "I can't stand working with them. I do everything possible to avoid them".

Yet, only 9% of Americans will tell someone if they have stinky feet.

Sally, a marketing assistant in Chicago concurs: "Some of my best friends have stinky feet. I feel sorry for them, but I just can't bring myself to tell them".

Why is it fair that people with naturally odorless feet have an advantage in life over people who's toe cheese smells like a rotting dead skunk?

The rich can afford Order-Eaters, foot powers and other treatments. But what about the poor? How about the homeless???? What about the socially dysfunctional, who don't realize just how much their feet really stink?

Aren't these people entitled to the same odorless feet as the rich?

Who will hire a person with stinky feet? How can they earn a living? How can they find dignity in their lives???

A person with stinky feet cannot truly be free.

It's very clear that the heartless free market won't solve this problem.

Leaving our Bromodrosis brethren to fend for themselves is not what America is all about.

The government must take action. It must take action now.

First, the government must immediately create a Department of Olfactory Wellness that will declare a new war on stinky feet and eradicate this plague on society once and for all.

Second, the government must also immediately place a tax on people who have naturally odorless feet and redistribute it to the wretched refuse so that can they achieve foot odor equality.

Third, the government needs to outlaw all forms of discrimination against people with stinky feet. It's just not right for someone to lose a job opportunity, let alone a sexual encounter because his or her feet smell like a pound of fermenting cabbage.

Only when we solve this dire problem, can all Americans truly be free.

Wednesday, September 14, 2011

Obama's Tax on Soup Kitchens and the Poor

President Obama unveiled his Son of Stimulus bill this week.

For the most part, the bill was a lightweight version of his previously failed "stimulus" bill. It proposes to penalize productive people and hand the money over to support temporary jobs in the government bureaucracy.

As was the case with the first "stimulus" bill, the new bill features even more government micromanagement in the form of "targeted tax cuts" and government-centered spending initiatives.

However, what is really interesting in this bill is Obama's assault on charities that help that poor.

The President's new bill will phase out charitable contributions for couples making over 250,000 a year.

Obama likes to rail against millionaires and billionaires, but working couples that make $250,000 are not not millionaires or billionaires. Obama is so obsessed with harming these people that he is willing to sacrifice soup kitchens and other charities that help the poor and homeless in the process.

Obama's proposals will impact approximately 40% of all the tax deductible contributions, and essentially penalize soup kitchens, hospitals, and churches that provide essential services to those who need them most.

Who does Obama's program hurt most? The "rich" or the "poor"?

The answer is obvious. Unfortunately, Obama doesn't really care about the poor. Like all leftists, he only cares about punishing the successful.

Saturday, September 10, 2011

Rick Perry is Right: Social Security Really is a Ponzi Scheme

Rick Perry's comments during this week's GOP debate at the Reagan library has caused quite a stir in the liberal media.

During the debate, Governor Perry defended the words in his book, calling Social Security a "Ponzi scheme".

After the debate, the "analysis" on MSNBC was truly fun to watch as every commentator sat shelled shocked over the fact that a politician would dare to use these words to describe America's most sacred welfare program.

The only person on the panel who had a clue about what might be going on was Ed Schultz who at one point questioned whether or not whether young people would stick with Obama or jump on the Perry bandwagon.

Unlike the political and media establishment in this country, young people understand that they are going to get the short end of the Social Security "inter-generational compact". Schultz surprisingly realized that Perry's message might resonant with young people.

Let's take a quick look at the Social Security system and see if Perry might be on to something.

The people who got into the Social Security system very early got back on average 15 times the amount of money they paid in. They got a great deal and were raving proponents of the system.

The people receiving Social Security benefits today are getting back on average 2 1/2 to 3 times what they paid in. They are also generally strong proponents of the system.

Today, Social Security is paying out more every year than it takes it. We are borrowing money from foreigners, like the Chinese and Saudis to pay current benefits. As the huge Baby Boom generation retires, the amount of debt we incur each year will quickly escalate.

So, what happens when my generation starts to retire in 15 to 20 years and what will happen to my kids?

We will all be left holding the bag.

There is a financial MODEL that describes this. The model is called a Pyramid scheme or Ponzi scheme or a Bernie Madoff scheme. The people who get it in early make out like bandits and the people who get it late get screwed.

That is exactly how the Social Security system will play out.

The fact is that the Social Security is a pay-as-you­-go welfare system that transfers money from young, struggling families to relatively well-to-do retired people. There isn't any "trust fund". The words "trust fund" are used to describe a mountain of debt. A mountain of debt is NOT a trust fund. It's a mountain of debt. Today, the mountain of debt in the Social Security system is so great that it cannot be paid.

Peel away the emotion, the Orwellian language about the "trust fund", and the other political rhetoric, and just look at the financial facts. Then this all becomes very clear.

Rick Perry is absolutely right and I am actually impressed that a politician would tell the truth about this. It's truly amazing.

The big question is what can be done?

Long term, people need to be able to save for their own retirements. Social Security needs to be taken back to it's roots as a program that supplements the income of retirees who are truly poor, through no fault of their own.

Today, 25% of people over 65 have pension or investment income that places them in the "wealthy" category. They still get Social Security benefits, so long as they don't work for their income. Why should young struggling families hand money over the wealthy retired people?

They shouldn't. Means testing Social Security will go a long way to make it solvent for the future.

When Social Security was implemente­d, the retirement age was 65. The average life expectancy was 59 for men and 61 for women. Most people didn't live long enough to get a check. Today, the retirement age is still 65. However, life expectancy is 73 for men and 78 for women.

The numbers just don't work.

We need to gradually raise the retirement age to keep up with life expectancy.

Bravo to Perry for telling it like it is. I certainly agree with Ed Schultz that a lot of young people will find this message appealing.

The other group who should find this message appealing are wealthy retirees who are stealing from their children's and grandchildren's future. Will they finally put their selfishness aside and say: "no more"? Probably not, but we'll see.

Sunday, August 28, 2011

Left Ready to Bash Rich Perry on Immigration

In 2001, Rick Perry spoke at the Border Summit. In the speech he advocated closer ties with our neighbor to the south.

While the left is busily trying to provide amnesty to Mexicans who have entered America illegally, they are also preparing to discredit Perry with his Tea Party supporters over his 10 year old views on our relationship with Mexico.

Quite frankly, I've changed my position on relations with Mexico quite dramatically since 2001, based upon real world evidence.

The basic argument of letting Mexican workers into the country is simple. Without an economic relief valve, the corrupt Mexican system would deteriorate into chaos. We don't need chaos on our border. But the reality is that we already have chaos on the border, thanks to the drug war. And the chaos is escalating.

When Vicente Fox become the first conservative Mexican President in several decades, I thought that we should give the guy a chance to reform things. But nothing changed. The corrupt system continued, but with different people in charge of the corruption.

My opinion today is that we should close the relief valve and let Mexico explode. A big explosion like we are seeing all over the Middle East is probably the only chance that Mexicans have of reforming their corrupt system.

Unlike the Middle East, there are enough people in Mexico with ties to and experience in the U.S. to help ensure that any explosion results in something better than they have today.

Close the border and let them stew. That's the real answer. It's a completely different answer than I would have given in 2001.

Circumstances change and it's okay to change a position based on new evidence. In fact, when circumstances change a reasonable and rational person will change their beliefs based on the new evidence. Those who don't change in the face of new evidence (like unreconstructed leftists) are not worth listening to.

Wednesday, August 24, 2011

Obama's Jobs Program

As the President suns himself at his $50,000 a week estate in Martha's Vineyard, the nation's economy continues to struggle, with new housing starts falling and delinquent mortgage payments on the rise.

As he was leaving for his vacation, Obama promised to unveil a new "jobs program" when he gets back. Undoubtedly, it will be another Keynesian pump priming disaster, just like Obama's "stimulus", which will do nothing to help the economy.

Keynesian economics should have been completely discredited in the 1970s. According to Keynesians and their Phillips Curve, you cannot have high inflation and high unemployment at the same time. Yet, this is exactly what he had under Carter and this is exactly where we are heading again. Yet the left clings to Keynesianism like a religion.

Keynesian economics is predicated on the notion that wages are sticky downwards, i.e., people will not willingly take a pay cut in a recession to clear the market and start economic growth again.

The Keynesian solution was to have government fool people into taking pay cuts during recessions by creating inflation.

That may have worked for a very short while, but people got wise to this and started demanding things like automatic cost of living adjustments in their contracts.

So, a fundamental policy prescription of Keynesian economics just doesn't work any more.

Another Keynesian policy prescription that doesn't work anymore is demand stimulation to start economic growth. Sure, pumping money into the system may help stimulate demand, but demand for what? Cheap goods made in China and Mexico, which does nothing to support economic growth at home.

In a global economy, borrowing money to stimulate demand is a foolish proposition.

What we really need to do to get the economy moving again is stimulate investments in innovation and productive capacity. There are things that government could do to help.

First, we need to dramatically simplify our convoluted 80,000 page tax code which punishes most American businesses with the highest corporate tax rates in the world, while letting politically favored companies get away with paying little to no taxes at all.

Second, our byzantine regulatory system needs to be completely rethought. We need to start by being more outcome focused than process focused. Regulations should have to go through a cost benefit analysis before they are enacted and on a periodic basis after enactment to ensure that they are effective at achieving the desired outcomes with as few side-effects as possible.

Third, we need to fix our broken government monopoly schools to produce students with sufficient skills in math and science to succeed in a high tech economy.

Forth, yes we need to invest in repairing and expanding our crumbling infrastructure. The focus has to be on results, not political expediency. If an infrastructure investment cost effectively helps the flow of commerce through the country it should be undertaken. Otherwise, there is no point in spending the money.

Fifth, we also have to get rid of incentives for not working. Allowing people to lay around growing their bellies on unemployment insurance for two years is counterproductive to economic growth.

Obama had his chance to simplify the tax code and make some needed infrastructure investments by embracing the proposal from his own debt commission. Unfortunately, he ran away from it as if it were the plague. Obama is not about to go to battle with his biggest supporters -- government bureaucrat unions -- to fix the schools. Obama's EPA is increasing the regulatory burden on American businesses. On economic policy, he is doing everything wrong.

The sad fact is that the economy is going to continue to struggle until Mr. Obama is ejected from the White House, because he just doesn't get it.

Friday, August 19, 2011

Thoughts from Taiwan

I spent the last week in Taipei, Taiwan visiting a customer.

I've been all over Asia, but this was my first trip to Taiwan, other than catching a connecting flight at the airport.

I'm sitting here at Taoyuan International Airport waiting for my 12 hour flight to Seattle, reflecting on my week.

I love Taiwan and its people. The city is on the move. People are hustling and working hard. Yet, they are extraordinarily friendly and caring.

Last night we went to Tower 101, which is one of the tallest buildings in the world. Until very recently, it also had the fastest elevator in the world. We climbed from the 5th floor to the observation deck on the 89th floor in a matter of seconds. The view was spectacular.

Taipei 101 is designed to withstand typhoon winds and earthquake tremors. Inside the building there is a 660 metric ton steel pendulum (my pic is on the left) which acts as a mass damper that sways to offset movements in the building caused by strong gusts of wind. It's the largest mass damper in the world and the building is an engineering marvel.

Afterwards, we had diner at a great restaurant that specializes in dumplings.

We were sitting at diner, looking at all of the energy in the city, the wonderful people, and everything that they've accomplished over the last 50 years. I couldn't help but think that if Chiang Kai Shek hadn't lead 2 million people off of the mainland, all of these people and what they've accomplished wouldn't be here because the communists would have murdered their parents and grandparents for rebelling just as the communists murdered so many others.

Our thoughts quickly drifted to the problems we face in America. Although the American left haven't turned into mass murders (yet), they are killing the country nevertheless.

In Taiwan and the rest of Asia, you are expected to work and take care of yourself. If you can't, you rely on your family. In America (and Europe) the government's welfare system has destroyed the family by replacing it with a faceless, uncaring bureaucracy. They've also replaced our core values of hard work and responsibility with sloth and dependency. So, you've been on unemployment insurance for 2 years???!!! No problem, Obama and his minions will let you ride out the rest of your miserable life at the taxpayer's expense.

At one point last night I told my colleague that we should take every big mouth leftist in the U.S., and dump them off in Taiwan, the Philippines or elsewhere in Asia without a penny in their pocket. If they can manage to survive a year, both they and America would be better off when they come back. I seriously doubt that many of them could survive.

It's getting close to boarding time. I am so glad to be coming back to America with another shining example of how the American values of hardwork, thrift, and personal responsibility translate into success in every society. It is so sad that many Americans are losing those very values.

Saturday, August 13, 2011

An Economic Lesson from Harry Truman

The appointment of yet another deficit commission, to make recommendations for reducing the programmed increases in our national debt over the next 10 years, demonstrates just how dysfunctional the political system has really become.

President Obama appointed a bi-partisan deficit commission last year. In December, they came back with a modest proposal to reduce the planned increase in the debt by $4 trillion over the next 10 years.

Obama should of went on TV, held the plan up, and told the American people that we need to do this to fix the economy. Then he should have dumped it in John Boehner's and Harry Reid's laps and focused like a laser beam on building support for it around the country. That's what Reagan and Clinton would have done.

Instead, Obama ran away from it. It was his own debt commission. Democrats and Republicans on the commission voted for it. But Obama ran away from it like it was the plague.

Over the last few months a bi-partisan group in the Senate, known as the Gang of Six, also came up with a modest proposal to reduce the increase in the debt by $4 trillion over the next 10 years. Both Democrat Majority leader Harry Reid and President Obama ran away from it.

Now, as part of the deal to raise the debt ceiling by a whopping $2.4 trillion over the next 18 months, the House and Senate have appointed yet another deficit commission tasked with finding future savings in the budget, amounting to a lousy $1.6 trillion over the next 10 years. This won't do a thing to solve our economic woes.

The big problem here is that Democrats just don't want to cut spending.

They are sustained by various Keynesian economists, like Paul Krugman who warn of dire economic consequences if we cut government spending.

Keynesian economists also warned Harry Truman not to cut government spending at the end of WWII. They actually tried to get Truman to keep the wartime economy in tact. They argued that we should continue to build military equipment and just bury it in the desert in the name of "full employment".

Fortunately, President Truman told the Keynesian's to take a hike.

Truman oversaw a massive transformation from a government directed economy to a private one. Yes, there were some minor dislocations as there are in all transformations, but the economy did not collapse, millions of people were not thrown out of work, and we did not enter a second Great Depression as the Keynesian's claimed would happen.

The following table, from the White House Office of Management and budget, illustrates spending during the Truman era versus today:

Year 1944 1945 1946 1947 1949 1949 1950 1951 1952 2011
National Defense 37.8 37.5 19.2 5.5 3.5 4.8 5.0 7.4 13.2 5.1
Human Resources 0.9 0.8 2.5 4.2 3.8 4.0 5.2 3.4 3.4 16.6
Physical Resources 2.6 0.8 0.4 0.5 0.9 1.1 1.3 1.2 1.2 1.4
Net Interest 1.1 1.4 1.8 1.8 1.7 1.7 1.8 1.5 1.3 1.4
Other 1.8 2.0 1.6 3.4 2.3 3.3 2.9 1.5 1.2 1.4
Undistributed offsetting receipts -0.6 -0.6 -0.7 -0.7 -0.6 -0.7 -0.7 -0.7 -1.0 -0.6
Total 43.6 41.9 24.8 14.8 11.6 14.3 15.6 14.2 19.4 25.3

Look how fast Truman wound down the war time economy: Government spending went from a peek of 43.6% of GDP to 11.6% of GDP in 4 years. Truman kept government spending at about 15% of GDP between 1947 and 1951. Yes federal spending jumped to 19.4% of GDP in 1952, but this was entirely due to increases in national defense to fight the Korean war.

Unless you were a black in the south, life during the late 40s and early 50s was pretty good, because the government mostly kept it's nose out of our business.

Look at the chart carefully. The problem we have today is very clear -- a bloated and unsustainable welfare / entitlement system, which now comprises nearly 17% of GDP. It will continue to grow and squeeze out the private economy as baby boomers head into retirement.

We need to take a lesson from Truman and unwind as much government spending as possible in as short a time as possible.

We don't need to go from 43.6% of GDP to 11.6% of GDP as Truman did. We only need to go from 25.3% to 18% or so. That, plus simplification of the 80,000 page tax code is all we need to do to restart the economy and balance the budget.

Harry Truman does not get enough credit from history for saving the country.

Had Truman listened to the Keynesian's, who wanted to build tanks and bury them in the desert, America would be a poor country today.

Wednesday, August 10, 2011

The Biggest Loser to Ever Occupy the White House

Obama's dismal handling of the downgrade to America's credit rating is the most pitiful lack of leadership in recent memory.

In my 52 years on this earth, I have learned that there is one thing which is 100% certain in life: winners take responsibility and losers blame others.

Bush, Europe, the weather, the Arab Spring, Wall Street, Owners of private jets, the Tea Party, Oil Companies, Glen Beck, Gold "speculators", the GOP, and even ATM Machines... all at fault for the dismal economy, which led to the downgrade. But not the government and certainly not Obama. No, they are as pure and faultless as a virgin's honey pot.

Even liberals are starting to get this. People from Maureen Dowd to several Clinton confidants have concluded that Obama is the biggest loser to occupy the White House since Jimmy Carter.

In my view, Obama may yet become the biggest loser to ever occupy the White House.

Nothing is going to change until this incompetent SOB is booted from office, one way or another.

Wisconsin Recall Election

I was watching MSNBC last night covering the Wisconsin recall election. They were in Wisconsin among a crowd of recall supporters.

Every single "working person" they interviewed was a government employee -- mostly employees of the failed government monopoly school system. There wasn't a single Teamster, UAW member, etc. in the crowd. It was all government employees.

This should have crystallized the real problem in America for everyone. The two sides in America politics are not "rich" versus "poor". The two sides in America are people who work for a living versus people who vote for their living. There are "rich", "middle class", and "poor" people on both sides.

We no longer have government of the people, by the people, and for the people. It's now a government of the government, by the government, and for the government.

Until this dramatically changes, America is going to continue its slide into the trash heap of history.

Thursday, August 4, 2011

What is Really Driving the Deficit?

We spend $700 billion on the military each year.

If we leave Iraq and Afghanistan we save $100 billion.

If we leave Europe, Japan, and South Korea we might save $100 billion more.

I support downsizing those commitments right now.

That leaves us with $500 billion in military spending, which is less than 3.5% of GDP. That would be lowest military spending since before WWII. It's a reasonable price to protect the country.

The deficit this year is over $1,500 billion. Take $200 billion out of the military and we still have a $1,300 billion deficit.

Yes, military spending needs to be reformed, but it is not the primary driver of the deficit.

The primary driver of the deficit is that over half the people in the country receive a government check.

Until that fact really sinks in, we are going to continue to hemorrhage money.

Friday, July 15, 2011

Will Obama Outmaneuver the GOP Again?

The debt showdown in D.C. is getting really nasty. This week Obama upped the ante by claiming that if the debt ceiling isn't raised, the government might not be able to send out Social Security checks.

This is an old Democrat scare tactic. Whenever there is a budget battle at any level of government, unscrupulous Democrat politicians hold up the programs that would be most painful to cut as a way to scare voters to put pressure on the GOP to cave into their demands.

The GOP shouldn't fall for it any longer.

The Federal government is expected to take in $179 billion in revenue in August. Interest on the debt, Social Security, Medicare, and military salaries will add up to $143 billion in August. That leaves $36 billion left over for everything else. Yes, other things will have to be prioritized -- that's called living within one's means.

Here's what the House needs to do: immediately pass a bill mandating that if the debt ceiling isn't raised, the administration must prioritize paying the interest on the debt, Social Security, Medicare, and military salaries above everything else. If the Democrat Senate fails to pass the bill, or if Obama fails to sign the bill, then everyone will know who is responsible for Social Security checks not going out.

Friday, June 3, 2011

Cain: Obama could not run one Godfather’s pizza restaurant

Newsmax is reporting that in an interview, former Godfather's CEO Herman Cain said that Obama doesn't have the capability to run one Godfather’s pizza restaurant.

Let's take a quick look at what an Obama pizzeria might look like:

1.) He'd pay his pizza flippers 6 figure salaries and endow them with lavish retirement plans.

2.) He'd force his delivery drivers into $40,000 Chevy Volts -- only a three hour recharge between each delivery.

3.) He'd implement a progressive pizza pricing policy. 50% of his customers with the lowest incomes would get free pizzas. In fact, he would pay them to eat his pizzas. The top 2% of his customers would have to pick up 40% of his cost if they wanted to eat his pizza. He'd borrow the rest of from Domino's.

4.) To make up for past discrimination, where Godfather's would refuse to deliver pizzas to crime ridden ghettos, Obama would implement a pizza reparations policy. The drivers would go to the ghetto, with extra money in their pockets so they would be worth robbing.

5.) When the business came crashing down, he'd blame the "greedy rich" for not wanting to pay $10,000 for each slice of pizza from his store.

Friday, May 6, 2011

America at the Crossroads

The U.S. unemployment rate rose to 9.0% in April. Economic growth is anemic. Gas is well over $4 a gallon is most states, and over $5 a gallon in Hawaii.

Over the last couple of years the government has implemented several programs, that cost around $1 trillion each, designed to "stimulate" the economy, including the Bush TARP, Obama Stimulus, and the Federal Reserve's "Quantitative Easing".

The economy has only gotten worse.

Obama and the left keep talking about implementing more of the same type of programs to "stimulate demand".

The problem is that the entire Keynesian notion of stimulating demand is obsolete in a global economy.

Sure, the government can temporarily hand out borrowed dollars to stimulate demand. What demand are they stimulating? Largely demand for products made elsewhere, which doesn't create any jobs in America.

I’m a free trader, but borrowing money to buy products made abroad is the path to ruin. We need to earn money to buy those products. Earning money requires us to make things that people want to buy.

To fix the ills that plague us, America needs to increase investments in innovation and productive capacity.

Today, there are two huge challenges stopping us:

First, our tax system is a complete disaster. According to OCED, American has the most progressive tax system in the world. We also have the highest corporate tax rates in the world. We also have one of (if not the) most complicated tax systems in the world, which costs us a half a trillion dollars a year just to figure out our taxes. To top it all off, there are huge U.S. corporations that don't pay any taxes at all, because they were able to successfully lobby politicians to implement loopholes in the tax system to specifically benefit them. Not only is our tax system unfair, it's also counter-productive and hurts our economy.

Second, the government monopoly schools are an even bigger disaster. America spends more per student than almost every country, yet the government monopoly schools are among worst performing schools in the developed world. America's economic prowess depends on our ability to innovate. Over the last couple of decades, most of our advanced technology talent has come from importing people from China, India, and other foreign countries. Luckily, these people still want to come to America. But importing talent is not a substitute for growing our own talent. The government monopoly schools don't graduate enough people with the basic math and science skills to move the country forward.

We need to do two things to get the country on track:

First, we need to simplify our Byzantine tax and regulatory system.

Second, we need to fix the broken government monopoly schools.

Sounds simple, right? Unfortunately, there are a huge number of special interests (from General Electric to the National Education Association) that benefit from the current system at the expense of the country. Those special interests are not about to give up their tax-funded goodies and go quietly into that good night. So, changing anything becomes increasingly difficult.

That's the problem.

Here's an undeniable fact: The rate of change in the world is changing exponentially. Unfortunately, the U.S. government is stuck in the industrial age, when the pace of change was much slower.

Unless America has some real reform that moves the special interests out of the way, our decline as a nation will accelerate rapidly.

Who will stand up and say: "no more"?

How about you???

Monday, May 2, 2011

bin Laden - Obama Credit and Blunder

In a dramatic late night announcement, President Obama went on national television last night and told the American people that a Navy Seal team killed Ossama bin Laden.

The U.S. government announced that they sent bin Laden to his watery grave, probably somewhere in the Arabian Sea.

Bravo to Obama and CIA Chief Leon Panetta for brining bin Laden to justice.

However, the decisions surrounding the disposition of bin Laden's cold, dead body were not without controversy.

I'm not a conspiracy nut, but I wonder why the government didn't keep bin Laden's body around for independent verification.

Obama is from Chicago -- a town notorious for winning close elections within the margin of error coming from dead people voting from the grave. Those dead folks put Kennedy in office in 1960.

Yes, bin Laden is probably dead, but the Obama administration should have produced independent verification of bin Laden's death. They didn't.

The administration's mistakes around verification of bin Laden's death will result in bin Laden's demise joining Pearl Harbor and the Kennedy assassination in the chronicles of American conspiratorial political history.

It didn't have to be that way. But the administration's actions made it so.

Friday, April 1, 2011

Consumer Reports: Chevy Volt doesn't make economic sense

Consumer Reports recently wrote a scathing report on Government Motors new Wundercar -- the Chevy Volt.

Consumer Reports concluded that:

"When you are looking at purely dollars and cents, it doesn't really make a lot of sense. The Volt isn't particularly efficient as an electric vehicle and it's not particularly good as a gas vehicle either in terms of fuel economy."

They are exactly right.

In real world conditions, the Volt will go about 28 miles on a charge. It takes 3 to 4 hours to recharge it.

Contrast that with the Tesla Roadster (made in America) which gets up to 245 miles on a charge and the upcoming Tesla Model S sedan, which will get up to 300 miles on a charge.

Unlike the Tesla models, the Volt has a gasoline engine that kicks in to recharge the battery when it runs dry. As Consumer Reports concluded, the combination doesn't live up to GM's hype.

Plug-in electrics are not the future anyway.

I've been convinced for quite a few years that Hydrogen Fuel cell electrics are the future. Most of the major auto companies, including Mercedes, Toyota, and even GM, seem to agree.

Fuel cell cars are powered by the most abundant molecule in the universe -- hydrogen. They produce electricity through a chemical reaction that is caused by combining hydrogen and oxygen. That energy is fed into an electrical motor. The only tailpipe emission is water vapor.

GM has a pretty good fuel cell prototype in the Equinox Fuel Cell SUV. The Equinox is a full size SUV powered by a hydrogen fuel cell.

The Equinox will currently go 160 miles on a tank full of hydrogen in real world conditions. It can be refueled in a couple of minutes. On a fuel cost basis, it gets about 70 miles to a gallon of gas. Not bad. And it's electric, so you get close to full torque at all RPMs, even in reverse!

Toyota has been showing off a similar fuel cell SUV. Mercedes is currently piloting a small "B-class" fuel cell car, with plans for larger fuel cell cars in the near future. Toyota and most other car companies have major fuel cell efforts underway.

The big challenge to fuel cell adoption is the refueling infrastructure.

GM has partnered with the Hawaiian Gas Company, which is building hydrogen refueling stations across Oahu. Mercedes has formed similar partnerships with energy companies in Germany who plan to roll out 1,000 hydrogen refueling stations in Germany over the next five years. California already has a handful of hydrogen refueling stations, with plans for many more.

Tesla has proved that electrical cars can be sexy and powerful. The Telsa Roadster is a great looking car. It goes from 0 to 60 in 3.7 seconds, which is as fast as the Ferrari 599 GTB Fiorano, Corvette Z06, and Porsche 911 GT3.

Electric cars are definitely the future.

What we need is an electric car that can be refueled in about the same time as a gasoline car.

That is what hydrogen fuel cells provide.

Hat's off to GM for trying something new and innovative with the Volt. Innovations don't always succeed. I suspect that the Volt will wind up amongst the long line of failures that GM has tried to bring to market over the last several decades.

However, GM is also on the forefront of fuel cell technology. That's a good thing.

Tuesday, March 29, 2011

Random Thoughts on the Situation in Japan

Japan is suffering through a horrendous series of back-to-back catastrophes that are starting to make the world question whether or not Japan will survive.

I've been to Japan 25+ times. Japan is a great country. The Japanese are a great people. They will survive these catastrophes.

However, they may not be able to survive their own brain dead politics which have:

A.) Kept Japan in a rolling recession for 20 years because the politicians refuse to reform their financial system.

B.) Torpedoed population growth by discouraging young women from marrying and having babies. (Only single women can really have careers in Japan, so many young women just don't get married and don't have kids.)

As sad as it sounds, perhaps the Earthquake, Tsunami, and resulting nuclear challenges will wake Japan out of it's 20 year old slumber and ignite their spirit of quality, excellence, and results that typified Japan in decades after WWII.

Friday, March 25, 2011

Libyan War Hypocrisy

The reaction to the Libyan war on all sides has been hilarious and the worst demonstration of hypocrisy that I have ever seen.

Republicans who cheered Bush when he attacked Iraq are now up in arms about Obama doing essentially the same thing.

On the other side, the same Democrats who attacked Bush are either cheering Obama or remaining silent.

The ONLY two groups who have been completely consistent are the far-far left (Dennis Kucinich, Ralph Nader, Cindy Sheehan, etc.) and libertarians (Judge Napolitano, Ron Paul, Rand Paul, etc).

Obama's foreign escapade has done a great job uncovering how screwed up things have really become in America.

Thursday, March 17, 2011

Open Season on Bureaucrats -- The Revolution Continues

Miami-Dade County Mayor Mayor Carlos Alvarez raised property taxes. He used the money to give huge raises to government bureaucrats.

Yesterday, he was booted from office in a landslide recall election.

200,000 people voted in the election, making this the largest recall election of a local government official in U.S. history.

88% of the people voted to toss him out.

This should be another warning to the cowardly and clueless politicians in D.C. who are still refusing to deal with the government deficit, debt, and economy.

Do your jobs, or it's your turn next.

Tuesday, March 8, 2011

America is still the Land of Dreams

The continuing poor economic situation really got me thinking about what America is all about and what it means to be an American.

I don't like to write about my family, but given the ugly situation in Wisconsin and elsewhere, I feel the urgent need to write about my wonderful wife and how she is realizing her dreams in America.

When I got divorced a few years ago, a friend advised me to take a broader perspective on potential partners than women in my local area. During my career, I've traveled the world many times and I've met a lot great people. So, I took his advice. I found a great woman in the Philippines.

We were married in May, 2007.

My wife opened a home day center in the fall of 2009. She found the regulations, she passed her state inspections, she acquired customers, and she served her customers well. Her customers love her.

In her first year in business, my wife netted over $40K. Not bad for a girl from the third world in her first year as a business woman in America.

We are now saving so that she can open a large day care center. She has dreams of opening many day centers. She will do it.

In her short time in America, my wife already knows that your dreams can come true. She has seen it. She has done it. Her dreams are coming true every day. She is thankful for being in America. Nothing will stop her.

Unfortunately, American leftists just don't get it. They are so tied up in their income distribution, collective bargaining nonsense that they can't see the real America. To them, the entire concept of America is lost in the haze of political nonsense.

My wife grew up in a one room bamboo hut. She picked root crops for her grandmother's family business. Her daily shower was pouring a bucket of water over her head.

Now she is a successful business woman in America.

In spite of the county's problems, America is still the land of dreams and opportunities. My wife has demonstrated this.

All I can say is: Shame on the lazy. Shame on the government bureaucrats. Shame on the political left. Shame on them all for trying to destroy this country and what America represents to humanity across the world.

Shame, shame, shame.

Thursday, March 3, 2011

Thomas Friedman and the Great Man Theory of History

Thomas Friedman recently wrote an article stating that Obama's racial make-up and religious ancestry are the root causes of the turmoil in the Middle east today. According to Friedman, people have decided to fight their governments because Obama is black and his father was Muslim. Here is what Friedman actually wrote:

Americans have never fully appreciated what a radical thing we did — in the eyes of the rest of the world — in electing an African-American with the middle name Hussein as president. I’m convinced that listening to Obama’s 2009 Cairo speech — not the words, but the man — were more than a few young Arabs who were saying to themselves: “Hmmm, let’s see. He’s young. I’m young. He’s dark- skinned. I’m dark-skinned. His middle name is Hussein. My name is Hussein. His grandfather is a Muslim. My grandfather is a Muslim. He is president of the United States. And I’m an unemployed young Arab with no vote and no voice in my future.” I’d put that in my mix of forces fueling these revolts.

Over the last few years Friedman has pretended to be some kind world authority because he's actually been somewhere other than Toronto and Cancun.

Well, I've been in 26 countries on 6 continents. I've been to many countries 20 or more times each.

I can tell you with complete certainty that Friedman has learned nothing in his travels around the world.

Thomas Friedman is trapped in the early 20th century "great man" theory of history. Stalin, Mussolini, Hitler, Roosevelt, Kennedy... "Great" men (not good men, but powerful men) changed our destiny. According to that view, a "Great Man" is the necessary catalyst for dramatic change.

Friedman desperately wants Obama to be the next "great man" who changes history.

The current reality is very different. The revolutions in North Africa and the Middle East are based on the availability of open and uncensored information. The same kind of open and uncensored information that Friedman and the mainstream American media views as a threat.

The Middle East has a very young population. They are on Facebook, Twitter, email, various discussion groups, and SMS (cell-phone text messages) interacting with their friends and relatives living in America and other western countries, as well as new acquaintances that they met on the internet. They also watch cable stations like CNBC International, CNN, and Al Jazeera. They know more about the world around them than any generation that proceeded them.

These people can actually see our freedom. They don't hate our freedom like Rudy Giuliani and other neo-cons believe. They are envious of it. What they hate are their own rulers who deny them this freedom.

In any societal disruption, changes in the environment build slowly. Eventually, those changes reach a tipping point and then radical change seems to happen overnight. This is what we are seeing in the Middle East today. The change that the internet brought to their countries has finally reached the tipping point. As a result, the people have awoken and the dictators are falling one by one.

I do agree with Friedman on one point -- we are only seeing the beginning of this revolution. There are dozens of tyrannies in the middle east and Africa that will eventually fall as part of this information awakening.

That is a good thing for them and eventually the world. I am glad to be here to see it.

Friday, February 25, 2011

The Final Death of the 20th Century

The last few weeks have been among the most exciting and promising in recent memory.

People all over the middle east are rising up against the tyrants who have lorded over them for decades.

Even Colonel Gaddafi -- a brutal dictator, who has been in power for 42 years -- is fighting for his survival. This should tell us all that something very big is happening in the world.

The turmoil isn't just occurring in the middle east.

Beleaguered taxpayers in Europe and America have staged their own revolutions as well -- booting out fiscally irresponsible politicians who have run up their public debt and torpedoed their economies.

In America, the Tea Party movement helped spur an electoral revolution that saw the largest GOP gains in the Congress in more than a generation.

Expectedly, the forces of reaction are waging a bitter fight against change.

Government bureaucrats and others who live off of tax money have staged violent protests in Greece, France, and the U.K.

In the U.S., the teacher's unions are mounting an all out effort to hold on to the unchecked power that they have over our wallets and our children.

America has among the worst public schools in the developed world. Last year we were 25th out of 34th in math and science. People across the political spectrum understand that we need fundamental reform in education. Over the last three decades, every proposal by both Democrats and Republicans to fix the public schools have been met by bitter opposition from the NEA and other government employee's unions. The NEA has been successful in blocking any and all change.

Today, the NEA is fighting for it's very survival.

The more I look at what's going on around the world, the more I am convinced that we are witnessing the final death of the 20th century and the concept of the all powerful state that it spawned.

People from Tea Party members in America to lowly peasants in Libya are standing up and saying: we've had enough, NO MORE.

It's a great time to be alive to witness this monumental struggle for freedom against the state.

The sad part is that America may very well lag in this revolution because our vested interests are the most powerful vested interests on earth. It's going to take more than one election to push them aside.

Let's hope that our resolve remains strong and that we remain focused, so that America remains the leading beacon of freedom in the world.

Sunday, February 20, 2011

The Fundamental Difference Between Private and Public Unions

I grew up in Detroit. I make a huge distinction between industrial worker unions like the UAW and Teamsters on the one hand and government bureaucrats unions like the NEA on the other hand.

The NEA funnels compulsory union dues into political campaigns to essentially elect their own bosses. The politicians who benefit from this refuse to make any changes whatsoever in the horrible school systems no matter how bad they get.

Milwaukee teachers earn on average for $100,000 a year in salary and benefits. What do we get for it? 32% of kids in Milwaukee never graduate high school. Many of those who do "graduate" are functional illiterates who can't read, write, or perform simple arithmetic.

American cannot remain a prosperous country with our awful school system. This has to change. It will never change as long as the NEA and AFSCME own the Democrat Party.

FDR himself was against government workers unionizing. He was right.

Common Thread to Middle East Protests: Young, Connected Populations

There have been a lot of uninformed commentaries on the cause of the various uprisings in the Middle East, especially among the neo-cons who have become hysterical about a plot by the Muslim Brotherhood to take over the Middle East and then the world.

The fact is that the situations in the countries experiencing protests in the middle east are all very different.

1.) Tunisia is a relatively wealthy country. The protests there are very similar to what happened in Chile and many Southeast Asian countries in the 80s and 90s -- people who got some amount of economic freedom finally demanded political freedom as well.

2.) Egypt is very poor and corrupt. Young people decided not to take it any more. Sure, the Muslim Brotherhood was involved in the protests, but they didn't start it or lead it. In the end, I suspect that Egypt's military will behave a lot like Turkey's military and not allow a theocratic state to emerge in there.

3.) Bahrain is also a wealthy country. It has a population that is 2/3rds Shiite being ruled by a Sunni minority. The Shiites see a fundamental unfairness and have finally have decided to do something about it.

4.) Iran is run by religious tyrants. The young people don't like it. Prior to America invading Iraq, the young people in Iran were electing reformist governments. The Iraq war enabled the clerics to whip up mistrust of America in Iran, warning that we were secretly plotting to install the Shah's son as ruler. Those type of scare tactics are no longer working.

The common thread running across all of these countries is that their populations are very young. They are restless. They are also on social media like Facebook and Twitter. So they understand more about the outside world than ever before.

Having direct contact with free people in North America and Europe is a catalyst for all of this discontent.

The neo-cons have it exactly wrong. The young people in the middle east don’t hate our freedom. They envy it. They see the freedom that we have and it causes them to be furious with their own governments for denying it to them. This is a good thing.

This is why cutting off trade and restricting travel is exactly the wrong policy when dealing with tyrants. We need to encourage more contact between Westerners and the oppressed peoples of the world. Yes, this even includes Cuba. Once they see what we have, they won’t stay silent any longer.

Saturday, February 19, 2011

Milwaukee Teachers Earn Over $100,000 a Year

The Wisconsin teacher strike has ignited another debate about America's supposedly underpaid teachers.

Let's talk reality here.

According to the MacIver Institute total teacher compensation in Milwaukee is $100,005 a year. Salaries average $56,500 and benefits are $43,505. It's a strange salary to benefit ratio, but unions have been pushing benefits over salaries for decades. It was their choice to do this.

Teachers work less than 37 weeks a year. They get 10 weeks off in the summer, 1 week at Christmas, 1 week for mid-winter break, 1 week for spring break, and 11 holidays. The leaves 1472 hours for work. $100,005 / 1472 hours is $68 an hour.

Over the last couple of years, I ran a little consulting firm. When I needed people, I brought them in as 1099 subcontractors at a straight hourly rate. No benefits whatsoever. Over the last two years, the average hourly rate I've paid is $65. That's less than the Milwaukee teachers make.

There are three important differences as well:

First, I live on the west coast, where the cost of living is much higher that it is in Wisconsin. Computer programmer rates are much lower in the Midwest than they are in Seattle. The average teacher in Wisconsin makes significantly more per hour than the average contract programmer.

Second, I hire people who have quantitative college degrees, like Computer Science where they go through 4 semesters of calculus, linear algebra, and statistics. I don't hire people who have worthless teaching certificates or degrees in "Phys Ed".

Third, if the people I employ don't do a great job, my customers won't pay me. They certainly won't bring me back to do more work. On the other hand, teachers get "tenure", which makes it impossible to terminate them no matter how screwed up their product (your kids) become.

The sad fact is that America's poorly performing public school system has little to do with lack of funding or poor teacher compensation. The schools don't perform because the unions care more about their own power than they care about our kids. That's the bottom line.

Friday, February 18, 2011

MSNBC: Wisconsin Teachers Out to Lunch

This morning on the MSNBC show Jansing & Company, they showed an interesting graph on the real financial situation with the teachers in Wisconsin.

According to MSNBC:

- The average single private sector employee pays 18% of the cost of his/her healthcare insurance.

- The average married private sector employee pays 29% of the cost of healthcare insurance for themselves and their family.

- In Wisconsin, teachers only pay 6% of the cost of their healthcare insurance.

Wisconsin has a budget deficit of $3.5 billion. They are constitutionally mandated to balance their budget. To help balance the budget, Governor Walker has proposed to increase the amount teachers contribute to their health insurance premiums from 6% to 12% of the cost. This is still far lower than people in the private sector pay. The teachers's union response? Close the schools, stop educating our kids, and run around carrying signs that equate Governor Walker to Hitler.

The underlying story is that America has among the most under-performing public school systems in the developed world. Last year, American students ranked 25th out of 34 developed countries in Math and Science. American was right in the middle on language skills. It's not a great performance for the students of the greatest country on earth.

Money isn't the problem. America spends more money on education per student than every other country except Switzerland.

Wisconsin teachers earn on average $89,000 a year in salary and benefits. They work less than 9 months of the year. That's $10,000 a month, equivalent to $120,000 a year if they worked full time like the rest of us. That's a fair chunk of change. Quite frankly, great teachers should probably make more than this. That's how to attract great teachers. We need to attract more great teachers. However, we also need to terminate bad teachers. Bad teachers are rarely terminated. Why?

The problem is that the NEA owns the Democrat Party. The NEA uses forced union dues to support Democrat politicians who reciprocate by blocking merit pay for great teachers, Charter Schools (which was the idea of courageous Democrat politicians), and school choice. Of course, any notion that a Principal could terminate a lousy teacher who is destroying your child's future is just not even open for discussion by the NEA and their Democrat protectors.

The McKinsey Global Institute just released a study which showed that America's public sector and especially America's public schools are the among the most unproductive in the developed world. They are also the most resistant to change. McKinsey also faults the U.S. government for creating the most burdensome regulatory climate in the world; not doing it's job in providing a healthy infrastructure that meets our needs; and ignoring our growing energy challenges.

What did The Economist say about McKinsey's conclusions? "Alas, a country which is so good at business is pretty bad at government".

That about sums it up.

This is our challenge.

Thursday, February 10, 2011

Every American Should be Proud of the Egyptians

The brave Egyptian protesters are in day 16 of their protest against the dictator Mubarak. Mubarak refuses to leave. The Egypt military is starting to make veiled threats against the protesters. Yet, the protests continue.

Every American should be proud of the civil disobedience the Egyptians are displaying. After all, Americans pretty much invented civil disobedience. Sorry President Obama, it wasn't Gandhi. Gandhi was a big fan of Henry David Thoreau.

Unfortunately, there is a segment in American society that is alarmed by the protests in Egypt. It's a segment of the population that I have a great affinity with and respect for -- conservatives.

One has to wonder how "conservatives", who champion American values, came to be alarmed by and even oppose the Egyptian's desire to be free of tyranny.

It all started with the Cold War. It continues with the desire of some "conservative" politicians (the neo-cons) to remain relevant by exploiting the fears of Americans, rather than exploiting our ideals.

During the Cold War, America faced an organized, ideological enemy (Communism) that enslaved half of the world and had tens of thousands of nuclear weapons pointed at us. America did what it took to fight this tyranny. One thing America did was prop up anti-Communist dictators -- some of whom were pretty nasty at home. American did what we had to do for the future of world. I supported it 100% and I won't apologize for it.

However, after the Cold War ended the U.S. government stopped propping up dictators in Latin America and Asia. Most countries in Latin America and Asia have progressed to market economies and pluralistic political systems.

Unfortunately, the U.S. government did not stop propping up dictators in the Middle East.

Who flew the Airplanes into the Word Trade Center? Hondurans? Chileans? Filipinos? South Koreans? NO. It was people who lived in oppressive regimes in Egypt and Saudi Arabia, that are supported either financially or militarily by the U.S. government.

Today, Tunisians and Egyptians are clamoring to be free. Others are likely to follow.

Americans should be cheering. Unfortunately, many "conservative" politician are sounding the alarm bells instead.


The GOP coalition is much more ideologically diverse than the Democrat Party. The only thing that held the GOP coalition together was anti-communism. After the Cold War ended, parts of the GOP coalition including libertarians like Ron Paul and paelo-cons like Pat Buchanan started questioning our expensive military commitments abroad.

This alarmed the "neo-cons", so they started looking for a new enemy. For a while during the 1990s, they were beating the drums against "Red" China, which in many ways is more capitalist than the U.S.

9/11 saved the GOP coalition for while. But 9/11 is not the hot topic for Americans today. So the neo-cons are reaching for new solutions. Some are starting to beat the drums against China again. Others are warning of an imminent threat that radical Muslim regimes will pop up all over the middle east. But Egypt is not Iran. There isn't an exiled Ayatollah waiting to take over. The most respected institution in Egypt is the pro-Western military.

I love my country. I often call myself a "conservative". But American conservatives who oppose the demonstrators in Egypt are on the wrong side of history.

Thursday, January 27, 2011

The Real Story with Obama's Colorado School Turnaround

During the state of the union address, Obama praised the Bruce Randolph school in Colorado for turning themselves around rather dramatically in a few short years.

Three years ago, Bruce Randolph was one of the poorest performing schools in Colorado. In 2010, 97% of the seniors graduated. Many of the graduates were the first in their families to get admitted into college.

How did they do it?

Sen. Michael Bennet and the school's principal Kristin Waters, convinced the Colorado government to give the school almost complete autonomy from the state's education bureaucrats over budget, staffing, schedule, school calendar, and curriculum.

One of the first things they did is terminate all of their tenured teachers and told them they could re-apply for their jobs. Only 5% got their jobs back. 95% of the tenured teachers weren't up to par.

The Gate's Foundation has done significant research into why public schools fail. Their conclusion is that it's all about teachers. The producer of the movie "Waiting for Superman" came to the same conclusion. Good teachers succeed and bad teachers fail our children. It's not any more difficult than that.

In the private sector a business can: A.) fire bad employees and B.) pay good employees a lot of money. You can't do that in government. That's the problem. It has to change.

If we're really serious about fixing the public schools, we need to give principals the ability to terminate bad teachers and reward great ones with substantial performance bonuses tied to international test scores. We also need to get schools out from under their state's education bureaucracies and let the principals and the parents who have kids in the school have a greater say in how the schools are run.

This is how the Bruce Randolph school was able to succeed. It's how other schools will be able to succeed as well.

Unfortunately, the teacher's unions have viscously blocked every attempt to implement these types of common sense reforms.

The big question is whether or not Obama and the Democrats are willing to do battle with their largest specialist interest group (the NEA) so that our kids can have a fighting chance in the global economy?

Wednesday, January 26, 2011

Obama's Tepid State of the Union Speech

Last night, President Obama delivered on of the most tepid state union speeches in recent memory. Obama's "winning the future" theme was exactly the right one. Unfortunately, very little of what he said will help us do that.

Obama should have held up the report from his own Deficit Commission. He should have told the American people that this is his program for moving forward. Then he should have turned around and handed it to John Boehner and asked him to pass it immediately.

Instead, we got a laundry list of disconnected new initiatives that just don't add up and won't do a thing to solve the looming fiscal crisis caused by too much government spending.

Here's the blow-by-blow analysis:

1.) Obama is calling for new "investments" on infrastructure. In this context, he's actually using the term "investment" correctly. Here's the problem: for years Democrats have called every bit of government spending "investments", including spending on transfer payments from one group to another. Only 6% of Obama's trillion dollar "stimulus" program was spent on real investments in our future. So, at this point it's difficult to trust what the Democrats say about this. Yes, we need to fix and upgrade our crumbling roads, bridges, ports, airports, water and sewage systems. But it has to be paid for by cutting subsidies and transfer payments.

2.) Obama mentioned China's "green energy" programs. Great! China is building the largest damn in the world. It's difficult to build a damn in the United States anymore because the extreme fringe of the environmental movement won't allow it. China has 30 nuclear power plants under construction. The last time the U.S. started a new nuclear power plant, Jimmy Carter was still president. Again, the extreme environmentalists won't allow it. Please tell us Mr. President, what specifically do you plan to do about your supporters, who have been blocking energy progress since the 1970s?

3.) Obama called for more "investments" in education. What he really means is more transfer payments to the teacher's unions who have destroyed our school system. No thanks. Been there, done that. Not a single dollar more at the local, state, or federal level should be spent on public schools until: A.) the teacher's unions are de-certified, B.) we abolish the entire notion of "tenure", which only serves to protect bad teachers, and C.) every school is taken away from the board of education bureaucrats and turned over to the parents who actually have kids in the school, i.e., every school is turned into a Charter school. Obama has claimed for years that he supports Charter Schools. It's time to put up or shut up. We're either going to truly reform one of the worst performing education systems in the developed world, or reconcile ourselves to becoming a second rate country.

4.) Obama called for building high speed rail lines in California and the Midwest. The last thing in the world we need is to waste money on a government run high speed rail system, which will cost a ton of money, almost no one will use, and will quickly degrade and stagnate like every other service the government tries to provide. A better answer to providing mass transit is to eliminate state and local laws which prevent private entities from competing to provide bus and other types of mass transit services. The Philippines have privately run mass transit systems, which do a great job at getting a lot of people where they need to go.

5.) Obama is right about the crazy organization of the federal government and all of the duplication across agencies. For example, the federal government has 72 welfare programs. They could all be collapsed into a single program that provides cash subsidies to the poor and disabled. We'd save a TON of money on administrative costs. A TON. Do you actually think that he will do anything like this? I don't.

6.) Obama called for a 5 year "spending freeze" on domestic discretionary spending. This won't even come close to balancing the budget. His freeze might reduce the deficit by $400 billion over the next 10 years, but deficits are projected to be $14 TRILLION dollars over the next 10 years, which will double the national debt to $28 trillion. His freeze amounts to less than 3% of the projected new debt. It's not enough to keep the country solvent.

7.) Obama is finally paying attention to the trade agreements with Columbia and Panama which have been languishing on the shelf for years. That's a good thing.

8.) He paid some lip service to tort reform to help reign in heath care costs. This is also a good thing, but I don't think he's serious given that Trial Lawyers are among the largest contributors to the Democrat Party.

9.) He also mentioned lowering the corporate tax rate, which is the highest in the world, and simplifying the tax code. This is the one recommendation from his deficit commission that he seems to be endorsing. It's a great idea and it should be done to help restore our competitiveness.

10.) Of course Obama had to throw some red meat to the fringe left by bashing oil companies and successful people. No surprise, but it is getting really, really old.

It's pretty obvious that Obama still doesn't understand that the country faces an almost insurmountable fiscal disaster caused by excessive government spending. Here are the two big questions: A.) Will the GOP actually do something about it? B.) If the GOP does do something about it, will Obama really go along? We'll see.

Sunday, January 23, 2011

Healthcare Reality Check

The GOP House has voted to overturn the huge mess known as Obamacare. We'll see if it passes the Senate. Regardless, President Obama is not going to sign. So, the GOP is already starting work on replacing Obamacare with their own ideas.

What should the GOP propose? There are two countries that can guide us.

Switzerland undoubtedly has the best healthcare system in Europe. Singapore has the best healthcare system in the world. Switzerland spends about 10.8% of GDP on healthcare. Singapore spends less than 4%. Healthcare expenditures in the U.S. have ballooned to a whopping 16.5% of GDP.

Neither Switzerland or Singapore have the kind of "socialist" or "single payer" systems that enchant the know-nothings on the American left. In fact, public expenditures on healthcare as a percentage of the total is about the same in Switzerland and the U.S. The government spends a much lower percentage of the total in Singapore:

Switzerland -- 55%
United States -- 50% average, depending on the state
Singapore -- 34%

Why do their systems work to control and costs and ours doesn't? Singapore and Switzerland have similar philosophies -- they put people in charge of their own care, but they also require them to take responsibility.

In Singapore you are required to save 8% of you income for healthcare. You can use your health savings to buy insurance and pay for out-of-pocket expenses. The government subsidizes health savings for very low income people.

In Switzerland you are required to spend 8% of your own money on health insurance. The government subsidizes insurance payments for very low income people. Out of pocket expenses are additional.

Switzerland and Singapore have created nation's of healthcare shoppers, who use their own healthcare dollars wisely.

The problem in the U.S. is that Medicare, Medicaid, and employer paid insurance take financial responsibility away from individuals so people don't have any incentive to use medical services in a cost effective way.

I've been to Singapore. They have a great and very cost effective healthcare system. It cheaper than ours. They also have better outcomes than we do. ditto for Switzerland.

The answer to escalating healthcare costs in the U.S. is not to give more control to power hungry politicians and greedy bureaucrats. The answer is personal responsibility and personal control. Singapore and Switzerland have shown us the way. Are American politicians smart enough to follow? We'll see.