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.

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.

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.

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.

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.

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.