Having live thru the "Wild 1960's", I think that I can shed a little light on the times and the Obama birth certificate. You may as how they could be related? They are connected. From the birth certificate, Obama was born 8/4/1961. I recall the 1960's as a time when a lot of homely girls had a place to express themselves. I never recall seeing a good looking hippie girl back in those days. It did seem fair to me at the time because many ugly girls had been cut out of much of the action. It was the time of drugs, free love and Marxist politics. How those came together was beyond me at the time. One thing that I did notice was that the kids who were in those groups mostly came from families who had the money to support them. The groups also seems to be made up of con men who were smarter than most of the others and who were just a little bit older and could easily take advantage of the younger and stupider ones. Looking back now, I still hold to that view. There were clearly two groups mixed together and the con men were the most dangerous. Now how about Obama's birth certificate.
He was born 8/4/1961 so that means his mother had to have been nailed by an "older" Black man who was already married 9 months earlier. Stanley had stayed in Washington to finish high school while her parents lived in Hawaii. We know that the school was a Marxist hot bed and see was in the middle of it. After graduation she moved to Hawaii to live with her parents and go to college. She started college at age 17 like many kids do in September of 1960 and within just a few weeks was impressed by a 25 year old Black student from Africa who nailed her before she knew what had happened. At the time, I knew several men about the same age as Obama's father who saw young hippie freshmen girls as an open season. I was an engineering student at the time and had more important things to do with my time. This is the way it was on the West Coast at the time.
The other thing that I have noticed is how many of the Hippie's of the time have held onto those strange ideas. I would have thought that most would have grown out of it, but they did not. Once a circle of friends has been established, it is very difficult to break out of it. The fact that the hippie group is so different from the normal people, it is even more difficult to get out of. President Obama loved his mother just like all of do and we are all significantly influence by our mother's philosophy. That is the way us humans are made and so is Obama. If you go along with this blog, you may better understand why Obama acts in such a strange ways compared to normal people. Obama is far from normal. Now you understand what kind of Acorn Obama is and the strange Oak tree that it fell from.
PS----------
Have you noticed that all the people who are promoting Marxism were never raised in a country that was Communist. They are normally from more prosperous countries but who see themselves as victims or called in someway to save others who they feel are victims. Interesting isn't it? Sounds like Obama's wife and his favorite Pastor, Rev. Wright.
Thursday, April 28, 2011
Tuesday, April 26, 2011
American Education Statistics
I am always digging into statistics on the American education system including the colleges and universities. The deeper I dig, the worse it looks. Try these numbers and see what you think?
* 11.7% of the kids at the University of Wisconsin Madison were born outside the USA.
* Only 43% of Black kids who get into college actually graduate.
* Only 63% of Non-Blacks who get into college actually graduate.
* Only 36% of Black males who get into college actually graduate.
* 95% of kids who get into Harvard graduate.
* 87% of kids who get into Columbia graduate.
* 22% of kids who graduate college in Russia earn engineering or technical degrees.
* 16.7% of kids who graduate from UW Madison were born outside the USA. This is because of their high rate of graduation compared to kids born in the USA.
What can be done about the low graduation rates? The taxpayers spend all this money on kids who don't graduate. This means that the cost per actual degree is almost twice the cost of sending one kid thru college. For Blacks, they cost double per degree because they graduate at less than 50%. If Harvard graduates 95% of their students, which degree is cheaper? How much do you think that it costs taxpayers for a Black male degree, given that only about 1/3 ever graduate?
When I have discussed these numbers with friends, they all say that it is too late for the USA. The damage has already been done. They site engineering and technical degrees as an even worse problem since the USA has been going down since 1986 in the number of engineering degrees in the face of increased college enrollments. We are spending much more and getting less for the money. I don't even want to dig into the statistics on student loans. When I graduated, I did not know a single student who had a student loan and most did not have a car loan either or a charge card, for that matter. Things have changed and not for the better.
* 11.7% of the kids at the University of Wisconsin Madison were born outside the USA.
* Only 43% of Black kids who get into college actually graduate.
* Only 63% of Non-Blacks who get into college actually graduate.
* Only 36% of Black males who get into college actually graduate.
* 95% of kids who get into Harvard graduate.
* 87% of kids who get into Columbia graduate.
* 22% of kids who graduate college in Russia earn engineering or technical degrees.
* 16.7% of kids who graduate from UW Madison were born outside the USA. This is because of their high rate of graduation compared to kids born in the USA.
What can be done about the low graduation rates? The taxpayers spend all this money on kids who don't graduate. This means that the cost per actual degree is almost twice the cost of sending one kid thru college. For Blacks, they cost double per degree because they graduate at less than 50%. If Harvard graduates 95% of their students, which degree is cheaper? How much do you think that it costs taxpayers for a Black male degree, given that only about 1/3 ever graduate?
When I have discussed these numbers with friends, they all say that it is too late for the USA. The damage has already been done. They site engineering and technical degrees as an even worse problem since the USA has been going down since 1986 in the number of engineering degrees in the face of increased college enrollments. We are spending much more and getting less for the money. I don't even want to dig into the statistics on student loans. When I graduated, I did not know a single student who had a student loan and most did not have a car loan either or a charge card, for that matter. Things have changed and not for the better.
Monday, April 25, 2011
Septic System Drain Field Restoration
This one is really off beat, but when something good comes along, it needs to be shared. Many of us have been dealing with rural septic systems and we know it is only a matter of time until the system fails. When it does, it most often is the the drain field that fails. This can cost big bucks plus all the regulations that will kick in. Over the years, I have tried all kinds of things to clean out my drain field and none have done the job. My wife insists on putting down all kinds of magic dust that is supposed to make the bugs eat the stuff, but that does not work either. Now I have found something that does work and it is very simple.
My first tries were to run the garden hose down from the vent pipe at the far end of the drain field. The idea was good, but it did not work. The reason is that the pipe slopes down hill from the solid waste catch tank. When you try to run water back up to flush out the drain field, all that you do is to put more water down at the end. There is no flushing action. Now the idea that works. I have one of those new HVLP paint spray rigs. It means, "low pressure, high volume" paint spray system. It runs with a turbine type compressor that moves a lot of air, but at low pressure. It is not like the old piston compressor that we used to pump up our car tires. It uses a regular garden hose for the air line since it is low pressure. Now what I did was to put the air line down the vent pipe at the end of the drain field. With me so far? The idea was to bubble the air "up hill" thru the drain field pipe back to the holding tank. It worked like a charm. As the air bubbled back to the tank, it pushed much of the water along with precipitate back to the holding tank. It is a little like the old fashion coffee pots or percolators. Because there is so much air coming out of the hose, it really scrubs the inside of the drain pipe and the drain field. Many of the drain holes in the drain field pipe had become plugged over time and the action of the bubbling really cleaned them out. It works.
I have never seen or heard of using one of these turbine type air compressors for this type of thing before and that is why I felt that this was something that needed to be passed along. It could save you several thousands of dollars as compared to having to put in a new drain field. If you think about the concept, I don't see any other way except for using a lot of air that could push the sludge up hill. There is no way to do this with water alone. Just passing on a tip. Once in a while even a blind pig finds an acorn.
PS----
The way that septic systems work is that the first tank operated as an anaerobic digester and the drain field operates as an aerobic digester. Anaerobic means "without oxygen" and aerobic means "with" oxygen. The action of the aerobic system is about 100 times faster than the anaerobic system. That means, the more oxygen or air that you can get into your system, the faster it is able to digest the waste. Since the drain field is aerobic, pumping in air is just what it needs to work faster. One way to get more oxygen into the system is to use one of those "stones" from a big fish aquarium. Even with a very small pump, the stone makes the air bubbles so small that they have many times the surface area of using a garden hose so that you get a lot more oxygen dissolved in the waste water.
If you look at a big public sewer system, you will see what looks like water being pumped into the center of the holding pools. What you are actually seeing is air being pumped in just like in a fish farm or an aquarium.
PS----
I have a CX-7 Turbine paint compressor made by Croix, but I think you could rent one. The outlet hose is a regular garden hose. Push the garden hose as far down the vent pipe in your drain field as you can and turn the thing on for about an hour. If you rent the thing for a day, turn it off and on about every 15 minutes and let the line refill for about 5 minutes before turning it on again. This action will flush most of the precipitate back to the holding tank. As a long term solution buy an aquarium air pump with capacity of at least 50 gallons along with a difuser stone of appropriate size. Put this down the vent pipe as far as it will go and turn it on. You may need a long extension cord, but the thing does not use 25 cents a day in electricity. The air will assure that you have an active arobic digester in the drain field. After a couple of months, your system will be as good as new.
My first tries were to run the garden hose down from the vent pipe at the far end of the drain field. The idea was good, but it did not work. The reason is that the pipe slopes down hill from the solid waste catch tank. When you try to run water back up to flush out the drain field, all that you do is to put more water down at the end. There is no flushing action. Now the idea that works. I have one of those new HVLP paint spray rigs. It means, "low pressure, high volume" paint spray system. It runs with a turbine type compressor that moves a lot of air, but at low pressure. It is not like the old piston compressor that we used to pump up our car tires. It uses a regular garden hose for the air line since it is low pressure. Now what I did was to put the air line down the vent pipe at the end of the drain field. With me so far? The idea was to bubble the air "up hill" thru the drain field pipe back to the holding tank. It worked like a charm. As the air bubbled back to the tank, it pushed much of the water along with precipitate back to the holding tank. It is a little like the old fashion coffee pots or percolators. Because there is so much air coming out of the hose, it really scrubs the inside of the drain pipe and the drain field. Many of the drain holes in the drain field pipe had become plugged over time and the action of the bubbling really cleaned them out. It works.
I have never seen or heard of using one of these turbine type air compressors for this type of thing before and that is why I felt that this was something that needed to be passed along. It could save you several thousands of dollars as compared to having to put in a new drain field. If you think about the concept, I don't see any other way except for using a lot of air that could push the sludge up hill. There is no way to do this with water alone. Just passing on a tip. Once in a while even a blind pig finds an acorn.
PS----
The way that septic systems work is that the first tank operated as an anaerobic digester and the drain field operates as an aerobic digester. Anaerobic means "without oxygen" and aerobic means "with" oxygen. The action of the aerobic system is about 100 times faster than the anaerobic system. That means, the more oxygen or air that you can get into your system, the faster it is able to digest the waste. Since the drain field is aerobic, pumping in air is just what it needs to work faster. One way to get more oxygen into the system is to use one of those "stones" from a big fish aquarium. Even with a very small pump, the stone makes the air bubbles so small that they have many times the surface area of using a garden hose so that you get a lot more oxygen dissolved in the waste water.
If you look at a big public sewer system, you will see what looks like water being pumped into the center of the holding pools. What you are actually seeing is air being pumped in just like in a fish farm or an aquarium.
PS----
I have a CX-7 Turbine paint compressor made by Croix, but I think you could rent one. The outlet hose is a regular garden hose. Push the garden hose as far down the vent pipe in your drain field as you can and turn the thing on for about an hour. If you rent the thing for a day, turn it off and on about every 15 minutes and let the line refill for about 5 minutes before turning it on again. This action will flush most of the precipitate back to the holding tank. As a long term solution buy an aquarium air pump with capacity of at least 50 gallons along with a difuser stone of appropriate size. Put this down the vent pipe as far as it will go and turn it on. You may need a long extension cord, but the thing does not use 25 cents a day in electricity. The air will assure that you have an active arobic digester in the drain field. After a couple of months, your system will be as good as new.
Sunday, April 24, 2011
Obama Has The Curse
Did you notice how fast Obama started looking for investors who were gaming the oil supply and driving up the prices? The reason that he was so fast out of the blocks was that he himself is cursed He has the "Gamers Curse". It is like most curses in that if you have spent your life "gaming" the system, then you expect that everyone else is also gaming the system. It is like the familiar liar's curse. You remember that one where if you are a liar, then you can't trust anyone else. The "gamers" curse affects you the same way. No matter how hard a person tries to ignore it, you can help yourself from looking for "Gamer's" when something like oil prices go up.
For Obama, going after oil gamers gives the impression that he is really trying to do something about oil prices, but in the final analysis he is just doing the old "Rope-A-Dope" and stalling to avoid having to do anything. If the office of the President of the USA was not so important, it would be laughable to watch Obama act in his totally incompetent way. Look at his audience back at Acorn. Those people were not wise enough to realize that Obama was gaming them too. Where is Obama now and where is Acorn or Rev. Wright? He had friends on the way up, but I am not so sure that they will continue to be friends as Obama's various curses come to light.
Check him out and see if you don't agree that he is "Cursed"?
For Obama, going after oil gamers gives the impression that he is really trying to do something about oil prices, but in the final analysis he is just doing the old "Rope-A-Dope" and stalling to avoid having to do anything. If the office of the President of the USA was not so important, it would be laughable to watch Obama act in his totally incompetent way. Look at his audience back at Acorn. Those people were not wise enough to realize that Obama was gaming them too. Where is Obama now and where is Acorn or Rev. Wright? He had friends on the way up, but I am not so sure that they will continue to be friends as Obama's various curses come to light.
Check him out and see if you don't agree that he is "Cursed"?
Saturday, April 23, 2011
Econ 102, The Next Chapter
Why is it that we hear so much about Econ 101? This is the very first course and most often the last one on economics that most college graduates ever take. Why is it that none ever stake their claims on Econ 102? They think that they already know enough about economics from Econ 101 that they don't need to learn anymore. I remember how smart I though I was after I learned the multiplication table from 1 to 10, but I was only 7 years old so I guess I was not as smart as I thought I was. Let's look at a couple of examples and see if Econ 101 made us all that smart.
First, all decisions are between alternatives and the biggest error made in most decisions that have gone bad is that the better alternatives were not in the running when the decision was made. That is a fact after analysing thousands of decisions, not considering other alternatives was the biggest reason for bad decisions. Most of the time people picked the right or best alternative out of those that was being considered. The other rule of decision making comes from Mechanics where they use the concept of the "free body diagram" to analyse forces. The "free body diagram" is one where you draw a box around the problem and balance all the forces within the box so that the object in the box can not move. If the box is in balance with the world, the things in the box also have to be balanced. This is a universal concept, but for some reason it never comes up in Econ 101. Why do you think that is?
Now let's see if we can use these concepts to figure out what we should do. Assume that the economy is in the toilet, just like it has been for some time and we want to see if we can get it going again. What should we do? We could spend tax money on wind mills or allow a coal mine to expand. These are our two alternatives. The coal mine with their power plant can make electricity for $0.025/kwh and the wind mill can make electricity for $0.250/kwh when it has wind. The coal fired power plant is complicated and needs to be cleaned from time to time so they figured that if a customer would allow them to turn off power once a week for an hour, they would be willing to sell the electricity to them for $0.015/kwh. If they wanted power 100% of the time, they would have to pay full price. This is the starting point.
Since power from the wind mill is not available 100% of the time, it is only worth the same as the coal fired power that is not available 100% of the time. Both are only worth $0.015/kwh. This means the power from the wind mill cost 16.7 times that of the coal fired plant. With me so far? As a consumer, why would you agree to pay $0.250/kwh if you could buy it from another place at $0.015. You would have to be stupid to do that. Now what if your government took money from me in the form a taxation and sent you a check each month for the difference in price between the wind mill and the coal fired plant? You could use wind power and it would not cost you anything extra, but what about me? What if you paid the full price for the wind mill power and then came to my home when I was away at work and just robbed me? Wouldn't it be exactly the same?
Here is the problem. We have all this coal in the ground right now and we know where it is and we know how to get it out and make electricity from it. How much is it worth just sitting there in the ground? Zero. It only has real value when it is mined out of the ground. Let's say that when it is run thru the power plant it is worth the same $0.025/kwh because it is available 100% of the time. Further, no tax money had to be used nor did we need to borrow money from China to mine the coal or generate the electricity, but with the wind mill, we had to collect taxes and borrow money from China. To make the power from the wind mill competitive with the coal power, we would have to give the wind mill some kind of tax credit. This is real money we are talking about here. The wind mill power, from above, will cost 16.7 times that from coal, so to make the cost of power "equal" or 1 for 1, we need to give 15.7 unit in credit to the wind power. Another way to look at this the ratio of pure waste to value is 15.7 to 1.0. Don't follow? Look at it this way for every dollar that we spend on wind power, we waste 15.7/16/7 or $0.94. Think about this. Why would anyone spend a dollar to get back just 6 cents in value? That is exactly what is going on here.
How many times have you seen a situation where any government knew how to spend tax money or borrowed money better than anyone else? They always come back to the transcontinental rail road as the example. Who do you think was the big winner in that one? Do you think that I would have been built anyway with or without government help? I do. Leland Stanford was one of the biggest winners of the tax payer's money and you must know him. He founded a university in his dead son's name, Stanford University. The government got us to the moon didn't they? They did and now what do we have to show for it? Some pictures and some moon rocks. Big deal. Is the quality of you life any better now? Would going to a science fiction movie been just as good? Maybe.
Back to the wind power and coal problem. If we end up at the same place with the same amount of electrical power in the end, what is different? In the case of coal power, we have no debit and we have no future liability. In the case of wind power, we have massive debit and a liability that will go on for every. Looking at the "free body diagram", for every wind mill that is built, we are digging a deeper grave for our country. Even if you personally decide to build your own wind mill with your own money, you are also helping to dig, because you could have put your money into digging for coal or drilling for oil. See, no one is outside the "free body diagram". What each of us does affects every thing inside the "free body diagram". Not graduating from high school or getting your girl friend pregnant all did us deeper. Only responsible behavior stops the digging. Simple isn't it?
First, all decisions are between alternatives and the biggest error made in most decisions that have gone bad is that the better alternatives were not in the running when the decision was made. That is a fact after analysing thousands of decisions, not considering other alternatives was the biggest reason for bad decisions. Most of the time people picked the right or best alternative out of those that was being considered. The other rule of decision making comes from Mechanics where they use the concept of the "free body diagram" to analyse forces. The "free body diagram" is one where you draw a box around the problem and balance all the forces within the box so that the object in the box can not move. If the box is in balance with the world, the things in the box also have to be balanced. This is a universal concept, but for some reason it never comes up in Econ 101. Why do you think that is?
Now let's see if we can use these concepts to figure out what we should do. Assume that the economy is in the toilet, just like it has been for some time and we want to see if we can get it going again. What should we do? We could spend tax money on wind mills or allow a coal mine to expand. These are our two alternatives. The coal mine with their power plant can make electricity for $0.025/kwh and the wind mill can make electricity for $0.250/kwh when it has wind. The coal fired power plant is complicated and needs to be cleaned from time to time so they figured that if a customer would allow them to turn off power once a week for an hour, they would be willing to sell the electricity to them for $0.015/kwh. If they wanted power 100% of the time, they would have to pay full price. This is the starting point.
Since power from the wind mill is not available 100% of the time, it is only worth the same as the coal fired power that is not available 100% of the time. Both are only worth $0.015/kwh. This means the power from the wind mill cost 16.7 times that of the coal fired plant. With me so far? As a consumer, why would you agree to pay $0.250/kwh if you could buy it from another place at $0.015. You would have to be stupid to do that. Now what if your government took money from me in the form a taxation and sent you a check each month for the difference in price between the wind mill and the coal fired plant? You could use wind power and it would not cost you anything extra, but what about me? What if you paid the full price for the wind mill power and then came to my home when I was away at work and just robbed me? Wouldn't it be exactly the same?
Here is the problem. We have all this coal in the ground right now and we know where it is and we know how to get it out and make electricity from it. How much is it worth just sitting there in the ground? Zero. It only has real value when it is mined out of the ground. Let's say that when it is run thru the power plant it is worth the same $0.025/kwh because it is available 100% of the time. Further, no tax money had to be used nor did we need to borrow money from China to mine the coal or generate the electricity, but with the wind mill, we had to collect taxes and borrow money from China. To make the power from the wind mill competitive with the coal power, we would have to give the wind mill some kind of tax credit. This is real money we are talking about here. The wind mill power, from above, will cost 16.7 times that from coal, so to make the cost of power "equal" or 1 for 1, we need to give 15.7 unit in credit to the wind power. Another way to look at this the ratio of pure waste to value is 15.7 to 1.0. Don't follow? Look at it this way for every dollar that we spend on wind power, we waste 15.7/16/7 or $0.94. Think about this. Why would anyone spend a dollar to get back just 6 cents in value? That is exactly what is going on here.
How many times have you seen a situation where any government knew how to spend tax money or borrowed money better than anyone else? They always come back to the transcontinental rail road as the example. Who do you think was the big winner in that one? Do you think that I would have been built anyway with or without government help? I do. Leland Stanford was one of the biggest winners of the tax payer's money and you must know him. He founded a university in his dead son's name, Stanford University. The government got us to the moon didn't they? They did and now what do we have to show for it? Some pictures and some moon rocks. Big deal. Is the quality of you life any better now? Would going to a science fiction movie been just as good? Maybe.
Back to the wind power and coal problem. If we end up at the same place with the same amount of electrical power in the end, what is different? In the case of coal power, we have no debit and we have no future liability. In the case of wind power, we have massive debit and a liability that will go on for every. Looking at the "free body diagram", for every wind mill that is built, we are digging a deeper grave for our country. Even if you personally decide to build your own wind mill with your own money, you are also helping to dig, because you could have put your money into digging for coal or drilling for oil. See, no one is outside the "free body diagram". What each of us does affects every thing inside the "free body diagram". Not graduating from high school or getting your girl friend pregnant all did us deeper. Only responsible behavior stops the digging. Simple isn't it?
United States Energy Policy Myth
If I have heard it come out of one mouth in Washington DC, I have heard it come out of a thousand times and not one would know an energy policy if it hit them in the head. We have an energy policy and it is the "free market" with just enough meddling by the government to prevent the "free market" from working. For some reason politicians and voters seem to think that there is some policy or procedure out there that would cause the cost of oil to go down when the price is based on world wide demand. It is part of the human mind set that seems to feel that there is some "perfect" solution out there waiting to be discovered that will solve all their problems. Some call it the "Silver Bullet" from the old Lone Ranger movies. I thought that the Lone Ranger was an actor and not a real person. How about you?
If the USA were able to produce more oil and you were one of those people who found this new oil on your own property, what would you charge for it? Over 50% of the oil would still be imported and for that we would have to pay the same price that every other country in the world had to pay. Now, tell me why you should get "less" for the oil that you discovered on your own property? You wouldn't. You would expect to get the same price for your oil. What is so wrong with that? Now when you found this new oil on your farm, you and your wife decided to form a corporation rather than the partnership that you had had all these years. Now when people bought your oil, it would be from this new corporation. Would that change the situation in any way? Would the oil now cost more or less? See how stupid this whole thing is about corporations?
Now the fact that you will be charging the "world price" for your oil and for all the poor voters, the gas prices would "not" go down, why would they allow you to drill on your farm that was 5 miles from a school? Given the fact that the price of gas would not go down, why would you expect to get a drilling permit from the county zoning commission? With the logic that seems to be going around these days, I think your permit might be rejected. How is that? If you think this is strange logic, just look around and see what is going on in Washington DC.
The problem is that our voters are so stupid that they do not know what question they should be asking. Rather than, "how can we reduce the price of gas?", they should be asking how can make enough money to afford the price of gas. We can look at the problem from both ends, price and how much money we have, but as shown above, there is no way that we can reduce the world wide price of gas so we are forced to figure out how we can earn more so that we can afford it. Sorry, there is no "perfect" solution for this one, we will just have to figure out how to earn more if we want to be able to buy gas. That's life, get used to it. Take your head out of the clouds, the world is not perfect and I guess this is the one we will have to live in.
Now back to your farm and your oil well. If you get the permit and can drill and get the oil that is under your farm, how will that help the voters to buy the high priced gas? I could use the GNP example, but that might be too complicated. Let's say that there are 5 people in this town 5 miles away who are out of work. You hire them to help drill the oil well and pump it out of the ground so that you can sell it at the world wide price to a refinery in the next county. Now what have we got that we did not have before. This is the old "with" and "without" model. Without, you lived in a mobile home next to your barn and the 5 people in town were on welfare. Now "with" this oil well, you decide to build a new home and buy a new pickup truck and the 5 people you hired are off welfare and they too can buy new pickup trucks. Notice that the price of gas did not go down a single Penny, but several more people who could not afford the gas before can now fill up the tanks of their new pickup trucks. Now, isn't that simple? If we had asked the right question in the first place, we would have gotten the right answer and you would have had your drilling permit 2 years sooner and all these people would have been better off sooner too.
If you have followed my simple example, why is it that it is so difficult for most voters and our politicians to figure all this out? I leave that to you and your friends to discuss.
If the USA were able to produce more oil and you were one of those people who found this new oil on your own property, what would you charge for it? Over 50% of the oil would still be imported and for that we would have to pay the same price that every other country in the world had to pay. Now, tell me why you should get "less" for the oil that you discovered on your own property? You wouldn't. You would expect to get the same price for your oil. What is so wrong with that? Now when you found this new oil on your farm, you and your wife decided to form a corporation rather than the partnership that you had had all these years. Now when people bought your oil, it would be from this new corporation. Would that change the situation in any way? Would the oil now cost more or less? See how stupid this whole thing is about corporations?
Now the fact that you will be charging the "world price" for your oil and for all the poor voters, the gas prices would "not" go down, why would they allow you to drill on your farm that was 5 miles from a school? Given the fact that the price of gas would not go down, why would you expect to get a drilling permit from the county zoning commission? With the logic that seems to be going around these days, I think your permit might be rejected. How is that? If you think this is strange logic, just look around and see what is going on in Washington DC.
The problem is that our voters are so stupid that they do not know what question they should be asking. Rather than, "how can we reduce the price of gas?", they should be asking how can make enough money to afford the price of gas. We can look at the problem from both ends, price and how much money we have, but as shown above, there is no way that we can reduce the world wide price of gas so we are forced to figure out how we can earn more so that we can afford it. Sorry, there is no "perfect" solution for this one, we will just have to figure out how to earn more if we want to be able to buy gas. That's life, get used to it. Take your head out of the clouds, the world is not perfect and I guess this is the one we will have to live in.
Now back to your farm and your oil well. If you get the permit and can drill and get the oil that is under your farm, how will that help the voters to buy the high priced gas? I could use the GNP example, but that might be too complicated. Let's say that there are 5 people in this town 5 miles away who are out of work. You hire them to help drill the oil well and pump it out of the ground so that you can sell it at the world wide price to a refinery in the next county. Now what have we got that we did not have before. This is the old "with" and "without" model. Without, you lived in a mobile home next to your barn and the 5 people in town were on welfare. Now "with" this oil well, you decide to build a new home and buy a new pickup truck and the 5 people you hired are off welfare and they too can buy new pickup trucks. Notice that the price of gas did not go down a single Penny, but several more people who could not afford the gas before can now fill up the tanks of their new pickup trucks. Now, isn't that simple? If we had asked the right question in the first place, we would have gotten the right answer and you would have had your drilling permit 2 years sooner and all these people would have been better off sooner too.
If you have followed my simple example, why is it that it is so difficult for most voters and our politicians to figure all this out? I leave that to you and your friends to discuss.
Friday, April 22, 2011
Gas Prices 101
Everyone is talking about the high gas prices, but no one seems to understand the problem or is able to ask the right questions. Watch the TV news and you will hear all kinds of claims and counter claims, but none have it right. We are talking about some very smart people here and not one has it right. Here is the first one. "If we drill more wells in the Gulf or any other place in the USA it will not make prices go down." That is a true observation and I agree with it. The conclusion that Obama wants us to draw from this correct statement is that there is no need to drill more and if that is the case, we have to do something else. Now what is that something else? He wants us to turn to Green energy like wind mills and solar panels. They are all wrong. What is the "end game" regarding energy.
If the shortage in oil is going to continue and get worse, then what should we do? We need to earn more. We need to produce more. We need to increase our per person GNP. In the end the country with the highest per person GNP will still be able to buy what oil is left no matter what it costs. The others will be out of luck. They will not be able to afford to buy gas or oil or any other form of energy. That is the "end game". Now where do you want to be? Now what about drilling for oil in the USA? The more we produce, the higher our GNP per person. Is that clear? The question that should be asked about drilling for oil is weather or not it allows us to pay for the higher oil prices. We are poorer if we don't drill and thus less able to pay for the more expensive oil. Simple.
Now wind and solar power. If we spend $100 to build a wind mill that in its life is not able to pay back $50 worth of power, we lose $50 off the GNP. If we spend $100 to drill more oil wells and we produce $500 worth of oil, we increase the GNP by $400. You did not know that it was that simple did you? If Obama's plan is to kill the economy of the USA he should be doing exactly what he is doing. Simple isn't it.
We need to stop asking the same screwed up questions and ask, "what action makes the USA's economy stronger?". If it makes us weaker as does the moratorium on drilling does, then "don't do it". Look around the world and see what countries have the highest per person GNP. Those are the countries who will be the one who in the end will still be able to buy oil. They will also be the only ones who will be able to afford to install wind mills and solar panels when that time comes.
It seems infantile for our President to be going after oil investor when the price of oil is based on the economy of the whole world and not just the USA. Most of the oil traders live outside the USA and thus are beyond the reach of our legal system. It is like the days when people thought the world was flat or that the earth was the center of the universe and the Sun revolved around the earth. We were stupid then and we are getting more stupid now. When will we wake up?
If the shortage in oil is going to continue and get worse, then what should we do? We need to earn more. We need to produce more. We need to increase our per person GNP. In the end the country with the highest per person GNP will still be able to buy what oil is left no matter what it costs. The others will be out of luck. They will not be able to afford to buy gas or oil or any other form of energy. That is the "end game". Now where do you want to be? Now what about drilling for oil in the USA? The more we produce, the higher our GNP per person. Is that clear? The question that should be asked about drilling for oil is weather or not it allows us to pay for the higher oil prices. We are poorer if we don't drill and thus less able to pay for the more expensive oil. Simple.
Now wind and solar power. If we spend $100 to build a wind mill that in its life is not able to pay back $50 worth of power, we lose $50 off the GNP. If we spend $100 to drill more oil wells and we produce $500 worth of oil, we increase the GNP by $400. You did not know that it was that simple did you? If Obama's plan is to kill the economy of the USA he should be doing exactly what he is doing. Simple isn't it.
We need to stop asking the same screwed up questions and ask, "what action makes the USA's economy stronger?". If it makes us weaker as does the moratorium on drilling does, then "don't do it". Look around the world and see what countries have the highest per person GNP. Those are the countries who will be the one who in the end will still be able to buy oil. They will also be the only ones who will be able to afford to install wind mills and solar panels when that time comes.
It seems infantile for our President to be going after oil investor when the price of oil is based on the economy of the whole world and not just the USA. Most of the oil traders live outside the USA and thus are beyond the reach of our legal system. It is like the days when people thought the world was flat or that the earth was the center of the universe and the Sun revolved around the earth. We were stupid then and we are getting more stupid now. When will we wake up?
Are You A Victum Too?
I guess that you have been following the recent Obama campaign speeches about the price of gas. He seems to be promoting the position that the reason that oil is going up is that "some one" is driving the price up by speculating on the price of oil so as to make profit for themselves. His followers look at themselves as victims of some big international conspiracy in the oil industry. They are not sure who the ones are who are doing this bad thing to them, but they are sure that they are the victims. Obama is no dummy and know how to tap into this whole business of victimization. His good pastor for 20 years, Rev. Wright, made a career out of convincing his followers that they too were victims and that he was the one who was going to help them "get even". It seems like a common denominator that most of the followers of Obama are either victims or do gooders who are going to take it onto themselves to help those victims get what is their fair share. Another common denominator with this group is that they don't seem to connect reward with responsible preparation, discipline and hard work along with a little good luck. They seem to accept the luck part, but not the other factors. It is always some person or group who victimizes them. They never see their own actions or decisions as the factors that have resulted in their state. I see a lot of college graduates who are so green with envy about their poor economic performance that they have to hide behind seeing themselves as victims rather than their own actions. Anyone can be a victim if they are an intellectual coward and not able to face the facts of life. How about a story?
My parents and grand parents came thur the Great Depression and the Dust Bowl all at the same time. This was after the flu epidemic of 1918 where many died because they were of Native American heritage and had little resistance. They were much worse off than any of those who claim to be economic victims to day. The difference was that they were not victims and did not blame anyone or group for their situation. They did not try to get even with anyone because they did not feel that it was any ones fault. When my grand mother was given a sack of potatoes, she did not feel that she deserved that sack of potatoes and only kept part of the sack of potatoes. She took most of the potatoes to her church so that they could be given to people who were in worse situation than she felt she was. The facts were that she was in worse shape than many of those who took the potatoes. She saw people from the outside and they did not look like they were doing too well, but when she looked at herself from the inside, she felt that she could handle her bad situation better than they could theirs. She never gave into allowing herself to feel she was a victim because she knew that would be the same a giving up and she had too many depending on her to allow that to happen.
Now the victims who follow Obama blame everyone for their failures. When one of these people do not graduate high school, they blame it on being a victim. They feel that if their grandfather was a slave, that is good enough reason. If they get their girl friend pregnant, again it is because they are some kind of victim. The other side becoming a victim is that when someone goes out of their way to help them, they do not appreciate it. This is because they do not see it as a gift. They see it as some thing that they deserve. They do not see a need to say "thank you", because they deserved it. My grand mother begged a person who was trying to give her something to only give her a small amount because she saw it as a gift. She never saw it as "getting even" as do the so call victims who follow Obama.
My parents and grand parents came thur the Great Depression and the Dust Bowl all at the same time. This was after the flu epidemic of 1918 where many died because they were of Native American heritage and had little resistance. They were much worse off than any of those who claim to be economic victims to day. The difference was that they were not victims and did not blame anyone or group for their situation. They did not try to get even with anyone because they did not feel that it was any ones fault. When my grand mother was given a sack of potatoes, she did not feel that she deserved that sack of potatoes and only kept part of the sack of potatoes. She took most of the potatoes to her church so that they could be given to people who were in worse situation than she felt she was. The facts were that she was in worse shape than many of those who took the potatoes. She saw people from the outside and they did not look like they were doing too well, but when she looked at herself from the inside, she felt that she could handle her bad situation better than they could theirs. She never gave into allowing herself to feel she was a victim because she knew that would be the same a giving up and she had too many depending on her to allow that to happen.
Now the victims who follow Obama blame everyone for their failures. When one of these people do not graduate high school, they blame it on being a victim. They feel that if their grandfather was a slave, that is good enough reason. If they get their girl friend pregnant, again it is because they are some kind of victim. The other side becoming a victim is that when someone goes out of their way to help them, they do not appreciate it. This is because they do not see it as a gift. They see it as some thing that they deserve. They do not see a need to say "thank you", because they deserved it. My grand mother begged a person who was trying to give her something to only give her a small amount because she saw it as a gift. She never saw it as "getting even" as do the so call victims who follow Obama.
Thursday, April 21, 2011
Facts Of Life
I was just talking with a young 10 year old boy and he told me that he had a job sweeping up his grandmother's shop. I asked if he had a savings account at the bank for his earnings and he said that he did not. I asked him if he had ever heard of "interest" or "compound interest" and again, he said "no". He said that he knew what "compound" meant, but not "interest". Since he did not have a savings account, I did not explain how banks paid interest on savings accounts. I explained that if his friend came to him to borrow a dollar for ice cream, would he loan it to him. Again he said he would, but he would expect to be paid back in a week. Now when his friend paid him back, how much should he expect? He said, "a dollar". I then explain that he should be paid something extra for the favor to have loaned the dollar in the first place and how would an extra 5 cents sound. He agreed that it seemed fair. I next told him that the extra 5 cents was what we called "interest". I could see in his eyes that he was starting to understand business. I then went onto explain "compound" interest when he next loaned out the $1.05 and expected to be paid back 6 cents extra. He was on his way now.
He next told me that he had also gotten some money from his grandfather for his birthday. I then asked him what he did with the money from his grandfather and he told me that he had already spent it on a new hat. Well, how about the money that he had earned sweeping up his grandmother's shop. What did you do with that money? He said that he still had it and was going to save it. It seemed like a good time to switch to politics, so I asked him if it was easier to spend his grandfather's gift money than the money he earned. He gave me a big smile and said that his grandfather's money was different and he did not mind spending it. It was clear to me that even at 10 years old, kids know the difference between money they have to earn and someone elses money. I then explain that he had just learned his first political lesson and as long as he lived, it wouldn't change. The government is not spending their own money, it is someone elses money just like your grandfather's birthday money.
It would be good for all of us to rethink when we learned the important lessons and "Facts of Life". It is at a much younger age than you might think. Most normal kids have learned these important lessons by age 8 and if they have learned them "wrong" they will carry that error for the rest of their life. Where was our President Obama up to age 8? Did he get it "wrong"?
He next told me that he had also gotten some money from his grandfather for his birthday. I then asked him what he did with the money from his grandfather and he told me that he had already spent it on a new hat. Well, how about the money that he had earned sweeping up his grandmother's shop. What did you do with that money? He said that he still had it and was going to save it. It seemed like a good time to switch to politics, so I asked him if it was easier to spend his grandfather's gift money than the money he earned. He gave me a big smile and said that his grandfather's money was different and he did not mind spending it. It was clear to me that even at 10 years old, kids know the difference between money they have to earn and someone elses money. I then explain that he had just learned his first political lesson and as long as he lived, it wouldn't change. The government is not spending their own money, it is someone elses money just like your grandfather's birthday money.
It would be good for all of us to rethink when we learned the important lessons and "Facts of Life". It is at a much younger age than you might think. Most normal kids have learned these important lessons by age 8 and if they have learned them "wrong" they will carry that error for the rest of their life. Where was our President Obama up to age 8? Did he get it "wrong"?
Wednesday, April 20, 2011
Compound Interest
This is a real dull topic, compound interest. At age 4 I opened my first bank savings account with Bank of America. That was back in 1944 and we were at war. I had been putting stamps in my little book and I had it full, so I went to the bank with my mother and opened a savings account. My mother took me because my father was away at war with all the other fathers. That was the day that I was told about "compound interest". Like the story about the Little Red Hen, the message stuck. At age 4, I was taking charge of my future and I knew it. Unto this point, no one had ever given me anything, but a few home made toys and a small green pocket knife. Yes, at age 4, I carried my own pocket knife. All the kid who I knew had pocket knives. That does not seem all that long ago and I still carry my pocket knife. Some how, I feel undressed if I don't have my knife. Now I use it to open mail and pot the caps off micro brewery beer bottles. My grandfather told me that if your knife was dull, it was not work carrying, so mine was always sharp. This reminds me of a story. I applied for a management consulting job with a famous company whose president lived in Texas. He told me that the first thing that he did when he interviewed a high powered management consultant was to ask to see his pocket knife. If he did not have one or if it was dull, the interview was over. Isn't that interesting? By the way, I lost that green handled knife in 1946 while rolling in the ice plant on the beach in San Diego. Even now, I feel sad about that day.
Now how about "compound interest". If you know algebra and have a slide rule or a calculator, you don't need tables. You can do your own calculations, but I know most people would feel a lot better using the standard tables. If you can't do the calculations and don't have a set of tables, you should not waste your time reading my blogs. In a past Blog, I mentioned that Egypt's population increased by approximately 33% in just 10 years from 1990 to 2000. In that blog, I pointed out that Egypt's main problem with personal income was that their population has grown a lot faster than their productivity and ability to produce food. It is the same for most of the world, but if you don't understand compound interest, you will never understand how serious this is. If you look in the tables under "Amount at Compound Interest" you will find how much a dollar is worth at the interest rate at the top per each year that you read downward. In the case of Egypt, if you want to know how fast the economy or GNP or Egypt would have to grow to stay even with the growth in population, all you need to do is to check for the 10 year point where your dollar would be worth $1.33. In my tables, it comes between 2.75% and 3.0%. You could do a little averaging and find the exact %, but this is good enough. 3% would be what it would take to just stay even. Now us Americans would not accept that. We want to get more and do better than our parents. That has been the American way since 1608.
Now to do "better" and have a higher standard of living, the economy has to grow faster than just 3%. It needs to grow by at least 5% or so to improve things. Now what has been happening here in the USA? Our population has doubled in about 50 years. In Mexico, it is only about 25 years. That is why we have and are going to have an even more serious problem with Mexico. Now we go back to the tables, but now we check at 50 years and find the interest rate that doubles our population is 1.5%. Now realize that the USA is doing better than most of the world on population growth. If you have been watching the news regarding the state of the economy, you will notice that for a few years, we went backwards. That is what we call a "recession", going backwards. Now we are going forward again, but before we can call it true progress, we have to make up for the loss, plus the increase in population during that time. Population growth did not stand still while the GNP was going backwards. I am not going to get into the numbers here, but I think you can see where I am coming from. If now we are growing at 2% to 2.5%, it is going to take a while to catch up to where we were and add on any real improvement. This is all made clear from the numbers in the interest tables.
In past blogs, I reviewed the situation in the world on food and energy. They are not unlimited. Right now we are about at the limit on food production and energy. What are you going to do about it? Do you really think that we can just "vote" our way out of it or put our heads in a bucket of sand? Check out those compound interest tables and maybe you will start to appreciate what is happening.
Now how about "compound interest". If you know algebra and have a slide rule or a calculator, you don't need tables. You can do your own calculations, but I know most people would feel a lot better using the standard tables. If you can't do the calculations and don't have a set of tables, you should not waste your time reading my blogs. In a past Blog, I mentioned that Egypt's population increased by approximately 33% in just 10 years from 1990 to 2000. In that blog, I pointed out that Egypt's main problem with personal income was that their population has grown a lot faster than their productivity and ability to produce food. It is the same for most of the world, but if you don't understand compound interest, you will never understand how serious this is. If you look in the tables under "Amount at Compound Interest" you will find how much a dollar is worth at the interest rate at the top per each year that you read downward. In the case of Egypt, if you want to know how fast the economy or GNP or Egypt would have to grow to stay even with the growth in population, all you need to do is to check for the 10 year point where your dollar would be worth $1.33. In my tables, it comes between 2.75% and 3.0%. You could do a little averaging and find the exact %, but this is good enough. 3% would be what it would take to just stay even. Now us Americans would not accept that. We want to get more and do better than our parents. That has been the American way since 1608.
Now to do "better" and have a higher standard of living, the economy has to grow faster than just 3%. It needs to grow by at least 5% or so to improve things. Now what has been happening here in the USA? Our population has doubled in about 50 years. In Mexico, it is only about 25 years. That is why we have and are going to have an even more serious problem with Mexico. Now we go back to the tables, but now we check at 50 years and find the interest rate that doubles our population is 1.5%. Now realize that the USA is doing better than most of the world on population growth. If you have been watching the news regarding the state of the economy, you will notice that for a few years, we went backwards. That is what we call a "recession", going backwards. Now we are going forward again, but before we can call it true progress, we have to make up for the loss, plus the increase in population during that time. Population growth did not stand still while the GNP was going backwards. I am not going to get into the numbers here, but I think you can see where I am coming from. If now we are growing at 2% to 2.5%, it is going to take a while to catch up to where we were and add on any real improvement. This is all made clear from the numbers in the interest tables.
In past blogs, I reviewed the situation in the world on food and energy. They are not unlimited. Right now we are about at the limit on food production and energy. What are you going to do about it? Do you really think that we can just "vote" our way out of it or put our heads in a bucket of sand? Check out those compound interest tables and maybe you will start to appreciate what is happening.
Tuesday, April 19, 2011
Bad News For Housing Starts
We just got the bad news on housing starts at 549,000. Building permits were even worse. Now you ask, "how can an increase in housing starts be bad"? Think about what got us into this problem? It is not just that we built too many houses, but they were bigger and more expensive than we could afford. We "invested" our national net worth into big houses. You would think that it was the national goal to have every one living in big houses that they could not afford.
Think about it this way. We have a population who is addicted to cocaine. It really makes them feel good, but the price keeps going up until they can't afford it. They mortgage everything that they have and so does the government to buy more cocaine. One day they can't borrow any more money and have to do with less cocaine. Wait, the price of cocaine starts going down due to the weak demand. It looks like good times are back with the price of cocaine going down, but the problem is that we are out of money to buy it. We all wonder what happened to the good old days when things were more "normal" and we could afford all the cocaine we wanted. The fact is that we were hooked on cocaine and we never could afford it. We just thought that we could. The fact that everyone else was hooked on cocaine too, made us feel that we were "normal". What could be wrong with that?
Think about it another way. We need a lot of energy to maintain our life style and much of it is in the form of oil that has to be imported. That would not be a problem if we were using the oil to make something rather than burning it in our cars or to heat our homes. It is like buying a big steak and eating it rather than buying the manure from the cow so that we can put on our fields to grow more corn. Since 1945, we have had a fixation with houses and the bigger the better. That is when the addiction to cocaine started and like all addictions, there comes a period when you have to get off the drugs. That time is now. What we need to do is to reduce the number of housing starts until we have a shortage of houses. When that point comes, we have to make owning a house so expensive that people will build smaller, cheaper and easier to maintain houses. We did just the opposite and it looks like we are back at it again. Bad news.
Rather than spend our national wealth on houses that don't produce anything, we need to start putting that wealth into things that produce something that someone outside of the USA wants to buy. That is our real problem. We have more people working for the government not producing anything than we do in our factories that do produce something. We have to turn that around and it starts with the, so called, housing market. 1945 to 2005, a period of just 60 years was "not" "normal". That period does not represent the "normal" housing market. It is and should have been a lot smaller. We have to wake up and realize that. We have to stop thinking of houses as an investment where we can "make" money. Buying and selling a house is not "making" money. Think about it. What did you make? What value did you create? It has all been smoke and mirrors and we have to admit it. When housing starts go up, it is "Bad News".
Think about it this way. We have a population who is addicted to cocaine. It really makes them feel good, but the price keeps going up until they can't afford it. They mortgage everything that they have and so does the government to buy more cocaine. One day they can't borrow any more money and have to do with less cocaine. Wait, the price of cocaine starts going down due to the weak demand. It looks like good times are back with the price of cocaine going down, but the problem is that we are out of money to buy it. We all wonder what happened to the good old days when things were more "normal" and we could afford all the cocaine we wanted. The fact is that we were hooked on cocaine and we never could afford it. We just thought that we could. The fact that everyone else was hooked on cocaine too, made us feel that we were "normal". What could be wrong with that?
Think about it another way. We need a lot of energy to maintain our life style and much of it is in the form of oil that has to be imported. That would not be a problem if we were using the oil to make something rather than burning it in our cars or to heat our homes. It is like buying a big steak and eating it rather than buying the manure from the cow so that we can put on our fields to grow more corn. Since 1945, we have had a fixation with houses and the bigger the better. That is when the addiction to cocaine started and like all addictions, there comes a period when you have to get off the drugs. That time is now. What we need to do is to reduce the number of housing starts until we have a shortage of houses. When that point comes, we have to make owning a house so expensive that people will build smaller, cheaper and easier to maintain houses. We did just the opposite and it looks like we are back at it again. Bad news.
Rather than spend our national wealth on houses that don't produce anything, we need to start putting that wealth into things that produce something that someone outside of the USA wants to buy. That is our real problem. We have more people working for the government not producing anything than we do in our factories that do produce something. We have to turn that around and it starts with the, so called, housing market. 1945 to 2005, a period of just 60 years was "not" "normal". That period does not represent the "normal" housing market. It is and should have been a lot smaller. We have to wake up and realize that. We have to stop thinking of houses as an investment where we can "make" money. Buying and selling a house is not "making" money. Think about it. What did you make? What value did you create? It has all been smoke and mirrors and we have to admit it. When housing starts go up, it is "Bad News".
Monday, April 18, 2011
Obama, Tax The Rich Is A Win-Win
Obama's plan to tax the rich is a Win-Win. How can that be? You just don't understand the objective. I was just talking with a few friends about Obama's plan to tax the rich. The first thing that was said was, "there is no way that he can balance the budget by just taxing the rich". The person thought that they had just nailed Obama. There was no way his plan could work and only confirmed that he did not know anything about economics. The person then rested his case thinking that there was no rebuttal of such a clear cut error by Obama. He was dead wrong. Obama had a win-win and no one seemed to the hands of the magician when he did exactly what he wanted to do giving him a win-win toward his objective. If you are not following this, it is because you don't understand his objective or you can't believe that there could be a person like Obama in the White House. Either way, until you accept what is his real objective, he will keep pulling the wool over you eyes until there is no way out for you and all of us. Now what is his objective?
Obama's objective is the same as it was for those rioters in the 60's. That is where his mother formed her objectives and those are the same objectives that were passed on to her son, Obama. In as simple statement, he feels that the whole USA is screwed up and the only way to fix it is to tear it all down and start over. That's right, he wants to tear down every thing that we know of the USA and start all over again and rebuild it the way he feels that it should be. Recall that his wife made the statement right after he was elected that, "...this is the first time in my adult life that I have ever been proud of the USA...". That is what she said and that is exactly what she meant. Now do you think that Obama could sleep with the women every night and not agree with her 100% on this point? Isn't it interesting that it is exactly the same position that his mother took. Do you think that is just an accident? Not on your life. Now if his objective is to tear down the USA so that he and his kind can rebuild it the way that they want, many be you will see that he has a win-win by taxing the rich.
Here is the win-win. Don't worry about whether or not it will fix our economic problems, because it won't. That's not the objective. Will it help to tear down the USA? Yest it will. First win is that it will damage the very people who are in a position to create jobs and wealth and taxes. The class of rich people is not a fixed group. It is made up mostly of people who were in the middle class who worked hard and earned their way in the the group called rich. Who now in the middle class would want to work that hard to get in to the rich class if Obama was going to tax them to death. No one. The second win is that it will further divide the people of the USA. People now speak of class war fare, but they don't understand that this is the objective not a result of a good policy that has gone bad. Recall the old adage, "divide and concur"? Could it be any clearer?
Wake up and look at the facts and don't think for a minute that Obama is just an other black kid who did well. He is a lot more like Hitler than anyone who I have seen in my 70+ years. The Germans did not seem to see it coming and it looks like we are no different. Those few who did see what was coming were not taken seriously. Now looking back with the wisdom of hind sight, it looks like the people of Germany were stupid not to have seen what was happening. The people of Germany were the best educated in the world at the time. How could anyone pull the wool over the eyes of the best educated people in the world? Impossible? No way. I may be a voice from out in the cold, but I think I have this one dead to right. What is Obama's real objective. To pull this off, he knows that he has to get reelected and will do anything necessary to do that. If he can get things bad enough he will declare "Marshall law" and then it will be all over. A little like Cuba and Chile under Allende. You tell me what Obama's objective is? He is not as stupid as he appears to act. Every thing he does has a purpose and an objective.
PS, You know whose the base for Obama, Blacks, Union members and young radicals. Taxing the rich is their dream. Many go by the creed that one day, "the poor will be rich and the rich will be poor". It might happen, but it will not be due to God or fate. If any government thinks that they can make this happen, someone has to be smoking something. Humans have always moved up on the basis of merit and hard work. This is the one law of nature that is not going to change. "If it is cream, it will rise to the top."
Obama's objective is the same as it was for those rioters in the 60's. That is where his mother formed her objectives and those are the same objectives that were passed on to her son, Obama. In as simple statement, he feels that the whole USA is screwed up and the only way to fix it is to tear it all down and start over. That's right, he wants to tear down every thing that we know of the USA and start all over again and rebuild it the way he feels that it should be. Recall that his wife made the statement right after he was elected that, "...this is the first time in my adult life that I have ever been proud of the USA...". That is what she said and that is exactly what she meant. Now do you think that Obama could sleep with the women every night and not agree with her 100% on this point? Isn't it interesting that it is exactly the same position that his mother took. Do you think that is just an accident? Not on your life. Now if his objective is to tear down the USA so that he and his kind can rebuild it the way that they want, many be you will see that he has a win-win by taxing the rich.
Here is the win-win. Don't worry about whether or not it will fix our economic problems, because it won't. That's not the objective. Will it help to tear down the USA? Yest it will. First win is that it will damage the very people who are in a position to create jobs and wealth and taxes. The class of rich people is not a fixed group. It is made up mostly of people who were in the middle class who worked hard and earned their way in the the group called rich. Who now in the middle class would want to work that hard to get in to the rich class if Obama was going to tax them to death. No one. The second win is that it will further divide the people of the USA. People now speak of class war fare, but they don't understand that this is the objective not a result of a good policy that has gone bad. Recall the old adage, "divide and concur"? Could it be any clearer?
Wake up and look at the facts and don't think for a minute that Obama is just an other black kid who did well. He is a lot more like Hitler than anyone who I have seen in my 70+ years. The Germans did not seem to see it coming and it looks like we are no different. Those few who did see what was coming were not taken seriously. Now looking back with the wisdom of hind sight, it looks like the people of Germany were stupid not to have seen what was happening. The people of Germany were the best educated in the world at the time. How could anyone pull the wool over the eyes of the best educated people in the world? Impossible? No way. I may be a voice from out in the cold, but I think I have this one dead to right. What is Obama's real objective. To pull this off, he knows that he has to get reelected and will do anything necessary to do that. If he can get things bad enough he will declare "Marshall law" and then it will be all over. A little like Cuba and Chile under Allende. You tell me what Obama's objective is? He is not as stupid as he appears to act. Every thing he does has a purpose and an objective.
PS, You know whose the base for Obama, Blacks, Union members and young radicals. Taxing the rich is their dream. Many go by the creed that one day, "the poor will be rich and the rich will be poor". It might happen, but it will not be due to God or fate. If any government thinks that they can make this happen, someone has to be smoking something. Humans have always moved up on the basis of merit and hard work. This is the one law of nature that is not going to change. "If it is cream, it will rise to the top."
Sunday, April 17, 2011
Greenies Are Alive And Well
With all the economic problems that America is having, you would think that the Greenies would call off the dogs, yet they are still alive and well. They do not seem to understand that they are much of our current economic problem. Notice that they are using the same old argument, "the solution is not 100% safe" or if we just hold out we will find the "perfect solution". We sent people to the Moon didn't we? I just saw a video claiming that we can get energy from sea water. The only way that we can get rid of the Greenie movement is the same way that we get rid of religion, because it is the same thing. For them, it is "faith" that we are dealing with not logic. Why some of us humans buy into things on the basis of "faith" is beyond of me.
Why are we still not drilling in the Gulf? The Greenies put forward two arguments for not drilling at this time. The first is that producing more oil here will have little affect on the price of gas. I agree with that point, but it is not the main reason why we need to drill. We have the worst trade balance with the rest of the world that we have ever had. That is the problem caused by importing so much of our oil, not the price.
How logical is it to not burn our coal here and make electricity, yet ship it to China where they will burn it? The same carbon dioxide will be put into the air there and in a couple of days it will be in the USA. I just saw another add on TV where some organic "waste" was converted into fuel of some kind. Why Greenies think that lawn clippings are "waste" is also beyond me. Leaves and lawn clippings rot and are naturally recycled now as the have been since the beinging of time. If what they claim is waste is not returned to the soil, they will have to come up with some other kind of fertilizer to replace it. As I have stated before, I have at least a million trees on my property that need carbon dioxide to survive. Without carbon dioxide, they will die. The more carbon dioxide there is in the air the faster my trees take it out and expel oxygen. Think of all the coal and oil that is under the ground. At one time it was carbon dioxide in the air and plants took it out and made wood out of it and eventually oil and coal. If you think about it, there must at one time been a lot of carbon dioxide around.
I had a wind generator on one of my sailboats in 1980's. I guess I was ahead of my time. It was a state of the art unit that used a standard DC generator and plastic propellers to charge my lead acid batteries. The actual technology dated from about 1905 and is exactly the same as what is being used right now in 2011. If there has been any technical advancement, it has been very very little. My guess is that we will make about the same amount of technical progress on wind generators in the next 100 years as we have made in the past 100 years and that is almost zero. That is the way it works with basic science. We are not talking about science fiction movies, we are talking about real science. What about wind generators is the real technical guts of the unit? The propeller and the DC motor. All the rest is concrete and structure, with some copper or aluminum wire to carry the electricity. I don't foresee a technical break thru on concrete of steel poles or copper wire, do you? The propellers are still the same as was perfected by the Wright brothers in 1908. I am a pilot and I know that not much has changed. The lead acid battery is still the best value when it come to storing electricity and it was perfected about 200 years ago. None of the newer batteries are as economical as the old lead acid battery. Even the latest lithium ion battery was invented in 1903 and not much has changed on that one either, so don't look for any big break thru too soon.
If you have any grasp for science and economics, you have to ask why we would be spending our national wealth on something that will not help solve out energy problem? Do you really think that we can defy the laws of physics? In the science fiction movies, people seem to be able to fly, but have you ever seen a real person fly? Sorry that I have to remind some of you, but science fiction is "not" real. They call it "fiction" because it is not real. Starting to get the message on wind and solar energy?
Why can't the city of Los Angles or New York City generate 100% of their power needs from a combination of solar and wind? Ever thought about that? I can heat my home with the trees from just 5 acres for ever. I can run a steam engine to generate 100% of my electricity from just an additional 5 acres and do that for ever. I would not need to import any oil, coal or other forms of power. it would be a lot of extra work, but I could do it. I can easily grow enough food and meat to feed myself and my family. Why is that? Low population density. What is the problem that faces the human race all over the world? Population and specifically population density. Why is it that you never hear the Greenies talking about the real problem that faces us all? When I was a kid, the USA had less than 150 million people. Now we are about 325 million. Compared to most of the world, we have a low population density, but we are still in trouble. See what I mean?
Greenies, get a life.
Why are we still not drilling in the Gulf? The Greenies put forward two arguments for not drilling at this time. The first is that producing more oil here will have little affect on the price of gas. I agree with that point, but it is not the main reason why we need to drill. We have the worst trade balance with the rest of the world that we have ever had. That is the problem caused by importing so much of our oil, not the price.
How logical is it to not burn our coal here and make electricity, yet ship it to China where they will burn it? The same carbon dioxide will be put into the air there and in a couple of days it will be in the USA. I just saw another add on TV where some organic "waste" was converted into fuel of some kind. Why Greenies think that lawn clippings are "waste" is also beyond me. Leaves and lawn clippings rot and are naturally recycled now as the have been since the beinging of time. If what they claim is waste is not returned to the soil, they will have to come up with some other kind of fertilizer to replace it. As I have stated before, I have at least a million trees on my property that need carbon dioxide to survive. Without carbon dioxide, they will die. The more carbon dioxide there is in the air the faster my trees take it out and expel oxygen. Think of all the coal and oil that is under the ground. At one time it was carbon dioxide in the air and plants took it out and made wood out of it and eventually oil and coal. If you think about it, there must at one time been a lot of carbon dioxide around.
I had a wind generator on one of my sailboats in 1980's. I guess I was ahead of my time. It was a state of the art unit that used a standard DC generator and plastic propellers to charge my lead acid batteries. The actual technology dated from about 1905 and is exactly the same as what is being used right now in 2011. If there has been any technical advancement, it has been very very little. My guess is that we will make about the same amount of technical progress on wind generators in the next 100 years as we have made in the past 100 years and that is almost zero. That is the way it works with basic science. We are not talking about science fiction movies, we are talking about real science. What about wind generators is the real technical guts of the unit? The propeller and the DC motor. All the rest is concrete and structure, with some copper or aluminum wire to carry the electricity. I don't foresee a technical break thru on concrete of steel poles or copper wire, do you? The propellers are still the same as was perfected by the Wright brothers in 1908. I am a pilot and I know that not much has changed. The lead acid battery is still the best value when it come to storing electricity and it was perfected about 200 years ago. None of the newer batteries are as economical as the old lead acid battery. Even the latest lithium ion battery was invented in 1903 and not much has changed on that one either, so don't look for any big break thru too soon.
If you have any grasp for science and economics, you have to ask why we would be spending our national wealth on something that will not help solve out energy problem? Do you really think that we can defy the laws of physics? In the science fiction movies, people seem to be able to fly, but have you ever seen a real person fly? Sorry that I have to remind some of you, but science fiction is "not" real. They call it "fiction" because it is not real. Starting to get the message on wind and solar energy?
Why can't the city of Los Angles or New York City generate 100% of their power needs from a combination of solar and wind? Ever thought about that? I can heat my home with the trees from just 5 acres for ever. I can run a steam engine to generate 100% of my electricity from just an additional 5 acres and do that for ever. I would not need to import any oil, coal or other forms of power. it would be a lot of extra work, but I could do it. I can easily grow enough food and meat to feed myself and my family. Why is that? Low population density. What is the problem that faces the human race all over the world? Population and specifically population density. Why is it that you never hear the Greenies talking about the real problem that faces us all? When I was a kid, the USA had less than 150 million people. Now we are about 325 million. Compared to most of the world, we have a low population density, but we are still in trouble. See what I mean?
Greenies, get a life.
Saturday, April 16, 2011
Pell Grants, What's Going On?
Did you hear Obama claim that he could not have attended college had it not been for the Pell Grant system from the USA government? He said that Republicans what to cut the Pell Grant system and that as long as he was President, there would be not cuts. At first look, the Pell Grant system must be a good idea and a good use for out tax dollars. Is that really true? I have been researching the Pell Grant program and will be reporting what I find. Before, I have even started, I detect a really bad smell coming from the program. You know the old saying, "where there is a bad smell, you will find a politician spending your money".
My first researching of the Pell Grant program has shown that there are many ways to get money from the government for about anything that looks like education. I think that you know that I am down on Mickey Mouse degrees that will never allow the person to pay back the tax money that was invested in them. I really should not use the word "invest" because there is no chance of being paid back. We all know that we need a better educated population if we are ever going to be able to compete in the world of the future. The problem is that all education is not equal and we need to recognize that fact. The top 5 degrees at the University of Wisconsin at Madison are totally worthless, but I know that we are giving many of these students Pell Grants. We need to stop this kind of waste. It is waste pure and simple. The UW is not a lot different from most colleges and universities in other states. The problem is every where.
Here is what we need to do.
(1) Identify those degrees that we need most to help build our economy and allow us to make products that we can sell to other countries to off set the cost of importing oil. That is what China is doing. They trade the products they make for the oil they import.
(2) Only approve Pell Grants for those degrees that our country really needs. We need more engineers and science majors and fewer political science degrees. We have 30 times the number of lawyers than does Japan. We have been giving out Pell Grants to produce even more lawyers who actually work against our economy.
(3) We should eliminate Pell Grants for degrees beyond a Masters degree. This sounds like a bad idea on the surface, but when you look at the payback ratio on Phd's, they almost never pay back. Most eat up a very large amount of tax money and the wealth of the country. You can produce 3 or 4 masters degrees for the same amount of money that you can for just one Phd. If we did a post audit on all the innovations that came from our investment in Phd's, you would find that there are very few. The Lithium Ion battery was not invested by a person with a Phd nor was the telephone or personal computer. You have been fed a lot of bull shit by those who want more and more of your money.
(4) No Pell Grant money should be spent on teaching subjects that are offered in our high schools. This means Chemistry, Physics and Math thru advanced algebra. No money should be used to teach any foreign language other than Mandarin. All those other languages are little more than personal hobbies. Art and performing arts are also examples of using Pell Grant money for hobbies and entertainment. I know that people who are getting this money from the tax payers will cry bloody murder, but you know it is a waste of tax money.
(5) One principle that we all must recognize is that, "you can't help a person who doesn't want to help themselves". Don't think so? Look at your own family and you will see that this is true. No Pell Grant should be made to a person who can't pay for their first year of college by themselves. They need to first prove that they want to do what it takes to help themselves. You know that anyone who really wants to get a degree could do this.
(6) Pell Grants should not be free money, like student loans. At 10 years after the person who got a Pell Grant or a student loan should have to start paying the money back. If they default on "one" scheduled payment, they should immediately be drafted into the Army and have to stay there until deductions from their pay has paid back at least 25% of what was left on their loan. This should teach them that the tax payers mean business when they made the grants or loans. It is a contract with the tax payers and they need to know it.
To get started on this Blog, I asked a couple of good friends who are college graduates and business people if they have ever known a person who got a Pell Grant and none of them did. I am going to research to see how many new businesses were started by people who got Pell Grants. I am also find out what college degrees were earned with the Pell Grant money and how many people never got a degree. I think that you will get your eyes opened on this one and you will see that all Obama wants to do is pay for votes with young people with our Pell Grand and student loan money. He has already federalized student loans. To get a loan or grant, all you have to do is to kiss the ring. Sound familiar?
PS, I would like to hear from another person who lived in a tent for 3 years and under a bridge for a month. For some reason, I never felt that I was some kind of victum. I picked cotton and was paid by the pound. The name of the game was to pick more cotton than anyone else and I did that. Exactly what is the problem?
My first researching of the Pell Grant program has shown that there are many ways to get money from the government for about anything that looks like education. I think that you know that I am down on Mickey Mouse degrees that will never allow the person to pay back the tax money that was invested in them. I really should not use the word "invest" because there is no chance of being paid back. We all know that we need a better educated population if we are ever going to be able to compete in the world of the future. The problem is that all education is not equal and we need to recognize that fact. The top 5 degrees at the University of Wisconsin at Madison are totally worthless, but I know that we are giving many of these students Pell Grants. We need to stop this kind of waste. It is waste pure and simple. The UW is not a lot different from most colleges and universities in other states. The problem is every where.
Here is what we need to do.
(1) Identify those degrees that we need most to help build our economy and allow us to make products that we can sell to other countries to off set the cost of importing oil. That is what China is doing. They trade the products they make for the oil they import.
(2) Only approve Pell Grants for those degrees that our country really needs. We need more engineers and science majors and fewer political science degrees. We have 30 times the number of lawyers than does Japan. We have been giving out Pell Grants to produce even more lawyers who actually work against our economy.
(3) We should eliminate Pell Grants for degrees beyond a Masters degree. This sounds like a bad idea on the surface, but when you look at the payback ratio on Phd's, they almost never pay back. Most eat up a very large amount of tax money and the wealth of the country. You can produce 3 or 4 masters degrees for the same amount of money that you can for just one Phd. If we did a post audit on all the innovations that came from our investment in Phd's, you would find that there are very few. The Lithium Ion battery was not invested by a person with a Phd nor was the telephone or personal computer. You have been fed a lot of bull shit by those who want more and more of your money.
(4) No Pell Grant money should be spent on teaching subjects that are offered in our high schools. This means Chemistry, Physics and Math thru advanced algebra. No money should be used to teach any foreign language other than Mandarin. All those other languages are little more than personal hobbies. Art and performing arts are also examples of using Pell Grant money for hobbies and entertainment. I know that people who are getting this money from the tax payers will cry bloody murder, but you know it is a waste of tax money.
(5) One principle that we all must recognize is that, "you can't help a person who doesn't want to help themselves". Don't think so? Look at your own family and you will see that this is true. No Pell Grant should be made to a person who can't pay for their first year of college by themselves. They need to first prove that they want to do what it takes to help themselves. You know that anyone who really wants to get a degree could do this.
(6) Pell Grants should not be free money, like student loans. At 10 years after the person who got a Pell Grant or a student loan should have to start paying the money back. If they default on "one" scheduled payment, they should immediately be drafted into the Army and have to stay there until deductions from their pay has paid back at least 25% of what was left on their loan. This should teach them that the tax payers mean business when they made the grants or loans. It is a contract with the tax payers and they need to know it.
To get started on this Blog, I asked a couple of good friends who are college graduates and business people if they have ever known a person who got a Pell Grant and none of them did. I am going to research to see how many new businesses were started by people who got Pell Grants. I am also find out what college degrees were earned with the Pell Grant money and how many people never got a degree. I think that you will get your eyes opened on this one and you will see that all Obama wants to do is pay for votes with young people with our Pell Grand and student loan money. He has already federalized student loans. To get a loan or grant, all you have to do is to kiss the ring. Sound familiar?
PS, I would like to hear from another person who lived in a tent for 3 years and under a bridge for a month. For some reason, I never felt that I was some kind of victum. I picked cotton and was paid by the pound. The name of the game was to pick more cotton than anyone else and I did that. Exactly what is the problem?
Thursday, April 14, 2011
Does Bull Shit Stink?
If you can't smell it, I don't think there is any hope for you. Bull Shit stinks and anyone with half a brain can smell it. For those who don't recognize the smell, wait and the smell will get stronger and then you will recognize it. Take it from an old cattle farmer, Bull Shit stinks. The way President Obama is spreading it around, I am surprised that corn farmers even need to buy fertilizer. Most of you heard his speech on how he was going to save us and the nation. The way he plans to do it is pure Bull Shit.
First, he is going to get rid of waste. How could that be bad? It is not bad, but he is selling it as though it will save tax money, when all it will do is to allow more money to be spent on buying votes from people who either don't work or don't pay taxes or who depend on government hand outs. Did you ever hear him say that he will "reduce" the amount of tax money used for his programs by the amount he "saves"? No he did not say that. If we have 10% pure waste now, why don't we cut the amount devoted to his programs by 10% and then let him keep doing what he is doing now with just 90% of what is now being spent? That is too simple. If he Bull Shitted you with his getting rid of waste argument, it means that you still can't smell Bull Shit when is right in front of you.
How about improving "efficiency"? How could anyone be against that? We all want to get our monies worth and that means our government has to spend our money "efficiently" Right? Did you hear him say that he can improve the "efficiency" of government programs such that he will be able to provide the same level of service for only 90% of what is now being spent? No! You only heard "Bull Shit" and I don't think most people even smelled a thing.
The bottom line is that to really save money, you have to cut the amount that government spends. It is that simple. Getting rid of waste or improving efficiency does not get the job done. There is also one other factor that he did not mention and that was "doing less". It is a little like "tightening ones belt". The reason than one can "tighten ones belt" is that they will have lost a lot of weight by having to eat a lot less. At some point, we have to get past "waste" and "efficiency" and deal with "less". If you have been eating steak, you will now have to eat hamburger or chicken. If we can't afford chicken, we will have to eat beans. That is a simple fact, but it is not one that you will be hearing from Obama. He wants to sell you on "Bull Shit" and if you can't smell it, he will have you eating "Bull Shit". My advise is for you to learn to smell "Bull Shit" before you end up having to eat it.
First, he is going to get rid of waste. How could that be bad? It is not bad, but he is selling it as though it will save tax money, when all it will do is to allow more money to be spent on buying votes from people who either don't work or don't pay taxes or who depend on government hand outs. Did you ever hear him say that he will "reduce" the amount of tax money used for his programs by the amount he "saves"? No he did not say that. If we have 10% pure waste now, why don't we cut the amount devoted to his programs by 10% and then let him keep doing what he is doing now with just 90% of what is now being spent? That is too simple. If he Bull Shitted you with his getting rid of waste argument, it means that you still can't smell Bull Shit when is right in front of you.
How about improving "efficiency"? How could anyone be against that? We all want to get our monies worth and that means our government has to spend our money "efficiently" Right? Did you hear him say that he can improve the "efficiency" of government programs such that he will be able to provide the same level of service for only 90% of what is now being spent? No! You only heard "Bull Shit" and I don't think most people even smelled a thing.
The bottom line is that to really save money, you have to cut the amount that government spends. It is that simple. Getting rid of waste or improving efficiency does not get the job done. There is also one other factor that he did not mention and that was "doing less". It is a little like "tightening ones belt". The reason than one can "tighten ones belt" is that they will have lost a lot of weight by having to eat a lot less. At some point, we have to get past "waste" and "efficiency" and deal with "less". If you have been eating steak, you will now have to eat hamburger or chicken. If we can't afford chicken, we will have to eat beans. That is a simple fact, but it is not one that you will be hearing from Obama. He wants to sell you on "Bull Shit" and if you can't smell it, he will have you eating "Bull Shit". My advise is for you to learn to smell "Bull Shit" before you end up having to eat it.
Wednesday, April 13, 2011
Is Obama That Dishonest?
I just listened to more bull shit come out of one mouth than I have ever heard in my life. He started off telling us that we could not solve our financial problem with the elimination of "waste" alone, but then turned right around and stated that he was going to eliminate "waste" and improving "efficiency". I never heard a single idea on how he was going to "reduce" government spending. For some reason he went beyond the 10 year period that he normally used when claiming savings to 12 years. If I use my 4th grade math, I can figure out that if I save $1.00 per year that I will save $10.00 in 10 years, but I will save $12.00 in 12 years. 4th graders are really smart.
Obama went on siting the items that he would not cut, but never sited any that he would cut. Green energy was right up there even though we all know that green energy will cost more and reduce our standard of living. He tried to claim that the federal government was responsible for our kids education when it is the state and local government who actually educate our kids. We have not had a federal department of education all that long and since it was created the quality of education in the USA has gone down. He claimed that government was the source of many of our significant inventions and technical advancements when, in fact, none have come from government efforts. Same for medical advances. I think that I reported that we are 33rd in the world in life expectancy. Recall that all of our medical spending has not increased life expectancy or saved lives. Obama is just spreading more bull shit and many people don't seem to recognize this.
Did you hear him use the word "investment" in education? I know for a fact that many of our kids who are taking up space in our universities are taking bull shit majors that will be worthless. They will never be able to pay back the cost of their, so called, education. If we would dump out 50% of the kids in our colleges who are taking these bull shit majors and open up space for real technical (difficult) majors.
Further, Obama stated that no one was going to be denied the most advanced medical attention. He was only going to eliminate waste and improve efficency. Regarding drugs, he was going to have the government buy the drugs in bigger bottles and then issue the in smaller bottles to us dumb tax payers. Does he really think we are that stupid? How about medical research? Name one medical advance paid for by the government that has ever saved us a single dollar? I can't. Private companies spend their own money to develop these drugs so they can advertise them and make more money. 99% are no better than the old drugs whose patent's have run out.
You can bet that the coolaid drinkers in the Democratic party will be praising the speach by Obama, but what will the TV news people have to say. Wait and see.
PS, "Everything is on the table except......". How does he think he can make this fly? Does he really think that Americans are that stupid? Wait, don't answer.
Obama went on siting the items that he would not cut, but never sited any that he would cut. Green energy was right up there even though we all know that green energy will cost more and reduce our standard of living. He tried to claim that the federal government was responsible for our kids education when it is the state and local government who actually educate our kids. We have not had a federal department of education all that long and since it was created the quality of education in the USA has gone down. He claimed that government was the source of many of our significant inventions and technical advancements when, in fact, none have come from government efforts. Same for medical advances. I think that I reported that we are 33rd in the world in life expectancy. Recall that all of our medical spending has not increased life expectancy or saved lives. Obama is just spreading more bull shit and many people don't seem to recognize this.
Did you hear him use the word "investment" in education? I know for a fact that many of our kids who are taking up space in our universities are taking bull shit majors that will be worthless. They will never be able to pay back the cost of their, so called, education. If we would dump out 50% of the kids in our colleges who are taking these bull shit majors and open up space for real technical (difficult) majors.
Further, Obama stated that no one was going to be denied the most advanced medical attention. He was only going to eliminate waste and improve efficency. Regarding drugs, he was going to have the government buy the drugs in bigger bottles and then issue the in smaller bottles to us dumb tax payers. Does he really think we are that stupid? How about medical research? Name one medical advance paid for by the government that has ever saved us a single dollar? I can't. Private companies spend their own money to develop these drugs so they can advertise them and make more money. 99% are no better than the old drugs whose patent's have run out.
You can bet that the coolaid drinkers in the Democratic party will be praising the speach by Obama, but what will the TV news people have to say. Wait and see.
PS, "Everything is on the table except......". How does he think he can make this fly? Does he really think that Americans are that stupid? Wait, don't answer.
Sanity In Disability And Workman's Compensation
Have you been watching what is happening with the California budget and other states? They are broke and getting worse. If things stay the same, there will be no hope for the USA and our children. Like many big problems, they are made up with a lot of smaller items and one of the best ways to solve the big problem is to start by solving the smaller problems. Sounds like a good idea to me. The basic problem is compensation in all forms for public employees. That is where I am going to start.
First, let's look at professional football players. We say that they "play" football, but it is actually just an other job. We also know that we do not see many professional football players who are over 40 years old. When they can't work any more, do they qualify for disability or workman's compensation? I don't know, but they would if they worked for the state. They do belong to unions like most public employees. Do you think professional football players should qualify for disability or Workman's compensation from age 40 to 65?
Next, let's look at airline pilots. To keep their pilot's licence, they have to have almost perfect eye sight. As a pilot, I know how difficult this is for one of us older pilots. As a private pilot, I do not have to meet the high standard of professional pilots. When a pilot's eyes sight goes, should they be eligible for disability or workman's compensation? You see some older pilots, but not too many.
How about policemen or fire fighters? I read someplace that in California the state troopers mostly go onto disability by age 50 and remain there until they actually retire with full benefits at age 65. This means that they only work from about age 25 to age 50, or just 25 years. They then bleed the tax payers for an additional 35 years. Is it no wonder that our states are all broke. What can we do about this? The public employees are "gaming" the system and they have gotten very good at it.
I do not have a problem with disability or workman's compensation, but I do have a problem with all the gaming that is going on in the public sector. Our legal and compensation systems should "make people whole", but not make them better off then they were before. A friend of mine brought one of his friends to my farm to bear hunt and I was surprised that the person could hunt during the week and was told that he was a policeman and he was on disability. He did not have any problem climbing a tree and using a bow. It was clear to me that he was gaming the system and the tax payers. What I think we should do is to "make the person whole", and that means allowing them to take a public job that they can do with their disability and if it pays less than their old job, they should get disability payments to make up the difference. This would make them whole.
I know that there are many public area jobs that 99% of disabled people could do. It might be a lot different from their original job, but it is still a job that needs to be done. I feel this would put a big hole in the gaming that is now going on in public compensation.
The nest point that follows from this argument is the desire to increase the age at which a person can go onto social security or public retirement programs. Some go on retirement as early as age 55 or 60. We need to push this out to at least 70 years old and soon. If some people don't feel that they are able to work until 70, then we should do the same thing as we do for disability and workman's compensation and transfer them to less stressful jobs. What we have to do is to eliminate the loop hole of gaming the systems as they do now. Every time you see one of these loop holes, you should demand that it be plugged.
First, let's look at professional football players. We say that they "play" football, but it is actually just an other job. We also know that we do not see many professional football players who are over 40 years old. When they can't work any more, do they qualify for disability or workman's compensation? I don't know, but they would if they worked for the state. They do belong to unions like most public employees. Do you think professional football players should qualify for disability or Workman's compensation from age 40 to 65?
Next, let's look at airline pilots. To keep their pilot's licence, they have to have almost perfect eye sight. As a pilot, I know how difficult this is for one of us older pilots. As a private pilot, I do not have to meet the high standard of professional pilots. When a pilot's eyes sight goes, should they be eligible for disability or workman's compensation? You see some older pilots, but not too many.
How about policemen or fire fighters? I read someplace that in California the state troopers mostly go onto disability by age 50 and remain there until they actually retire with full benefits at age 65. This means that they only work from about age 25 to age 50, or just 25 years. They then bleed the tax payers for an additional 35 years. Is it no wonder that our states are all broke. What can we do about this? The public employees are "gaming" the system and they have gotten very good at it.
I do not have a problem with disability or workman's compensation, but I do have a problem with all the gaming that is going on in the public sector. Our legal and compensation systems should "make people whole", but not make them better off then they were before. A friend of mine brought one of his friends to my farm to bear hunt and I was surprised that the person could hunt during the week and was told that he was a policeman and he was on disability. He did not have any problem climbing a tree and using a bow. It was clear to me that he was gaming the system and the tax payers. What I think we should do is to "make the person whole", and that means allowing them to take a public job that they can do with their disability and if it pays less than their old job, they should get disability payments to make up the difference. This would make them whole.
I know that there are many public area jobs that 99% of disabled people could do. It might be a lot different from their original job, but it is still a job that needs to be done. I feel this would put a big hole in the gaming that is now going on in public compensation.
The nest point that follows from this argument is the desire to increase the age at which a person can go onto social security or public retirement programs. Some go on retirement as early as age 55 or 60. We need to push this out to at least 70 years old and soon. If some people don't feel that they are able to work until 70, then we should do the same thing as we do for disability and workman's compensation and transfer them to less stressful jobs. What we have to do is to eliminate the loop hole of gaming the systems as they do now. Every time you see one of these loop holes, you should demand that it be plugged.
Tuesday, April 12, 2011
Gas Prices vs Obama Economics
The big guy has done it again and shown that he does not know a thing about economics. His latest was his statement that, "if your car only gets 8 miles per gallon, you should consider trading it in...". I will admit that high gas prices are a consideration when purchasing a car, but when it comes to economics, there are a lot of other things that need to be considered. To make this simple, I am going to use an example.
First the guy with the car that gets only 8 miles per gallon. My guess is that the car is an old one an it has a "zero" trade-in value. Further, the fact that it is worthless, there is no need for collision insurance. If the car only gets 8 miles per gallon, you can bet that the person is not driving it from coast to coast either. Now with these assumptions, lets do some calculations. If gas costs $4.00 per gallon, the cost for gas per mile comes out to be $0.50/mile. The cost for depreciation per mile is "zero". The car is not worth anything. They would have to carry liability insurance on the car since in most states, that is the law. If the policy cost $500/year and they only drive 250 miles per month, the cost per mile would be $0.17/mile. Adding all this up, I get $0.67/mile. That seems high, but figures don't lie.
Now let's look at Obama's recommendation. Our person goes out and borrows $40,000 from the Chinese to buy a higher mileage car. He figures that after 5 years of driving, the car will only be worth about $10,000, so for each year he drives the car he will lose $6,000. Now he only drives 250 miles per month or 3,000 miles per year. Using my 4th grade math again, I get $2.00/mile. Now this is a great car that gets 35 miles per gallon. Again, the 4th grade math---$0.11/mile. He will still need the liability insurance costing the same $0.17/mile. Because this is a newer car and he has financed it, the China man will require collisions insurance too. He would be lucky to get by for $600/year and this would add $0.20/mmile. Now let's add up the figures for Obama's advice. We get a total of $2.48/mile.
Now we return to our 4th grade math and notice that Obama's advice will cost us 3.7 times the cost of keeping our old car. Isn't this starting to look like the old "cash for junkers" program that was such a boon-doggle? Have you noticed that if we did just the opposite of what Obama has advised, we would have been making the correct decision every time? Does that also tell you some thing? Notice that no one in the media seems to know 4th grade math either because we have not heard a sound about what he said. We only hear them saying that he should not have made a joke about the situation. His joke is not the problem. It is what he said, because that must also be what he was thinking and if he thinks like that, we don't need him spending our money.
First the guy with the car that gets only 8 miles per gallon. My guess is that the car is an old one an it has a "zero" trade-in value. Further, the fact that it is worthless, there is no need for collision insurance. If the car only gets 8 miles per gallon, you can bet that the person is not driving it from coast to coast either. Now with these assumptions, lets do some calculations. If gas costs $4.00 per gallon, the cost for gas per mile comes out to be $0.50/mile. The cost for depreciation per mile is "zero". The car is not worth anything. They would have to carry liability insurance on the car since in most states, that is the law. If the policy cost $500/year and they only drive 250 miles per month, the cost per mile would be $0.17/mile. Adding all this up, I get $0.67/mile. That seems high, but figures don't lie.
Now let's look at Obama's recommendation. Our person goes out and borrows $40,000 from the Chinese to buy a higher mileage car. He figures that after 5 years of driving, the car will only be worth about $10,000, so for each year he drives the car he will lose $6,000. Now he only drives 250 miles per month or 3,000 miles per year. Using my 4th grade math again, I get $2.00/mile. Now this is a great car that gets 35 miles per gallon. Again, the 4th grade math---$0.11/mile. He will still need the liability insurance costing the same $0.17/mile. Because this is a newer car and he has financed it, the China man will require collisions insurance too. He would be lucky to get by for $600/year and this would add $0.20/mmile. Now let's add up the figures for Obama's advice. We get a total of $2.48/mile.
Now we return to our 4th grade math and notice that Obama's advice will cost us 3.7 times the cost of keeping our old car. Isn't this starting to look like the old "cash for junkers" program that was such a boon-doggle? Have you noticed that if we did just the opposite of what Obama has advised, we would have been making the correct decision every time? Does that also tell you some thing? Notice that no one in the media seems to know 4th grade math either because we have not heard a sound about what he said. We only hear them saying that he should not have made a joke about the situation. His joke is not the problem. It is what he said, because that must also be what he was thinking and if he thinks like that, we don't need him spending our money.
Monday, April 11, 2011
Tough Love vs Slobbering Love
To put the best spin on it, I will accept that both the Republicans and the Democrats want what is best for the USA and the future of our children. Where I get off is the way each is going about it. To understand what is going on, all you have to do is to look at your own children and your relationship to your own parents. When I was a kid and wanted something or to do something and I asked my Dad and he said "no". That was the end of it. It did not do any good to go and ask my Mother. She knew better than to commit to something that was against what my Dad said. Like most kids, I used the argument that, "all the other kids are going or have this or that". It didn't work. My Dad always said, "he didn't care what other parents did, this was the way it was going to be". Now have things changed since you were a kid? What your Dad and mine were doing was giving us "tough love". I even heard my grandmother telling one of her grand kids who she was giving a spanking to say, "this hurts me as much as it hurts you". At the time, I thought that his was all just talk, but now after having my own kids, I know what she meant and it was true. There are many times when a responsible parent has to say "no" and stick with it. The first think that happens is a flood of tears, but as a responsible parent, you know that you have to stick to your guns. You know that the decision that you just made is the right one for the kid that you love. This is what I mean by "tough love".
As a kid, we passed down cloths and even shoes as the older kids our grew them. It was never a question of style. It was a question of warmth and economy. We mostly had enough money to afford new cloths, but we knew that the old ones were just fine and had a lot of wear left in them. We did not go to second hand stores in those days because all the cloths they had were already worn out and all patched. Now when you go into a second hand clothing store, every thing looks almost new and is often the latest style. How did this happen? Why is there so much waste? Why do we and our kids seem to accept waste as just a part of life now? Why don't parents have the courage to say "no" to every new style that come down the pike? Do you think it is because they did not understand that their parents really loved them when the said "no"? Looking back now, do you really feel that the fact that your parents often said "no" to you that you have grown up stunted in some way? Do you feel that you are less prepared to deal with life as a result of not getting everything that you wanted? Do you think that the "tough love" that you got was bad? Hey, things have changed and changed in a big way and not for the better. We need a lot more "tough love" from Washington DC.
Watch what is going on in Washington DC right now and ask yourself if any of those people know what "tough love" is? I never saw anyone go hungry due to "tough love" nor did I see anyone cold due the lack of warm cloths. "Tough love" is a little like making yourself strong by lifting weights. All of us have to do a little more lifting and doing without if we ever expect to gain the strength that is needed to keep this place afloat for the future. Remember the glass house space simulation thing from a few years ago? They put this couple inside this self contained space chamber that had all these plants for food, ect. Did you notice that limbs would often break off the trees inside the place due to their own weight. No one expected this, but it was because there was no "wind" to flex the limbs to make them stronger. Even plants need "tough love" to function. Look at our schools and you will see more examples of the "slobbering love" that I am talking about. Isn't it interesting that the more we spend the worse the educational results? If we had been keeping our eye on the ball, we could have predicted exactly what has happened. It would have been no mystery.
Back to Republicans and Democrats. They need to be reminded of what "tough love" means. Keeping someone alive well beyond the point where all quality of life has ended is not real love, and we do it at great expense to society. Why? Not letting your kids eat candy is not cruel. It is responsible. We have become an over weight country by all measures, so providing less food to those who don't work is responsible and just good old fashion "tough love". I want to hear someone say the words "tough love" on the TV news one of these days. Most of the people who watch TV would have to go to their dictionary to find out what the words mean. That's the problem. Try changing the world by saying "tough love" at least once per day and see what happens.
As a kid, we passed down cloths and even shoes as the older kids our grew them. It was never a question of style. It was a question of warmth and economy. We mostly had enough money to afford new cloths, but we knew that the old ones were just fine and had a lot of wear left in them. We did not go to second hand stores in those days because all the cloths they had were already worn out and all patched. Now when you go into a second hand clothing store, every thing looks almost new and is often the latest style. How did this happen? Why is there so much waste? Why do we and our kids seem to accept waste as just a part of life now? Why don't parents have the courage to say "no" to every new style that come down the pike? Do you think it is because they did not understand that their parents really loved them when the said "no"? Looking back now, do you really feel that the fact that your parents often said "no" to you that you have grown up stunted in some way? Do you feel that you are less prepared to deal with life as a result of not getting everything that you wanted? Do you think that the "tough love" that you got was bad? Hey, things have changed and changed in a big way and not for the better. We need a lot more "tough love" from Washington DC.
Watch what is going on in Washington DC right now and ask yourself if any of those people know what "tough love" is? I never saw anyone go hungry due to "tough love" nor did I see anyone cold due the lack of warm cloths. "Tough love" is a little like making yourself strong by lifting weights. All of us have to do a little more lifting and doing without if we ever expect to gain the strength that is needed to keep this place afloat for the future. Remember the glass house space simulation thing from a few years ago? They put this couple inside this self contained space chamber that had all these plants for food, ect. Did you notice that limbs would often break off the trees inside the place due to their own weight. No one expected this, but it was because there was no "wind" to flex the limbs to make them stronger. Even plants need "tough love" to function. Look at our schools and you will see more examples of the "slobbering love" that I am talking about. Isn't it interesting that the more we spend the worse the educational results? If we had been keeping our eye on the ball, we could have predicted exactly what has happened. It would have been no mystery.
Back to Republicans and Democrats. They need to be reminded of what "tough love" means. Keeping someone alive well beyond the point where all quality of life has ended is not real love, and we do it at great expense to society. Why? Not letting your kids eat candy is not cruel. It is responsible. We have become an over weight country by all measures, so providing less food to those who don't work is responsible and just good old fashion "tough love". I want to hear someone say the words "tough love" on the TV news one of these days. Most of the people who watch TV would have to go to their dictionary to find out what the words mean. That's the problem. Try changing the world by saying "tough love" at least once per day and see what happens.
Thursday, April 7, 2011
2010 Budget, It Is Really Simple
You must be following what is going on in Washington DC on the budget. You know me and I see every thing as being very simple. You know that this is not complicated if you have been reading my blogs. Let me show you how simple it is.
Think about being in a life boat out on the high seas. It is in the black of night and you don't have any idea how far you are from land or when you might be rescued. You notice on the life boat that there is all this kinds of baggage that people have loaded on. In those bags are shoes and pictures of their children. What do you do? Again, it is easy. You throw overboard everything except food and water and enough close to keep you and the others warm. Everything else goes overboard. It might turn out that you are rescued the next day or you might enter a storm that would sink your boat if it remained over loaded. Now, what is the decision rule that this whole thing points out? "Always go farther than you think you need to go to save your life and those of your children". You can always buy the stuff you threw overboard if you live thru the event. If you keep the extra stuff and die as a result, you are out of the gene pool and thus the human race is better off. See, it is simple isn't it?
From this example it is clear that you can always spend less than you think you need to spend and if you turn out to be wrong, you can always spend more in the future to make up for your error. The opposite is not possible, because you can't unspend money. If you spend too much and lose your home or car, it may be very difficult to unspend and get them back. Business is no different. I have seen it a million times.
A business is in trouble and knows they need to reduce cost and people. They have a couple of choices. Fire the exactly correct number of people to allow them to get thru the trouble that your company is in. As I have blogged in the past, it is almost impossible to hit the number to fire right on the button. This means that you will end up either firing too many or too few. Is there a best side to be on? Yes!!!
Always fire more than you think you need to. You can always hire them back, but if you go out of business, no one has a job. Simple isn't it?
Isn't this how our congress should be dealing with the budget? It is simple isn't it? Our guys are trying to cut cost like they know "exactly" what is needed when they don't have any idea. We all know that we need to cut "more" rather than less. If we cut too much we all know that it would be very easy to kick up the spending.
Another point that always works. Rather than looking at expenditures one on one, it is normally better to "rank order" the expenditures. It is real simple. All you have to do is to make a list from "best" to "worst" of items that you spend money on. We don't ask if they are worth it or not. It is easy to do. In your home budget, you can justify why you need all the items on your list, so that method does not work. If you make a list from top to bottom with the best on top and the worst on the bottom, all you need to do is to start from the top and stop when you run out of money. Isn't that what our government needs to do? I told you that it was simple. You would not need to know any complex math to rank order expenditures and then to see when you ran out of money. What you might find is that there are some items at the bottom that are "good", but sorry, there is no money for them. This is life.
Think simple!!!!!
Think about being in a life boat out on the high seas. It is in the black of night and you don't have any idea how far you are from land or when you might be rescued. You notice on the life boat that there is all this kinds of baggage that people have loaded on. In those bags are shoes and pictures of their children. What do you do? Again, it is easy. You throw overboard everything except food and water and enough close to keep you and the others warm. Everything else goes overboard. It might turn out that you are rescued the next day or you might enter a storm that would sink your boat if it remained over loaded. Now, what is the decision rule that this whole thing points out? "Always go farther than you think you need to go to save your life and those of your children". You can always buy the stuff you threw overboard if you live thru the event. If you keep the extra stuff and die as a result, you are out of the gene pool and thus the human race is better off. See, it is simple isn't it?
From this example it is clear that you can always spend less than you think you need to spend and if you turn out to be wrong, you can always spend more in the future to make up for your error. The opposite is not possible, because you can't unspend money. If you spend too much and lose your home or car, it may be very difficult to unspend and get them back. Business is no different. I have seen it a million times.
A business is in trouble and knows they need to reduce cost and people. They have a couple of choices. Fire the exactly correct number of people to allow them to get thru the trouble that your company is in. As I have blogged in the past, it is almost impossible to hit the number to fire right on the button. This means that you will end up either firing too many or too few. Is there a best side to be on? Yes!!!
Always fire more than you think you need to. You can always hire them back, but if you go out of business, no one has a job. Simple isn't it?
Isn't this how our congress should be dealing with the budget? It is simple isn't it? Our guys are trying to cut cost like they know "exactly" what is needed when they don't have any idea. We all know that we need to cut "more" rather than less. If we cut too much we all know that it would be very easy to kick up the spending.
Another point that always works. Rather than looking at expenditures one on one, it is normally better to "rank order" the expenditures. It is real simple. All you have to do is to make a list from "best" to "worst" of items that you spend money on. We don't ask if they are worth it or not. It is easy to do. In your home budget, you can justify why you need all the items on your list, so that method does not work. If you make a list from top to bottom with the best on top and the worst on the bottom, all you need to do is to start from the top and stop when you run out of money. Isn't that what our government needs to do? I told you that it was simple. You would not need to know any complex math to rank order expenditures and then to see when you ran out of money. What you might find is that there are some items at the bottom that are "good", but sorry, there is no money for them. This is life.
Think simple!!!!!
Wednesday, April 6, 2011
Public Employee Compenstation #5, I Figured It Out!
It has taken me a while, but now I think that I have figured it out. I now have a way to show the total picture of public employee compensation. One of the biggest problems for most people is how to deal with the compensation for current employees after they retire from their current jobs. I feel that the best way is to look at what it would take to "buy out" their future earnings. That is to cash then out when they retire or are layed off for any normal reason. If they are fired for "cause", I think that a new set of rules should apply. In this blog, I am only going to go into normal retirement or layoff situations. We will still need to look at the implications of when we fire someone for "cause".
I can't cover all possible contracts so what I am going to do is to assume what I think are standard provisions in most contracts and run the numbers on those. In the process, I think you will get a feel for how significant different provisions can be "financially". A small item can have big implications for tax payers in the future.
Let's take a look at a few. The first one that I want to take up is the provision of when a person becomes "vested". Vested means at what point the person gains access to future tax payers money. Look at the example of where a person takes a job where they work, but don't get any vacation until they have worked for the company for a full calendar year, at which time they are "vested" for one weeks vacation. Then after 5 years, they are vested for 2 weeks of paid vacation and so one. The point is that you have to work for some period of time before the "perks" start to kick in. These are normal provisions. The problem with public employees is that there is often no vesting period. You get all the perks from day one. Due to the complexity that I pointed out earlier, it can get complicated fast and often no two situations are the same. You will need a computer to figure out most of these. For that reason, I am going to deal with a set of problems that will demonstrate what school boards and tax payers have to deal with when trying to make the right decision. It is not easy.
Now, let's go back to our example in #3 where I used a typical female teacher who had worked from age 30 to age 65 and then retired with school benefits. Recall that she made a total of $1,668,537 in pay for those 35 years and the district would have to have in the bank at 3% interest an additional $1,421,477 to cover her expected retirement payouts over the next 20 years. You can now ask the question, "What would it cost to "buy out" her future benefits?" At a 3% discount rate, the value would be the $1,421,477 above. My point is that we need to publish what the "buy out" would be for each employee every year.
There are some other aspects to this that needs to be consider and those are expected interest rates. Recall back in the 80's when real estate was going up at rates close to 10% per year and the stock market was on fire? With a retirement program calling for "fixed" payments, the interest rates can have a very big impact. If the rates go up, the less the school district has to have in the bank on a person's retirement to cover future benefits and, like wise, they have to have more in the bank if the interest rates are lower. What we now have is "low" interest rates, so school districts need more money in the bank and that means higher taxes. Follow that? Here are some numbers from the interest tables. The factors are for 20 years. The first is for 3%, 14.8774 and the second on is for 8%, 9.8181. In the example above at 3% the school district needed $1,421,477 in the bank, but with an interest rate of 8% they would only need $938,080. We know that with current economics we really can expect to earn 3%. We should be using an even lower rate like 1.5%. I we did that, what would the school district need in the bank? How about, $1,640,392. That is the same as the female school teach made during her whole life.
Complex and hard to follow isn't it? That is the problem with public employee compensation. We are going to have to understand this or us tax payers will continue to be screwed. One step that I think we could do, is to show the "buy out" figure for each employee, year by year. Most tax payers should be able to at least understand this one figure.
PS----------Here is what we need to do. For each public employee, we need to figure the cash buyout value of their future benefit package at the start of the work year and at the end of the work year and add the difference to the current years compensation plus any benefits that apply just to that year. This would include medical insurance and vacation. Now take that total and divide it by the hours worked for the year and you would have the total cost per hour of that employee. Now with this good number, you could judge if the employee and what they are doing is worth it or not. What you would find is that the cost of the public employee is much higher than you ever thought and thus many of us would conclude that they are not worth it and thus could be eliminated. This is the kind of think that we need to do if we ever expect to get the cost of government under control.
I can't cover all possible contracts so what I am going to do is to assume what I think are standard provisions in most contracts and run the numbers on those. In the process, I think you will get a feel for how significant different provisions can be "financially". A small item can have big implications for tax payers in the future.
Let's take a look at a few. The first one that I want to take up is the provision of when a person becomes "vested". Vested means at what point the person gains access to future tax payers money. Look at the example of where a person takes a job where they work, but don't get any vacation until they have worked for the company for a full calendar year, at which time they are "vested" for one weeks vacation. Then after 5 years, they are vested for 2 weeks of paid vacation and so one. The point is that you have to work for some period of time before the "perks" start to kick in. These are normal provisions. The problem with public employees is that there is often no vesting period. You get all the perks from day one. Due to the complexity that I pointed out earlier, it can get complicated fast and often no two situations are the same. You will need a computer to figure out most of these. For that reason, I am going to deal with a set of problems that will demonstrate what school boards and tax payers have to deal with when trying to make the right decision. It is not easy.
Now, let's go back to our example in #3 where I used a typical female teacher who had worked from age 30 to age 65 and then retired with school benefits. Recall that she made a total of $1,668,537 in pay for those 35 years and the district would have to have in the bank at 3% interest an additional $1,421,477 to cover her expected retirement payouts over the next 20 years. You can now ask the question, "What would it cost to "buy out" her future benefits?" At a 3% discount rate, the value would be the $1,421,477 above. My point is that we need to publish what the "buy out" would be for each employee every year.
There are some other aspects to this that needs to be consider and those are expected interest rates. Recall back in the 80's when real estate was going up at rates close to 10% per year and the stock market was on fire? With a retirement program calling for "fixed" payments, the interest rates can have a very big impact. If the rates go up, the less the school district has to have in the bank on a person's retirement to cover future benefits and, like wise, they have to have more in the bank if the interest rates are lower. What we now have is "low" interest rates, so school districts need more money in the bank and that means higher taxes. Follow that? Here are some numbers from the interest tables. The factors are for 20 years. The first is for 3%, 14.8774 and the second on is for 8%, 9.8181. In the example above at 3% the school district needed $1,421,477 in the bank, but with an interest rate of 8% they would only need $938,080. We know that with current economics we really can expect to earn 3%. We should be using an even lower rate like 1.5%. I we did that, what would the school district need in the bank? How about, $1,640,392. That is the same as the female school teach made during her whole life.
Complex and hard to follow isn't it? That is the problem with public employee compensation. We are going to have to understand this or us tax payers will continue to be screwed. One step that I think we could do, is to show the "buy out" figure for each employee, year by year. Most tax payers should be able to at least understand this one figure.
PS----------Here is what we need to do. For each public employee, we need to figure the cash buyout value of their future benefit package at the start of the work year and at the end of the work year and add the difference to the current years compensation plus any benefits that apply just to that year. This would include medical insurance and vacation. Now take that total and divide it by the hours worked for the year and you would have the total cost per hour of that employee. Now with this good number, you could judge if the employee and what they are doing is worth it or not. What you would find is that the cost of the public employee is much higher than you ever thought and thus many of us would conclude that they are not worth it and thus could be eliminated. This is the kind of think that we need to do if we ever expect to get the cost of government under control.
Subscribe to:
Posts (Atom)