Global Warming Or Climate Change

With all this business about Climate  Change, why don't we hear people asking the right questions?  Is it because we are all that stupid?  Here is the simple question that we should all be asking. Given that climate change is a real thing, when will it have a significant affect on the quality of life for us humans if we do absolutely nothing?  To judge what we may need to do to prevent or slow climate change, we need to first know some thing about the impact and "when".

Next, the final question. If we do all the things that the climate change nuts want us to do, how long will it extend the time when climate change will have a significant affect on the quality of life for us humans here on Earth?  Once we have answers to these two question, we can then discuss the real problem and that is "is it worth it"?

If we are going to take food from the mouths or our kids today, we need to know if it is worth it or not.  What if you found out that there would be zero impact on the quality of life for us humans here in the USA until about 150 years from now?  If you found that all the things that we are doing  only extend that date by 5 years to 2165?  Would you think that you were being screwed by people like Obama?  If you don't then you should have your IQ checked.

To put this into some context, look at Detroit.  Detroit became a bad place and people reacted by moving out.  In just about 50 years, the population of Detroit went from 1.5 million down to just 1/2 million.  The cost of land in Detroit sells for less than an acre of land in Iowa now.  The lesson here is that if conditions change, like climate, people adjust easily to the change.  This is just one more reason why taking food from the mouths of your children is a very stupid way to adjust to any climate change that may happen.  The other point is that there is no need to change until you can see the "whites of their eyes".  That is the reason that we should not be taking food from the mouths of our kids until there is actually a significant change in the climate.  If you buy into Obama and his group, I guess it is OK to take food from your own kids, but not mine. 

Start thinking for yourself and thinking about your kids and grandkids and saving the world for them rather than people around the world who you don't even know.

PS---Let's say that if we do all the things the Greenies want that it will delay the impact of climate change from 100 years from now to 105 years from now.  Rather than starting now to lower the quality of life for all of us, we did nothing and saved the wealth and food that we would have produced, in 100 years, we would have enough food and money to maintain our quality of life for at least and additional 25 years.  Isn't is clear that doing nothing is better than what the Greenies are demanding?  Are we all as stupid as we appear?

What Ever Happened To The Truant Officer?

When I was a kid, our school had a "Truant Officer".  If you did not show up at school, them would come to your house to see what was wrong.  We used to call missing school, "Playing Hooky".  I guess that it came from kids going fishing rather than going to school.  What ever it was, it seemed to work because kids did not miss school and we had a  much higher graduation rate than we do now and girls were not getting knocked up like the are now.  This is the point of this blog.

I used to live in Buenos Aires and my kids went to school there.  One day one of my kids was not feeling good so I let them stay home from school.  About 10:00 am that morning, I had a knock on the door and it was the "Truant Officer" who wanted to know why my kid was not in school.  He agreed that I had a good reason for not sending my kid to school that day and asked if I needed the school nurse to come and take a look at my kid.  I said "No".  That is how it worked in Buenos Aires and still does.  That may be one of the reasons that Argentina has the highest literacy rate in the Western Hemisphere and the USA is no better than about 30th in the world.

If the system worked so well in Argentina and back when I was a kid, why did we get rid of the Truant Officer?  That is the question that we should be asking.  The fact that over 25% of our kids drop out of school and do not graduate is the main reason that our per capita income is going down while that of much of the world is going up.  It is also the main reason that we are in debit for over $17 trillion dollars and will never be able to pay it back.  We are living credit and some day that is going to run out.

A long time ago, I was running a computer plant in a rural area where I hired a lot of people who used to do farm work.  I had a serious problem with attendance, much like what we have in our public schools.  What I did was to hire a company nurse who I sent out to check on people who did not come to work to see if they were sick and needed some kind of help.  Most of the time the person did not have any kind of health problem, and were staying home because they were just lazy. The fact that the nurse showed up at their door was enough to eliminate the attendance problem.  It also prevented people from coming to work sick and spreading what ever they had to other workers.  The nurse was just like the Truant Office that I described above.  I know that in most schools, the nurse does not make house calls the way my nurse did.  If they did, I think that it would have the same affect on school attendance and graduation that my company nurse had.

Whys is it that we have had most of the solutions to our current school drop our problem, but don't use them?  Is it because of cost or union rules?  Is it because we do not want to hurt someone's feelings?  Is it just not "PC"?   My recommendation is that we bring back the Truant Officer for any school that has more than a 5% drop out rate.  We could start as low as 25% and I know that it would cover most of the schools in the USA.  There are schools in the USA where the non-graduation rate is over 50% and you know it.  As a country, we can not afford to let our kids drop out of school without graduating without some kind of penalty.  Some one is going to have to feed and cloth most of these drop outs in the future so we might as well get more involved earlier when we can do something about the situation.

Many schools now have cops in the schools.  Why not a Truant Officer too?

Real Economics, Chapter 1

Over 50 years ago I had a graduate class in Macro Economics taught by Ted Kreps who was a famous economist of the day.  The way that he taught economics was the "same" as what he had leaned earlier from economists just like himself.  People with his kind of thinking have dominated the college and universities for the past 75 years.  They throw around terms like "stimulation" as though the concept was handed down by God Almighty.  I never heard one of these economists explain in any kind of detail how "stimulation" actually helped the economy of any country.  They all just accepted the concept on "faith".  Then and now, I do not accept anything on "faith" alone.  To accept something on the basis of "faith" requires one to turn off the brain that Darwin gave us and I can not do that.  Now, "real economics".

First, we need some simple ground rules like "What is the objective of economics?".  Economics is the study or a model of the "real economic" system that allows us simple minded humans to understand what is going on.  It is like speech and the written language.  Speech is the real thing and the written language is just a small abstraction of the real thing.  Speech came first and a written language is an add on option. Real economics also came first and economists came later and are also just an option.  With me on this?  It is an important concept to understand.  The real economy does not need economists.

The second item is the "objective" of any economic system.  For this blog, it is to produce the best quality of life for the individual.  Look at the economic system as a pie where each person gets a piece.  If the pie grows bigger, but if the number of people grows faster, the average person gets a smaller slice of pie.  For that reason, we need to look at any economic system on the basis of how it affects the average person.

 Finally, "What is an economic system?"  It is a system that provides the elements of the "quality of life" for the average person.  Some of the basics are food and shelter, but there is a lot more.

Early man was a hunter gatherer who searched for food and lived in caves like other animals.  Most people think that hunter gatherers are just a part of ancient history, but the concept is still alive and well today.  Farming, fishing and mining are modern examples of hunting and gathering. The USA started out 100% with hunter gatherers, both Native Americans and Europeans.  In this blog, I am going to call hunting and gathering--"Value Extraction". The making of arrow heads by Native Americans marked the shift to "Value Added" economic activities. Finally, Capital was introduced and it could be loaned out or rented to produce "Capital Value".  These are the three elements of all economic systems as you will see.

Historically, "Extraction" was the largest economic element and here in the USA, it was 100% when Columbus discovered America.  The day Columbus stepped ashore, he was the richest person in the world.  As more and more Europeans came here to "Extract", the wealth per person started going down because the limited extractable resource was divided by a larger and larger number of people.  That is why I mentioned above that we need to look at economics on how they affect individual people.  I don't know how much of current economy is "extraction", but I would guess that it is still only down to about 50% with "Value Added" about 30% and "Capital" the other 20%.

There is a limit on the absolute amount of extractable wealth and it is having to be divided up between more and more people.  That is a fact.  If you notice, some of the riches countries in the world are those who have a large amount of extractable wealth compared to the size of their populations.  Some examples are, USA, Canada, Russia, Brazil, Australia and the oil producing countries of northern Africa. Some of those who depend on "Value Added" are not doing too well.  Some of these are Japan, England, France, Spain, India and Italy.  Germany is about the only one who is holding their own using "Value Added".   The USA is not doing too well on "Value Added" either.  Over 50% of our population can not compete with the rest of the world on the basis of "Value Added", thus high drop out rate of much of our work force.

Another point.  Technology or special skills have always been the main driver of "Value Added".  The Native American who could make arrow heads was much richer than those of his tribe who could not make their own arrow heads.  Originally, let's say, that the arrow head maker was twice as wealthy as his average tribe members.  This trend would continue to grow as a few members of the tribe gained more and more skills.  Today, a person who is 7 feet tall and can professional basketball is over a 100 times wealthier than the average person.  This same principle also applies to all kinds of advanced technology.  In the example of the basketball player, he may add millions to the general economy, but it has very little affect on the "average person's" wealth

I mentioned above that Germany is doing better than most other European countries with their "Value Added" strategy as is South Korea.  The other things that both of these two countries are doing is social pressure to minimize the number of "free loaders" in their society.  Out of wedlock births in South Korea is "zero" as are school drop outs.  If either South Korea or Germany had the level of social irresponsibility that we have here in the USA, both would be economic failures.  It is only due to the abundance of "extractable" resources that allow the USA to function in the competitive world.  Given these clear facts, I can not understand how the Obama administration could glut our ability to utilize our "extractable" resources thru excess regulation.  Either the Obama administration has zero understanding of economics or that he is a Judas who wants to destroy the USA from the inside.

This blog has gotten a little longer than I had planned so I will add another chapter later.

VA Hospital And Zero Defects

Are you pissed off about how the VA Hospitals are being run?  Well, I am.  The other problem that I have is how all this is being handled.  All the talking heads are talking about the low level people who did this, but that is not the real problem.  What you will notice about the Obama administration is that they never know about anything when it happens.  I told this story before, but it needs repeating.  I left the barn door open once when I was a kid and during the night, a neighbor called and said one of our cows was in his yard.  I told my dad that I would go get the cow and he said, "No, he would go get the cow after he gave me a hard spanking."  The job of a real manager is to prevent problems, not close the barn door after the cow or horse is out like the Obama administration does.

If I have heard this once, I have heard it a 100 times from MBA type managers, "I don't have to know what people who report to me have to know.  All I have to do is to "know how to manage them".  Nothing could be stupider. When people who report to Obama are screwing up, Obama does not know it until someone outside government reports it to him.  His reaction is always the same.  "I did not know anything about it, but I will close the barn door now."

Now, my experience with Philip Crosby and his "Zero Defect Program".  I worked with Philip back in the 1970's when he was responsible for Quality Control world wide while I was responsible for Quality Control for a 50,000 employee division.  "Zero Defects" means just that.  Once you allow a small level of screw ups, the number of defects always grows.  Philip used the example for doctors who deliver babies with the question.  "How many babies should we allow the doctor to drop on their heads?"   We all say "Zero", so why not with any other aspect of quality?  "Zero Defects" is a mind set that demands that managers know what they are doing and that they "prevent" defects in the first place, not sort them out after the fact.  In the case of the VA hospitals, finding the people who made the defects is not the problem.  The problem is the managers who allowed the defects to happen in the first place and that starts with Obama and the people who report too him.

What we all have to ask is "Who allowed the problem with the VA to happen?"

Immigration Reform And What AreThe Real Numbers

You won't hear this from the talking heads on TV, but here are the facts about immigration.  Myth number one, "This country was built by immigrants, so to keep the economy growing we need more immigrants."  To fully understand why this is a myth, we first need to agree on what is the "objective".  Is the objective a "bigger" economy or is it more individual wealth?  Since, ultimately the objective is quality of life, it would appear logical that the objective should be more individual wealth.  Having a bigger pie that is divided by more people is bad if the average individual end up with a smaller slice of pie.  Under Obama, the pie has been growing slower than the increase in the number of people.  That means that the average person or family is ending up with a smaller and smaller slice of pie.  If you can't follow that simple concept, there is no reason to read the rest of this blog.

You did not learn this in Economics 101, but there are only three basic ways to create wealth.  Those are (1) Individual added value, (2) Capital, (3) Extraction.  Here is how each operates.  An example of individual added value is when a person takes a piece of leather and makes it into a pair of shoes that is worth more than the leather he started with.  The main input form the individual is hard work and intellect.  This is what most people think is the main source of wealth and it is.  The next is Capital.  This is where you rent your money to someone who pays you interest for the use of that money.  Historically, this has been one of the biggest sources of wealth generation.  For those who did not have capital, they were locked out of this aspect of the economy.  Think of Kings and Queens here.  The final one is extraction.  This includes oil, coal, timber, fish and farming.  The Earth only has a limited amount of these sources of wealth, but they are some of the largest.

The final point of the above is that they need to be viewed on a per person basis rather than just the absolute amount.  They can be added together, but that too needs to be on the basis of a per person.   If this sounds like a round about way to look at immigration, it is, but necessary.  Here in the United States our economy is made up of all three of the above.  When America was first discovered, all it had was extractable wealth.  Originally it was the fur trade that made the first American millionaire.  That was an example of :extraction".  The Gold Rush in California was another example of extraction wealth.  Most early immigrants did not produce much wealth by method (1) or (2), it was by extraction.  The problem with an economy that is based on extraction is that there is a limited pool to draw from and the more people you have drawing from this pool, the smaller share per individual.  It is possible to compensate for the decline in extractable wealth by greater use of factor (1), but that requires hard work and the use of intellect which is also in short supply.

Now let's get onto immigration.  Isn't it clear that the more people we have to divide up the extractable wealth between the smaller the share per person?  I don't care where the people come from or what their skill base is, they are going to have a negative impact on the amount of extractable wealth per person.  Isn't that crystal clear!  I have blogged before that the impact of capital has been going down as new productivity has shifted to higher and higher tech.  Capital is not as valuable as it once was.  That is a fact that all need to start understanding.  This is one reason why economic stimulation has become a dead concept.  This only leaves one area from where future potential exists for additional individuals to produce new wealth.  It is my position that no more than 25% of the USA  population have the intellect and other skills necessary to carry their own weight.  Given the fact that someone is going to have to pay all or part of the dues for the other 75%, this means that any  new immigrants that we allow in has to pay their own way plus their share of  the dues for the 75% who can not now carry their own weight.  Remember that these new immigrants will have to be added to the divisor of the extractable wealth and thus it gets smaller and smaller per person too.

If you are starting to get the message, you will see that if we want to maintain our objective of wealth per individual and quality of life that we can only let in those who can carry their full weight and a little extra for those already  here who can not carry their own weight.  This is my best number, but if your family does not "produce" at least $125,000 of income and wealth, you do not carry your own weight.  Now, if we are going to let some immigrants come in, we need to expect them to carry their own weight and that means "producing" over $125,000 in wealth per family.  If we don't do that, the quality of  life of the average family here in the USA is going to go down.  Got that!  Letting in unskilled or people who do not have the intellect to help pay the bills will make the future of your children "worse" and your grandchildren even "worse".  If you love your children more than some Mexican stranger, you know that I am right.

Simple isn't it?  I know that you never looked at it this way before did you?

PS---Darwin did a good job with the human race, but in 1492, most were still hunter gatherers.  They had too many in Europe, but America could still use some more.  That was the main reason that the "economy" boomed here.  It was not due to the superior talent of the immigrants too America.  Now, we have too many who are just hunter gatherers and that is the problem.  We don't need more, period.