Job Experience Myth

I have been watching advertisements on TV for "experienced" applicants.  This sounds good, but if you look deeper, it is a total "myth".  That is what this blog is all about.

Like I have pointed out in the past, you first need a clear objective and exactly what it that?  You need to hire a person who can do the job, but a lot more.  You need someone who can not only do the job, but can grow with the job and possibly be promoted to a different job in the future.  When you look at an applicant with experience, you have to ask, "how did they get that experience?"  Who taught them what they needed to know?  Do you think that you could teach better than that other person?  It is the trend that people change jobs today, a lot more often than they did in the past.  Thus you need to try to hire people who can make those changes when the time comes and it will.  Are you starting to see the problem with just considering experience?

To meet the objective above, you need a person who is "smart" and who can adapt to new situations.  You have heard of people described as "fast learners".  Those types of people really do exist and you need a way to find them.  How about "work ethic"?  I think that you know that a person with lots of experience can also be low on the work ethic side.  What if a person has too much experience?  I mean, what if they have been in the very same job for a long time.  Is there a reason for that?  When I was in college many years ago, I had a professor in Industrial Psychology who was promoting a concept called "MAQ".  It stood for management advancement quoation.  Boiled down, it was the ratio of age and management level.  Here is an example.  Let's say we have two candidates of different ages but who hold similar level jobs.  The "MAQ" concepts says that the younger candidate is the preferred one.  I think that you can see why.  Like most things related to human performance, none of these measures are "exact", but they are much better than 50/50 and that is the game one is playing in the selection process.

This is a little repeat, but bear with me.  In the interview process, you need to find out if the person has come into their experience by way of an algorithmic or empirical path or an analytical one.  Empirical knowledge suffers from the fact that it is often domain specific and thus can not be extended to new situations, where as, analytical knowledge is based on sound proven principles that apply universally.  This is a critical point to determine in the interview process.  As you can see, some experience may be worse than no experience at all.

I know that many managers responsible for hiring go by the principle that, "They need to hire people smarter than themselves".  It is impossible to for a manager to manage people if they do not know how to do the job themselves.  You only have to look at successful technical companies to see that this is true.  In most cases, it is better to hire a person with potential and then train them yourself.

A final point.  As jobs change and we all know that they are changing very fast, it will become more and more difficult to find people who have experience in future jobs that are not yet even defined.  Empirical knowledge become more and more worthless while analytical knowledge becomes more valuable.  Most experience is thus empirical and is a myth as it may apply to the future.

Birth Rates And Global Warming

Remember when China came out with the new policy of "only one child"?  The world could not believe that any government could come up with a more uncivilized policy, but now I think that many feel that China was just ahead of the times.  What do you think?  That is the idea behind this blog.

I check some of the figures on the internet on birth rates by country and found some interesting facts.  The countries with the highest birth rates were in Africa and Muslim countries.  The USA ranked 150th in the world, or about the middle.  It has to be clear to everyone that Africa is the poorest place in the world, yet they have the highest birth rate.  Is that civilized or stupid?  If us humans are the cause of global warming then the worst offenders have to be the counties of Africa and the Muslim countries.

Look at the Gaza Strip.  The birth rate there has dropped a little in the past 40 years, but over breeding is still their number one problem.  They have not been able to feed themselves for many years and depend on food aid just to survive.  I checked a few years ago on Egypt and found that they double their population every 20 or so years.  We all know about India and their population problems, but did you know that Pakistan has a higher birth rate and Muslims living in India have a higher birth rate than the Hindu's!

When I used to teach Decision Theory, I would ask the new class what was the first step toward solving a problem and most of the class would respond that it was to "define the problem",  Wrong!  The first step is to "admit that you have a problem"!  This is true with over weight people, alcohol or drug addicts and it is the same with over population.  I know that most people want a better life or a better quality of life, but they don't seem to understand that breeding too many kids is directly counter to that objective.

The data shows that those with the lowest birth rates tend to have the highest quality of life, while those with the highest birth rates have the lowest quality of life.  Could that be any clearer?  What is it going to take before the human race wakes up too the facts?  We seem to have come to grips with the problem of over population of dogs and cats, so why not humans?  If we wake up to over breeding, we can stop global warming and have a better quality of life at the same time.  What we are doing now is not the solution for either!!

Berlin Terrorist Discussion

It happened again in Berlin!  What is needed is an open minded discussion of the whole terrorist problem and specifically what Germany is and has been doing.  That is what this blog will try to do.

We need to agree on a few simple facts.  For thousands of years the civilizations of the West have been dealing with crime using "fear of punishment" as the solution.  It has worked as long as those who were committing the crimes were concerned about getting caught or their own health and safety.  There have been all kinds of brutal types of punishment used.  More recently and in the constitution of the USA we have banned many of these old types of punishment.  Civilized people have judged that it is better to put up with a "few" criminals who are not deterred by brutal punishment rather than "over" punishing regular criminals.  We take pride in our position based on the "past", but what do we do when we have a new situation where we now have "many" criminals or terrorists who have "zero" fear of punishment?  That is the problem that we now face.

If we can agree that we want to stop terrorist, what are our alternative actions?  All we can do is to be sure that we have all the alternatives on the table and then  to pick the one that is "best", but it has to be one that actually does stop terrorist.  We could take the position that we now have with murder or bank robbery which is to follow a policy that keeps these to a low "acceptable" level.  Realized that both murder and bank robbery are against the law, and we still have murders and bank robberies.  Do you think that this is what we want regarding terrorism?   I don't think so!

We know that 100% of terrorists are followers of the Muslim religion and thus one way to assure that we do not allow in more terrorist is to stop letting in Muslims!  This would mean that we would exclude over 90% of Muslims who are not terrorists.  Exactly what do we owe anyone including Muslims who want to immigrate into the USA anyway?  If we let them in, it is "at our pleasure".  There is no legal basis for letting them in.  This is the same with Germany.

Look at the smoke screen coming out of Germany on this recent truck terrorist.  The German police had the terrorist under surveillance  for months to assure that he did not commit any crime.  That is what they claimed, but it is not true.  Given that a terrorist can decide at any moment to take criminal action like driving their car into into a group of people or business, how can the police stop it?  The whole thing takes place in a matter of seconds!  Even if the police were able to shoot the individual immediately, what difference would it have made?  None!

Do you know of any other solution to eliminate terrorist other than not letting them in to the USA in the first place?  If not, I guess that we are stuck with not letting in anymore Muslims!  I don't think that Trump likes this alternative, but what other choice does he have?

PS--The fact that they found and killed the terrorist will have "zero" affect on preventing future terrorist events.  If this were a typical bank robber, it would have some affect, but not with Muslim inspired terrorists.  That is why we need to totally rethink how we deal with Muslim inspired terrorist.  We can't keep using the old formula that does not work with these types of terrorists.  One of the strategies for take over of the West my Muslims is to "out breed them".  It is hard for most people to get their heads around this one, but it is the truth and we need to understand that!!  The Muslims in France are breeding at 10 times the rate of original Frenchmen.  Do the math!!

"ImmigrationI Is Good" Myth

I have been blogging for some time that immigration is "not" good.  Almost everyone seems to feel that immigration is good for the economy.  That is clearly a myth! I will try to explain how many have been taken in by this myth in this blog.

To evaluate a decision, you first need some kind of objective to judge a decision against.  I'll deal with that first.  Here is a list of possible objectives.

(1) Help poor people around the world by allowing them to move to the USA for the good life.

(2) Make the economy "bigger" by allowing in people who can produce some "value added", no matter how small that amount might be.

(3) Make decisions that improve the quality of life for the people who are citizens of the USA including their kids and grand children.

(4) Make decisions that raise the "median family income" and avoid those that lower it, given that median income is the main driver of median quality of life.

With any list of objectives, they are bound not to be mutually exclusive and may actually be in conflict.  I think that my list above is a good example.  Take (1), if helping poor people around the world by letting them immigrate into the USA is "good", it is also "bad" at the same time.  You need to be able to answer whether the decision "nets" out positive for the USA.  More immigrants lower the quality of life by making the USA poorer and more congested with less and less free space.  New immigrants tend to be breeders of big families and thus do much more future damage to the USA over time.

How about (2)?  I don't know how many simple minded people that I have heard saying that poor immigrants take jobs that our people do not want to take and that they pay taxes and contribute to the economy.  This may be partly true, but it misses the main point and that is, it lowers the median family income and makes us poorer.  The pie may be a little bit bigger, but the  size of the pie that the median person gets is "smaller".  That seriously violates objective (4) and you can't do that if you want USA to be a better place to live.

How about (3)?  Most people can not see beyond their noses and do not take into account the future implications of their knee jerk actions.  The future of the USA and the future of our children is not something that short term thinkers have any business playing with.  My family has been here for over 30 generations and during that time, they were always working for the "future" of the USA and their unborn children.  I don;t want to see anyone sell out our future for some kind of short term gain!

Finally, it is very difficult to raise median family income by just value added labor alone.  Our economic history has been based on the exploitation of our natural resources from day one.  It has been supplemented with value added labor like making shoes or building cars, but few of those workers ever earned much more than the median level income.  Before Obama became President, the median family income was about $55,000.  Now, it is down to about $47,000!  Many very skilled hard working people earn much more than the $55,000 or $47,000, but it does not raise the median family income because there is not enough of them.  An average person mining Gold or drilling an oil is easily "worth" more than the median family income.  More immigrants do not help Gold mining or oil well drilling or farming.  It just means we have more mouths to feed from the pot!!

Who do you think that the children of immigrants are going to vote for?  The party who let their parents immigrate here and allowed them to live on welfare, that's who!!  No wonder Obama and the Democrats want to let in more and more immigrants.  They don't really care about the immigrants or the welfare of the USA, all they want is to stay in power!!  States like California and New York are a couple of the poorest educated states now while places like Iowa, and the Dakotas are the best.  Why do you think that is????

Skin In The Game For Global Warming Advocates

One of the things that bugs the hell out of me is hearing global warming advocates shooting their mouths off and proposing ways to restrict my freedom when they have no skin in the game.  That is the point of this blog.

Every time I hear a global warming advocate tell me not to cut my own trees or shoot deer on my own property, I think that they should be looking in the mirror and asking why they never planted any trees on the property that they pay taxes on.  It is like those people down at Starbucks drinking over priced coffee with money that their parents gave them.  What do they really know and don't seem to want to pay for with the tax money that they paid on the money they worked for.  Here are just a few idea that I have to allow them to get some skin in the game.

(1)  For each child that they have, they should be required to plant at least 10 trees.  I would rather make that 100 trees, but that would eliminate 90% as possible parents.  I was watching the war in Syria and noticed that there had to  be at least 1,000 people for every tree.  No wonder they have problems!

(2)  Now for wind power.  Most of these "save the world" global warming people want to spend more and more of my tax money on wind mills to generate "clean" power should have some skin in the game.  I recommend that all wind power has to be consumed within 50 miles of where it was originally generated.  Global warming advocates want to put their wind mills that are paid for with my tax money in my back yard, not their own back yards.  It is the same for solar power.  Both solar and wind power cost at least 10 times that from coal or natural gas, but when it is mixed at a small percentage with cheaper power most consumers don't see the real cost.  If people in these urban areas who want all this green power had to pay the full cost, I don't think that they would be as enthusiastic.

(3)  Here is another one.  How about garbage?  These big urban areas generate most of the garbage, but they want to dump their garbage in my back yard, far from their big cities.  I recommend that we pass a law that all garbage had to be disposed of within 50 miles of where it was generated.  What do you think places like New York City would be like if they were required dispose of their garbage within 50 miles rather than hauling it by truck and train many miles away into other states?

(4)  How about water?  In the case of California, the people in the LA area voted to steal the water from Northern California and ship it by canal over 500 miles to LA so that the people there could water their lawns a golf courses.  Farmers in Northern California who had land next to the Sacramento river could not take water out of that river to water their cattle because they were out voted by people in LA who wanted the water for their swimming pools.  It is the same with the water from the Colorado river.  I recommend that water should not be shipped across state lines or beyond 50 miles of the river from where it came.  In this case, I do not see a simple way for greenies or global warming advocates to get some skin in the game.  Do you know anything about Owens Valley?  It was another one.

(5)  I have one final one.  How about immigrants?  If they feel that where they are living is so bad that they have to get out, "no matter what", then here is how they can get some skin in the game.  I recommend that they agree to be neutered.  It is one thing for us to allow them in, but what about some equal value for them to have to give up?  I think that neutering them is a good way for them to put some skin in the game.  If we don't do something like this, it will not be too many years before we are over run with Muslims people from other places that they over populated.

PS---When the humane society saves the life of a dog or cat, they neuter the animal so that the animal ends up with some skin in the game.  The main reason that they have the animals in the first place was due to "over" breeding.  If they just sent the animal back out into the society without neutering, it would make the problem worse.  I think that neutering is better than letting the animals die as Darwin would have done!!

Leave Global Warming To Darwin

It is interesting that Darwin has been here a lot longer than the politicians and scientists and has done a very good job.  Don't follow that?  That is the point of this blog.

The modern thought process by our current generation of College professors and the kids who graduated from their classes is that us humans are the major cause of global warming.  This whole thing can be divided into it parts for better understanding.  First, we need to answer the simple question, "do we really have global warming?" If the answer to this first question is "no", why are we even having this discussion.  If I grant some latitude that the answer "may" be "yes" we can go on to discuss other aspects.

Rather than just discuss short range impacts of global warming, why don't we jump to the "end game" and discuss how global warming will end up after it runs its course.  Think about what this world will look like after global warming has run it course.  I think that most scientists agree that many of us humans will die off because the places where they live will become totally uninhabitable.  Let's start with that point--"totally uninhabitable".

if you look around, you will find places on Earth that are currently uninhabitable.  How about those?  Look at Death Valley in California.  It is hotter there than what many places are projected to be due to global warming in the next several hundred years.  The world has not come to an end due to the special climate of Death Valley and it won't if other places become uninhabitable.  Look at the Dust Bowl in Oklahoma?  When that area became uninhabitable, the humans who tried to live there moved to places less affected, like California.  We called them Okies.  You remember that!!

Remember Easter Island?  It had a lot of trees when the first humans showed up and they thrived.  Over time the number of humans grew and grew until they cut down all the trees for fuel and building material.  Had the same trees all died because of global warming, the net results would have been the same.  Unlike the Okies who moved to California, the humans on Easter Island could not leave because they had no wood to build boats.  Darwin stepped in and let most of the humans die off until Easter Island could grow enough food for the few humans who were left.  This is how Darwin will deal with global warming.  If those human on Easter Island were allowed to leave Easter Island and go to another island, the process of over population would have continued until that new island also died off.  The only advantage is that the final die off was delayed by a few years.

Isn't that what we are looking at with global warming given how we are currently dealing with it?   No matter how bad it gets here on Earth due to global warming, there will still be places where humans can survive.  Look at Eskimos in Alaska.  They live in a very uninhabitable place, but they have been living there for several thousands of years.  Darwin just keeps the population density down to a point that norther Alaska can support.  If humans are the cause of global warming, then as most of the humans of the world die off, global warming should stop!  Right!!  You can't have it both ways.

Now, look at the USA.  We only have 75 people per square mile and millions of trees per each of our citizens.  Compare that with countries who have many times our density and many fewer trees per citizen.  Why should we save them at our expense when they over populated their own countries?  Why should we allow them to come here like Okies came to California.  Let Darwin deal with them!!!

PS--This is a repeat. The right strategy for global warming is not to prevent global warming, but to be one of the survivors.  To do that we need to be the wealthy and have a low population density. Squandering our wealth trying to prevent global warming and allowing in more and more immigrants makes both key things above much "worse"!!!  Once the human die off as a result of global warming has run its course those of us who survive will gradually get back to normal.

What Is The Cause Of Claimed Global Warming?

If you have a broken arm and it hurts, what is the cure?  We all know that the cure is "time" for your body to heal the broken bone, but what does the doctor do?  He gives you pain pills.  I think that most of us know that the pain pill has zero to do with healing the broke  bone.  A further examination shows that this person has had two broken arms before.  When asked about his life style, the patient admits that he is a rock climber and falls from time to time.  Now that we have some facts, what is the cure for broken arms?  Don't risk your life climbing rocks!!  Now, let's look at global warming,

We know a few facts about global warming.  Thousands of years ago, we did not have a serious problem with global warming, or did we?  Something happened that caused the massive glaciers that covered much of Earth to melt.  Global warming people ignored that this event ever happened.  They do seem to agree that the quality of life of us humans caused global warming.  We know that our high quality of life is a direct result of the use of energy rather than muscle power.  Can't have one without the other.  If we only had a few countries in the world who had a high quality of life and thus used a lot of energy, global warming would not be a problem, but that is not what is happening.

It is clear that the cause of global warming, according to the global warming advocates, is caused by the high use of energy used to attain a high quality of life.  If we were all hunter gatherers, we would not have a global warming problem!  The problem with that is that few would have any quality of life.  Further, we would have to reduce the population of humans here on Earth by at least 90%.  The number of humans per square mile would have to be down to about 5 or 6.  In the USA, our population density is low, but it is still about 75 per square mile.  In many countries around the world their population density is over 500 per square mile.  It is impossible to ever get their use of energy down to a level where they have zero impact on global warming.

In England, they have a tradition that the oldest son gets the farm.  When I first heard this, I thought that this is not fair!  Now, when I look back at it with a wider understanding, I now feel that England had the correct tradition.  If they had split up the farm with each generation, sooner or later the land would be divided up into section smaller than a city lot and all would starve or be very poor.  What happened to my family was that they were forced to divide up the farm and all got poorer and poorer.  The Catholic church has been standing in the way of birth control for over 2,000 years with the result that countries where they dominate becoming the poorest on the Earth.  Quality of life is also among the worst on Earth for these same people.  Now, you are starting to see the Catholic church climbing on the global warming band wagon, when they have been the main cause for the past 2,000 years.  It makes me sick!!

In college I took a class in Wildlife Conservation and learned that wild life habitat's have a "limit" of how many animals they can support.  It is so simple to understand when it comes to animals, but it is impossible to get the same point across when it comes to "people".  Why is that?  We have countries in Central America where there are 500 people or more per square mile.  You need to ask, "Who is responsible for this problem?"  It is liberal "do gooders" and the Catholic church.  I should not lay all the blame on Catholic dogma when Muslim dogma advocates maximum breeding even if they can not afford to feed their children.  That is just one more reason why responsible USA citizens need to minimize Muslim immigration.  If we don't we will end up as poor as the places where the Muslims came from.  Our quality of life will be only a ancient memory!!

War Of 1812 Land Warrants And Immigrtion

Many in my family fought in the War Of 1812 and for their 6 months service, they got land warrants for 160 acres in Missouri and Arkansas.  The value of that land today is about $3,000 per acre.  That means for just 6 months of service, they were paid a bonus of $480,000.  That meant they had a net worth of $480,000 if they had no other assets.  The bottom line is that back in 1812, the median family net worth was almost 10 times what it is today.  What is the definition of "rich"?  It is how much you are worth, not how much you make.  That is the point of this blog.

I checked the data and found that today, the median family net worth is about $45,000;  Just 10 years ago the number was about $55,000.  With my 4th grade math, I  calculate that our net worth has been going down at the rate of about $2,000 per year which is about the same as for the past 10 years.  These are the starting facts.  Now we need to see if we can figure out exactly "why" our wealth has been going down.

If a typical family was able to save 10% of their median family income of $50,000, how many years would it take for a median family to get back to as wealthy as we were back in 1812?  My calculations show that it would take 96 years.  Notice that most people do not live that long and all new people whether born here or are immigrants, most start with a net worth of zero.  What we need are fewer of these "zero's" if we want to become a richer country.

I blogged in the past that no country in the world has ever gotten rich by value added labor.  All the richest countries got rich by the exploitation of their natural resources and then divided that wealth by the fewest number of people.  The math does not lie.  If you can tell me how more immigrants are going to raise the median family income or net worth, I will change my tune.  The immigrant kid from Somalia who tried to kill those students at Ohio State was on welfare along with his mother and her 6 other kids.  Did that family raise the median family net worth or lower it?  You have to be able to use your 4th grade math to come to the correct answer.

The USA used to be rich and we were able to give soldiers who served just 6 months 160 acres of land that is now worth about half a million dollars.  Think about that one!!

PS--There is another point. Many of the soldiers who got the 160 acres sold that land or the warrants and then used that money or net worth to buy things like food and clothing that now has a value of zero.  What we have been doing and are still doing is using up our net worth.  It makes a lot of people feel richer when they are not.  Our government does the same thing by borrowing money to add to the taxes they collect and then spend that on things that now have zero value.  The affect is that the net worth of our country or government is also going down too.

PS--My family had gotten land warrants in Tennessee by serving in the Revolutionary War, but had 10 kids and that land or net worth had to be divided up and thus each person got poorer.  The original wealth was 100% from natural resources and the addition of more mouths diluted that wealth and made all poorer.  Don't you see that it is exactly the same with our current situation with massive immigration!!!  They worked hard to create net worth by "value added", but it did  not compare to the net wealth from natural resources----160 acres of land.

PS---Years ago, we gave new immigrants 160 acres of land under the "homestead act".  This made them instantly rich.  Now, most  new immigrates are destitute and have zero net worth.  This makes our median net worth go "down" and thus make us poorer and poorer along with our quality of life.

Super Container Ships And Amazon Impact On Economics

Several years ago, I was sailing from the Bahamas to Palm Beach when I encountered one of those giant container ships.  He was about 10 miles away, but I knew that they traveled a lot faster than most people think.  I called the captain on the radio and asked if I should pass behind or ahead of him.  He call that I should pass ahead of him.  Every thing worked out OK.  Super container ships is the idea behind this blog.

Let's go back before there were any super container ships.  In those days the transportation of a product from China add 20% to the retail cost of a product.  Now it is down to only about 5%.  Why is this a big deal, you might ask?  It is a very big deal and here is why.  Think about a product made here in the USA that sells for $100 and a product from China that sells for $95.  That is not much and most people would buy the product made in the USA even though it cost $5.00 or 5% more.  Now look at the impact of the super container ship.  The product from China used to include $20 for shipping, but now with the super container ship the cost is only $5.00.  That results in a final retail cost of  $80.  Now we are looking at a big enough difference of 20% and now you buy the product made in China.  Who ever made the USA product is out of job.  Simple isn't it?

We are not through.  What is the impact of companies like Amazon?  It is the same as that of the super container ship.  The USA made product that has a retail price of $100 has a total of $25 to support the big  box retail stores where the product is sold.  When Amazon came along, they cut out the added cost of the big box retail store and reduced the cost from $25 to just $10.  This is good, right?  Not when it comes to made in the USA and her's is how.  The product from China that used to cost $80 now has a cost thru Amazon of $65.  The USA product can play this game too and their product now has a retail cost of $85.  Notice that it is still that same $20 difference, so what is the big deal?

Before the super container ship, the product from China has the same retail cost as the one made here in the USA.  After the impact of the super container ship the product from China had a retail cost of $80.  That was 20% less than the USA made product.  Now when you add in the impact of Amazon, the product from China has a retail cost of $65 and the USA made product has a retail cost of $85.  What is the big deal?  Now the product from China has a retail cost of 23.5% less than the product made here.  See what is happening?  The USA made products are getting less and less competitive with those made in China.  China still has their same labor cost advantage as their percent advantage keeps getting bigger.

I hope that you have followed my simple example and see what is happening with world trade and how we are at a big disadvantage and that disadvantage will keep growing.  I could come up with many more examples, but  I think you can see what is happening!!!

PS--Efficiency does not solve the problem either because China can buy the same equipment and tools.  Since we are about 35th in the world in math, our workers are not any better or efficient either.  The future does not look too good, does it?  All we have is our natural resources and diluting them with immigration will cancel out that advantage too.

Trump Administration Tax Cuts

The Trump administration is promising big tax cuts as the solution for our economy, but it might not be as simple as that.  That is what this bog is all about.

What I am hearing from the news is that Trump is proposing a reduction in individual income taxes as well tax on businesses.  When 10% of the tax payers pay 90% of the taxes, do you really think that we need to reduce individual income taxes on the middle class?  I think that many of these politicians think that it will put more money into the pockets of tax payers and that they will spend that money and drive our economy higher.  I ask you, "How is giving a family who is not paying a significant amount it income tax now going to have enough extra money to spend on something "made in the USA" when most of what they buy is not made in the USA"?  Where are they going to get all these new jobs?  Will it be as a greeter at WalMart or some other retailer of imported products?  The increased cost of Obamacare is going to eat up any pay increase, no matter how it is done.  Even if Trump gets rid of Obamacare, it appears that he is going to keep some of the "mandates" that continue to increase family and business costs significantly.

Given that most voters do not understand basic economics, I think that Trump may be throwing them a bone to keep them under control while he does things that actually do help the economy and jobs.  There are several things that affect the number of jobs and the pay rate for those jobs and earning more for doing the same thing is not some thing that helps to create more jobs.  Obama has made it more difficult for businesses more by his regulations and mandates than the affect of taxes.  High tax on businesses is a slight of hand trick that politicians use to pull the wool over the voter's eyes.  They do not seem to have the character to face voters and explain to them that workers pay the tax in the end any way.

 You can increase the GNP by a couple of ways and getting more of our voters off welfare and into jobs is one way.  Workers only deserve higher paying jobs when they are "worth" more by producing more, not when they use extortion or political pressure.  We are the dumping grounds for almost every country in the world for their products.  We have a lot of agriculture products, but many of the countries around the world who need the food are so poor that they can not afford to pay "full" price.  We have all kinds of programs that subsidize these countries with out tax money.  The bottom line is that we need more exports a fewer imports.  How do we do that?  Simple, right?  Make our products cost less and imported products cost more.  I think that a 3rd grader can understand that.

How do we do that?  Shift the tax and things like social security and health care for the poor off the backs of businesses and onto "consumption".  That means "sales tax"!  People who cheat on their income tax with the "black market", now would end up paying their share of taxes.  Illegal drugs is a big business here and they don't pay any tax.  Shifting to more of our taxes coming from "value added" tax would mean that we would be taxing their illegal income.  Imported products from places like Mexico and China would cost more and thus level the playing field for our businesses.

The bottom line is that Trump should not lower income tax for middle class.  He needs to work on getting the middle class to be "worth" more and thus able to pay their share of tax.

Death Of Obamacare

It is going to happen, so we all have to get used to it.  Obamacare will be dead in a few more weeks.  This blog is about what and why this is all going to happen.

Here is the back side of Obamacare.  I said back in the beginning that Obama is a Judas who wants to destroy the USA from the inside and I still hold that same view.  I have a round about argument for my position so hear me out.  Look at two countries, Greece and Argentina.  These two countries lived well beyond their means for several generations and when it came time to pay the piper, look what happened?  Their people go used to living high on the hog and when reality kicked in, they revolted and tried to continue living beyond their mean until both their countries were total messes.  Simple minded and gutless politicians kept the party going on "credit".  Are you following all this?  Does it smell like Obamacare?

What Trump has inherited is a country like Greece and Argentina in their early days.  If Trump really has the guts and true love for this country, he will not buckle under pressure from almost every quarter.  I think that if you have read my older blogs that you know that believe in "tough love" and that is exactly what we need now.  I know from experience that very few people have the strength of character to follow thru with "tough love" when "tough love" is called for.

Another thing that is lost in the discussion is the fact that if more people have jobs that many will get health care paid for by their employer.  Here is another point that I have pointed out in the past and that is that many of these programs have "double" impact.  Think of it this way.  If we have 10 families and only 5 have jobs, it means that those 5 who have jobs will have to pay the health care for the 5 that do not.  Every worked pays one for one.  Now if one of the families with out a job gets a job due to programs by Trump, the figures will look like this.  6 families with jobs will have to pay for the health care of 4 families.  Rather than one of the ones with a job paying for one family without a job, his equivalence now is to pay for 2/3 of a family.  See how big that double impact is?  I pointed out before that government has a multiplier impact when it comes to killing jobs and increasing tax on those that do end up with jobs.

Are you ready for "tough love" to save the USA for our children and grand children?

PS--Here  is another slant on why Obamacare is bad.  How much does it really cost to give free "first class" health care to 5% of our population who do not now have "first class" health hare?  This is all 4th grade math.  The 5% of our population who did not have health insurance really did  have "some" health care.  Let's say that their health care had a cost for tax payers of about $500 a month.  The other 95% of the population who had regular health care thru their companies or that they paid for with their own money. was worth about $1,000 per month.  That was before Obamacare.  Now, with Obamacare if the cost for the 95% went up by just $100 too $1,100 it would mean that they would be paying $1,900 additionally for "each" of the 5% of the population for "first class" health care!   That mean that, in the end under Obamacare, it will cost $2,400 per month from our GNP to add those people.  One might argue that it is "good", but it is clear that it is "not worth it"!!  Notice how the true cost is hidden?  Finally, Obamacare and the people who created it are dishonest!  They lied to you and most of you did not even know it!!

Vote Recount And Voter Fraud

While listening to all the talk on the News about "voter fraud", you would think that someone with a brain would show up and set the record straight?  Why not?  That is the point of this blog.

What percentage of our population knows anything about "statistics"?  Almost zero!  What needs to happen is go get someone in here who knows something about quality control and particularly "statistical" quality control.  I had the good fortune of working under Phil Crosby while he was the World Wider Manager of Quality Control for ITT.  Some of what he had to say rubbed off.  For the record, you don't need to recount a total state to determine if there is voter fraud or not.  All you need to do is to take a reasonable size random sample.  This could be done over the whole USA for the less than the cost of recounting one state like Wisconsin and do it faster.

If the purpose is to determine the extent of possible voter fraud, you have to ask why three of the closest margin states were selected?  If you look at the possible types of voter fraud that are possible, one of the greatest is voting by non-citizens.  In the case of Wisconsin, I think that they have a much lower percentage than do states like California and states that have sanctuary cities.  I think that states that have more absentee votes or internet voting are much more likely to have voter fraud too.  If there is such a concern about voter fraud, why are not these same people in favor of some kind of voter ID?  You need a picture ID to by beer in my local grocery.  I have joked that every voter should have to show a receipt that they have purchased beer at my local grocery.

I don't know who sold the USA on these low tech voting machines that only get used two or three times a year.  Their problem is that there is no audit trail with them, so how do you do a meaningful recount?  I heard that Canada does their voting 100% on paper ballots and they get their official results faster than we do.  I would prefer paper ballots just so that there is an audit trail.

I heard that there was a survey of illegal aliens where a very large percentage stated that they had voted here in the USA.  Given that places like California will issue a drivers license with a picture tells me that is probably true.

A final point about random sampling,  The degree of accuracy of the results is only a function of the sample size, not the size of the total population.  This means that the same size sample would be needed for both California and Wisconsin to have the same confidence in the results even thought California has several times as many people as Wisconsin.  I have seen that in some countries the voting has to occur on a single day and each voter has to put their finger into a container of ink to show that they voted and thus can not vote twice.  I know for a fact that with many early voting systems and absentee voting that someone other than the legal voters often fills out the voting forms.  Have you ever seen what goes on in some of our nursing homes?  Often many of these people don't know their own names or are blind.  There are a lot of holes in our system and sampling would show us where to plug the holes!!!

Ohio State And Bayes Theorem

Have you noticed that the politicians can't seem to come to an agreement about whether or not the Somali who tried to kill students at Ohio State is a "terrorist" or not?  What we need is a better understanding about basic English and Bayes Theorem.  We have to figure out how to communicate where everything is not "exact".  I have blogged before that it is almost impossible to be exact about anything.  Ask yourself, "How sure do you have to be to call this Somali a terrorist"?  Is it 90% or 99% or 100%?

I think that we should use the same criteria that we now use for "Global Warming" for terrorism.  How sure do you think these same politicians are when they claim that "Global Warming" is the most serious problem facing the world?  I am not sure that it is even 50%-50%, but see how they climb onto the bandwagon?  Our legal system with our jury system has convicted a small percentage innocent people to death and we don't complain about that as much as we wring our hands over calling "terrorists" "Radical Islamist Terrorists".

If you read my prior blogs on Bayes Theorem then you know that it takes into account "prior" knowledge about the world rather than taking on every decision like it is the very first one that has ever occurred.  What do you think are the chances that this Somali is a "Radical Muslim Terrorist" given the facts that he is a Somali, a Muslim, drove his car into a crowd and slashed many with a knife.  Just based on these facts and prior history of events like this, my estimate is 99% that he is a "Radical Muslim Terrorist".  I know that it is not 100% like most political liberals would want.

Do me a favor and take into account your prior knowledge about the world when you have to judge events like this.  If you do, you will be using Bayes Theorem!!!

School Choice Vouchers

People have been talking about "school choice vouchers" for some time, but few really get down into the facts.  The purpose of this blog is to point out some important facts.

The teachers union, who was in the pocket of Clinton from the very beginning, are against any type of vouchers.  They claim that it will hurt normal public schools by taking needed money away from them.  On the surface this sounds like a good argument, but when one applies basic 4th grade math, it turns out actually be an advantage for public schools.  Here are the numbers.  The national average cost per public school student is about $12,000 per year.  Think of how much it costs for a typical 3rd grade class of 25 kids,  Would you believe that it costs $300,000?  A typical 3rd grade school teacher only makes about $50,000, so where does the other $250,000 go?

I blogged in the past that home schooled kids do better on average than the kids in our public schools and it does not cost tax payers a single dime.  The more kids that are home schooled the more money that public schools have "per student".  In my area just over 10% of our kids are home schooled.  That means that rather than having $12,000 per average public school kid, we end up with $13,333 per public school kid.  It is the same for kids who go to religious schools.  Rather than having less money for public schools, the public schools actually have more money per student.

We know that these new charter schools cost "less" per student than the public schools who have unionized school teachers.  The more of these charter schools we have the lower the cost is going to be for tax payers.  You have to think about exactly what the purpose is for education money.  Is it to provide high paying jobs for as many unionized school teachers as possible or give our kids a good education for the least tax money?

Remember a few years ago when the unionized public school teachers pushed for smaller class sizes under the curtain that it would improve out comes?  Well, the actual out come was that kids did not do as well as they did before while the cost per student went up and more unionized public school teachers had jobs.  With more teachers, the unions collected more dues!!!  That was the only gain!!

I favor vouchers for charter schools and home schools but not religious based schools.  The vouchers should be some percentage of the $12,000 average cost per student.  I would be very satisfied with a voucher worth about $6,000 per student.  It would mean that students would have a better out come and there would be fewer unionized public school teachers with jobs.  I think that it is amazing that most parents who home school are not college graduates, yet their kids have better out comes!

When you hear some unionized school teacher arguing against vouchers, step forward and enlighten them with the facts.

PS--When I talk to public school teachers I notice that they take a lot of pride in their exceptional students but don't talk much about how they brought marginal students up to standard.  The fact is that many of the kids who go to charter schools or who are home schooled are basically smarter than the average student.  If these kids were taken away from the public schools, it would allow the unionized teachers to do a better job on the marginal students that they have left.  It would give a true measure of just how good these unionized school teachers really are.

What Are You Really Worth?

You never hear any discussion about what someone is worth except in sports.  A great quarterback is worth several time what an average quarterback is worth.  We all understand this logic, but when it comes to one's self, it can get real messy.  That is the idea behind this blog.

First, a little story.  Back in 1949 when I was just a young kid, I used to pick cotton every chance that I could.  I always put most of my earnings in my savings account at Bank of America.  On one Saturday back in 1949 I picked 200# of cotton.  That was my record.  The farmer was paying 3-1/2 cents a pound and paid you in cash each time you brought your sack to the trailer to be weighed.  This was real "piece work" where you were paid based on how much cotton you picked.  With this plan, there was no question about "what you were worth".  I could out pick all my friends and thus, I was "worth" more than any of them.  On that Saturday back in 1949, I earned $7.00 in one day.  That was what I was "worth" back then.  Not bad for a 9 year old kid!!!

The next year some of the farmers had automatic mechanical cotton pickers where one person with the new automatic cotton picker could pick more cotton than 10 kids like me.  Contractors came along with these new automatic cotton pickers and could pick cotton for 2 cents a pound and still make a profit.  As a result, the farmer would only pay kids like me 2 cents a pound rather than the old 3-1/2 cents a pound.  Rather than me being "worth" $7.00 a day, I was now only worth $4.00 a day.  At my young age, that was a great awakening and a lesson that I have never forgotten.

Now, how much are you really worth?  Years ago loggers felled trees with an ax and a two man cross cut saw.  They could earn enough in those days to feed and house their family.  When chainsaws came along the "worth" of a strong man with only an ax went down to the point that he could no longer feed and house his family.  He was "worth" less!  Further, before the chain saw it took 10 men to do what one man could do with the chainsaw.  This meant that 90% of loggers using axes were out of jobs.  Now, how do they feed their families?  This has been the problem with the human race since the beginning of time.  It is not a new thing.

The simple lesson from the above is that your "worth" changes over time and you have to change if you want to stay even or become "worth"more.  You can't stop the world though many have tried.  Look at this example.  If you have a job that requires you to drill holes very accurately by measuring and laying out exactly where the holes are to be drilled and you are one of the few who can do this, you would be like the great quarterback and could be "worth" a lot.  What if the company owner was able to purchase a machine that could drill the holes just as accurately and almost anyone could operate the new machine, how much would you now be "worth"?   Clearly, not as much as before.

Isn't it clear that if you want to maintain your "worth" or increase your "worth" that you have to gain new skills to a level that not all other workers can attain.  The net affect is that those who are able to gain the new skills are "worth" more while those who only have the old skills are "worth" less.  In the big picture, what we have is a situation where a few get richer by being "worth" more while many get poorer.  The bottom line is that those who have less ability have to work harder or they will fall behind.  As jobs get more complex or difficult this trend will continue.  If you look deeper into the figures, what you will see is that workers with more intellectual ability will mostly be the ones who advance while those with less intellectual ability will fall farther and farther behind.  For the most part intellectual ability is something that one is born with and which can only be marginally off set with education.  Education has its limits and it is not for free.  It costs in terms of years in class or school and shortens the number of working years the individual has to pay back the cost of education.

I have set the stage for a situation where there appears not to be a solution and that is right.  The only solution is to mitigate the affects.  That means we have to minimize the waste of intellect since it is clear that we have a limited amount in the human race.  Further, those who lack the necessary intellect can not be allowed to waste the wealth produced by those who are able to contribute by being socially irresponsible requiring more and more resources to be allocated to law and order or avoidable health costs.  Unionization that ignores the basic facts of life related to what one is "worth" are not solutions, but tend to only make things worse.  Like unions, manipulation of free markets is not a solution either.  In prior blogs, I pointed out that, so called free trade, is not a free market because individual countries manipulate the markets for their individual advantage.  Where a foreign country clearly manipulates their markets, we have to protect ours.  Your "worth" is continually under attack from foreign countries as well as technical progress here.  We can do something about the foreign part and we should.

The bottom line in all this is that you are the only one who is in control of your "worth".  It is a complex world that we have little control over and don't expect government to make you "worth" more.  At it best, government can only help to prevent others from making you "worth" less!!

Trump's Version Of Obamacare

There are several key items that should have been part of Obamacare which were not considered.  That is the idea for this blog.

First, all decisions need an objective and it appears that Obamacare never had a clear objective.  Was it to provide "better" health care to those who could not afford "better" care?  I am not sure.  Was it to make health care less expensive so that more people could afford "better" health care?  I don't know.  Was it to increase our capacity to provide "good" health care so that wait times could be reduced?  Was it to reduce the percentage of our GNP that was devoted to health care from its current 17%?  Was it to get our citizens to live healthier life styles, thus to reduce the cost of health care?  Doesn't look like it.  Was it to increase the life expectancy of the citizens of the USA compared to the rest of the world?  Was it to be the first step by a Judas to destroy the USA from within by squandering our national wealth and create an entitlement that would be difficult to undo in the future?  I think that I may be getting close to the answer.

 Rather than focus on real health care, Obamacare focuses on "insurance" when the ideal medical system would be a "distributed" system where everyone paid with there own cash for their medical services.  Do you have medical insurance for your dog or cat?  Why not?  Would it save you money or actually cost more?  Easy question!  Do you think that we need someone in Washington DC telling us how to care for out dog or cat?   Then why do we need anyone to tell us how to take care of our own health?  We don't.

Have you ever heard anyone from Washington DC explaining why people in Japan tend to live almost 10 years longer than we do here in the USA and spend far less on medical?  Why not?  Did you know that when President Lincoln was shot that the doctors actually "bleed" him as a cure for his gun shot wound?  That was not that long ago!  China has a herbal tradition in their medicine and they spend far less than we do and get almost as good of results.  Anyone in Washington DC talking about China's medical system?  Didn't think so.

All we seem to talk about is "insurance".  Trump appears to want to keep kids up to 26 years old on the health policy of the company where their parents work.  Notice how they say, "on their parents policy"?  It is not the parents policy, it is paid for by the person's employer and the cost is added onto the cost of the product or service that their employer provides.  It is not magic. We all pay the cost of this "so call" free bee and most are not aware of it.  There is no free lunch, but there are fewer jobs as result of this "mandate".  Even Trump seems to be falling for the scam!

How about "pre-existing conditions"?  It would be like not having insurance on you car and then when you wreck it, you buy Obamacare for your car!  As in Obamacare, it is against the law for an insurance company to sell you health insurance that does not cover your kids upto age 26 or cover pre-existing conditions.  What if you were in perfect health as a result of your long term responsible efforts to eat right and exercise regularly and wanted a policy that just covered major items with a big deductible?  It would be against the law under Obamacare.  You don't have a free choice to spend your own money the way you want.  I think that Trump is going to have to rethink this one too.

The bottom line is that I don't think that there is anything in Obamacare that is worth keeping and the first thing Trump needs to do is to fire the 40,000 unionized government employees who were hired to force Obamacare down our throats.  That is almost 1,000 per state to administer the plan, not counting all the ones the insurance companies hired and the medical community to administer their share of the program.  In the case of Obamacare "more" is not better.

Since states control the doctors, hospitals and the insurance companies, they should run what ever kind of program the voters in their state want.  If they come up with bad plans, the people can always move to another state.  That is not possible under Obamacare.  You are just screwed.

Remember when doctors made "house calls"?  In that model, you paid the doctor in cash with no middle man taking a cut.  That is how most of the world still does it and it is the least cost model.

Economics Lesson 101

I may not be the greatest authority on economics, but I can tell you that 90% of those who claim to be experts are not either!  This blog is a simple lesson in Economics 101.

I have been involved in business decisions for over 50 years and know how the rubber meets the road.  I have administered multi million dollar capital budgets for some of the largest companies in the USA and there are some simple lesson that can be learned.  I want to take just two.  (1) What and how much should we spend our capital budget on?  (2) What products should we make that we can make a profit on?

When it comes to capital spending we have a choice between various projects and each has some kind of rate of return.  Remember that an investment is one that "pays off" and you measure that with the rate of return.  It is like putting money in the bank.  You want to put your money in the bank that pays the most interest.  Right now the interests rates are very low so in many cases it is not that you can not find the money.  The problem is that many investments don't yield a profit.  Why is that?  Let's say that the potential investment is for more sewing machines to make shirts.  If it costs more for fabric and labor than it does to buy the shirt from China, it does not matter how cheap the sewing machine is or how low the interest rate is for money borrowed from the bank.  An investment in more sewing machines is a "bad" investment.  Every company has many proposals like this that are just below the cut-off line for being acceptable investments.  This is an important part of the critical economic lesson.

In many cases, it does not take much of a change in fabric an labor cost to make a marginal investment a very good investment and vise-versive.  Obamacare added extra cost to making a shirt by mandating that additional items be added to the companies health insurance such as birth control, pre existing conditions and keeping kids on the family health insurance to age 26.  These are not "free" items.  They make the shirt more expensive to manufacture here in the USA while the shirt from China still costs the same. Obamacare, alone, has thus killed a lot of jobs here in the USA.  If it had gone the other way, it would have made a lot of jobs that were slightly none competitive, competitive.Think about it this way.  There are high tech jobs at the top that don't have to compete with cheap labor around the world, but these are limited because there is a limited number of people world wide who have the necessary intellect.  That is not true of lower skilled and lower tech jobs.  Obamacare does not kill these high tech jobs, it kills the jobs of the middle class.  Got it?

The second group is products that companies would like to make, but can't make them at a profit or not at a high enough profit to justify.  GMC just decided to move their small car manufacturing to Mexico for just this reason.  This was a close decision that was decided by a small difference in profitability;  With the high tax rate on GMC, it was enough to swing the decision.  I am sure that GMC was making a small profit on their small cars, but it was just not enough.  With a reduction in the tax rate for companies like GMC, many of these types of close decision would be made in favor of keeping the manufacturing here along with the jobs.

Why people feel that companies should pay so much in taxes is beyond me.  In the end, the people end up paying the tax anyway with higher priced cars from GMC while Toyota does not have to pay the same amount of tax.  It is one thing to have competition between companies here in the USA who all play by the same rules compared to competition with the rest of the world who play by different rules.  It is not the same thing.  To make many of these marginal products profitable here, we need to level the playing field by taking taxes off businesses and putting them on "all" products equally including imported products.  If this is not crystal clear to everyone, I don't know how Trump or any government can help you.

What people need to take away from this blog is that there are many jobs and products that are right on the line between being profitable or justified and it does not take much to push them one way or the other.  Look at buying gas for your car when the average price of gas is $2.00 per gallon.  Which station are you going to fill up at? The one selling gas for $1.98 or the one at $2.03?  We are only talking about 2.5% difference here when we burden manufactures with 7% for social security and another 7% that they pay you that you then pay in!   The Toyota is not burdened by any of this!

That is my economics lesson 101 for today!!!

PS---Here is an example:  Let's say that you are considering investments in stock, real estate or a new product and have a big list of ideas where each yields higher or lower returns.  It would look much like this:

% Return          Number of ideas  Total acceptable ideas
12%                    1                         1
11%                    2                         3
10%                    4                         7
 9%                     8                       15
 8%                    16                      31
 7%                    32                      62
 6%                    64                      96
 5%                  128                     234
 4%                  256                     480

If your criteria was 7% return, you would have 62 acceptable projects or jobs.  If Obama made your cost go up just a little and your new criteria was 8% you would have to cut 31 projects or half your jobs.  If Trump was able to cut costs for businesses so that your new criteria was 6% you would add 64 new projects or jobs.  It cuts both ways and small changes have big impacts as you can see. That is a difference of 95 projects or jobs!!!

PS---Remember your history lessons about the early USA?  Remember the "Customs House"?  There was one at every port of entry.  That was because it was the easiest place to collect sales tax.  There was no income tax back then.  Think how difficult it would have been to let goods come in tax free and then send out thousands of tax collectors to collect the sales tax one dollar at a time?  You have to ask yourself, "Who had the idea to load so much of the taxes onto payroll and business in the first place?"  Did you ever hear the expression, "The authority to tax is the authority to destroy?"  We have to stop shooting ourselves in the foot and correct some of these major errors of the past.

Obama's News Conference 11/14/2016

It looks like Obama is going have a very sore arm after patting himself on the back so much today in his first news conference after the election of Trump as our next President.  The election of Trump is a clear rejection of 99% of what Obama did as President.  If Obama's ego was not so big he would admit that he tried to take the country in the wrong direction and the voters have made a correction with the election of Trump.  Here are some examples of how stupid Obama is.

He is going to help the middle class and those on the lower end of the economic ladder by supporting a higher minimum wage.  I don't know of anything that kills jobs at the bottom faster.  He thinks that this is the way that those on the lower end of the economic ladder get "a bigger piece of the pie".  It sounds like he thinks that businesses run on magic.

He challenged the new Trump administration about taking the insurance away from 20 million people who are now on Obamacare.  Isn't it some kind of "set up" by Obama to make Republicans take the candy away from a child who never deserved the candy in the first place.

Obama claimed that immigrants built this country and that we need more to continue that process.  He seemed to claim that if we have a younger population that it is better for the economy.  I think that the median age in the Gazza Strip is about 13 years and they are one of the poorest group of people in the world.  Japan has some of the oldest people and they have a better quality of life than we do.  I think that you understand from some of my past blogs how stupid Obama is on this point.

How about keeping your kids on your companies health insurance plan until they are 26.  Obama makes it sound like that was for "free" when it adds to the cost of products made here while not affecting the cost of products made outside the USA.  The true cost of this "mandate" is hidden and thus Obama can pull the wool over the eyes of many of our stupid voters.

How about "pre-existing" conditions?  This is not free either.  Healthy responsible people have to pick up the tab for over weight people, smokers and drug users.  We should not spend any more for health care than Japan does where they live almost 10 years longer.

Obama also made claims for how he has helped the environment.  Ask farmers what they think or coal miners.  All this has done is to make our products less competitive and thus has caused the loss of jobs here.  For some reason, Obama did not explain how and why his administration squandered so much of our tax money on uneconomical "clean energy" like wind mills and solar.  He did not acknowledge the extra energy that 25 million illegal aliens use.  It dwarfs any savings that he thinks his administration has made.

Regarding health care.  Obama thinks that the cost of health care goes up by magic when it goes up due to burdensome regulations and throwing more money to drug companies and insurance companies.  He never points out anything that he has done to drive down cost.  Remember that we import over half of our doctors.  I am glad that he did not mention the liberal student loan program that has wasted over a trillion dollars.  We need more doctors, scientists and engineers, not more kids with worthless political science degrees if we are going to compete with the rest of the world.

I did not take notes, so I know I have missed many of Obama's stupid claims.  The question that he should have gotten was, "How did being a community organizer prepare you for the office of President of the USA  compared to Trump's experience?"

PS---Both Obama and Trump need to test their actions against this simple criteria:'
       * Does it raise the median family income?
       * Does it increase our exports and balance of trade?
Notice that Obama has failed on both of the above!

You Can't Have Your Cake And Eat It Too

I did not make this one up.  It is an age old saying that has a lot more meaning than you might think and that is the idea behind this blog.

I was talking to a very disappointed democratic voter today.  He was almost in tears and was difficult to communicate with.  I think that he may be typical of may other disappointed voters.  He was very concerned about the idea of sending back the illegal immigrants and that we should let them stay.  I tried several arguments on him, but to no avail.  I asked him, "What about the USA do you want to give up to allow the illegal immigrants to stay?"  He did not seem to understand the question.  He did not think that he had to give up anything to just let them stay.  This is where the saying in my title comes in.  If you want to eat your cake, then you can't put the cake on the shelf with no bites out of it.  Is this over your head too?

One of the things that makes the USA great is that it is based on the "rule of law" with the understanding that the law will be equally enforced and no one will get special treatment.  If we let a special group of illegal immigrants stay here while we enforce things like the IRS regulations against other people, that is clearly not fair.  Equal means equal and my friend seemed to be willing to give all that up.  He then argued that many of these illegal immigrants have been here for years and have jobs and own homes.  To that I proposed that if someone killed your child 10 or 20 years ago and you finally found them, should they be prosecuted?  Of course!  Isn't that the same thing?  What difference does the number of times the Earth rotates around the Sun matter to equally enforcing the law?

My friend also considered it racist not to let Muslims into the USA.  He was not rational enough on this point to continue the discussion.  Again, like the saying above, my friend only wanted to keep out the "bad" guys.  He wanted to "have his cake and eat it too".  He did not seem to understand that these choices are mutually exclusive.  He wanted to keep the "bad" guys out, but he could not come up with  any way to do that except for keeping out all Muslims.  Like many liberals, they want to hold out for a miracle alternative that does not exist.  To my understanding, only religious people believe in miracles and that is one reason we try to keep religion out of our official government.

I was never able to develop my argument with this person to show that immigration lowers the median income. net worth and quality of life for people here in the USA.  It makes us poorer.  I would like to have gone onto my argument about resource exploitation and value added labor, but I have found my friend, like many liberals, unable to be open minded and objective enough to follow an argument that contained more than 5 words.

Every time you hear some liberal propose that we do something that violates our constitution or the foundation of what makes the USA what it is, ask them, "What do you want to give up/" and I don't just mean for you as an individual, but for your children and all the children of the future.  Remind them that they are dealing with the rights of future generations and that they should rethink their fit of emotion.  If you want to end "rule of law" and allow people to cheat the system and others who are part of the system, OK, but understand what you are doing before you pull that trigger!

PS---There are other ways that a person can help people in places like El Salvador without breaking the law and allowing them to come into the USA illegally.  A very high proportion of the illegal immigrants come from El Salvador which is one of the poorest and most densely populated countries in the Western Hemisphere at 785 per sq mile.  Compare that to the USA at only 75 per sq mile and the county that I live in the density is just 18 per sq mile and I want to keep it that way!  The solution is for places like El Salvador to get their population under control rather than to keep breeding like rabbits.  It was the Catholic church that discouraged birth control in South America and who created this problem.  Good intentioned people provided health care to many over populated countries, but ignored birth control and see what problems they created.

Trump, How Could The Poles Be So Wrong?

Many people today are asking, "How could the poles be so wrong?"  I think that I may have part of the answer in this blog.

First off, how do we get our knowledge about things?  We use our brains to observe and based on those observations, we draw conclusions about things.  It works fine if things are not changing very fast, but what happens if things are changing.  Here is an example.

How fast is your car going "right now"?  You look down at your speedometer and it tells you that your car is going 50 mph and then you look up at the road in front of you assuming that you are going 50 mph.  If you were going at a "steady" speed, 50 mph would be the correct answer.  If you had the brakes on, when you looked down at the speedometer, then when you looked up at the road, you would actually be going slower than 50 mph.  In that case 50 mph would be the wrong answer.  I think that something like this is what happened with the poles on the election.

Since Trump was trending up, the poles were always "behind" the true value.  At the exact time people were in he  voting booths, Trump was actually ahead of Clinton.  The purpose of a pole is to first find out where the vote was at the exact time the pole was taken, but by the time the result of the pole was analysed and reported, it was "behind".  The step that was missing from the pole reports was the "prediction" part, or where the voters are at the time the results were reported rather than where they were when the pole was taken.  Any engineer who is knowledgeable in the area of control systems knows this.  The problem is that most of those who were working with the poles were political science majors in college and know little more than 4 th grade math.

The other item is political correctness.  Just like in the poling example above, our problem with political correctness is a lot worse than what your old observations have told you.  Here is how I think that it affected the poles.  Have you ever supervise or participated in a "focus group"?  I have.  It is very difficult to keep the feelings of the person doing the poling or running the focus group out of the data.  I think that most of those doing the poling were liberals and when they asked a question they gave off body language or choice of words that identified what kind of answer they preferred.   It was the same for the person being asked..  Do to political correctness, the person being interviewed wanted to keep the interviewer happy by giving them the answer that they wanted.  In prior blogs, I pointed out that political correctness makes it OK to tell little white lies if it keeps everyone happy.  I think that you can start to see that all this political correctness has created a bunch of voters who are not honest and tell little white lies.

When someone like Trump comes along who is bigger than political correctness it catches most people off guard.  They think it is strange for a person to tell the truth when a little white lie would keep everyone happier.  I think this may be a repeat, but here goes.  I was talking with my father and his older brother about "good friends".  I propose a test to see who was the best friend.  Both claimed that they had lots  of friends and they were "good" friends too.  The test was, "Would you tell your best friend if you knew his wife was running around on him?"  Easy question, right?   My father answered that he was not sure if he would tell his friend or not, but his older brother said, "hell yes!".  Now which do you think was the  better friend and the one less affected by political correctness?

Our schools, colleges and urban areas are knee deep in political correctness while most of our rural areas are not.  Now look at the election results and tell me if you think that political correctness had any thing to do with the results?

PS---For the record.  Females are infected with political correctness to a much greater degree than are men.  That is one of the main reasons that the poles and the votes were so different  between females and males.  Females don't want to hurt anyone's feelings and find political correctness a good cover for telling little white lies.  Further, most of our school teachers are female.  How do you think that affects the attitude of our young people's voting habits?

Hey! Voter, Wake Up

This blog reviews some important points about Obamacare that most voters don't understand.

Prior to Obamacare, we were spending 17% of our GNP on medical.  That means that we spend much more than any other country in the world.  For that money, we do not get better out comes than countries that spend much less.  In terms of life expectancy, we are about 40th.  There is the feeling among the voters that there is no limit to what we could and should spend on medical.  Voters never stop to think that, "we are not rich".  We have financial limits.  We are not the richest country in the world!!

The insurance rates for Obamacare were calculated based on the cost when we were spending 17% of our GNP on medical, but, for some reason, the insurance companies didn't take into account the inflation factor that Obamacare would cause.  Remember what happened to the cost of college when the government poured billions of extra loan dollars into the college system?  College costs went up just like medical cost have.  I worked my way thru college, but I could not do it today given the inflated costs.  My family also paid for their medical care in the past, but with the inflation caused by Obamacare, we can no longer afford to do that.  Interesting isn't it?

The latest news is that the insurance cost for Obamacare are going up by an average of 25%.  That means we will be spending more than the original 17% of GNP for medical.  Using my 4th grade math, I calculate that we will now be sending 21.25% of our GNP on medial.  If you understand this critical point, then we have to cut an equal amount out of what we spend of our GNP on other things.  For the median family, it means that they will have to cut their standard of living cost by $2,125 from their $50,000 income.  If families are spending more for medical, it means they will be spending less of things like new cars, homes, clothing and food.  Obamacare is going to cause a serious decline in our economy.  If the government raises the minimum wage as a solution, it will mean fewer jobs and a downward spiral from there.  With our national debit at 20 trillion dollars, there will be no money for things like infrastructure.  Remember Obama's "shovel ready" projects?

If you look at the basic concept of Obamacare, it was to dictate from Washington DC how we were going to pay for our medical care.  Obamacare only added cost as you can now clearly see.  If we were serious about the cost of medical care, we would have looked at ways to make it cheaper and we did not do that.  The bottom base line on medical is a system where everyone makes their own individual decisions about medical care and pay for it with their own money.  That is the way it worked for thousands of years.  The farther away from that simple model, the more medical care is going to cost and that is Obamacare.

We all know that you can drive down to Mexico and get dental and medical services cheaper than here in the USA.  The same is true for India.  For most serious medical procedures, you can pay the air fare and still come out ahead.  I stayed at the home of the minster of health of Punjab India a few years ago and know this first hand.  You can go into any drug store in India and get a scan to find the sex of your expected baby for less than $10.  Here in the USA, it is going to cost several hundred dollars.  That is just an example and we are not doing anything about it.  In most countries of South America, you don't need a perscription before you buy needed drugs.  Here in the USA it will cost you more for the doctor to write the perscription and it costs for the drugs.  If you watch TV, you will see all the advertisements by Lawyers to save you from bad doctors.  Based on how much money the lawyers extort out of the system, you would think that we have the worst doctors in the world when, in fact, we have most of the best.

Getting a little long.  Wake up!!

Economic Honesty

This blog is a small point, but I think it is important.  I have blogged in the past about this whole idea of "economic stimulation" and here is another small point.

First, is there really any difference between giving a person money and not taking the same amount of money form them in the first place.  No!  Building on this point, is there any difference between spending money on an "economic stimulation" package and not collecting taxes equal to the "economic stimulation" package?  I don't think so.  Here is what we have been doing.

When Obama took office our economy was in a recession (by definition).  The congress under Bush gave the OK for a big economic stimulation package that Obama later implemented with his "shovel ready" programs.  My second question is about how to view the economy "given" the stimulation package.  If the economy starts to grow or stop declining should that be considered a "win".  Not quite!!  This economy is a phony and a phony economy is not a true "hands off" economy.  It is a little like thinking that a person with a broken leg is getting better because they can now get around in a wheel chair.  Follow that?

Now, when the original simulation ran out, Obama started borrowing from China rather than collecting the full amount of taxes needed to pay our bills.  Is that any different from continuing the original stimulation package,  Again, I think it is exactly the same thing and the resulting apparent improvement in the economy is totally phony.  Economist seem to buy into the idea of a economic stimulation packages, but for some reason they don't see running a big deficient as the same thing.  Further, they don't seem to be able to tell the difference between a "normal" economy and a "phony" economy.

No matter what you see and hear on TV, the economy of the USA is still broken just like the guy's leg in the wheel chair!!!

PS--The ten trillion dollar deficit that has been run up by Obama amounts to the biggest stimulation package in human history.  Now, th big question is, "How are our children going to pay it back?"  Or better yet, "How are these immigrants going to pay it back?"

Ice Chest Trick

From time to time, I stumble onto a good idea or two and this is one of them.

My wife and I were taking a road trip and wanted to take along our ice cooler so that we could have cold drinks and snacks on the trip.  Rather than just putting the ice into the cooler and arranging the food around it, I tried a new trick.  In the process of robbing the ice cubes out of our refrigerator, I notice that there was a lot of ice in the plastic box that was in the freezer part.  Rather than dumping the ice directly into the cooler, I decided to just put the whole box in.

It turned out to be a great idea because none of the items in the cooler got wet or damp from the melting ice.  Further, there was no need to drain the water nor was there any chance of a leak of water on the trip, but that was not the best part.  With the ice all in the plastic box, the ice lasted twice as long.  How could that be you might ask?  It all comes down to engineering and heat transfer.  Air is a good insulator, so if you can keep air between the cold ice and the warmer sides of the ice chest you don't have as much heat gain.  It is not a case of loosing the cold.  Cold does not really exist, it is the lack of heat.  If you have melted ice or cold water touching directly on the sides of the ice chest, you have significant heat transfer from the warm outside to the cold water and ice in the ice chest and you don't want that.  There is even a small air gap between the bottom of the plastic box that contains the cold ice and the bottom surface of the ice chest.  This is the area where the most heat gain occurs.

When you drain cold water out of your chest, you are loosing valuable cooling.  With the above, you keep the cold water inside the ice chest.  There is no need to dump the cold water unless you are concerned about a spill inside your ice chest until all the ice is melted.  As long as there is any ice in the plastic box, its total contents is at 32 degrees, so why waste a good thing.

You could do almost the same thing by putting the ice into a plastic bag, but this would eliminate the valuable air gap between the bag and the sides of the ice chest.  Next time you load your ice chest try to find a plastic container that you can put your ice in before you put it into your ice chest and I think you will be very satisfied.

PS---This is also a "Green" idea since it saves energy!!

Simple Economic Math And Amazon

This blog uses simple 4th grade math so don't worry.

First, let's take a look at Obamacare.  The USA, before Obamacare was spending 17% of our GNP on medical.  That is the highest of any country in the world and that money is buried in the products that we produce.  If we make a pair of shoes, the 17% medical is part of the cost of those shoes. Remember that we used to make 99% of our own shoes, but now it is down to less than 5%.  Ask yourself "why"?  It now appears clear that we are up to at least 20% of our GNP under Obamacare and it is likely to go as high as 25%.  That means that every thing we make and try to export is going to cost that much more.  Don't people realize this?  When we import a product from some place like Mexico, they don't have this 20% extra Obamacare cost added to their products.  That is just one reason that many of our companies are closing plants here and moving to Mexico.

Here is another one.  Take social security.  The company pays 7% of the labor cost and the employee matches with another 7% for a total of 14% and that is not even enough to pay the benefits.   I don't know what the real number needed is, but it has to be at least 18% or 20%.  All this extra cost has to be added onto the products made here like the pair of shoes.  Just in these two items alone, we are talking about as much as 35% or about 1/3 of the cost of a pair of shoes.  I can tell you that none of the countries that we import shoes from has this kind of penalty on their shoe manufacturers.

Why don't we hear anything from Obama, Clinton or Trump about adding the above cost to imports so that our shoe makers are treated equally?  If all products were charged the same amount whether made here or in another country, it would add about 25% to imports and reduce the cost of shoes made here by at least 15%.  That is a "swing" of almost 40%.  Are you starting to see how significant this is in leveling the playing field?   What we are doing is taxing and killing jobs here while we give a free ride to imports.  I don't know of a single country in the world that is as stupid as we are.  The only people who come out ahead with our current system are the "retailers" and look at what they pay their "clerks"?  Amazon is even going one step farther and cutting out the "clerk" all together.  You might make money in the stock market with Amazon stock, but it is killing the economy of the USA at the same time.

I am going to repeat it here.  How much does Amazon "export" to help us pay our bills?  Zero!!!  Amazon kills jobs here in the USA while making it easier for imports to be sold here.  Who is talking about that?  A wall on the border is only a small part of the solution.

PS--Here is one for you.  What if we treated the collection of taxes for building and maintaining our roads like we do for shoes?  That would mean we would tax our domestic oil companies and let foreign oil come in tax free,  Thank God we have a sales or consumption tax on gas so Saudi Arabia and other foreign oil companies share in the building and maintenance of our roads,  We call it a "use" tax, but it is exactly the same as a consumption tax so imports pay their share!!!

Interesting Numbers On Russia and China

I just looked up these economic numbers for Russia and China.  How do you think their economies are doing compared to that of the USA?  Between 2000 and 2013 the USA economy has been in the toilet.  The total economy has grown a little, but the per capt has not grown and the median has actually gone down.  The USA is getting poorer by any logical measure.

Here are the numbers for Russia and China. These numbers are what the average person earns.  I am not sure of the unit of measure, but it is consistent and valid for measuring what has changed.

                                    Russia                  China
2000                            6,650                    2,830
2013                          23,180                  11,850

Sorry, but those are the numbers.  Both of two main competitors are getting rich fast while we appear to be dead in the water.  A second fact is that each of these two countries graduate many more engineers, scientists and mathematicians than we do.  No wonder they can "hack" our computers so easily!!

PS---Russia is exporting oil and other natural resource products while China is exporting labor based "value added".  Russia can keep up what they are doing for years, but as soon as China's labor cost get higher, their products will not be as competitive.  Note that there are very few product that we produce with "value added" labor that are competitive in the world.  It is turning out that automation alone can not counter lower labor cost anymore like it once did.  "Water around the world is seeking its natural level" and that means the party is over for the USA and our high standard of living!!

Economic Lesson From Gold Rushes

I was born in California and have visited the Mother Lode area and have panned for Gold there.  I actually did find a small amount of Gold, but that is not the objective of this blog.  It is to analyze the life cycle of a typical Gold Rush type situation.  There is a lot one can learn.

There have been numerous Gold Rushes here in the USA and most follow the same life cycle that the one in 1849 in California did.  As the story goes, one of John Sutter's men by the name of Marshal was building a water way to bring water to the wheel of a new saw mill when he found traced of Gold in the water way.  That started the Gold Rush of 1849 and to this day we still have the 49'ers (The football team).

The area where Gold was discovered was in the foothill of the Sierra Mountains, a place with few small towns and few few people.  That all changed with the discovery of Gold.  Large cities sprang up over night.  After the Gold played out the cities and the people left, leaving just ghost towns where lively cities once were.  The main point that I want to make here is that these cities had thriving economies where there were all kinds of services and people making money.  What is the significance of all this?

You hear today how economists promote "stimulation" for the economy.  This is supposed to get the "normal" economy going.  Their model is like "priming a water pump".  Once the pump is primed, it will then be able to keep pumping water.  I know that most of you have never actually primed a pump, but I have many times.  For priming to work, the pump has to have pumped water before and not be broken in some way.  Priming a pump that is broken on a well that is dry doesn't work.  Follow that?

Now, back to the Gold Rush.  In the foot hills of California in 1849, there was no economy and what the discovery go Gold did was similar to what economists do when they stimulate the economy.  The Gold stimulated the economy, but there was no real economy there in the first place back in 1849 to stimulate like with the water pump.  As long as the Gold was there to stimulate the economy of all those towns, people had jobs, bought homes and sent their kids to school.  Things looked very normal.  The economies of these towns was in most cased many time the size or the amount of Gold being mined.  There was this "multiplier" factor.  I don't know what it was, but it could have been 10 to 1 or even higher.  Now, we are getting to  my main point.

It does not take much in the way of "natural resources" to stimulate a thriving economy, but without that "natural resource" stimulation it is difficult to have a thriving economy for very long based on economic stimulation packages.  I just looked up some numbers on the Russian economy.  Did you know that the median income in Russia has "tripled" since 2005?  How did Russia do it?  They lowered their population and increased their exploitation of their massive "natural resources".  It was much the same for the USA from about 1790 to about 1930.  Since then it has been a big up and down for the USA and economists keep thinking of the USA economy as a water pump that is not broken when the fact is the water level in the well has dropped significantly.  Before about 1920 the farmers in California could water their crops from free flowing springs or from surface water flowing in the rivers, but not now.  They started pumping water out of the ground until the water levels have fallen just like the Gold played out in the hills.

Are you starting to understand how "natural resources" are the main factor that stimulates real economies.  You can steal the Gold like Spain did or you can catch the fish off the Grand Banks as the Portuguese did.  Where are those countries today?  Right now, the natural resources that is driving the world's economies  are oil and food.  Now, how do you think that our university trained economists are going to "stimulate that"?  Sorry, but they don't have any bullets nor did they ever have any real bullets.  Economic stimulation packages are like giving a person with terminal cancer some pain pills.  It does not solve the real problem, but it can get votes!!!