The Federal Economy

Posted on May 31, 2009 by Allen's Blog

The head of the World Bank warns against continuation of the out-of-control stimulus plan – and so far only 5% of the funds have even been spent! That is interesting since the economy shrunk that same 5% in the first quarter 

“While the stimulus has given an impulse, it’s like a sugar high unless you eventually get the credit system working, When unemployment increases, that’s probably the most political combustible issue.”

The federal government is offering, but not yet spending money. Whatever has, or has not been done has not changed in the least what is going on in the economy, except that everyone is issuing warnings about saddling our grandchildren with debt.

That is a real threat. We took one Granddaughter to breakfast today, and at 16 she has absolutely no concept of debt having lived in familial socialism. Her concept of “the future” is next weekend. We didn’t mention her inheriting debt. It would have been a conversation killer.

I can only hope that as the economy recovers, as it will with or without stimulus (as it always has) that the Obama administration will stop its headlong spending and release its grip on the banking and auto economy.

That is just a wish. I have no confidence that any politician, once having control and power, will relinquish it. The last one was apocryphal: General George Washington, when a Col. offered him the Crown, (a crown which the Col. didn’t have to offer of course, it was more in the nature of a trial balloon) and Washington declined.

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The Korean Conundrum

Posted on May 31, 2009 by Allen's Blog

My very close association with the North Koreans leads me to worry about our national policy. Only Robert Gates, Sec Def, gives me any confidence in this administration getting it right.

For the record, I also think Hillary is also on the right side of the debate in this administration.

I was in the Korean War, and saw combat there. Subsequently I was the personal aide to Commander L.M. Bucher while he was held captive and brutally tortured with his crew of the USS Pueblo (AGER-2) for a year by the North Koreans.

I have no illusions about the North Koreans, but apparently Candidate Obama did. Like most lawyers, he believed that everything can be worked out in conference if the right people are at the table. History proves him absolutely wrong, but he studied law and not history.

Some say that North Korea wants to play on the Big Stage, and therefore developed nuclear weapons. Some say they just want to sell nuclear and missile technology because that is what they have for sale.

This delving into motive is useless because knowing their heart does not determine for the world the results of their hands. Perhaps it is academically useful, in the vein of studying serial killers to see if we can find out what drives them, but first we need to find and incarcerate the killers. Studying their motives is an important tertiary step in the process.

I don’t care about their cognition impulses, just their threat. They are a bellicose nation with the means to back up their threats. In Western terms they are irrational, at least their behavior is antithetical to what the western mind determines as useful – like feeding their people.

In the past, the West has fed their people in the hope that something approaching rational behavior would be adopted, but so far that has not worked and Robert Gates says the united States does not intend to continue down that road.

Just across its southern border lies its model – the highly prosperous South Korea. Recognizing that potential it does what economically weak but militarily powerful nations usually do – it invades to steal that which others produce.  A chance remark by a Democratic appointed Secretary of State mentioned that South Korea was not within the military sphere of United States protection, and that caused the North Koreans to believe they had carte blanche to move militarily.

They are an isolated dictatorship, with weaponry far beyond their ability to deploy them to back up their diplomatic issues. They have no diplomatic issues they wish to use the military as a backup…they only have the military. They have no agriculture, no economy, no education, no anything.

Just a military. A HUGE military. That and a government that is almost entirely, again, military.

They are a one-trick horse…a military power stymied by geography from exercising that power. Their borders are a much more militarily powerful China, Russia, and South Korea defended by the United States. Their most bitter enemy is nearby Japan, so as powerful as they are, and as nasty as they wish to be, they are physically constrained by the four most powerful economic and military powers on earth!

They have no socially redeemable issues in art, or music, or literature, or…really anything. They are angry, frustrated and very dangerous.

When all you have is a hammer, every problem is a nail – and all they have is military power.

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My Commencement Address

Posted on May 31, 2009 by Allen's Blog

This is the weekend when commencement addresses are given, and the spirit of giving Commencement Addresses, I am pleased to submit mine.

For more than 20 years. The great majority of you have had zero responsibility for your own life or for others. The food on your table, the clothes on your back, your school tuition and your school books were paid for by someone else. There will come a time in your life when you are responsible not just for yourself, but an extended family including children and possibly parents.

Some of you contributed a pittance here, and a pittance there, but by and large you have lived in familial socialism – fed by that money tree in your parent’s back yard, or at least that was your analysis.

You have only recently looked beyond that comforting but murky picture to the equally murky realization that someone other than your parents, and your recent lover would soon need to be happy with you — someone who is not particularly impressed with your smile, but rather in what your knowledge and labor will bring to their bottom line. Being pleasant will no longer be enough to sustain the money tree.

Now, you may be able to delay this reckoning by joining the Armed Forces or the Peace Corps, and that will certainly help your Country – a wise and fruitful move, but in the end you will eventually have to become a productive member of society who produces something that society wants and needs – or protecting those who do productive work so they can be productive.

Society has a sufficient number of people riding in the wagon – fellow members of society who through medical condition or birth are unable to help – so you, with your education and youth, it will fall on you to pull the wagon.

You will be induced by friends to join them is continuing your life of sloth by hiking through Europe, or joining their commune on the North Coast of Kauai, but you have already spent 20 non-productive years at others expense, so every day you waste is just one more day lost you cannot recover.

President Obama has urged you donate your time to non-profits. I have spent a lifetime with non-profits, but as a volunteer not as a career path. Microsoft was not founded by someone who took time off for a trek through Europe – Bill Gates has the same number of hours as do you.

We each have the same number of hours, so it is a question of what you intend to do with it. Microsoft was built by young brains sustained by pizza and coffee – and 20 hour workdays. That company made more than a thousand millionaires just during their development years.

General Motors was destroyed by work rules limiting the amount of work, and saying what work could be done by whom – at wages and pensions demanded by employees beyond their productivity. 

Select your employer, carefully. During your career, there will be many forks in your road with the future depending entirely on what fork you select. Only the future will determine if you make the right decision, but if you make decisions based on long range plans rather than short range advantage, you will be ahead of the game.

How do you make money in this society: Simple. Do work that others cannot, or will not do. If you have scientific or engineering skills, medical or law, all backed by the perquisite education, you have skills that most humans cannot do. You will have paid your price up front. Your future is secure.

For the remainder, you must do work that others will not do – everyone can, and will willingly work in a bank, a flower shop, a veterinary clinic or a book store. Those are pleasant work conditions – and you will have a lot of competition. If you do something that most people hate to do – embalm bodies or clean septic systems, as examples – people will pay you well so that they do not have to do it.

The best way to help your country is to make enough money to be an employer for others, and to be charitable to those unable to do for themselves. Who has done more for humanity: Bill and Melissa Gates, or Jesse Jackson?

I rest my case.

Robert Heinlein was right: “Specialization is for insects.” Develop skills and knowledge in several disparate fields – so that as the economy takes one segment of the economy down, you have an escape route. You don’t know what skill or knowledge base will be overtaken by a new and rising economy being designed today in some Omaha basement. Of course you can depend upon luck, but it is better to have a plan. One man I knew was a Marine Officer, but just in case he should ever be ordered to do something he was not prepared to do – he developed a dual career as a college professor. In retirement he got to indulge his second career – but he made Major General in the Marines so he never needed to use his alternative career as a parachute.

The smartest individual I know is a medical doctor, and a professor medicine. He is also a Ph/ D in Engineering and former professor of mechanical engineering. That man is prepared, but he do not think he is an “Egghead.” He won the Nationals as a hot rod designer, builder and driver! He is a complete package, and like you he paid his academic price upfront.

Paying the price early is an essential of life – you must pay it while you are young and energetic, and of course while you know everything. Life becomes tougher as you age, have lost your energy, and it does not help that you also lose your confidence that you know everything.

You are going to live sufficiently long to have several careers. Make certain you develop career plans in two vastly different career paths.

By the way, no one has ever made a good living and supported their family by hiking through Europe.

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The Ooops Group

Posted on May 31, 2009 by Allen's Blog

 Liberal enviros don’t like the term – so in the future I’ll lovingly refer to them as the OOPS GROUP.

It began a long time ago. Remember DDT? The OOPS GROUP saved the environment of a few bird species at the cost of 20 million Africans under the age of 5 (and counting), through virulent malaria. It can be argued that Rachel Carson (author of “Silent Spring,” 1962) is the biggest mass murderer in history, easily eclipsing Pol Pot, Mao, Hitler, and Stalin. (It is only in the past few years that DDT has again been locally used in some parts of Africa to stop the scourge of malaria.) OOPS!

(To be fair, Carson NEVER recommended banning DDT, she simply recommended studying it – our government and the U.N. overreacted to OOPS GROUP pressure, and started the worldwide ban.)

Then Three Mile Island. It’s true that more people died in the back seat of Senator  Kennedy’s car than ever died at Three Mile Island. At the demand of the OOPS GROUP, the U.S. abjured building nuclear plants, while the world (particularly France) built them like crazy, generating powerful economies and industry to compete with us and leaving us dependent on coal and oil.  OOPS!

Then there was Global Cooling. If we had done what the OOPS GROUP wanted to do in 1974, we would have exacerbated natural Global Warming (which has been quiescent for 10 years). OOPS.

The OOPS GROUP demanded that we add MTBE to gasoline to replace toxic lead as an engine-knock preventative. Then, when science found MTBE, a low-level carcinogen, in our water supply, the OOPS GROUP demanded that we stop using the very additive they had previously demanded we use! OOPS! The OOPS GROUP demanded that we replace MTBE with Ethanol – then the OOPS GROUP discovered that Ethanol could actually replace oil-based gasoline. EUREKA!

The bio-fuels, primarily Ethanol, demand by the OOPS GROUP caused a dislocation in agricultural plantings, world wide. The result: Food riots for a week in Haiti and other nations; rising food prices everywhere. The U.N. “Special Rapporteur for the Right to Food,” Jean Ziegle, told a German radio show that growing crops for bio-fuel is a “crime against humanity.” OOPS!

Now we have the OOPS GROUP, who demanded we stop using paper grocery bags and instead use plastic bags, demanding that we stop using plastic bags and are proposing a tax on plastic bags. OOPS

Now the OOPS GROUP wants the U.S. to destroy its industrial capacity through a Kyoto-type agreement, while China builds a coal-powered electrical generating plant a week, and pollutes our common planet to the point they must curtail their infrastructure construction to run their Olympics! OOPS!

Every day, just in Africa, and just children under the age of five, 2,777 children die from malaria. OOPS.

Alar, Saccharin, Y2K, Love Canal, Africanized bees, Ozone depletion, MTBE, population bomb, electromagnetic emissions, bird flu, heterosexual HIV… considering their track record, why do we listen to the OOPS GROUP on ANYTHING?

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Mr. President, Don’t Look Back…

Posted on May 31, 2009 by Allen's Blog

The Left is starting to bark loudly at their President Obama.

The President is being roundly criticized by his own supporters for continuing Bush policies which both Candidate Obama and his Liberal supporters condemned before the election.

The continuation of rendition, and ‘prolonged detention” is particularly haunting for the Left, but President Obama finds himself abandoning his ideology when confronted with daily CIA briefings. His continued political supporters would prefer the word ‘nuanced” rather than “abandoned” but whatever the word, the President has relaxed his legal stances.

That is no problem for a politician, but is quite a feat for a “Constitutional lawyer. 

One of his previous supporters (Ted Rall) wrote in a Miami newspaper: “Obama is cute. He is charming. But there is something rotten inside him. Unlike the Republicans who backed George W. Bush, I won’t follow a terrible leader just because I voted for him. Obama has revealed himself. He is a monster, and he should remove himself from power 

“Prolonged detention,” reported The New York Times, would be inflicted upon “terrorism suspects who cannot be tried.”

“Cannot be tried.” Interesting choice of words.

Any “terrorism suspect” (can you be a suspect if you haven’t been charged with a crime?) can be tried. Anyone can be tried for anything. At this writing, a Somali child is sitting in a prison in New York, charged with piracy in the Indian Ocean, where the U.S. has no jurisdiction. Anyone can be tried.”

Well,Ted, of course they can be tried, the question is, “At what cost?”

Can we risk the lives of our intelligence sources?

Can we risk the lives of our informants among the detainees?

Should we risk further damage in the Middle East through telling everyone of our “enhanced interrogation?”

The Left answers “yes” to each of these questions. They also answer yes to the question, “Should we refuse to kidnap Al-Qaeda leaders when they walk the streets of cities within our reach?”

Apparently, the Left simply does not take war seriously. The rules they want us to follow would be fine if we were fighting France, but we aren’t.

The Left wants us to follow the Marquis of Queensbury Rules, and let the enemy use the Marquis de Sade’s rules.

Fortunately, even President Obama is smarter than that.

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A Deal With The Devil

Posted on May 30, 2009 by Allen's Blog

The subject of how and why we continue to buy cheap Chinese goods has quite a history.

Part of the reason we do it has to do with the Balance of Payments — only by having a vibrant Chinese economy can we have the Chinese buy our national debt.

Yes, it is a deal made with the Devil.

The U.S. gets three benefits — cheap goods sold cheaply at Wal-mart for our less prosperous, we get to sell them huge mining and construction products that their now growing economy requires, and the Chinese use the proceeds for the cheap goods to buy our debt in bonds.

The advantage to the Chinese is that they get to build their economy, which for decades had been dirt poor. They use the economic buildup to construct a huge army and a growing technology.

Our disadvantage is that we export our labor, and our technology which the Chinese steal.

The problem is a dynamic one: Modern communications and travel means that what once (just 100 years ago) was local products produced by local people, grew through communications and travel to be national, and then, slowly but finally, international. 100 years ago, most people didn’t travel 100 miles from their homes.

My study of the Hawaiian culture and economy is instructive. Initially, because Hawaiians were basically lazy, having lived in a paradise where one never worried about tomorrow but could throw a net in the morning and pick natural fruit in the afternoon, the plantations brought in cheap labor. First Japanese, then Chinese, then Filipino. All were recruited from countries, serially, when those nations were at war and farmers were anxious to escape. They left family and lived in deprivation, for money — just as Mexicans do today.

The Hawaiian plantations worked for 100 years, but labor unions slowly drove up wages until it was finally cheaper to raise sugar and pineapple in Indonesia than it was to raise sugar and pineapples in Hawaii. There is one sugar plantation left on Kauai.

Owners always seek the lowest wages. The U.S. steel industry lost steel to Japan, who lost it to South Korea who lost it to Brazil…

Of course, tariffs are put in place to try to even the playing field. It was sugar tariffs that caused Hawaii plantation owners to take advantage of a civil eruption to take over, and join the U.S. The Hawaiian plantation owners wanted to do that because sugar farmers in Louisiana housed the Congress to have very high tariffs against outside sugar farmers.

Those tariffs are still there to protect Louisiana and Texas farmers from Cuban, Indonesian, and other sugar farmers. Those tariffs are designed to offset the wage differentials between the U.S. and the nations that could raise sugar cheaper.

There has been this fight between advanced nations with high living standards and high wages, and those emerging nations with low wages for the use of that labor in making products and crops for many decades.

There is no answer. The U.S. buys  cheap goods from China, but it also wants to sell Caterpillar tractors to China. If the U.S. puts a tariff on cheap goods, China will put a tariff on Caterpillar tractors (and Boeing Aircraft), and instead buy Kubota tractors from Japan, and Airbus from France.

Congress must think that, on balance, we are getting a good deal. Everyone feeds the alligator, hoping the alligator will eat them, last. We keep the poor happy with cheap goods, we keep the corporations happy with international sales, and we trust to the good will of future Chinese leaders that they will not use their growing economic and military power to attack us.

It is a deal with the Devil.

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Warning: Geek Alert

Posted on May 30, 2009 by Allen's Blog

The main “killer aps” are word processing, e-mail, data bases and spreadsheets…those programs that almost everyone uses. Software manufacturers are always looking to break into the list with something that really “sells.” (Even if it is free, like Google’s Picasa 3, it gains corporate reputation.)

Microsoft continues its search for the next “killer ap” with “Bing,” which Microsoft claims is not so much a search engine (like Google), but rather a “decision assistant.”

Now most of us are just as happy as we can be with Google, so why a new search engine and what will it do differently?

Google puts the most popular websites first in its search. Microsoft will substitute its “judgment” as to what you really mean with your question. In effect, it substitutes its judgment for popularity. That may or may not be a “good thing” for you.

You will have to determine for yourself. It certainly will be different, and only you can say if for you that will be “better.” Any major competition for Google will be welcome, and the new features of Bing that prove useful will drive Google to improve (or at lest change) their product.

There are many competitors for Google (Ask, Lycos, etc) but Google is dominant, and for a good reason.

Google also announced a new product, Wave, in their search for a new “killer ap” as well, but it is designed more for collaborative teams than for individuals. It is a new method of teams e-mails carrying threads following each other rather than just adding e-mails on top of e-mails. This product is not just useful for corporate users, but independent contractors working collaborative as well.

If there is anything useful there, it will pop up in Outlook and Outlook Express.

One really interesting thing I  saw this week is a new 10” notebook )also called a Netbook)  screen design that will permit Notebooks to serve as Book Readers. The current Kindle and Sony Book Readers cost as much (About $350) as a notebook, without the power and flexibility that Notebooks bring to the table.

The new notebooks, due at the end of the year, will permit users to change their screens to grayscale, at a substantial battery saving, and at the same cost as a Notebook.

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