Thursday, June 26, 2014

World Peace Is Crumbling Under Obama's Watch

The world political situation is reminiscent of the 1930s and the build-up to a world war.

Economically, we don't have an outright economic depression (yet) but that could still happen. After all, there is gradually slowing growth in the world economy since the recovery from the financial crisis. That combined with sky-high debt levels create the risk of financial accidents throughout Europe, Japan, China and the US. Not much has been fixed since the last financial crisis.  Problems were simply papered-over with vast amounts of debt and money printing. A re-ignition of crisis could easily happen and a world-wide lapse into depression conditions is not out of the question this decade.  I say depression because, in the event of a shock and economic downturn, there are no counter-cyclical policy tools remaining since the Central Banks and governments remain "all in" with their "emergency" stimuli 6 years after the crisis. There's nothing left for them to do and growth is still sinking.

Meanwhile, peace around the world is crumbling as tyrants fill the leadership role left by Obama's mindless and strategy-less withdrawal from everywhere and the attendant loss of US credibility.  The decline of US power is reminiscent of the decline of England's power prior to the Great Depression. At that time, the new power in the world was the US -- who proved to be unable and unwilling to lead the world out of depression.  Now, it's China's turn to fail the world as they struggle with their own failure of communism. Fail, it will.

Tuesday, June 24, 2014

Obama's Immigration Crisis: El Tren De La Muerte

Obama and Biden have significantly worsened the US-Mexico border crisis -- almost as if they relish creating anarchy.  See yesterday's blog which says that the President's irresponsible talk of amnesty and his promises to not enforce immigration laws has caused a surge of immigrants at our border and overwhelming our Federal border patrols.   The administration's loose lips are creating security risks for citizens living near the border, compromising our nation's security, overwhelming the border patrol, and causing many immigrants to die.   The only way to shut this down is to shut Obama's (and Biden's) mouth and shut the border for awhile.  Such a signal to 'stay home' would be given by anyone who really had these people's (and our nation's) best interest at heart.  But we know that this irresponsible administration cares not a wit about what's good for our country.  

From Breitbart Texas,
Thousands of illegal immigrants are flooding the U.S.-Mexico border and the problem isn't likely to get better anytime soon. In a mad dash to make it to the U.S., many of the Latino minors are hopping aboard a network of Mexican freight trains called "El Tren de la Muerte," or Death Train. This phenomenon may support claims that the Obama Administration's lax stance on immigration is encouraging thousands of children to put their lives at risk.

Children who travel via Death Train must jump onto a moving freight car. Minors who cannot successfully pull themselves onto the traveling cars fall onto the tracks--many are left with extreme injuries.
I have sympathy for these people, but they are extremely ignorant and incompetent people with little to offer America.  Their countries are economic basket-cases because of widespread ignorance and extreme incompetence at all levels.  So, why would we want them here?  To advance this same process in this country?  We already have enough ignorant people!  Also, because of Obama's failing economy, the US economy has not been creating low-level jobs for the low-IQ, low-skill, low competence people already in this country.    

Here's some pictures of the "el tren de la muerte" that ferry thousands of Central Americans and Mexicans to the "paradise" that is the US border crossing. 









Unfortunately dozens of people have died at the hands of cartels, other criminals or accidents.



Monday, June 23, 2014

Obama's Border Crisis Now a Humanitarian Crisis

The South Texas border patrols are now picking up 1,000 people per day and have picked up 160,000 persons in the last 8 months.  The border patrols are overwhelmed.  Obama, Biden and others have very significantly worsened this problem.  Because they have publicly made clear their refusal to deport children and refusing to enforce other immigration laws, they have essentially opened the floodgates of opportunity seekers.    Naturally word has gotten out all over central America and the throngs are coming -- many are unaccompanied children -- to take advantage of our lawless Administration essentially advertising amnesty for children and others.  Also, see here.

From Breitbart Texas,
Thousands of illegal immigrants have overrun U.S. border security and their processing centers in Texas along the U.S./Mexico border. Unaccompanied minors, including young girls under the age of 12, are making the dangerous journey from Central America and Mexico, through cartel-controlled territories, and across the porous border onto U.S. soil. The photos illuminate the conditions of the U.S. Border Patrol’s processing centers, as well as the overwhelming task Border Patrol is facing.
"The Obama administration's band-aid fix has been to ship a good portion of these immigrants — many of whom are weak, emotionally vulnerable, sick, and confused — to other sectors as far as San Diego county in California and release them with no obligation other than to show up for a hearing in 15 days."  [yeah, that'll work! NOT!]

Most of those released will abscond and never show up for their hearings, taking their chances that ICE won't have the time or resources to go looking for them," she added. "Until they can get to where they want to go, they're overwhelming local community resources in cities like Laredo, El Paso, and Tucson that haven't had enough time to prepare for this ‘solution.' This is an awful way to showcase what cartel and gang violence is doing to children and their families in Central America, and it's a humiliating example of what our government's inability to develop solid immigration and border security policies can cause.”
Unfortunately, people are dying along the way -- many of them young people.  Border patrols are Federal employees and must be pissed-off if they can see the fact that Obama himself is worsening these problems for them.  Since Obama is refusing to enforce existing laws, how likely is it that Republicans will trust him to enforce any new law??

Obama can add "anarchist" to his undistinguished resume.   Like every other aspect of this irresponsible and stupid administration, Obama and his band of idiots are worsening every problem from here to Europe, the Middle East to the Far East.   



Friday, June 13, 2014

Romney Was Right About Nearly Everything

Romney was right about nearly everything. Obama and the Left tried to make fun of him, to make him seem like he was some sort of dinosaur.  But it's the Left and Obama that are wrong about nearly everything.

Romney was right that ObamaCare would not work and that people would lose their policies. He was right when he criticized Obama for failing to establish a status of forces agreement with Iraq to keep some American security forces in Iraq.  He was right when he said that, if Obama were re-elected, that he wouldn't be able to work with Congress.  He was right that Russia was our biggest geopolitical foe.  He was right in claiming that Obama would further weaken America.  He was right about the economy.  He was right about a managed bankruptcy for GM was a better course of action than the President's screwed-up extortion deal that had unlawful elements. He was right that the GM "rescue" would not save Detroit.

Romney's comment about managed bankruptcy proceedings for GM is timely as GM has now recalled 70%  more cars in 2014 than they sold in 2013, showing that GM continues to be a failed company. 

Obama is (and always will be) wrong about nearly everything.

During the 2012 campaign debates, Romney correctly said the following:
It's [Russia and Putin] a geopolitical foe, and I said in the same -- in the same paragraph I said, and Iran is the greatest national security threat we face. Russia does continue to battle us in the U.N. time and time again. I have clear eyes on this. I'm not going to wear rose-colored glasses when it comes to Russia, or Mr. Putin. And I'm certainly not going to say to him, I'll give you more flexibility after the election. After the election, he'll get more backbone. Number two, with regards to Iraq, you and I agreed I believe that there should be a status of forces agreement.
In Iraq, Romney advised correctly that a status of forces agreement with Iraq (keeping some residual forces) would be necessary to keep the peace there.

Regarding Iraq, from Fox,
"Unfortunately, the president has not taken the action necessary, has not had the foreign policy necessary, to protect our interests overseas or in various parts of the world," Romney told Cavuto. "All of the decisions made in the past put us in very difficult position now, frankly, with very poor options. This is a consequence of a president who did not take the right actions at the time opportunity presented itself.”
Romney would have been a great President -- infinitely better than what the low-information voters handed us. 

Wednesday, June 11, 2014

Buffet Indicator Hits Rarefied Territory

Warren Buffet's favorite stock market indicator is the entire stock market valuation divided by GDP.  A higher number means stock market prices are higher relative to the total gross domestic product.

Right now, the indicator is reaching rarefied territory of about 2.2 standard deviations above the mean value -- meaning that stocks are reaching valuations that have occurred only about 2% of the time in the past 60 years.  In other words, stock prices have been lower 98% of the time in the past 6 decades (and probably extending all the way to 1929).  Only at the peak of the Dot Com super bubble was the indicator higher.  The implication is that the Federal Reserve has created a near super bubble. 

Greenspan helped create the super bubble of year 2000.  Bernanke has intentionally engineered our current bubble.   Booms and Busts Created By the Federal Reserve

Also see my blog entitled The Stock Market is Probably Near a Peak.

Here's the chart from Doug Short:


The moral of the story is that if you're holding on to equities here after a 5 year bull run, prices have rarely been higher.  Stock prices have been lower 98% of the time in the past 6 decades.   It is not a favorable risk-reward ratio!!

Beware!

Tuesday, June 10, 2014

Thanks Obama and Hillary! Al Qaeda Has Never Been Stronger

I was listening to a CBS Evening News report that Al Qaeda has captured Mosul in Northern Iraq in the past 24 hours.  Mosul is the second largest city in Iraq and northern Iraq was one of the more stable areas of Iraq until now.  From the Washington Post:
The collapse of government forces in Mosul echoed the takeover earlier this year of the town of Fallujah in western Anbar province, where U.S. troops fought some of their fiercest battles of the Iraq war in an effort to quell the insurgents.
Mosul, however, is a far more important city, the capital of northern Iraq and a key commercial and trading center. It had also been an important focus of the U.S. military’s effort to stabilize Iraq.
They also captured some $400 million dollars from the Mosul central bank and US Black Hawk helicopters.  From Economist,
The jihadists seized huge stores of American-supplied arms, ammunition and vehicles, apparently including six Black Hawk helicopters and 500 billion dinars ($430m) in freshly printed cash. Some 500,000 people fled in terror to areas beyond ISIS’s sway.
 Many of the insurgent fighters came from nearby Syria, where Al Qaeda's presence has soared. They have, in fact, changed their name to Islamic State of Iraq and Syria or ISIS, to reflect their expanded operations.

Add the brazen Al Qaeda attack on the Karachi's International Airport to the mix and you get a picture of Al Qaeda that has never been stronger.  They are making a joke of Obama's claim that Al Qaeda was "on the run."  It's now totally laughable except it's so sad.

This is what happens when Obama stops fighting -- Al Qaeda fights on!  Obama didn't bother to negotiate a residual force agreement in Iraq to advise and assist militarily.  This lack of a that agreement has helped open the floodgates for the Jihadists, including both Hezbollah, Iranian and Al Qaeda,  leading to sudden and shocking territorial gains in Iraq.

Incoherently, he says that such an agreement is required in Afghanistan now that our troops are being withdrawn.  (He's "flubbing" that one too because Karzai is too "difficult" but it is Obama is too fucking lazy and incompetent)    In Afghanistan, Obama foolishly made public our military withdrawal schedule -- meaning that Al Qaeda will be making similar territorial gains in Afghanistan this year once our troops are gone.  The Islamic insurgency is alive and well in Afghanistan.

The US retreat from the world has been led by Obama and Hillary Clinton.  But evidence is mounting that we are storing up big problems down the road.  What happens when the region blows up?  What do we do then?  I don't know the answer to that question.  What happens when Pakistan is suddenly collapses after Afghanistan falls to Jihadist Islamists?  You know Iran is working behind the scenes to destabilize the region too while "making nice" on the surface with the nincompoops in the Obama Administration.

Withdrawal of US influence and feckless US leadership can't possibly help.   Obama has created a US leadership vacuum nearly everywhere and it's being filled.  It's being filled by Russia and Iran in Syria, Hezbollah and Al Qaeda in Iraq, Russia in Ukraine, China in the South China Sea and, coming soon, Al Qaeda in Afghanistan.  None of this bodes well for the future -- the future once Obama is run out of Washington.  The entire gains from the "war on terror" are being reversed before our very eyes.  Danger is rising now that Al Qaeda is now stronger than they have ever been.

Obama Lies: "I Will Never Leave a Comrade to Fall Into the Hands of the Enemy"

In defending the Bergdahl-Taliban swap, Obama said that "we don't leave our men and women in uniform behind" -- pretending to be a patriot (everything is for political gain with this bunch).   Kerry reiterated that "talking point" like the good progressive soldier that is.

Obama also said “I will never leave a fallen comrade to fall into the hands of the enemy."  

But they are are bald-faced liars.   Leaving our Libya ambassador and staff behind in a prolonged and deadly attack is PRECISELY what this administration did in Benghazi.  The White House left our men to die during a 7 hour Jihadist attack starting at 2 pm on a Friday afternoon, with no attempt at rescue them nor any effort to find the perpetrators.  Obama lied again when he said that he would find the perpetrators. There was no such effort. In fact the diplomatic mission (and CIA base) in Benghazi was ransacked and picked over by looters for weeks.

The sad truth is that, before Obama, the military did have a tradition of never leaving our men behind, especially those who were under attack.  The principle of leaving no one behind — no matter the cost — is deeply embedded in the U.S. military.  No effort is spared to get them home if they fall into enemy hands.   It's so reliably true that it someone must have overruled any impulse/effort to rescue Ambassador Stevens and staff during the Benghazi attack. 

It was likely Obama himself who ordered a "stand down" of forces -- which is why the entire administration and it's apparatchiks are stonewalling and lying about this matter.  EVERY effort must be made not to expose the sad truth of the extreme incompetence and even subversive nature of this black administration.  It's no big surprise: nearly every black leader in this country is intentionally or inadvertently an enemy of our Republic.   You see, it's Anglophones who invented the freedom and the political freedom that led to the USA and it's Constitution.  Africans and African Americans have no such tradition.  They do not have sufficient intellectual capability to create or understand it -- and apparently never will.

Getting re-elected was Obama's only concern -- not governing.  The attack by Islamists would have inconveniently exposed his false talking point that Al Qaeda was "on the run."  Then they created the false "talking point" of blaming the attack on a silly U-Tube video to hide that truth.  Add Susan Rice to the list of serial liars.  Worse, the lies and stonewalling worked and tricked the nation during the 2012 election season.  They successfully hid their real agendas:  anti-military, anti-business, anti-democracy,  pro-socialism and essentially anti-America.  Remember, the full affliction and catastrophe of ObamaCare was also deferred until after the 2012 election.

We have a bunch of despicable liars, cheaters and traitors in this administration.  What else would expect?   Their every talking point is a lie and a liberal trick.  Regarding Obama and Benghazi, the truth is likely that he was an incompetent, even AWOL, commander-in-chief -- a title which he shouldn't have;  no one has ever been less worthy. 

Sunday, June 8, 2014

The US and World Economy Could Face a Lost Decade

We live in a time of slowing global growth where manufacturing is in contraction in places like Japan and China and much of Europe is in recession.  America's first quarter GDP reading was contracting at a negative 1%.   Estimates for the US 2nd quarter keep dropping but are still positive.  The global economy is slowly sinking despite outrageous quantities of debt expansion and trillions of money printing.  


Most major countries still have a zero interest rate policies (except China), high deficit spending and rising debt levels even though we're 5 years past the financial crisis.  Money printing continues in the US and Japan but still world-wide growth continues to slow.   Government and monetary authorities are "all in" with stimulus -- but it's not working.

Central Bank Balance Sheets Show That We Live in a QE World
 I'll attach what I call "the most important chart in the world"  It's shown for the US but it's suddenly applicable to China too since their debt has rocketed by more than the US AND Japan debt increases combined in the past 5 years.   In China, overall credit has jumped from $9 trillion to $23 trillion since the Lehman crisis.  

Diminishing Marginal Returns on Debt
If this chart is true, then increasing debt (deficit spending) won't save us in the next recession.   It might hurt more than help  -- recession or not .   I'm calling into question whether there are any policy tools left to combat the next economic downturn.   In the past, the counter-cyclical policy tools included lower interest rates and deficit spending (increasing debt).   It's possible (now) that deficit spending will not work and if interest rates are already zero, there's no room to lower them either.   (Yeah, there's QE but that is proven not to work. Japan has doubled down on QE and it's not working!!)     Since our deficit is still some $500 billion, it would swell to something like $2 Trillion per year in a recession -- a scary thought.

The next recession will likely be the 3rd one in a row caused by a bursting financial bubble (caused by governments and central banks) that will probably originate in Asia.   But when an economic decline begins, I'm saying that we could have a lost decade coming because there are no "arrows in our policy quiver"to counteract the downturn!   (Only China has room to lower interest rates, but their debt levels are already near danger levels meaning that China itself may be the epicenter of the next bust.)   When there is recognition of this, then you'll have the 50% drop in stock market prices that Marc Faber talks about.   There might even be a gradual realization of this predicament -- with years and years of stock market (and corporate profit) declines.   2014 may be the first year of declines!   


It could be that the US is truly following Japan into another lost decade during which time cash and treasury bonds could be king.

Friday, June 6, 2014

56 Items on America's To-Do List

America is dying a death of a 1,000 cuts but we're going to have to wait 3 more years until there is even hope of a serious President who has the minimal competence to negotiate with both parties and who is not beholden to a looney-left-wing agenda.

But I'll skip to a positive note by highlighting 56 things that we could change for the better in a national "to do" list.   Here goes:
  1. Get money out of politics.  Go with all Federal money for national campaigns--no private contributions should be permitted. 
  2. Ban lobbyist money too.  Ban SuperPacs.  Just say no.  Make all contributions to national politicians illegal. 
  3. Eliminate the stupid and phony ruling that Carbon Dioxide is "harmful or a threat to human health" since it's actually required for plant life and not harmful like sulfur dioxide or nitrous oxides.  The EPA is out of control. The clean air act is being highly misused. 
  4. Lower the corporate tax to something like 10 to 15%, reform the corporate tax code and bring back manufacturing jobs from Asia!  High corporate tax rates in the US, now the highest in the world, creates an incentive for companies to move and/or stay overseas.  Apply the new and lower corporate rate to individuals filing as S-Corp and LLCs.
  5. Downsize and basically eliminate the NSA.  Repeal the Patriot Act.  Our government can't be trusted to prevent malfeasance, mission creep and "security" agencies running roughshod over our constitutional rights.  Change the focus of the NSA to the monitoring of all the financial transactions, emails, and phone calls of our national politicians and bureaucrats to enforce the ban on contributions to national politicians. 
  6. Reform the entitlements of Medicaid and Medicare in light of the Demographic shift  taking place. There are only 3 persons working to support 1 beneficiary.  It used to be 5 workers per beneficiary in the 1960s.  Right now, there's nothing but red ink as far as the eye can see -- totally unsustainable.
  7. Give the States "block grants" of money to spending on Medicaid and Medicare.  Cap the growth of these Federal entitlements to 2% or less.  Let the States spend the money and take steps to better take care of their citizens.  State money would be added onto Federal money as is seen fit by each State.  Devolve power back to the States where it belongs.    Limiting government expenditures would truly slow medical cost inflation.
  8. Consider replacing the Medicaid system to a substantial "premium support" and outright vouchers so that people shop for their own policies.  Government expenditure increases should be fixed or limited rather than open-ended.   
  9. Reform Social Security in light of Demographic shift and longer life expectancy.  In the 1930s, there were some 40 workers per S.S. beneficiary, now it's 3 workers to each beneficiary -- heading to 2 to 1.   Right now, there's nothing but red ink as far as the eye can see -- totally unsustainable.
  10. Pass a law to require the Federal Government to balance the Federal Budget.  Austerity on THE GOVERNMENT (not people) will be healthy for the real economy and eventually help ordinary people.
  11. End the dual mandate and reform the Federal Reserve or End the Fed Entirely.  Their sole functions should be to maintain zero inflation and be a lender of last resort only.  See Booms and Busts Due to the Federal Reserve.
  12. Begin a program to further develop Thorium molten salt reactor technology for our long-term, zero carbon energy supplies.   Thorium Reactors May Solve World's Energy Crisis and How Thorium Reactors Work.
  13. Pass Tort reform in the States to reduce medical costs.
  14. Encourage more supply of medical professionals including physicians assistants and internet doctors.
  15. "Bust the trusts" of AMA and Big Pharma: outsource drug supply via worldwide bidding and graduate more doctors.
  16. Allow pharmacists to dispense most medicine without a doctor's prescription.  Pharmacists can handle most issues and they know when they don't know enough.
  17. Shift individuals to their own medical policies and away from employer coverage (making them portable) by giving them the expense deductibility rather than corporations.  
  18.  Replace ObamaCare.  See How to Replace ObamaCare and Why. ObamaCare has double-downed on a broken system.  Fix the system with a variety of measures listed here!
  19. Further encourage/expand medical savings plans which allow for more high-deductible policies (people paying more of their bills; questioning pricing and demanding the lowest price, more "skin in the game"),
  20. Transition sick people without coverage and having pre-existing conditions to high risk pools with state and federal government support.  BTW, These high risk pools are being eliminated as part of ACA! The ACA itself is becoming a "high risk pool" and because of this, premiums will continue to soar.
  21. We need the "fresh air" of shareholder democracy at our corporations.  Pass rules that shareholders must approve executive pay packages including stock options, etc. Complete disclosure of pay packages must be made for shareholder vote.  Pass laws that major investors like public pension funds must be on the Boards of Directors (by law).
  22. Bring back the Glass-Steagall and repeal Dodd-Frank (it's already 5200 pages and not finished nor completely implemented) and  separation of regular banking from investment banking.  Limit leverage in both "regular" banks and "investment" banks to 12 to 14 times capital (ie.,conservative).
  23. Make bankers responsible for bank failures. Pass laws against "financial malfeasance" where, if convicted, banker and entire executive suites would be liable for jail time and salary claw-backs for serious "financial malfeasance."  If a bank requires government assistance, then the entire executive suite and board should be tried in court for financial malfeasance and face possible jail time.  That will do wonders!  You don't need Dodd Frank if you're willing to jail bad bankers.
  24. No off-balance sheet items on any earnings report from corporations (and banks)---make everything clearly stated on the balance sheet and shareholder reports (and filings with the government regulators). 
  25. Put all derivatives on exchanges and have banks/investment houses mark-to-market all hedging positions at the end of each day.
  26. Reform our immigration system by Instituting a point-based immigration system similar to Canada's immigration system.  ALL applicants could apply to various categories of immigration and be admitted through quotas and ranked objectively by a point system.  Illegal and undocumented Latinos already in the US should be required to register and should be given a one year visa (with permission to work) then given consideration only through the point-ranking system. Speaking English, education and skills should be significant sources of "points" for most categories other than "agricultural worker" or "unskilled laborer." See Bring On an Immigration Point System and Canadian Immigration System is Far Superior to the US.
  27. Expand immigration from Developed areas of the world and less from 3rd World Nationalities.
  28. Invite foreign graduate students, master's and doctoral candidates, to immigration interviews.
  29. Expand immigration under the Point System for those proficient in Science, Technology, Engineering and Mathematics (STEM).
  30. Allow local law enforcement in the States to check immigration documentation during routine law enforcement. This will appropriately send a message that we are tough on illegal immigration.
  31. Eliminate the mortgage interest deduction for mortgages for well-off taxpayers (at least) and eliminate the preferred capital gains treatment for house sales.
  32. End the never-ending money printing program at the Federal Reserve putting Trillions of dollars in the hands of the top 0.1% and 0.01%.
  33. End the ZIRP policy now (Zero interest rate policy): normalize short-term interest rates to match or exceed current inflation rate (ie.,establish a normal fed funds rate).  This helps mom and pop savers and retirees who are trying to scrap by collecting money on CDs and deposits. We're screwing mom and pop savers to the tune of $125 billion per year in lost interest income.
  34. Outlaw public sector unions at local, state and national levels. Even FDR advised this. Teachers unions are hurting our kids and not helping, all other public unions only extort taxpayer money. Government employee benefits are estimated to be 45% too high compared to private sector.
  35. Cut public employee costs; kill defined benefit plans for public workers and scrap Davis-Bacon and all prevailing wage laws for public workers.  (hat tip to Mike Shedlock at  Global Economic Analysis Blogsite)
  36. Pass national "right to work" laws to allow individuals true freedom to join or not join unions.
  37. Freeze Federal employees salaries and reduce benefits which have ballooned 45% higher than similar jobs in the private sector. 
  38. Create a "vocational high school" path for the 50% of black and hispanic people who are not and can not graduate an "academic" high school as we know it.  It should all be voluntary. The vocational option might appeal to even more young people who are doing fine in our high schools.
  39. Eliminate Federal laws against marijuana, and possibly for cocaine and minor drugs.  See my blog: It's Time to Legalize Marijuana
  40. Eliminate Ethanol subsidies. These subsidies exist because ethanol is not cost-effective (why else would it need subsidies?)   Ethanol doesn't make economic sense compared to petroleum distillates. Stop consuming up to 40% of the corn crop for fuels! Stop the madness! 
  41. Cut much of the Agriculture Dept.  Eliminate most of the current programs per Cato Institute suggestions,  Subsidies to corporate farmers has never made sense.  Devolve the food stamp and food subsidies to the States. 
  42. End Electric car subsidies to wealthy people who buy $100,000 electric cars (Tesla and Fisker cars cost $100k),
  43. Cut Agricultural sudsidies to corporate farms.   Stop corporate welfare!  
  44. Better yet, kill the Department of Agriculture!  It really should be called the Department of Food Stamps.  Devolve food stamp money to the States.
  45. Cut Defense Department spending per Cato Institute suggestions. We don't need troops in 140 countries. Military procurement has been a boondoogle for decades.  Veterans retirement benefits are very generous and expensive.
  46. Downsize Commerce Department per Cato Institute suggestions
  47. Eliminate the Department of Housing and Urban Development per Cato Institute Suggestions.
  48. Cut Mortgage subsidies (tax credits) for mostly wealthy or well-off people to finance their homes and even multi-million dollar McMansions,  These tax subsidies should be limited!  
  49. End the Education department.  Sending money to Washington DC for them to re-allocate it doesn't make sense.   End the entire department and dismantle all of it's programs! Cost savings: $106 billion each year.
  50. Kill the Energy Department who brought you Solyndra and countless other wasteful boondoggles. End it per Cato Institute suggestions! Private enterprise is entirely capable of providing funding for energy research. Privatize the Strategic Petroleum storage program. Put defense related expenditures in the Defense budget.  Cost savings: $38 billion per year.
  51. Downsize the Health and Human Services Dept. . HHS spending is over 1/4 of the total federal spending or $900 Billion per year.  It's Cut many of the programs that the Cato Institute recommends.
  52. Reduce Medicare and Medicaid fraud  Fraud costs an estimated at up to 10 to 20% or up to $150 billion in fraud.  Go to the block grant to the states per the Paul Ryan budget.  There is some chance that States might root out that fraud which is exactly why no one wants to do this!
  53. Stop the rapid rise in SS Disability payments and beneficiariesDisability program enrollments soared after easing of rules allowing claims of "mental distress" or "mood disorders."  Tighten standards back to where they were before Obama was elected.  
  54. Repeal 1931 Bacon Davis Act and 1935 National Labor Relations Act. The extra cost of union requirements in Federal projects is huge.  Stop it!  Pass a National Right-to-Work act.  See the Cato Inst write-up on reforming Labor Markets
  55. Substantially Dismantle the Department of Labor.  Devolve the $131 Billion Unemployment Insurance program to the states.  Eliminate job training programs, job corps, trade adjustment services per Cato Institute suggestions
  56. Stop Sugar industry price supports.  They are a complicated combination of import restrictions, production quotas and a kind of guaranteed prices.   The US government makes sugar prices higher than world prices and drives candy-making businesses to Canada and Mexico taking factory jobs with it! , Last year, the price of sugar around the world averaged 26.5 cents per pound, compared with 43.4 cents in the U.S.  Stop it!

Thursday, June 5, 2014

Global Warming is No Reason To Panic, Only A Call For More Technology

Democrats tend to be Malthusians -- meaning they tend to be pessimistic, cynical and have trouble envisioning win-win scenarios where everyone gains beyond imagination.  Obama and his fellow Malthusians tend to only see a dire future with scarcity.  This is due to many reasons: 1) their ignorance of the issues, 2) lack of a faith, 3) lack of imagination, 4) lack of faith/trust in the ingenuity of mankind, and 5) a failed understanding of free market economics and US history.  In short, they are ignorant of everything that has led to dramatically higher standards of living!

But you can see the pessimistic and ignorant worldviews in action with regard to Obama's recent climate change initiative.

Yes, the earth has warmed 1.6 deg F (2.4 deg F in Northern Hemisphere) in the past 100 years.   And the sea is rising about 1/10th of an inch per year.   But it's not a reason to panic or enact policies that put more people out of jobs.   See my blog Global Warming Made Easy.  But that's just what Obama is doing with his over-reaching (and ineffective) climate initiative that will hurt the economy and hinder job creation.  He wants to lower electric power plant emissions by 30% in 2030 compared to the year 2005*. (* see footnote below)   The Democrat's war on jobs continues!  

What they don't get:  technology will come to the rescue again and everyone will be better off!

The EPA and Democrat's Over-Reach


First off, regulating carbon dioxide as "harmful or threatening to human health" as part of the Clean Air Act is a joke and such an interpretation should be reversed.  Unlike Sulfur and Nitrogen oxides, which are poisonous, CO2 is necessary for life.  Carbon dioxide is naturally occurring at about 0.030% (300 ppm), plants require it for their photosynthesis and the level has only risen to a less-than-astounding 400 ppm in 60 years.   To call 400 parts per million levels of CO2 in the atmosphere "harmful to human or public health" is untrue and should be reversed.  It's just not true.

And this slow and small rise of CO2 is barely affecting the climate.   At best, you might call the climate effects as an "inconvenience" since nothing drastic is happening.  And it appears that the warming has halted in the past 10 years or so.

There has been no trend in the number of disastrous hurricanes or anything else. Claims to the contrary have been debunked.  Last winter was the coldest in decades!   The sea will rise a foot in the next 100 years which is manageable given that our hydrocarbon era may only last another 100 years (or less).  Seawalls and gradual shifting back from seashores can and will happen during the next 100 years.  There is no reason for higher unemployment or any other panic reaction. 

But Obama's and other's misunderstandings are based strictly on alarmist views due to their pessimistic nature.  The only drastic or "runaway" warming scenarios come from faulty climate "models."  Obama and his liberal left (all liberal arts majors?) have far too much faith in these faulty models and it's going to put people out of work.  All of the models are failing!

What Obama doesn't know is a lot!  He proves that daily.  Even a 30% cut in electric power generation CO2 emissions is miles away from actually halting the rise of CO2 in the atmosphere.  Electric power energy is only 40% of our total energy use.  So, a cut of 30% of the 40% share is only a 12% reduction of total energy and emissions.

There is no evidence that a 12% cut will do anything!   Just to slow the CO2 accumulation in the atmosphere would require a 55% reduction in total emissions (not just 12%) to match the uptake (absorption) of CO2 by the land and sea.  To reach 55% reduction target, you'd have to cut 100% of CO2 emissions from power plants, AND convert most vehicles to electric.  Furthermore, you might need to build some nuclear or wind power plants to power the electric cars!  The cost is in the $10's of Trillions for the US alone.   It's not happening and it's not going to happen anytime soon.

For example, after decades of alarmism, there is not a single power plant in the world where carbon is being captured.  And the US has 10,700 power plants alone!  And the technology to do so is still being developed.  Most old power plants cannot be converted.  In reality only new-built power plants can be fitted with flue gas scrubbers as part of the design.  Furthermore there are huge problems and costs associated with injecting carbon dioxide into subsurface reservoirs or into deep sea ocean trenches.  It's an extremely large volume to be disposed of.

Obama knows none of this.  He's content with just shuttering of old power plants whether there's electrical brown-outs in the future or not.   He knows nothing about that either.  He doesn't even care. This all proves again the idiocy of central planning and central planners. They don't know what they are doing nor foresee unintended consequences.

My most important point is that, although man has caused warming,  the cost to re-tool the economy away from fossil fuels is so great that it's not going to be done at this time.  Furthermore, since the warming is basically benign, it's not worth spending the money!   It's just not going to happen.  All of this will be reversed in 2016 (just ask Julia Gillard from Australia who enacted a carbon tax. She was soon bounced from office).

Technology to the Rescue


The answer to our modest warming issues and the eventual demise (and increased cost) of hydrocarbon energy is more technology.  Eventually we need something like Thorium energy to power the economies of the world.   The sooner the better!  See: Thorium Reactors may solve the world's energy crisis.   The molten salt reactors are made inherently safe, run at atmospheric pressure (no containment buildings, etc), and hugely fuel efficient.  The fuel is 4 times more abundant than Uranium.  Even the waste products are minimized and less radioactive.

What should be done is to call for a pilot program for companies like Westinghouse or GE to build and test Thorium molten salt reactors to perfect the technology.  China and Norway are already putting these reactors into use on a trial basis -- using a design that the US invented!  One thing IS for certain:  oil and gas are finite resources and already peak cheap oil is here.  We need to perfect the commercial design of these reactors and then work with a more friendly government to streamline regulatory rules and permitting.  It'll take decades so we should be starting now.

A call for a private-sector led Thorium Reactor program (or even a private sector and government partnership) should have been Obama's big initiative -- not some counter-productive and job killing initiative that will vanish once he's swept from office.  We desperately need a truly intelligent and serious President -- not Jimmy Carter II.

Footnote:

* Year 2005 is convenient start point because the natural gas from fracking boom has already lowered our country's CO2 emissions.   It's ironic because Obama doesn't even like the natural gas boom but is taking 'advantage' of it here.