The NASA Old Guard Supporting Mitt Romney to Reverse Obama’s NASA Disarray

Posted by PITHOCRATES - January 28th, 2012

Week in Review

NASA doesn’t like President Obama.  For it was on his watch that they retired the Space Shuttle program.  And now have to rely on the Russians to ferry American astronauts to the International Space Station.  Pretty sad for it was NASA that put a man on the moon.  No one else has.  And now the American space program has been reduced to hitchhiking rides on old Russian rocket systems that were used during the glory days of NASA (see Last man on the Moon backs Mitt Romney’s race to White House orbit by Jacqui Goddard posted 1/28/2012 on The Telegraph).

In an open letter endorsing Mr Romney’s candidacy, veterans including Apollo 17 moonwalker Gene Cernan, first space shuttle pilot Bob Crippen and former head of Nasa Mike Griffin, feted him as the only contender capable of reversing the “disarray” wreaked on Nasa by President Obama.

Their boost comes after several days of campaigning by the Republican hopefuls on Florida’s Space Coast, a region that thrived during Nasa’s glory days but which is now facing economic gloom following the retirement of the space shuttle last year and confusion over what will succeed it.

On Friday, Mr Romney admitted to a crowd at Cape Canaveral – home to Nasa’s Kennedy Space Centre – that if elected, he would assemble expertise to help chart a new course for the space programme. Mr Gingrich said that he already had one in mind: colonizing the Moon by the end of his second term as president.

Obama is making no friends in the space community.  Despite his quest for jobs of the future.  And if any jobs would qualify as jobs of the future they would have to be space jobs.  But there’s a problem with these jobs.  They’re not unionized enough.  And don’t send a lot of campaign money to Democrat coffers.  Hence Obama’s lack of interest in NASA.

Interestingly, the old guard of NASA is endorsing Mitt Romney.  Who will establish a blue ribbon panel to figure out what to do with NASA.  While Newt Gingrich is proposing Apollo – Phase II, the return to the moon.  This would be a boon to the space community.  Which is what you’d think the old guard would want.  Unless they don’t believe the taxpayers would never support such a bold and expensive program like that.  Or they think it was just expedient politics before the Florida primary.  Or they just don’t believe Newt Gingrich can win in the general election.  And they want someone who appears to be more moderate.  And can reach across the aisle.  Like John McCain.  Who lost in 2008 to Barack Obama.  Which just goes to show you how well moderates fair against Democrat ‘moderates’ (Obama ran as a moderate but gave us Obamacare).


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Obama Favors Protectionism to Save Manufacturing Jobs that Employ Few while Increasing Costs for Consumers Everywhere

Posted by PITHOCRATES - January 28th, 2012

Week in Review

In full campaign mode, Obama seeks the support of unions in the manufacturing industry (see Why Manufacturing Can’t Solve The Jobs Problem by Roya Wolverson posted 1/27/2012 on Time Business).

Among other things, Obama’s State of the Union speech Tuesday drove home the idea that U.S. industries need more protection. “Over a thousand Americans are working today because we stopped a surge in Chinese tires,” he said in his speech. That’s all fine and good if your goal is to hold on to U.S. manufacturing jobs. But it’s not going to solve the country’s overall unemployment problem. And in the end, it may cost the American consumer more than those jobs are worth.

For one thing, raising trade barriers on imported goods like tires makes tire-buying more expensive for American consumers, which, as Matthew Yglesias points out, only undermines those consumers’ ability to spend elsewhere. It also provokes countries like China to raise trade barriers on U.S. goods, which makes the job of increasing U.S. exports and export-related jobs even harder. Even if protections did save some manufacturing jobs, they wouldn’t be enough to move the needle on unemployment. It’s worth remembering that only 11% of U.S. jobs come from manufacturing, thanks to globalization, which has taken jobs abroad to lower-wage countries, and technological advances that have increased worker productivity. And that percentage has been declining steadily for several decades.

…And since we can’t reverse that process, the biggest gains in the job market can’t come from greater protections, but instead from gains in technology. Standard Chartered’s Gerald Lyons made the point today that, despite the enduring public perception that technology kills jobs, for every one job technology destroys, it creates 2.1 other jobs. Thus, instead of clinging to our past by supporting unproductive industries and erecting trade barriers, the U.S. has to find “the types of jobs that are fit for this country’s future,” argues Diamond.

Once upon a time the whale oil business was booming.  And a lot of people where employed in the whaling industry.  Until John D. Rockefeller came along.  Who created Standard Oil.  Introduced Americans to kerosene.  And put the whale oil business out of business.  Creating far more jobs in the petroleum exploration and refining business than the whale oil business ever did.  Now if President Obama were in office during this time he would have placed a tax on kerosene to protect those whale oil business jobs.  Because although he may talk about the jobs of the future, he wants to protect the jobs of the past.  Especially if they are protected by a strong union.

When only 11% of U.S. jobs are  in manufacturing, this protection of the jobs of the past is also very costly.  Because to save 11% of jobs in the economy he will raise prices on everything in the economy.  Meaning 100% will pay a surtax so the 11% can keep these jobs of the past.  So to sustain a little economic activity he will kill a lot of economic activity.  Which doesn’t make sense.  But it will protect union jobs.  And sustain contributions to Democrat coffers.  Which is the whole point of saving these jobs of the past.


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Obama Attacks Colleges for High Tuition Costs and Irks College Administrators

Posted by PITHOCRATES - January 28th, 2012

Week in Review

In an odd move President Obama has attacked colleges for the high tuition costs.  Odd because colleges overwhelmingly support Democrat candidates.  Colleges are like public sector unions for all intents and purposes.  And he would never ask public sectors to cut their budgets.  Democrats never attack the colleges for the high cost of tuition.  They attack people who don’t approve higher taxes for higher education.  But Obama attacks colleges.  Leaving college administrators dumbfounded (see College presidents pan Obama cost-control plan by the Associated Press posted 1/28/2012 on the New York Post).

Fuzzy math, Illinois State University’s president called it. “Political theater of the worst sort,” said the University of Washington’s head…

Illinois has lowered public support for higher education by about one-third over the past decade when adjusted for inflation. Illinois State, with 21,000 students, has raised tuition almost 47 percent since 2007, from $6,150 a year for an in-state undergraduate student to $9,030…

Bowman said the undergraduate experience can be made cheaper, but there are trade-offs.

“You could hire mostly part-time, adjunct faculty. You could teach in much larger lecture halls, but the things that would allow you achieve the greatest levels of efficiency would dilute the product and would make it something I wouldn’t be willing to be part of,” he said.

If you crunch the numbers that’s $189,630,000 ($9,030 X 21,000) Illinois State takes in each year from their undergraduate students.  That’s a lot of money.  But it excludes donations.  And federal and state aid.  Which when added all together pays for administrative workers, janitors, administrators and, of course, professors.  Which makes you wonder where all that money goes.  The $189 million.  The donations.  And the federal and state aid.

Of course, everyone knows where it all goes.  Where it always goes.  Pay and benefits.  In particular, salaries, health care and pensions.

People love to work at these colleges.  Because of all that money.  You can’t get this in the private sector.  Which is why pay and benefits in the public sector, including these colleges, are far better than in the private sector.  Because they always justify their ever increasing tuition costs on the imperative to educate students to compete in the high-tech world of tomorrow.  While those working in the high-tech world can’t make similar pleas so their customers will pay higher prices for their high-tech products.  No, they can’t do that.  For that would be greedy.  But colleges can.  While no one calls them greedy.

And if you argue against colleges you sound like you’re against winning the future.  Even though many of these students are getting degrees in art, music, sociology, anthropology, women studies, minority studies, etc.  Which really don’t help to win the future.  But they do provide a lot of jobs on campus.  And a lot of tuition revenue from students who don’t want to take the more difficult degree programs that require math.


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Reforms in the National Health Service opposed by the BMA, Royal College of Nurses and the Royal College of Midwives

Posted by PITHOCRATES - January 28th, 2012

Week in Review

There is a struggle in Britain about power and money in the National Health Service (NHS).  Health care costs are rising.  Services are being rationed.  And the current government is trying to fix these problems by decentralizing the NHS.  By transferring budgets and decision making to the general practitioners (GPs) at the local level.  The front-line doctors.  Making the GPs responsible for their budgets.  And their patients’ care.  At the local level where doctors treat patients.  Making the practice of medicine once again an intimate relationship between doctor and patient.  But others see this as a heinous plot to introduce market forces into health care (see NHS ‘in peril’ if health reforms fail, warn GPs by Stephen Adams posted 1/27/2012 on The Telegraph).

In a letter to The Daily Telegraph, the heads of more than 50 new doctors’ groups argue that the British Medical Association’s policy of “blanket opposition” to the Health and Social Care Bill fails to represent GPs’ views.

They warn that previous reforms have not gone far enough and have consequently “paid the price of disengaging the frontline staff most needed to modernise the NHS”…

The letter has been signed by 56 GPs who are helping set up clinical commissioning groups (CCGs) across England. Under the Bill these will effectively replace primary care trusts (PCTs) and be handed their budgets.

Andrew Lansley, the Health Secretary, has consistently argued that the central thrust of the Bill is to give doctors a greater say, and key to this is giving them more responsibility for commissioning health services…

However, many believe the real motive is to open up the NHS for greater private sector involvement.

Last November the BMA moved to a position of total opposition to the Bill, and since the New Year the Royal College of Nurses and the Royal College of Midwives have followed suit. The Royal College of GPs is deeply sceptical, although not yet publicly in total opposition.

The inefficiencies of national health care have resulted in medical rationing.  Which has lowered the quality of health care for the patient.  So why would anyone oppose reforms to improve the quality of health care for the patient?  Because it will introduce market forces into health care.  Which will reduce costs and improve efficiency.  Which could also impact pay, benefits and pensions of health care providers.  The most expensive part of national health care.

This is the danger of national health care.  It destroys the quality of health care.  But it also creates a very vocal and powerful health care bureaucracy.  That takes on a life of its own.  And makes reform nearly impossible.  It’s happening in Britain.  And will happen in the U.S. if Obamacare is not repealed.


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Ontario Turns to Rationing to Combat Rising Costs in their Health Care System

Posted by PITHOCRATES - January 28th, 2012

Week in Review

When you go to a national health system you give up on market forces.  There is no competition to keep prices competitive and affordable.  Because there is a single payer.  The government.  That pays for health care with taxes.  Which are finite.  And as health care costs rise they consume more of these finite taxes.  Until they reach a point that either that finite amount of taxes must be increased.  Or you ration health care services (see Ontario to cut health services covered by medicare by the The Canadian Press posted 1/25/2012 on CBC News).

Ontario will reduce the number of health services covered by medicare as the Liberal government looks to cut costs and trim a $16-billion deficit.

Health Minister Deb Matthews says the government is reviewing all health services to see if evidence shows they improve patient outcomes, and if not, they could be delisted from OHIP…

Matthews will outline a plan next week with several initiatives that she says will both improve patient care and address Ontario’s fiscal reality.

Of course these are mutually exclusive goals.  You cannot improve care by providing less care.  What you get instead is rationing.  Less care for the same level of taxes.  To offset the increase of health care costs.  Caused by the exclusion of market forces from a national health care system.

The inevitable decline of health care typical in all nationally provided systems.


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The U.S. Economy entering the Lost Decade Phase like the Japanese in the Nineties?

Posted by PITHOCRATES - January 28th, 2012

Week in Review

If you listened to the 2012 State of the Union address you heard President Obama say that America was back.  The economy was growing again.  And businesses were hiring.  But if that were true the chairman of the Federal Reserve wouldn’t pledge to hold interest rates at zero for another year.  For that would indicate a sputtering economy that they’re trying to revive.  Not the rosy picture given at the State of the Union (see Bernanke Pledges to Keep Rates Low Thru 2014: A “Very Pessimistic” Outlook, Former Fed VP by Aaron Task, Daily Ticker, posted 1/25/2012 on Yahoo! Finance).

Keeping rates low until 2014 is “good policy [only] if you believe the recovery is going to be very weak and weak globally,” says Gerald O’Driscoll, former vice president and economic adviser at the Dallas Fed and currently a senior fellow at the Cato Institute. “If they really think they can project weak growth that far out, then they’re saying…the U.S. economy is becoming like the Japanese, no growth for long period of time. That’s very pessimistic.”

Yes, this is exactly like the Japanese.  The Keynesian critics of living within your means like to point to the Japanese bond market.  They have no problem selling their bonds. Yet their debt is about 200% of GDP.  About twice the US debt (at about 100% of GDP).  But this debt had consequences.

The Bank of Japan made money cheap to borrow in the Eighties.  And people did.  Stock and real estate prices swelled into a great bubble.  Bringing on inflation.  So the Bank of Japan tapped the brakes.  And raised interest rates.  Causing a lot of that debt to go bad.  Causing a banking crisis.  Which led to a series of bailouts for banks and businesses.  Sound familiar?  Think Subprime Mortgage Crisis.

The great Japanese asset bubble deflated during the Nineties.  The Lost Decade.  And the Japanese have tried everything within their monetary powers to stimulate their economy.  Even kept interest rates at zero.  Just like the Americans are doing now.  It didn’t work for the Japanese.  And there’s little reason to believe it will work for the United States.


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