Che Guevara is the Left’s Favorite Marxist Hero
When you have nonsensical policies it can be difficult to advance them. When you have policies that haven’t worked whenever they’ve been tried it can be difficult to advance them. When you have policies that informed people reject it can be difficult to advance them. When you have policies that will fundamentally change the country while taking the federal government closer to a monarchy it can be difficult to advance them. Unless the masses are uninformed. Or scared.
Fear. It’s a good tool to advance bad policy. Especially with an uninformed people. When the antiestablishment hippies of the Sixties got tired of turning on, tuning in, dropping out and trying to overthrow the federal government through domestic terrorism (as groups like the Weather Underground tried) they changed tack. These old hippies gave up their violent revolutionary ways. Kept doing their drugs. And started overthrowing the country from the inside. By entering education.
If you’ve ever wondered how the nation started its turn left this is it. These hippies began teaching our kids. Filling their heads with revisionist history. Attacking capitalism. Lauding socialism. And communism. These people were, after all, the ones who started putting up posters of Che Guevara. The guy who when in Cuba wanted the Soviets to nuke the United States. A part of the Cuban Missile Crisis they don’t teach in our public schools. For Che Guevara is the Left’s favorite Marxist hero. Which is why today you see young and impressionable college students with posters of Che Guevara in their dorm rooms. Or wearing t-shirts with his image.
Volcanic Eruptions Cool the Planet while burning Coal Warms the Planet
These old hippies hate capitalism. So they teach our kids the evils of capitalism. And the goodness of the federal government. The very government they once tried to overthrow. Now that federal government can only do good. As long as liberal Democrats like them are in power. And they use the federal government to go after their sworn enemy. Capitalism. Which is why our kids come home from school scared to death about global warming. And grow up to be good liberals who hate capitalism. Because capitalists cause global warming. By putting profits before people. And before the planet.
On February 15, 2013, a large meteoroid exploded in the sky over Russia. Causing a lot of damage. Shattered a lot of windows. Set off a lot of car alarms. And injured some 1200 people. But it didn’t kill anyone. Because it exploded some 20-30 miles above the ground. Which was lucky for the people below. For the energy in this 10 metric ton meteoroid was equivalent to a small nuclear bomb. Had it landed intact in Moscow it may have destroyed that city. Events like this are rare. But a lot of meteoroids enter the earth’s atmosphere. Most burn up. But some pieces make it through to crash into the earth.
A large meteoroid impact may have caused the extinction of the dinosaurs. But so far human civilization has escaped. But it’s just been dumb luck. For there is a lot of space junk up there hurling its way all over the universe. Making a large meteoroid strike sometime in the future a very real possibility. Meteoroids that can take out cities like a nuclear bomb. Yet they don’t teach our kids this in school. The Left isn’t pressing for some space-based defense force that could land on a meteoroid to attach rockets to try and steer it away from the earth. Or even to detonate a nuclear device to try and push it off course. No. We hear nothing about this danger. Yet they scare our kids about man-made global warming. Teach them to hate coal. Even though burning coal puts the same stuff into the atmosphere as an erupting volcano. But volcanic eruptions cool the planet. While burning coal warms the planet.
Fear is Good, Fear is Right, Fear works
So the whole global warming debate appears to be more politics than science. But our impressionable kids hear this stuff and accept it as fact. While they ignore a real threat. Meteoroids. So why do they scare our kids about global warming but not about a meteoroid crashing into the planet? Because peddling fear about meteoroids doesn’t offer any political capital. Not like putting the fear of God into our kids that global warming is killing the planet. And forcing the polar bears to swim miles from shore because the Arctic is melting. This fear offers political capital they can use to further regulate businesses. And to attack capitalism. Because only government can help the polar bears by preventing businesses from destroying the planet with all of their man-made global warming.
To the Left fear is good. Fear is right. Fear works. Which is why they always turn to it whenever they are trying to pass bad policies that an informed people reject. As we see in the sequester debate. A modest decrease in the rate by which they will increase spending. The federal government will spend more this year than they did last year. Even with the sequester cuts. But they put the fear of God into the uninformed that these ‘cuts’ will unleash Armageddon. We’ll have no safe food to eat or clean water to drink. Cops, firefighters and teachers will lose their jobs en masse. Criminals will run free as prosecutors won’t be able to afford to bring them to justice. We’ll vacate our border because we won’t be able to pay our border patrol. People will suffer great delays at our airports because they will lay-off TSA agents and air traffic controllers. And we’ll have to release people from prison because we won’t be able to afford to incarcerate them anymore.
None of its true. But it sure sounds scary. Like it will be the end of the world. And to stop this all we have to do is raise taxes. Hmmm. Raise taxes? Or die in the fiery pits of Hell? Which one do you think the uninformed will choose? Our young adults graduating from high school. Those getting a liberal college education. Those who get their news from The Daily Show. Who are more interested in sex and drugs. Based on the 2012 election. Where they warned women that if they wanted continued access to birth control and abortion they had better vote Democrat. And, of course, Washington and Colorado decriminalized marijuana. So what are these people going to believe? Whatever the people who put the fear of God into them about man-made global warming want them to believe. And they will. Because fear is good. Fear is right. Fear works.
Tags: capitalism, Che Guevara, Coal, college students, Democrat, fear, fear is good, fear is right, fear works, federal government, Global Warming, hippies, Liberal Democrats, man-made global warming, Marxist, meteoroid, peddling fear, polar bears, political capital, public schools, raise taxes, scare, sequester, uninformed, uninformed people, volcano
We have spent much of our History trying to Tame the Awesome Power of Water
Water can be scary. And very powerful. Which helps with it being scary. We saw what happened when that storm surge hit the East Coast. It just swept everything in its path. For water has mass. Making it heavy. Just try holding a couple of buckets of water with your arms outstretched. You won’t be able to hold them up long. Now think about the weight of a few billion buckets. An amount no one could move. But there are few things this amount of water can’t move. Except maybe a levee. A floodwall. Or a dam.
Also making water scary is that you don’t know what is lurking beneath the surface. During periods of heavy rains storm sewers quickly fill to capacity. Water backs out onto streets. Flooding intersections. And basements. Streams and rivers rise above their flood stage. And overflow their banks. Water saturating the soil may wash it away from underneath. Creating large sink holes. That from the surface may look like a puddle of water. Water overflowing riverbanks can hide many dangers. Submerged debris that can entangle you. That have swift and dangerous currents flowing through them.
Rising water can get into areas where it doesn’t belong. It got into the subway tunnels in New York. Causing a lot of damage. It got into the basement electrical rooms at the Fukushima Daiichi nuclear power plant in Japan. Causing a lot of damage. Including a partial meltdown of the reactor core. A failed levee can flood a city. Like New Orleans. So untamed water can do a lot of damage. And we have spent much of our history trying to tame the awesome power of water.
Each Spring the Snows melt and the Rains come Swelling Rivers beyond their Flood Stage
Early cities rose on rivers. For rivers were our first highways. The river’s current turned water wheels to power our mills and factories. Provided irrigation for our farms. Etc. Rivers allowed cities to come to life. Which is why a lot of our cities today have rivers flowing through them. Yes, a river view is beautiful. And the recreational opportunities are plentiful. But they are not why we founded these cities on rivers. It was all the benefits the river provided. Things that allowed a civilization to grow. But it wasn’t all good.
Each spring the snows melted. And the rains came. Swelling rivers beyond their flood stage. Overflowing their banks. Bringing great damage to life along the rivers. Especially to the towns on its banks. So we did something with these rivers that were prone to such damaging flooding. And built a dam upstream. To control that flooding.
They would choose an appropriate location upstream. Some place where the river valley narrowed a bit. So they could build a dam across the valley. Once they did the water upstream of the dam rose into a lake or reservoir. Providing a source of drinking water. Irrigation water. Recreation. Or power generation with a hydroelectric dam. Very beneficial things. But all secondary to its main purpose. To eliminate that recurring flooding.
A Dam’s Sluice Gates are the Key to Flood Control
If you’ve ever seen a dam on a river you probably noticed some things. Turbulent water at the base of the dam on the downstream side. Warning signs and some sort of a barricade (such as a chain stretched across the river held up with floats) a hundred feet or so in front of the dam on the upstream side. Signs you would be wise to heed. For great danger lurks beneath the surface of the water. In that dam are underwater openings. That have moving gates to make these openings bigger or smaller. Sluice gates. And you don’t want to be anywhere near these gates whenever they’re open. For the weight of a few billion gallons of water creates a powerful force of water moving towards those gates and through the openings. If you ever thought of diving off a small dam don’t. You would be sucked quickly to these openings. If they are not opened enough for your body to fit through the force of the water would hold you against the openings until you drowned. If the opening is large enough the water will flush you through with great force and violence. Discharging you into the turbulent water on the downstream side of the dam.
These gates are the key to flood control. During the snowmelt runoff and heavy rains of spring we can close these gates to allow only a trickle of water flow. Maintaining a safe river level downstream. The excess snowmelt runoff and the rains will fill the lake or the reservoir upstream of the dam. After the rains stop they can open the gates a little more to bring down the level of the lake or reservoir. Without sending the river downstream above its flood stage. If the level rises too high behind the dam the water will enter a spillway and flow over/around/through the dam. Like an overflow in a sink. Allowing the water to rise only to a maximum level behind the dam before spilling over/around/through the dam. Joining that turbulent water on the downstream side. Which you want to avoid as much as the dangers on the upstream side of the dam.
We haven’t always been successful in controlling the awesome power of water. Some dams we’ve built have failed. Like the Teton Dam in Idaho. An earthen dam. Just upstream of Wilford. Built for flood control. To protect the towns and farmlands downstream of the dam. As it turned out, though, the Bureau of Reclamation did a poor job building the dam. And the rains were heavy that year. Raising the level behind the dam 3 feet a day instead of the designed 1 foot. Water started leaking through the dam. Saturating the soil making up the dam. The water rose rapidly. But before it could reach the spillway the dam gave way. Sending some 80 billion gallons of water rushing downstream. Wiping out Wilford. And destroying most of Sugar City. And Rexburg. Causing damage as far away as 30 miles downstream in Idaho Falls. Illustrating the awesome power of water. And the price we pay when we don’t give it the proper respect.
Tags: dam, downstream, flood control, flood stage, flooding, heavy rains, lake, rains, reservoir, rising water, river valley, riverbanks, rivers, sluice gates, snowmelt, snowmelt runoff, snows, spillway, turbulent water, upstream, water
Excessive Federal Taxes reduce Disposable Income which reduces New Economic Activity
The key to economic growth is disposable income. The more disposable income people have the more economic activity they will create. So the key to a healthy economy is maximizing disposable income. And we can do that in a few ways. First of all we need jobs. And we can create more jobs with fewer costly regulations. And lower taxes. If we make it less costly to hire people businesses will hire more people. Which they aren’t doing right now. Primarily because of Obamacare. Which is so costly to businesses that they’ve frozen new hiring. And are pushing some full time employees to part-time. As well as investing in capital equipment wherever they can. Replacing people with machines. Because machines don’t incur Obamacare costs, taxes or penalties.
For those lucky few who haven’t been replaced by machines they can earn some disposable income. Depending on their skill level. A low-skilled person who never graduated from high school cannot earn as much disposable income as a thoracic surgeon. So if you want stuff. And you want to stimulate the economy. Become a thoracic surgeon. Or something else that takes years of college and years of on the job training. And hundreds of thousands of dollars of student loan debt.
But earning a good income isn’t enough. Because from that income we must pay an enormous amount of taxes. Greatly reducing our disposable income. Some of the taxes we can see. Such as those itemized on our paycheck stubs. Federal and state income taxes. And Social Security and Medicare taxes. But there are a lot of taxes we don’t see. Such as excise taxes on the things we buy from gasoline to liquor to cigarettes. And then there are property taxes. Sales taxes. And the list goes on. All of which take a bite out of our disposable income. Siphoning away real economic activity over the years as the federal government added new taxes. And increased the tax rates of the old taxes.
The Federal Government came up with the Withholding Tax to Prevent an all out Tax Revolt
When the Founding Fathers ratified the Constitution there weren’t many taxes. Mostly custom duties and tariffs. Which was enough to fund the limited government they created. But ever since the Founding some in the federal government have been trying to destroy what the Founding Fathers created. And replace it with what they fought so long to get rid of. A very large government that reaches into all parts of our life. Like a monarchy. Where those in the federal government belong to a new aristocracy. Who are more equal than everyone else. And live a far, far better life. If you don’t believe this just check out property values around Washington DC.
With the American Civil War killing a generation of fathers a lot of boys grew up with over protective and doting mothers. When these boys came of age and entered politics they weren’t as manly as their father’s generation was. Because they grew up without fathers to teach them to hunt and fight. Instead, they grew up with mothers who taught them to be more nurturing. Giving us the progressive movement. Woodrow Wilson gave us a permanent federal income tax. And tried to expand the federal government to be more of a monarchy with a powerful executive that can govern against the will of Congress. And the people. After World War I we returned to normalcy. And Warren Harding and Calvin Coolidge gave us the Roaring Twenties. And the modern world. Then Herbert Hoover and other progressives caused the Great Depression. With a crisis too good to let go to waste FDR picked up where Woodrow Wilson left off. Exploding the size and reach of the federal government. And the great surge in federal taxes began. Over the years they added more and more. Such as these (see Table 2.1—RECEIPTS BY SOURCE: 1934–2017).
Some of these you are no doubt familiar with. The biggest bite is the individual income tax. Something most of us have received our W-2s for and have just prepared our federal income tax returns. Or are about to. Dreading it. Unless we’re getting a refund. Those who owe money will probably take their sweet time. As they hate writing a check to the federal government. Which is why the federal government came up with the withholding tax. For if people had to write a check for the full amount of their federal income taxes each year there would be an all out tax revolt. And probably a lot more imprisonment for people not paying their federal taxes. For no one has that kind of money sitting around. Which is why the government takes it from you before you can spend it yourself.
Excessive Federal Spending requires ever Higher Taxation and ever more Borrowing to Feed
The big debate in Washington now is the sequester. And the automatic cuts of the sequester. Which were proposed by President Obama. Which Congress wrote into a bill. And the president signed into law. In hopes that Republicans and Democrats would come together and find a way to reduce the record high deficit. The Republicans want to do the obvious. Cut the spending that caused the record deficit. Democrats want to do what they always want to do. Raise taxes. Saying that we don’t have a spending problem. That the four years of trillion dollar deficits isn’t because we’re spending too much. It’s because we’re not taxing enough to pay for that spending. That rich people aren’t paying their fair share. But that’s not what you see when you look at the numbers.
These taxes are identified in the above table. As government spending grew so did taxes. In particular personal income taxes which provide the majority of federal tax revenues. Which exploded after LBJ’s Great Society added a lot of new federal spending. And after President Nixon decoupled the dollar from gold in 1971. Unleashing inflation. Note that personal income taxes are greater than corporate income taxes. That’s because there are more people than corporations. For example, Siemens AG is an international corporation that employs about 360,000 people. Who all pay personal income taxes. After personal income taxes comes old-age and survivors insurance. Otherwise known as Social Security. And all of these taxes have continued to grow. Taking a bigger and bigger bite out of disposable incomes. Putting a drag on new economic activity. Note that the only falls in federal tax revenue were due to two Democrat-caused recessions. Bill Clinton’s dot-com bubble burst causing a bad recession in 2000. And his subprime mortgage lending bubble he started with his Policy Statement on Discrimination in Lending burst causing a bad recession in 2007. Apart from these, though, the pattern has been more spending. Not less. Which would suggest that we do have a spending problem.
Also included on this chart is the federal debt. Note how it spiked up during World War II. Then settled down at a constant rate for about 30 years. Until LBJ’s Great Society spending increased federal spending. But these massive new taxes weren’t enough. For that’s when the big deficits started. Adding on to a growing federal debt. With the only decline in this growth coming during President Clinton’s presidency. President Clinton’s dot-com boom (before the bubble burst), the peace dividend from President Reagan winning the Cold War, the Asian financial crisis and Japan’s Lost Decade all helped the American economy shower the treasury with cash. Putting the nation into a surplus for a year or so. But that didn’t last. As federal spending continued to outpace tax revenue. Culminating with President Obama’s trillion dollar deficits. With federal tax revenue at the highest since President Bush’s record high just before Clinton’s subprime mortgage bubble burst into the subprime mortgage crisis. And the Great Recession.
So yes, Virginia, we have a spending problem. A spending that requires ever higher taxation and ever more borrowing to feed. Taking an ever bigger chunk out of disposable incomes. Leaving less and less for new economic growth. Explaining why the economy has never recovered from the Great Recession. For President Obama’s policies only increase taxes and the cost of doing business. And do nothing to create disposable income.
Tags: Bill Clinton, bubble, debt, deficit, disposable income, excise taxes, FDR, federal debt, federal government, federal spending, Founding Fathers, Great Recession, Great Society, income, income taxes, jobs, LBJ, monarchy, Obamacare, personal income taxes, Progressive, recession, regulations, sequester, Social Security, spending, spending problem, subprime mortgage, tax revenue, tax revolt, taxes, withholding tax, Woodrow Wilson
With less Disposable Income there will be less New Economic Activity Created
The key to economic growth is disposable income. For when we live from paycheck to paycheck economic growth is flat. It’s when we have disposable income that we can spend money beyond our basic needs. Such as on a vacation. A new car. A television. New windows, carpeting, appliances, furniture, etc. Movies, ball games, dinners, the theater, etc. New clothes, jewelry, shoes, accessories, etc. Tennis rackets, skis, baseball gloves, hiking boots, fishing gear, etc. Smart phones, MP3 players, iPads, laptops, etc. Jet skis, boats, motorcycles, mountain bikes, etc. Radio-controlled cars/helicopters/planes, Game Boys, Xboxes, Wiis, PlayStations, multiplayer role-playing computer games, etc.
Buying these things creates a lot of economic activity. But we can’t buy any of these things unless we have disposable income. So the only way to increase economic activity is to increase disposable income. Which means there is a direct relationship between GDP and disposable income.
There’s been a lot of talk about real incomes being flat. Even falling during the Obama presidency. Which is bad. For if median incomes are falling people will have less disposable income. And with less disposable income they will be buying less of all those things that create new economic activity. The things we enjoy. That make our lives more fun. More enjoyable. And less miserable. Those things that increase our standard of living. And the quality of life. So a flat and falling median income reduces our standard of living. And our quality of life. As we live from paycheck to paycheck. Making barely enough to meet our living expenses. And sometimes not even making enough for that. Having to turn to government assistance to make up the difference.
We add Disposable Income and Discounted Government Spending to get the Net Add to GDP
The key to disposable income and GDP growth is jobs. And the more jobs the better. So job creation is very important. Which means we need a business-friendly environment. With a minimum of costly regulations. And low taxes. To encourage employers to hire more people. So more people have jobs. Those who do use their income to meet their living expenses. And use their disposable income to create new economic activity. The more disposable income they have the more new economic activity they can create. So what’s the best way to increase their disposable income? The same way we encourage employers to hire more people. Low taxes. We can illustrate this in the following table which is based on assumptions and approximations.
The effective tax rate a person pays includes all taxes he or she will pay. Property tax, sales tax, gas tax, telecommunication tax, liquor tax, cigarette tax, import tariff, dog license tax, fishing license tax, luxury tax, watercraft registration tax, vehicle sales tax, state income tax, federal income tax, Social Security tax, Medicare tax, capital gains tax, etc. Median income and living expenses are constants. We subtract taxes from median income to get net income. Subtracting living expenses from net income gives us disposable income. We then calculate these numbers for additional effective tax rates that are multiples of 4%.
We add disposable income and stimulus together to get the net add to GDP. What we call ‘stimulus’ is a percentage of all those taxes reentering the economy through government spending. In our example 80% of those taxes find their way back into the economy. While 20% is lost through waste and inefficiency. This stimulus can pay for a government worker, a government contractor or a direct government benefit that helps people meet their living expenses. This redistributed income is money that the income earner would have spent had it not been taxed away. Instead, someone else will spend it. But not as efficiently. As it must first pass through an inefficient government bureaucracy.
Giving People Benefits does not Replace Disposable Income
We extend the table out to an effective tax rate of 52% and graph the results. We see that as the effective tax rate increases disposable income falls. As does GDP growth. Showing that increasing taxation reduces GDP. That said, average GDP growth has been approximately 3% during the latter half of the 20th Century. Despite increasing taxation reducing GDP. So how do we reconcile a falling GDP and a 3% GDP growth? With aggressive increases in productivity. And investments in capital equipment. Allowing business to produce more with less. Resulting in a rising real GDP growth rate. As shown in the following graph.
In order to maintain a 3% growth rate in GDP we need a rising real GDP growth rate (in one America doing very well despite government) to offset the falling discounted GDP growth rate due to falling disposable income (in another America not doing well because of government). When we add the real and the discounted GDP growth rates together we get the constant 3% of average GDP growth. Which is why businesses have never been more profitable despite stagnant economic growth during President Obama’s time in office. They’re doing well because they’re producing more with less by exchanging people for new capital equipment. Hence the higher profitability along with chronic high unemployment. With more unemployed workers than available jobs there is a downward pressure on median income. That combined with higher personal effective taxes has greatly reduced disposable income. And new economic growth. Which subtracts a lot away from that real GDP growth.
Giving people benefits does not replace disposable income. For government assistance helps people meet basic living expenses. While having a job offers the ability to earn disposable income. Which is key for new economic growth. If we bring the effective tax rate down the discounted GDP growth graph will flatten out. As this happens the gains in productivity would remain. Leaving real GDP growth unchanged. With real GDP growth unchanged and discounted GDP growth decreasing the average annual GDP growth would therefore increase. And approach real GDP growth. With double digit GDP growth tax revenues would soar even at lower effective tax rates. Requiring less borrowing. Which would give us smaller deficits. While reducing the growth in the federal debt. Perhaps even reducing the debt. Solving all of our financial problems. By simply cutting taxes. And the spending those taxes fund.
Tags: capital equipment, disposable income, economic growth, effective tax rate, GDP, GDP growth, GDP growth rate, government assistance, government spending, increasing taxation, inefficient government bureaucracy, job creation, jobs, living expenses, median income, net income, new economic activity, producing more with less, productivity, quality of life, real GDP growth, real incomes, redistributed income, regulations, standard of living, stimulus, taxes, unemployment
Week in Review
The first time I skied on a mountain I was pretty nervous. I had only just begun to ski. I was still snow plowing my way down the slopes. But my friends were going to a great ski resort. I didn’t want to miss out on a good time. When we arrived and bought our lift tickets there was a newspaper clipping taped to the window. Earlier that week a girl fell out of a chairlift and died. Making me even more nervous.
It was cold. Very cold. The sun was melting the snow a little in the day. And it froze at night. Except when we got there. The clouds never broke when we were there. So the slopes were sheer hard ice all day long. As I snow-plowed back and forth across the mountain I slid sideways down the fall line. As I stopped to rest an advanced skier stopped by me. He remarked how bad the conditions were. The slopes were littered with death cookies. Frozen chunks of ice that didn’t move when a ski hit them. Making me even more nervous. On the next day the winds were so bad they closed part of the mountain. Because the mid-station served that side of the mountain I couldn’t get off there. Something I didn’t know until after getting on the lift. I had to take the lift to the top of the mountain. Where you could take some runs down that kept you off the closed side of the mountain. Making for a very long and tiring snow-plow down. Suffering the early stages of frostbite, aching muscles and some bruising from some falls and collisions I left the mountain that day and made it home alive. Despite a few close calls.
When you’re young you do stupid things. And take risks. Like skiing on a mountain when you’re barely a beginner. Skiing is dangerous. People die skiing every year. Including kids (see First picture of tragic 13-year-old schoolgirl who died in ski lift accident on school trip to Italy as friends pay tribute to ‘bubbly and popular’ teenager by Hannah Roberts posted 2/24/2013 on the Daily Mail).
Tragedy had struck on the first lift of the day, moments after the teenager had put on her skis.
According to newly-emerged details, the schoolgirl slid from the chair after accidentally sitting in the wrong seat of the four-man chairlift.
Investigators told the La Stampa newspaper: ‘She didn’t end up sitting in her assigned seat, perhaps as a joke or because she lost her balance. In any case she ended up sitting in the arms of a school friend.
‘Because of this the safety bar didnt go all the way down, so at the first tremour of the lift, she slid and fell’.
The schoolgirl’s injuries were compounded by the fact that she fell not onto fresh snow but onto a stream in which there lay several rocks, it has now emerged.
A terrible tragedy. What makes it so tragic is that it seemed so harmless. Just goofing around on a chairlift. But how quickly things changed from silly fun to horrific tragedy. Anyone who has ever skied probably did a lot of stupid things that only dumb luck kept them from hurting themselves. Or killing themselves. According to the National Ski Areas Association about 42 people die on average skiing and snowboarding each year in the U.S. With another 45 suffering paralysis, serious head and other serious injuries. But we don’t hear a lot about this horrific toll of death and suffering.
According to the Washington Post approximately 84 people died in mass shootings in the U.S. in 2012. Including the great tragedy in the theater in Aurora, Colorado. And the great tragedy at the school in Newtown, Connecticut. The media does not stop talking about these 84 deaths. And neither do the liberal Democrats pushing for gun control. Who want nothing less than a total ban on guns. Even if it saves only one life. Yet not one of them is calling for a total ban on skiing and snowboarding. Which will save more than one life. In fact, we know the number of lives such a ban would save. It would save about 42 people on average a year. (As well as preventing another 45 from suffering paralysis, serious head and other serious injuries.) Which is more than one. Yet there is no such push for a skiing and snowboarding ban. Why? Young people do most of the skiing and snowboarding. And liberal Democrats don’t want to piss them off by taking away something the vast majority of them enjoy and do responsibly. While giving no such courtesy to gun owners. The vast majority of which are responsible.
Why the double standard? If they don’t care about the loss of life on the slopes then they can’t care about the loss of life from these mass shootings. Meaning that they want to take away those guns for some other reason.
Tags: accident, chairlift, guns, loss of life, mass shootings, mountain, ski, skied, skiing, slopes, snowboarding
Week in Review
The UK’s National Health Service (NHS) has been suffering from the costs of an aging population. People are living longer into retirement thanks to extensive medical care. While fewer people are entering the workforce to pay the taxes that pay for that extensive medical care. Resulting in longer wait times. Shortages of doctors and nurses. Rationing. And the closing of hospitals. Or transferring specialties to centrally located hospitals to achieve some economies of scale (see Scottish flu victim airlifted to Leicester hospital posted 2/24/2013 on BBC News South Scotland).
A Scottish woman is in intensive care at a specialist hospital in Leicester after contracting a suspected form of swine flu.
Jennifer Scott was transferred by helicopter from Dumfries and Galloway Royal Infirmary after she was diagnosed with a serious “flu-type illness”…
A spokeswoman for University Hospitals of Leicester NHS Trust said the patient had been flown to Glenfield as it was one of a limited number of hospitals in the UK that had specialist equipment required for her case.
Note that they transferred this Scottish woman to an English hospital. Where one of the limited hospitals with specialist equipment was located. But this wasn’t just a stone’s throw over Hadrian’s Wall. Dumfries, Scotland, and Leicester, England, are about 250 miles apart. Boston and New York City are just a little closer to each other. Can you imagine a patient coming down with swine flu in Boston having to be airlifted to New York City? To a hospital with the appropriate specialist equipment? Of course not. But, then again, you haven’t lived under the fully implemented Obamacare yet.
There’s a reason why they had to airlift this woman some 250 miles. The cost of national health care just doesn’t permit building hospitals like Glenfield Hospital in all of their cities. The U.S. has an aging population, too. And will follow the NHS example to cut costs under Obamacare. Where there will be an ongoing effort to do more with less. Which will lead to moving specialties to fewer hospitals. For what is a few hours of travel compared to the cost savings?
Tags: aging population, Dumfries, England, Glenfield, hospitals, Leicester, National health care, National Health Service, NHS, Obamacare, Scotland, swine flu, UK
Week in Review
China created a booming economy thanks to a healthy export market. In part because of their cheap labor. An in part by keeping their currency weak. For when you buy goods from China you first have to exchange your currency for theirs. If your currency is stronger than theirs is you will get a lot more of theirs in exchange for yours. Allowing you to buy a lot more Chinese goods with your stronger currency. This is why China likes to have a weak currency. And takes actions to keep it artificially weak. Something her trading partners don’t like. For their weaker currency tends to make the net flow of goods in international trade with China flowing from China to everyone else. Thus giving China a healthy export market. At the expense of everyone else’s export market.
But China is a developing economy. Things change when you become an advanced economy. Because you don’t have impoverished masses filling your factories manufacturing goods for export. You have a thriving middle class. With a high standard of living. With good jobs giving them disposable income. And few of them work in the export economy. So despite all the talk about unfair trade practices of China most people in an advanced economy don’t worry that much about trade deficits. For they’re buying a lot of imported goods. From smartphones to coffee beans. And a weak currency makes these items more expensive.
So there are two sides to the value of your currency. If you have impoverished masses filling factories to build export goods a weak currency is good. It lets the state sell more of those export goods. In an export-dominated economy. And provides a lot of low-paid factory jobs. If you have a thriving middle class a strong currency is good. For it lets the people buy a lot of stuff. Creating a lot of better paying non-factory jobs. In a non-export-dominated economy. Basically the difference between free market capitalism. And mercantilism (see Is the World on the Brink of a Currency War? by Michael Sivy posted 2/21/2013 on Time).
Currency wars – and trade wars generally – have their origins in a 17th and 18th century economic theory known as mercantilism. The idea was that a country’s wealth comes from selling more than it buys. A colonial empire could achieve this positive balance of trade by acquiring cheap raw materials from its colonies and then ensuring that it exported more finished goods than it imported. This was usually accomplished with tariffs that made imports very expensive.
Such an approach couldn’t work in the modern world. Countries don’t get cheap raw materials from colonies anymore. They have to buy them – especially oil – on the open market. So while currency devaluation makes exports cheaper for foreign buyers, it also makes essential imports more expensive. For Europe in particular, which imports so much of its energy, devaluation isn’t necessarily a plus…
The Federal Reserve’s quantitative easing – buying bonds to swell the money supply – is aimed principally at stimulating domestic demand. European advocates of a cheaper euro currency, meanwhile, are hoping to make national debt easier to finance, not trying to pump up exports. In fact, the continent’s greatest exporter, Germany, is the country least amenable to currency devaluation…
So forget all the talk of a currency war. What’s going on has nothing to do with trade and everything to do with debt and growth and inflation. If the global economy is in danger of reliving the past, it will not be a repeat of the 1930s. Rather, it will be a repeat of the 1970s, when the Federal Reserve expanded the money supply to offset the economic slowdown caused by the oil crisis – and ended up encouraging double-digit inflation.
The double-digit inflation of the Seventies really devalued the currency. Raised prices. Greatly limiting the amount of stuff people could buy. Even though printing money then didn’t work these nations believe it will work now. Because it will make their exports cheaper for foreigners to buy. Despite making everything more expensive inside their own country.
But there is another reason they love to print money. It lets them spend more. And it makes old debt easier to pay off. We call it monetizing the debt. For example, if a nation has a GDP of $1 million and a debt of $500,000 that debt is huge. It’s 50% of GDP. But if we turn on the printing presses and devalue the currency to one tenth of its original value that GDP is now $10 million ($1 million divided by 1/10). Making that outstanding debt only 5% of GDP. And a whole lot easier to repay. But what is one person’s debt is another person’s retirement savings. So not only does inflation increase prices it destroys our retirement savings. And all this just so we can boost the small sliver of our economy we call exports.
If this is so bad on so many levels why do governments print money then? For one simple reason. To get people to vote for them. Because all the people see is the free stuff the politicians are giving them. The damage it causes comes later. And they can always blame that on Republicans. Who refuse to raise tax rates on rich people to make them pay their fair share.
Tags: balance of trade, capitalism, cheap labor, China, currency, currency devaluation, currency wars, debt, double digit inflation, exchange, export economy, export market, free-market capitalism, impoverished masses, increase prices, inflation, mercantilism, middle class, prices, retirement savings, weak currency
Week in Review
The greatest cost of all airlines is fuel. Airplanes that burn less fuel make airlines more money. And help airlines go from losing money to making a profit. Aircraft are complex machines. Full of high-tech stuff. But one of the best ways to burn less fuel is not all that high-tech. You just make planes lighter. One of the ways of doing that, though, is very high-tech. The new lithium-ion battery. Which packs a whole lot of energy in a tiny package. Allowing Boeing to make their Dreamliner just a little bit lighter. Allowing it to burn less fuel (see Japan Finds Swelling in Second Boeing 787 Battery by Mari Saito, REUTERS, posted 2/19/2013 on the New York Times).
Cells in a second lithium-ion battery on a Boeing Co 787 Dreamliner forced to make an emergency landing in Japan last month showed slight swelling, a Japan Transport Safety Board (JTSB) official said on Tuesday.
The jet, flown by All Nippon Airways Co, was forced to make the landing after its main battery failed…
The U.S. Federal Aviation Authority grounded all 50 Boeing Dreamliners in commercial service on January 16 after the incidents with the two Japanese owned 787 jets.
The groundings have cost airlines tens of millions of dollars, with no solution yet in sight.
Boeing rival Airbus said last week it had abandoned plans to use lithium-ion batteries in its next passenger jet, the A350, in favor of traditional nickel-cadmium batteries.
Lighter and more powerful than conventional batteries, lithium-ion power packs have been in consumer products such as phones and laptops for years but are relatively new in industrial applications, including back-up batteries for electrical systems in jets.
As it turns out it can be a little risky packing a whole lot of energy into tiny packages. It may make batteries lighter. But it’s like putting a tiger in a box. If it isn’t a good box it’s not going to restrain that tiger. And that’s what sort of has been happening with lithium-ion batteries. People who bought discount replacement cell phone batteries saw those cheap knockoffs burst into flames.
Lithium-ion batteries have a tendency to burst into flames if they are overcharged. This is the risk of using concentrated energy. It’s why they grounded the entire fleet of Boeing Dreamliners. And it’s why the all-electric car is not practical. The one battery that gives it a useful range can be a little temperamental. Like a tiger in a box.
Tags: aircraft, airlines, airplanes, all-electric car, batteries, Boeing, Dreamliner, lithium ion battery
Week in Review
It’s not been a good year for Detroit. Well, it’s been more than a year. It’s been a few bad years. Actually, it’s been a great many bad years. Since 1970. When Ford Motor Company Chairman Henry Ford II joined with other business leaders to form Detroit Renaissance. To revitalize the City of Detroit. And some 42 years later, the City of Detroit is still struggling (see Detroit’s Misery Can Be Its Turning Point by Micheline Maynard posted 2/23/2013 on Forbes).
Detroit boosters were dealt a one-two blow this week by the kind of outsiders they have come to resent.
First, a state review panel declared that a financial emergency existed in the city, making it likely that Michigan Gov. Rick Snyder will appoint an emergency financial manager with sweeping powers.
Then, Forbes weighed in by declaring Detroit the nation’s most miserable city, based on a series of criteria that include crime, unemployment, foreclosures and home value…
Although General Motors is based in Detroit, and Chrysler recently opened an office there, the automobile industry is not going to provide the vast numbers of jobs the city needs to become solvent.
And there lies the problem for Detroit. A city that grew big and rich off of the automobile industry saw a steady exodus and a declining tax base when the automobile industry declined. Live by the automobile. Die by the automobile. And it’s just not Detroit. A couple of other Michigan cities broke into the top 10 of Forbes’ America’s Most Miserable Cities 2013.
#7 Warren, Mich.
Troy and Farmington Hills are part of the government-defined Warren metro division. Like Detroit, the Warren metro has seen home prices collapse–off 53% the past five years.
#2 Flint, Mich.
Flint has been demolishing homes as the city shrinks with residents leaving in search of jobs. Only Detroit has a higher net out-migration rate. Flint ranks third worst for violent crime, behind Detroit and Memphis.
#1 Detroit, Mich.
Violent crime in the Detroit metro was down 5% in 2011, but it remains the highest in the country with 1,052 violent crimes per 100,000 people, according to the FBI. Home prices were off 35% the past 3 years, which is the biggest drop in the U.S.
If you seek a pleasant peninsula* you’d do better looking for one where the UAW isn’t dominant. Perhaps Florida. For the UAW is a city killer based on these Michigan cities. (*The official state motto of Michigan is “If you seek a pleasant peninsula, look about you.”)
The Big Three dominated these cities. Where fat pay and benefit packages were passed on to consumers in overpriced vehicles. The Big Three’s monopoly on car sales allowed them to make fat profits. And pay enormous amounts of taxes to the cities that had the factories that assembled their cars. City coffers were so flush with cash city governments grew. And city workers enjoyed fat pay and benefit packages. This was the high water mark of the UAW. Just after public sector unions had joined them on the gravy train. But then something happened that devastated the UAW. Consumers got choice. They no longer had to buy overpriced ‘rust buckets’ the Big Three was putting out during the Seventies. For the Japanese gave them choice.
And so began the great decline of the Big Three. Quality and value did them in. It’s what the people wanted. While the UAW wanted consumers to pay more and get less. So they could continue to enjoy their fat pay and benefit packages. As the jobs went away so do did the taxes. The cities bloated with all those government workers with their fat pay and benefit packages tried to maintain the size of their governments even while the tax base was declining. Reducing other government services as they had little money left over after paying those fat pay and benefit packages.
With fewer and fewer jobs available people left these cities. Empty houses dotted the horizon. And housing prices fell. With the tax base continuing to decline. Poverty rates rose. As did city services for the impoverished. Leaving even less for other city services. Causing a further exodus from the city. Urban blight followed. As did crime. Causing a further decline in property values.
Low interest rates helped boost housing prices. For awhile. President Clinton’s Policy Statement on Discrimination in Lending kicked off subprime lending in earnest as lenders bowed to the Clinton Justice Department to put more low-income and minorities into homes they couldn’t afford. Creating a huge housing bubble. Built on easy credit. Artificially low interest rates. And the adjustable rate mortgage (ARM). When rates went up all those low-income and minorities who bought houses they couldn’t afford defaulted on their higher mortgage payments. Creating the subprime mortgage crisis. Giving us the Great Recession. Creating a flood of foreclosures. A free fall in housing prices. And more of the same that helped put those three Michigan cities into the top ten of Forbes’ America’s Most Miserable Cities 2013.
Michigan recently opted to become a Right-to-Work state. Greatly angering the UAW and those public sector unions. But it may be just what Michigan needs to reverse the great decline caused by the UAW and the public sector unions that devastated some of Michigan’s greatest cities. One thing for sure it can’t get any worse. Not when being a union state for so long secured three places in the top ten of Forbes’ America’s Most Miserable Cities 2013.
Tags: automobile, automobile industry, Big Three, choice, city of Detroit, city workers, declining tax base, Detroit, easy credit, fat pay and benefit packages, flint, foreclosure, house prices, housing bubble, housing prices, If you seek a pleasant peninsula, interest rates, jobs, Michigan, most miserable city, property values, subprime, tax base, taxes, UAW, Warren
Week in Review
The American Left loves Hugo Chavez. Because he is an anti-capitalist socialist. In Venezuela they put people before profits. And the Left loves that. For it is only under socialism where there is true equality. Where everyone is equal. Rich and poor. Government official and descamisado. And everyone gets the best of everything. Something the America Left is striving for in the United States. So American can be as just and as fair as Venezuela (see Hugo Chavez Returns Home After Cancer Surgery posted 2/18/2013 on Sky News).
President Hugo Chavez has returned home to Venezuela after more than two months of medical treatment following cancer surgery.
Mr Chavez’s return from Cuba was announced in a series of messages on his Twitter account…
The 58-year-old, who has been in power for more than 14 years, was first diagnosed with cancer in 2011…
Mr Maduro said Mr Chavez will continue his treatment at the Carlos Arvelo Military Hospital in Caracas.
Of course, Hugo Chavez is more equal than everyone else. When he gets cancer he goes to the finest health care available in the socialist world. Cuba. While the ordinary Venezuelan must suffer the Venezuelan health care system. Which isn’t very good when it comes to treating cancer. For Hugo Chavez didn’t get treated in Venezuela.
Note that Hugo Chavez has been making Venezuela a better place for 14 years. A more just place. And a more fair place. Something the American Left applauds. Because ordinary Venezuelans are better off than ordinary Americans. For ordinary Venezuelans are pampered with cradle to the grave socialism. Of course, for some, the grave comes a lot sooner than some would want. Why? Because after making Venezuela a better place for 14 years he still hasn’t built a decent hospital in the country. And you know the Venezuelan health care system for the people is bad when he goes to a military hospital for his follow-up care. For in the United States the better hospitals are not on military bases. There in our cities. Where they are available to everyone. Unlike the ordinary Venezuelan pampered with cradle to the grave socialism.
The American Left can bad-mouth the American health care system all they want and laud Hugo Chavez till the cows come home but not one of them will leave the U.S. to get their health care needs in that Socialist utopia. Venezuela. Even if Hugo Chavez lets them use the military hospital in Caracas. And given the choice the ordinary Venezuelan would probably choose the American health care system over their own. And probably over the Cuban health care system as well. For when it comes to socialist utopias they’re not very utopian.
Tags: anti-capitalist socialist, cancer, cradle to the grave socialism, cradle-to-the-grave, Cuba, equality, Health Care, hospital, Hugo Chavez, ordinary Venezuelans, Socialist Utopia, Venezuela
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