Showing posts from March, 2013

Stockman's End Of World Scenario

David A. Stockman is a former Republican congressman from Michigan, President Ronald Reagan’s budget director from 1981 to 1985 and the author, most recently, of “ The Great Deformation: The Corruption of Capitalism in America .” has an editorial in the April 1, 2013 issue of the New York Times concluding that our economy is about to collapse. It is worth reading. I do not agree with him, although action is needed now, and here are some of my thoughts. 1. We were at a near depression in 2008 and are still crippled by chronic unemployment. Congress refuses to do anything about this and therefore the only tools left to combat this near depression are controlled by the Fed. 2. Our debt problem is getting closer to being solved with both Congress and Senate finally passing budgets that need to be reconciled. We can control our debt in an orderly fashion over a 15-20 year period. 3. Stockman mentions little about the larger threat of emerging middle classes in the world including Chi

Today's Education

“Today, because knowledge is available on every Internet-connected device, what you know matters far less than what you can do with what you know. The capacity to innovate — the ability to solve problems creatively or bring new possibilities to life — and skills like critical thinking, communication and collaboration are far more important than academic knowledge." Creating Innovators: The Making of Young People Who Will Change the World, Tony Wagner, Harvard Education Specialist

Gay Marriage

"This is not to begrudge anyone their faith — whatever gets you through the night, brothers and sisters. Rather, it is to say that you should be free to have your faith govern your life but not to extend it to the governance of others’ lives." History In Real Time , New York Times, March 28, 2013 The problem is created if you are convinced as a Christian it is your duty to protect against attacks against your religious beliefs. If God intended only a man and women should marry you feel compelled to oppose any decision going against what God intended. Most of us believe our religious beliefs trump secular laws. What we are experiencing relative to gay rights and marriage is the same thing some Muslims are going through relative to Christians. If they believe all Christians are infidels and need to be killed, no secular government is going to change their mind. I am leaning in favor of allowing gays to marry; however, perhaps I am going against some Catholic teachings an

Education: Dumb And Dumber

One of the biggest tragedies of this country is our politicians, and many of our citizens, look at education as an expense rather than an investment. We think of long range planning covering an election cycle. Countries like China think out 50 or 100 years. The most important investment we can make for the future of our families and our country is education. By 2030 China will have graduated 200,000,000 college graduates, which is more than our total work force. At the same time our defense budget is 5 times the size of China and is equal to the next 13 largest defense budget countries in the world. Isn't there something wrong with this? Investing in education will not only increase our GDP but will also decrease expenditures we make to help the impoverished and fight crime. DUMB!!

Cyprus and Capitalism

It may be time to rethink economic theory. Historically economics was taught with a national perspective and over time it was applied globally. With the advent of fast global transportation and computerization do the old rules apply anymore? As capitalists should we be in favor of letting the wealth of our citizens flow wherever it finds the greatest return even at the expense of our society? An economic system is created to serve society; society is not created to serve an economic system. Technology today allows capital to flow freely and instantly all over the world. The Cyprus crisis raises the question whether capitalism works at a national level, but not at global level. Capitalism dictates that money flows freely to wherever it can obtain the greatest financial return, even if it means across borders. If somebody or some corporation earns its money within its own political borders should it be allowed to use that money outside of its political borders to maximize its weal

Dr. Carson For President?

If we learned anything from our current President it is that experience matters. Also, success in one field does not guarantee success in another. Having the skill to perform brain surgery does not guarantee one will be a great President. Hindsight says we made a mistake in not electing Hillary Clinton in 2008. Obama just did not have enough political and managerial experience to run the country. The same is true of the surgeon. In one of Dr. Carson's speeches I heard him say jokingly, "Politics is not brain surgery". He is right, just like brain surgery is not professional football. Dr. Carson is obviously very intelligent. The one thing we learned from Obama is intelligence is not a substitute for experience. Both are needed to be President. In this most recent election, Obama had the experience.

Frustrated Republican Base

Last election the Republicans went against one of the laws of science; for every action there is a reaction. When the GOP wooed members of the Tea Party, members of the more moderate party wing became disenchanted. The party gained far right conservatives and lost much of their moderate base. Moderates felt alienated as the Tea Party and other far right contingents became more vocal and prominent. The seeds of this disappointment began in 2008 as a desperate presidential candidate, John McCain, selected Sarah Palin as his running mate. It was obvious she was not qualified as McCain kept her in hiding for over a month after her nomination. Over this past week  the Republicans did a good job of identifying why they lost so badly in 2012. In 1858 Abraham Lincoln made the following statement referring to slavery, "A house divided against itself cannot stand".  This is also true of a political party.  A party needs core values and therefore if they are to be successful  they

China and Debt

The war that matters is the one with China. Economists are the teachers and right now the Keynesians are not doing as well as they should because their messengers are failing to deliver the message to the public and congress. The President and Senate are the blame for this.  For four years they have repeatedly told the public what they did not want, European style austerity; however they have not succulency said  they are seeking a plan that gets our budget under control over a 15 to 20 year time period and up front deliver programs that create jobs and puts us in a position to better compete in the future. This plan would spur growth and control our debt over a time period that does no harm to our future. Presently we are in a game of we qi with China over the future world economy and we are losing. In his book, The Art of War, Sun TZU, the Chinese philosopher advises his commanders to induce his opponent into accomplishing the commander's own aims or force him into a po

Weed Out Debt Scolds

We need to implement a plan that reflects our economic reality. The plan needs to incorporate presently investing in infrastructure, research and development and gaining control over our long-term debt problem in the future. The deficit scolds are out there and they are winning the argument for austerity. Paul Krugman, who coined the phrase "Debt Scolds", and his fellow economists cannot sell the idea of investing now by themselves.The administration needs to step up and play a bigger role in this debate. All of the Presidents time is focused on horse trading with the debt scold followers instead of challenging their intellectual positions. It is as if he is acknowledging the righteousness of their arguments and pleading with them to be merciful. The result of this tactic will be not whether the scolds win; but rather how much they win and how much damage they do to the economy. It is late in the negotiations, but the President needs to change his approach from one of tr

Climate Change And Competition

The Keystone Pipeline is raising the issue once again of climate change and the environment  There is a balance that needs to be taken into account when addressing climate change. We occupy a small part of this planet and we cannot lick the climate challenge by ourselves. The issue needs to be addressed on the world stage. As an advanced country, it is easy for us to talk about doing something concerning CO². However, as places like China, India, Southern Africa, Central and South America, who are concerned about providing the basic necessities to their people, increase their usage of environmentally bad fuels, the result will put us at a significant competitive disadvantage directly hurting our "standard" of living. A partial answer is to increase funding for alternative energy research so the switch to environmentally friendly fuels is not only good for the planet but also economically prudent. That is why the carbon tax, used for energy research, should be implement

Stupid Investment Policy of GOP

Sometimes I think the G.O.P. does not realize in order for this country to compete in the global economy of the mid 21st century we will need to utilize every resource available to fend off the relative economic rise of countries like China, India, Brazil, Russia and even Mexico. We are not going to win this competition by squandering resources. The biggest untapped resource being wasted is the millions of citizens living at or near poverty that today are most worried about living day to day. The Republicans have no problem with giving subsidies to oil companies to keep drilling for oil so it will be inexpensive to fill up their tank tomorrow. We recognize that some oil wells come up dry, but that is part of the cost of doing business That same Republican rants about providing food stamps to our greatest resource, our citizens, so they can get past thinking about feeding their family and begin to invest in their families future.That same Republican is against providing funds f

Health Care And Free Markets

Nobel laureate George J. Stigler discussed how regulation was “...designed and operated primarily for...” the benefit of the industries being regulated. and as a result could use the regulation for their advantage. Stigler's conclusion was  “Every industry should be either effectively competitive or socialized.” Health care is one of the industries where free markets do not work. Health care is an industry where the receiver of services, the patient, does not directly pay the provider, the doctor, for services rendered. A third party, an insurance company,  pays for the service and therefore the consumer is not as vigilant as he normally is when making a buying decision . The patient does not aggressively shop for the best care at the most affordable price in the market place because no money is coming directly from his pocket.. A trickle down affect of the disconnect between who is receiving the service and who is paying for it also negatively affects  the cost of drugs and o

Corruption of Obama

Organizing For Action, a new non-profit "social welfare" group, is a direct descendant of Organize For America, President Obama's campaign organization for 2008 and 2012. The difference is the new organization has no limitations on who can donate money and how much they can give. It is their hope that at least half the money raised will be from contributors of $500,000 or more. Some will say Obama can no longer claim to be an innocent virgin and in fact may be a prostitute. I agree! The individuals running the organization will be the familiar names of Obama's campaign team; Jim Messina, Obama's campaign manager, David Plouffe and Joe Carson. i suspect that a major difference of how the two organizations will operate is I will not be receiving a daily email asking for a $5 donation like I did from Organize For America. Our government in Washington does not work and the principle cause of this ineptness is money. Now this outsider, President Obama, has become

Failings of Keynesians

The unwillingness to act, stimulate now by investing in infrastructure, education, research and development, while developing a long term plan to get our debt problem under control, has less to do with economics than communication. Our prime communicator, the President, has failed on this issue. Further, Keynesian economists, those who believe in a stimulus now and a long term debt reduction plan, have been unable to gain credibility on the need to stimulate because they spend too little time acknowledging the need to harness the expansion of debt in outlying years. One loses credibility If the general public and those in Congress "feel" we must gain control of spiraling debt caused partially by an aging population and yet 90% of the message they hear from Keynesian's is we need to stimulate now while giving little time to our need and ability to solve the debt issue over a longer term horizon. As a college professor one can have total command of a given subject, bu