The Right is Wrong and the Left is Wronger

Enough Oil to Completely Replace All Imports

Friday, March 11, 2011"Enough oil to COMPLETELY REPLACE all imports"By Tom FlakeMy mother recently forwarded me one of those emails that make the rounds either offering some amazing discovery or incredible wealth creation by working with someone in Nigeria. In this case it was an email that had apparently been around for quite some time, claiming that the United States had vast quantities of oil, more than the entire Middle East and more than enough to wean us off of Middle East oil and its attendant problems.It didn't pass the smell test, so I went to Snopes.com the urban myth debunkers and did some research. This presented a problem. While Snopes took the position that the email was bunk, their article seemed to confirm some of what was in the email. So I did additional research and found some amazing facts. 1) America uses about 20 Million barrels of oil a day which means that in a year we use about 7 Billion barrels.2) The United States Geological Survey has said over the last decade through a series of studies that our reserves look like the summary below:Oil (Million of Barrels)Natural Gas (Trillion cubic Feet)Liquid Natural Gas (Millions of Barrels)LinkGreen River Formation1,500,000.00.00.0RANDLower 4811,556.4552.945,690.4Alaska11,821.0146.5178.0Total1,523,377.4699.445,868.4A more detailed analysis with links to source documents is contained in a table at the end of this post.3) The united States does apparently have enough oil to COMPLETELY REPLACE all imports for the next 208 years (roughly). You may have heard some say that we are the Saudi Arabia of coal. It turns out that the data shows we are also the Saudi Arabia of oil. Note: The headings on the columns are in Millions of Barrels and Trillions of Cubic Feet. This means that the USGS estimates that the United States has 1.5 Trillion Barrels of oil and 45 Billion Barrels of liquid natural gas resources. For comparison, Saudi Arabia has about 260 Billion Barrels of reserves, about 1/5 the United States! And according to Wikileaks, those may have been overstated by as much as 40%, to encourage foreign investment. It is possible that Saudi Arabia has only 1/9 as much oil as the United States!BTW my estimate is conservative because it doesn't include Canadian oil shale or tar sands, both of which have quantities greater than the Canadians are ever likely to use, thus selling to us makes great sense for them and further alleviates our need for oil from outside North America.Admittedly, the lion's share of the U.S deposits reside in the Green River Formation located in the western region of the lower 48, in the form of oil shale, which is difficult to extract and only economical to recover above the $70 per barrel price. Every time an oil company THINKS about developing the Green River, the world price for crude mysteriously (or not) lowers to below the economical level of development. In the world of private enterprise, uncertainty is a killer when you are trying to raise capital to finance a project making this an area the government ought to intervene as a matter of national security. Its location makes it more attractive on the other hand, because it is in the lower 48 making it more difficult for those who wish us ill to cut the supply lines by sinking tankers or blocking the Suez canal. Think about it this way. How many jobs would be created in drilling the wells, creating the processing facilities, the refineries, the pipelines, and the ancillary industries, trucks, drill heads, piping etc.? AND at $100 per barrel we are spending $730 Billion dollars per year overseas. If we could keep that money in the domestic economy and tax it, how much better off would the federal budget be? Finally, most of this oil sits on Federal land, if the government charged $20 per barrel in royalties to the oil companies, how much of the national debt could we pay down? 1.4 Trillion Barrels x $20 = More than enough.There is however one fly in the ointment. Apparently we are CURRENTLY producing a significant amount of oil from the oil sands of Canada, a different source than Green River, but not far from there, and the oil is just piling up due to a lack of pipeline infrastructure to get it to the refineries as this piece highlights. One last story. I was once in China and found myself arguing with someone about the merits of Al Gore's movie "An Inconvenient Truth". He was arguing that the planet was heating up (global warming) and that the polar ice cap had melted. We had just flown over the North Pole to get to China, and during the trip it was daylight for most of the time and we had flown over 11-13 hours of nothing but ice. It was at that point I asked, "Who are you going to believe, Al Gore or your lying eyes?" I've included all of the links below from The U.S. Geologic Survey and the RAND Corporation so you don't have to believe me, you can see the numbers with your own eyes.I didn't take the time to post this piece to simply rile people up. I posted it in the hope that this will go viral and you can help by doing two things. First, I'd like you to send this story to friends. Second, I'd like you to write your Congressman (Republican or Democrat) and tell them that for National Security reasons, to create jobs and to balance the Budget, they need to make developing U.S. Domestic energy production (extraction, transportation, refining and distribution) a national priority.The key is you, the proof that people have an interest in this is demonstrated by the original email that my mother circulated to me. However, it has the taint of urban legend. You now know the facts, and what those facts mean to the future of the United States. I urge you to do something with that knowledge.Oil (Millions of Barrels)Natural Gas (Trillions cubic Feet)Liquid Natural Gas (Millions of Barrels)LinkLower 48Western Oregon200915.02.28.0USGSEastern Oregon Washington20060.02.49.8USGSMontana Thrust Belt2002108.88.6239.8USGSNorth/Central Montana20080.06.10.0USGSBakken/Williston Basin20083844.03.7202.0USGSSacramento Basin20070.00.5323.0USGSSan Joaquin Basin2003392.01.885.7USGSEastern Great Basin20051598.01.885.0USGSWyoming Thrust Basin200438.80.957.3USGSWind River Basin200541.02.420540.0USGSBig Horn Basin2008316.01.013.0USGSPowder River Basin2006639.016.6130.9USGSHanna, Laramie, and Shirley Basin200694.00.313560.0USGSSouth Western Wyoming2002131.484.62578.0USGSDenver Basin2003104.22.551.8USGSUinta Piceance200259.221.442.8USGSSan Juan Basin200219.150.6148.4USGSRaton Basin20050.02.428.1USGSPermian Basin20071257.040.61021.0USGSFort Worth Basin200498.526.71074.0USGSAnadarko Basin2011495.027.5410.0USGSArkoma Basin20100.038.0159.0USGSMichigan Basin2005990.011.4219.9USGSIllinois Basin2007214.04.724.0USGSBlack Warrior Basin20035.98.57.7USGSGulf Coast Region2007690.0113.73724.0USGSAppalachian Basin200354.370.3872.5USGSFlorida Basin2001351.21.774.7USGS Oil (Millions of Barrels)Natural Gas (Trillion cubic Feet)Liquid Natural Gas (Millions of Barrels)LinkAlaskaANWR199610,500.00.00.0USGSNorthern Alaska20080.085.40.0USGSANPR2010896.052.80.0USGSKemik - Thomson Play Central North Slope2008252.02.851.0USGSCentral Alaska

The Looming Currency War

Tuesday, October 19, 2010

Today the Dow dropped 165 points. This was 1.48% of its value. Did it even register on your consciousness? Did you ask yourself why your retirement was today worth less than yesterday?

The Dow has had an impressive record over the last nine months. Almost impressive enough to make you forget its abysmal record over the last ten years (down slightly). So much for buy and hold. If you are planning to retire someday, you must find an investment that doesn't lose money over time and in order for it to be a worthwhile investment and to increase in purchasing power over time, the rate of increase must exceed the rate of inflation.

It turns out that stocks decreased today because the Chinese raised their interest rates. That in turn lead to an increase in the value of the dollar. See here for details. But if the dollar increased in value, you might ask, "why are my American companies worth less?" Are you might ask, "Why does China raising their interest rates cause my portfolio of American companies (The Dow) to decrease in value?" Or at least you should be for if you aren't, you are missing something that has been going on for at least two years (think gold at $800 per ounce) and needs your attention.

Here's the issue. Virtually every country's government and central bank have based their expectations of growth on exports. They reason that in the eighties and nineties; Japan, Malaysia, Singapore and South Korea amped up their economies and provided jobs for their people, all while building export based economies. More recently China, Vietnam and other have done the same thing. So they reason, "why not us"?

In the past a country could build an export based economy on the fact that they had cheap labor and therefore they could produce goods that were labor intensive (think cars) at a price advantage to those countries that had comparatively expensive labor. As those countries have reached full employment and wage inflation has erased that comparative advantage, they have had to change competitive strategy to other vectors such as quality (think Toyota). Once everyone reached comparatively full employment and everyone reached essentially perfect quality, there were fewer and fewer vectors to compete on. (think Japan over the last fifteen years) Thus the engine that created so many jobs for so many countries has stalled.

But what does all this have to do with the Dow and the interest rate in China? Various countries have arrived at or are arriving at the conclusion that if they cannot compete on traditional vectors, they will make their currency less valuable and thus their goods more affordable in export markets. This is why some US economist aren't worried about $2 Trillion deficits. They know the currency will be devalued, but they believe that this in turn will create export based jobs and that the workers who are then employed will be so happy to be employed that they will ignore the fact that they are being paid in ever decreasingly valuable dollars and never mind the retirees whose nest egg haven't increased in value over the last ten years.

Here's where it becomes scary. This becomes a race to the bottom with no bottom. A game of chicken where everyone is playing against an opponent with nothing to lose. It isn't coincidence that China increased interest rates only a day or two after NOT being found to be a currency manipulator by the US government.

So let's play a thought experiment. If you are the US and China just caused your currency to increase in value, which you believe will cost domestic jobs, what's your next move? My thought is the US will move to depreciate it's currency even further.

So as currency and currency denominated investments become less and less valuable, what should you do to protect and grow your nest egg? My suggestion is hard assets. Buy gold, silver platinum, oil futures etc. I am not the first one to suggest this. You may wish to research here. You will find some countervailing arguments that contend that the run in commodities has ended and that King dollar will prevail. If these countervailing arguments are right, expect to see more job destruction as more of "our jobs" go to countries that out-compete us in the war of depreciating currency... Also, figure the odds of Obama allowing the dollar to appreciate over the next two years, leading to worse unemployment, which would in turn scuttle any remaining hope he has of winning re-election....

Philosophical Clarity and It's Absence

It strikes me that both the left and the right need a bit more consistency in their positions.  This is nothing new, but I thought I'd point out an area that is particularly glaring and ask the question that follows as a natural logical extension of the issue. 

It seems to me that on the right, who stereotypically oppose abortion because of the sanctity of life, they should own the environmental issue.  That is unless they are of the opinion that the unborn have a right to life on a polluted, resource depleted, world.

Similarly on the left, who stereotypically support abortion and any other method of population control,  they also support recycling, reducing, reusing.  For what?  Who are they preserving these resources for if not the future generations they are convinced the planet would be better off without?

If the right were honest and consistent in their philosophy they would be both, for all things green, and for eliminating abortion.  That way, those people they save from the abortionist would have a better planet to be born into.

 On the left, if honesty of philosophy and logic reigned, their position would be equally consistent.  Eat, drink and be merry for tomorrow we die and we don't care what comes after so use it all up and throw it all away...Hey! I didn't say it made sense; I just said it was logically consistent. 

Environmentalists and Terrorists

It strikes me that there are some similarities between terrorists and environmentalist.  First and foremost among these similarities seems to be a "do as I say, not as I do" mentality. 

The best example of this among the terrorists is, suicide bombers.  I have yet to hear of an example of an Imam strapping dynamite to himself and blowing himself to kingdom come in his hurry to get to his share of the virgins.  Instead, they choose young girls, young boys, the mentally ill (as if suicide bomber and mentally ill weren't synonyms) and they convince, drug, and blackmail them and their families into paying the last full measure of devotion, rather than paying that ultimate price themselves.

The environmentalists, at the same time are for birth control, eugenics, population control, euthanasia, etc., anything to reduce the Earth's human population.  Anything except NOT having children themselves or better yet, committing suicide themselves.  No, like the Imams, they are too important to their cause to make that ultimate sacrifice.

So the next time you hear them espousing the righteousness of their cause I think your best response may be, "I'll follow where you lead, right up to the point where it appears to be a bad idea."  Suicide? You go first.  Not having children? How many are you not having?  Virgins from Allah? You go on ahead!  Letting our older parents, disabled children or the other weak among us die?  Why don't we start with you and yours?  Once you lead by example, we'll decide if the example is worth following.  That's a far better method of leadership and one that's far less gutless than what is currently practiced by the environmentalists and the atheists.

Confused? Me too! What does "Save the Planet" Mean?

I hear people use the term save the planet.  I must confess I am confused.  Save it from what?  Save it for whom?  Save it to what end?  Is it in danger of destruction?  If so, destroyed in what manner?  Do people who use this term speak English as a first language?

People who use this term usually are trying to motivate people to take some type of action.  eg. You should recycle to save the planet.  Does that mean if I don't recycle, the planet will be hit by a meteor?  Clearly, that isn't the case.  There is no connection (that I've heard anyone make) between my recycling and the course of asteroids in their path.  The only thing I can figure is that they must not mean "saved from utter and complete destruction" as in asteroid collision, sun going nova, black hole destruction.  Even nuclear weapons would likely leave roaches and critters in the oceans.

Perhaps when people use the term they mean save the planet from being made unlivable to human beings.  Have any of these people seen pictures of slums in the worst of South America or Asia?  People can live quite successfully in the worst kind of filth.  My observation is that pollution, litter, clutter, debris, man-made detritus, while not pretty don't make an area uninhabitable.  This means that when people use the term "save the planet" they don't mean saved so that the planet will continue to support human life.  There is no evidence that my failure to recycle will leave the planet uninhabitable.

Perhaps when people use the term save the planet, they mean improved so that the carrying capacity of the planet for human habitation is increased.  That since the human population is increasing, they are concerned for future generations reaching some level of overpopulation and thus they wan't to increase the amount of arable land that is being farmed.  Their actions though, preserving forests, protesting population growth, advocating abortion, doesn't support the hypothesis that these people are into preserving and extending the species.

This can only mean that people who use the term save the planet must mean "lower the carrying capacity of the planet for human beings".  Use less to preserve a natural environment for other species use.  Because somehow when a whale kills and eats a fish, that's better than when a human kills and eats the fish.  From the fishes point of view I don't see the difference. 

The problem is that this philosophy is bankrupt and illogical to its very core.  Extinction as a matter of natural selection (random) is good.  Extinction as a matter of human intervention (purposeful) is bad.  Resource use by animals and plants (good).  Resource use by people (bad).  More mousquitos and roaches (good)?  Less humans (bad)?  I wonder if cattle, dogs, cats, and other species that have thrived as a function of their usefulness to humans would agree.  In fact, if you want to save a species from extinction prove that is has a commercial value.  It will be cultivated, and thrive, parrots, alligators, buffalo.  They all have done well as cultivated by humans.  On the other hand, dinosaurs, mammoths, etc. all suffered extincition, without human intervention.  Perhaps if humans can find a use for dinosaurs, they'll use genetic engineering and cloning to bring them back.  That should prove a moral quandry for the "save the planet crowd".  Would that be a good act or a bad one? 

From the standpoint of recycling to preserve resources for future generations, people who believe we are using things up such that they won't be available for future generations only have a point to a certain point.  Basic grade school chemistry/physics tells us "matter can neither be created nor destroyed only altered in form"  With enough energy almost anything can be made into something else.  We can recycle a car into re-smelted sheet steel.  We can turn rubber and plastic into other rubber and plastic things.  The only exception to this is natural products.  I am unaware of man's ability to make a fish or a tree.  So to the degree that "save the planet" means use each resource at a rate no higher than the earth's ability to replenish it, I'm onboard.  But to the extent that it means live in a hovel and eat dirt so that three toed sloth's have a better lifestyle, count me out.

A Rose by Any Other Name

It is a long held tradition in politics to use nicknames as a ploy to belittle policies and personalities.    Reagan's implementation of the Laffer curve was dubbed "voodoo economics".  Recently members of the Bush administration became "Bushies" and worse, those who espoused agressive action against terrorists became "neo-cons".  The political gameplan, once the nickname has been applied, is to deride the person, or ideal using the nickname in a deprecating manner as often as possible.  Using Lenin's axiom "A lie told often enough becomes the truth".  So it doesn't matter that Reaganomics worked. It doesn't matter if all of President Bush's adminstration followed him philosophically.  It doesn't matter if the war in Iraq was necessary.  All that matters is that, in the main, political opposition to these people and ideas was given a "handle" to grab onto by the application of a nickname.

Interestingly, this seems to primarily be a tactic of the left.  What was the derogatory nickname applied to President Carter?  President Clinton?  My theory is that the right, in the main, has greater respect for the office of the presidency and therefore hasn't in the past stooped to these tactics.  This despite the fact that these tactics are demonstrably effective.  Did you remember "voodoo economics"?  Could you come up with a nickname that had been applied to President Clinton?  This despite the fact that Reagan's tenure ended twenty years ago and Clinton's ended nine years ago?  What does this say?

Because these tactics are effective and because the stakes have become so high, I propose that we begin to utilize those tactics of the left that are effective.  While President Obama has only been in office for about three months, he has been prominent in the public eye for about three years.  And while certain political opponents have tried to tag him with nicknames none have appeared to gain any traction.  "Obination" didn't seem to stick (though I liked that one and a $20 Trillion debt seem an abomination).  

As we search for the appropriate appelation for President Obama and his adminstration, there are some rules that must be followed for it to be effective:

        1) It has to be cute and memorable 

        2) It has to be short

        3) There has to be a ring of truth to it

I've thought about several and rejected several, one that seemed at first blush was "The Anti-Christ".  While it has a ring of truth to it (meeting rule 3) and it is short (meeting rule 2), it is in no way cute and therefore must be rejected. 

So one I'd like to propose is "Neo-NatSoc".  This is short for New National Socialist.  This is unfortunately, true (meeting rule 3) it is short (meeting rule 2) and it is memorable as a play on neo-con.  I know that there may be some trademark problems because it is owned by the "National Socialists" and they are a prickly crowd who aren't into sharing.  I also know that it is going to be difficult to brand a non-aryan such as Barak Obama as a National Socialist, but since words mean things and he is a trying to turn the Nation of the United States into a Socialist version of uptopia, it does seem accurate, no matter how distasteful.  So what do you think?  Does this work as a nickname that will stick and can be used to deride President Obama, or can you come up with something that will work better?

Modeling, Simulaton, and Snakeoil, Oh My!

I wouldn't normally speak about myself in a blog post and other than my opinions, in my posts, you would be hard pressed to learn anything specific about me.  Because at the end of the day my posts are about what I believe is right for the country, not about me or my life.  This post is different, what I am about to tell you is in no way meant as a boast.  Rather, I want to establish my credentials simply so that you will know that I know what I am talking about not simply from an opinion perspective, but from a professional assessment.

I have spent the last twenty years developing computer models, models that generally lent themselves to business modeling and forecasting.  I have done business planning, and stock market simulation, using Monte Carlo simulation, linear programming, best case, worst case, most likely case, scenario comparison, sensitivity analysis, etc.  My undergraduate degree is a Bachelor of Science in Business Administration with a concentration in "Decision Science" and my graduate degree is a Masters of Business Administration during which I did a great deal of work in quantitative analysis.  So when I tell you I am in expert in this field that statement comes with a significant amount of third party credibility, and real world experience.  When I make the following statements, I am not theorizing, hypothesizing or repeating what I read somewhere.  Rather I am telling you how a seasoned professional with twenty plus years of experience in the field is assessing the situation.

Recently, the Obama administration put forward their ten year assessment of where their budget for the upcoming year will, if unchanged take the country.  Their numbers differ by about twenty percent over the period in question (about ten years) from the numbers the Congressional Budget Office (CBO) came up with, when they analyzed the budget and forecast put forward by the administration.  Other than the size of the numbers involved and the ghastly deficits produced by this budget there is nothing particularly significant about the fact that the two models differ.  In fact, in a ten year projection relevant to natural systems such as markets a 20% difference is actually quite close and that makes the results that much more chilling (but the effects of a $20 Trillion national debt are the subject of future posts)

So to save you the four plus years of college and the many years of learning the trade there are some basic rules about modeling and simulation that will help you understand the point of this post:

1) Natural systems - markets, weather, etc. are far more difficult to model than synthetic systems (such as assembly lines or traffic patterns)

2) The greater the level of detail required of the model the less accurate the results are going to be.  In other words if you want to know if the economy is going to grow or shrink in 2010, that is far easier to predict than by precisely how much that in turn is far easier to predict that if a particular stock is going to go up or down and that is easier to know than how much a stock will go up or down.

3) Any model has a limited number of inputs that each drives the model in  a certain direction and among those inputs are some assumptions that the modeler makes each one of which has a different degree of impact on the results.  The amount of sensitivity can have significant impact on the model results even when the modeler makes seemingly modest adjustments to only one or two assumptions.

4) Lastly- anyone, no matter how much education or experience who tells you that they know precisely what will happen in the future, by a certain amount, because a model they built tells them so, is wrong, misapplying the tools, or lying.  If by chance they happen to be right, it is simply luck, not skill.

With that said, I want to change your focus from the budget to global warming.  If the budget guys can't predict within 20% of each other what the economy will look like in the next ten years.  And through tax policy, monetary policy, law making and regulatory policy they control many of the inputs.  Common sense should tell you the degree to which some quasi-meteorologist is going to be right.  Particularly when you consider that they are using essentially the same tools and mathematical techniques to forecast global warming over the next 50-100-200 years as are being used by the economist inthe administration.  I can tell you with 100% certainty that when someone says, “The median temperature of the earth will increase by 2 degrees Celsius by the year 2080 and that the increase will have effects A B or C" they are wrong, period. 

 

The earth may heat by that amount or more or less.  The affect may be A B or C or it may be K L or M.  When the weather changes (and it always changes, after all what makes you think the weather is the same now as it was 200 years ago?) will it be because the output of the sun changed, the orbit of the earth changed, the magnetosphere of the earth changed (think it's constant? Just look at the shifting patterns of the northern lights), the reflectivity of the changes of the earth changed over time. (due to deforestation) or that concentrations of CO2 in the atmosphere went up?   The likelihood is that it was due to an interplay between all of these factors.  I am not saying that things won't change.  I am not saying that man couldn't be better stewards of the riches that we have been granted.

The point is, that the interplay of these factors is too complex for the weatherman to predict with any clarity what the weather will be a month from now much less with any precision, hell even tomorrows forecast has +/- swing of 4-8 degrees.  People forecasting 10-20-50-100-200 years from now, give me a break!  Modeling and simulation give you a best guess.  The snakeoil salesmen selling global warming never disclose the "guess" portion of the analysis, they state it as gospel and expect people to change based upon their guess. 

I just thought that during a period when the limitations of modeling were on display for all to see (administration/CBO) that it would be illustrative to hold up the admitted margin of error between the CBO and administration numbers and compare them to the infallibility being presented on global warming.  Since both sets of numbers are being built by people in the administration with an agenda, why are they right on global warming and wrong on the budget?  Or is it the other way around?

Money Laundering by the Criminals Who Are Stealing Our Children’s Future

When John Gotti laundered $10 of millions of dollars, it’s considered the crime of the century.  When Hillary Clinton does it, it’s considered just another day at the office.  I am at a loss, I don’t even know what to call it, but “we” in the form of Hillary Clinton just promised $900 Million to Hamas to rebuild their “country” after the Israeli’s destroyed it.  Wow, where to start…

First thing to think about when attempting to put this in perspective, the United States has no money. When you are running a $1.75 Trillion deficit, by definition you not only, have spent all of your money, you’ve spent a GREAT deal of the banks money as well.  We are borrowing the money from China.  Therefore, but for the laundering, China is giving/borrowing $900 Million to Hamas.  If they were to do this directly, we’d likely have a problem with this.  Why? The only reason I can come up with is we wouldn’t be getting to “dip our beak” in the transaction.  The problem here is that when gangsters use this term they are expecting to make a profit.  When our government takes this tact, they are talking about paying more interest.  At this point I’d like to turn the government over to the mafia, at least then we’d make a profit.

Second thing to think about, as discussed in previous posts, since this is all money spent in deficit, it is debt piled on non-voting, unborn generations.  This means that the next million babies born, in addition to the $43,333 they are already in debt the moment they are born, are an additional $900 dollars in debt.  We as their parent are guardians ought to at least be allowed to ask what they are getting for their money.  It turns out even more debt.  Not only do we never pay down the debt, so interest is always piled on interest.  In addition, WE FUND BOTH SIDES, with money borrowed from the Chinese.  So we pile on debt to buy Israel arms, so that they can destroy Hamas towns, so that we can borrow more money to rebuild those towns, so that Israel can in turn destroy them with money we borrowed from the Chinese.  Is it only me, or does anyone else see that the only people who are losing in this war are the American taxpayers?

Third thing to think about, there are about 1.5 million Lebanese.  This works out to about $700 per person for every man woman and child.  Aren’t there 1.5 Million American’s who could use $700, I don’t know, for a week’s unemployment, for economic stimulus, for a weekend vacation?  Seems to me my future unborn grandchild has a better claim on it than the gangsters in government and the gangsters in the Middle East.

I’ve got an idea.  Stop funding Israel, stop funding any Lebanese: the government, Hamas, Hezbollah none of them.  Stop borrowing money from the Chinese in order to do it and stop the criminal insanity of screwing the American tax payer, who in this deal are getting it coming and going.

What Happened to That America Dad?

I am “Old School”. In a previous era I may have been considered macho. I prefer combat sports (boxing and mixed martial arts) to team sports (baseball and basketball). I prefer outdoor activities (rock climbing, whitewater rafting and camping) to video games. I prefer competition to cooperation, and may the best man win. All too often today, macho self-confidence is confused with “asshole”, “arrogant”, or “pig-headed” particularly when it entails any interface with the gentler gender. I believe that in this era of feminized, emasculated, gender-neutral, neutered, politically-correct, “my right to not be offended, trumps your freedom of speech” era, many men who would otherwise voice their opinions have chosen instead to be quiet and pine for a better yesterday. Yet, straight shooters who opt to solve problems rather than wring their hands over them, is exactly what we need.

One method of compensation I have adopted is to collect movies of a John Wayne, Chuck Norris variety. I prefer a simple life where problems can be dealt with head on. The other night, my family was deciding on a movie to watch, and I suggested, that because my son was studying American history and WWII that we watch Patton. The monologue at the beginning is famous and parts bear repeating. “Americans traditionally love to fight…” “Americans love a winner and will not tolerate a loser…” Within five minutes, of the beginning of the movie, my son turned to me with wonder and admiration in his voice and asked, “Dad, what happened to that America”? I suddenly got tears in my eyes, I hadn’t realized how far off the path we had gotten. My response was as accurate as it was politically incorrect, “Son, the last two generations in power have pissed away that America and I fear that if my generation doesn’t do something to reverse the slide, there won’t be anyone who remembers what was once noble and admired about cowboys and firemen and soldiers”.

It has become common in business literature and B School classes to deride the “charismatic leader”. To portray the team as paramount and the lone wolf as dangerous, this in the face of all of the facts. Some things to consider, Steve Jobs has saved Apple not once but twice. Microsoft has gone nowhere since Bill Gates backed away from his day to day responsibilities. When Dell got into trouble several years ago, the first thing they did was bring Michael Dell back. In Organizational Behavior they stress the fact that group decisions are often better than what an individual leader will come up with. This is after discussing “sub-optimization” and “group think” and failing to discuss at all, the time cost associated with group dynamics. Give me a decisive, informed, engaged, ethical visionary to a group anytime.

It is interesting to note the difference between Ronald Reagan’s first inaugural address and Barak Obama’s. Both inherited an America on the ropes. In each case unemployment was high and getting higher. Arguably in Reagan’s case the scenario was worse, interest rates were MUCH higher, and inflation was higher. I don’t know for sure, but is suspect in Reagan’s first thirty days he never claimed that they were in the worst economy since the Great Depression and I suspect he never used the terms "catastrophic", "crisis" or any other similar panty-waste, hand-wringing, pussy whipped, "I feel your pain", BS for what he saw, as a job that needed doing with an outcome measured in the quality of people's lives, NOT in how many poll percentage points a certain stance was worth. What we need in America today is more Patton’s and fewer Powell’s, more Apple‘s and fewer Lehman Brothers, more leadership and fewer focus groups.

Sins of Omission, What the Politicians Aren’t Saying

Recently the government passed The American Recovery and Reinvestment Act (The stimulus bill) catchy title eh?  The projected cost on it’s face is $780 Billion dollars.  The way it was sold to the American taxpayer is that it would save or create 3.6 Million jobs.  If this much money is at stake and this many people’s lives are at stake shouldn’t someone ask some questions?  After all, if you assume there are 300 Million people in the United States, which works out to $2600 for every man woman and child.  Since there are six people in my household, I think I should be able to ask what I am getting for my $15,600. At the same time, that works out to $216,666 per job created or saved.  Shouldn’t we ask how the government accounts for a job saved?  A job created, that seems relatively easy to account for, a job saved, that seems “squishier”.  Finally, wasn’t there a cheaper method of saving or creating these jobs?

First of all, what’s in it for me.  After all, I am employed, gotten as much education as I can, worked hard, played by the rules, not taken on too much debt (though my wife would argue that last point) why should the government take $15,600 from my family and give it to people who aren’t employed, haven’t worked on their education, don’t work hard, haven’t played by the rules, have taken on too much debt.  Moreover, if the government takes this money from me to rescue these people this time, what’s to stop them from repeating this bad behavior in the future?  Why won’t the government take another $15,600 from me ten years from now when the next bubble bursts and why should I be paying for other people’s bad behavior.  Ben Bernanke used the metaphor that if you neighbor’s house is on fire you should help put it out.  This doesn’t begin to pass the smell test.  First of all, I should help my neighbor, but the government shouldn’t come to my house in the middle of the night, hold a gun to my head and force me to help my neighbor all the while telling me, “thank you for volunteering”.  Second, my neighbor has been quietly filling his basement with gasoline, and piling dry brush against his house for the last several years, where is his responsibility?  Finally, as I not only am forced to help put out the current fire, and rebuild my neighbor a new house, who is going to take the matches out of his hands so that there is no next time?

Despite the absurd fact that we could just grant $216,666 to the least employed and poorest 3.6 million amongst us and that the net effect would be take them off of the unemployment rolls for 3-5 years and immediately stimulate the economy as they spent the money and that if there was some requirement for them to pay down their mortgage it would help the banks, and this would largely solve the economic crisis.  This is one of the reasons that fiscal conservatives have a problem, not that it would work, but because the government isn’t taking this tact.  In fact, the approved method is to dole the funds out over a protracted length of time, to projects that various special interest deem worthy, not in an effort to fix the economy, rather in an effort to shore up power and reward political patrons.  Rather than being efficient and effective, instead we are left with ineffective, slow and designed for any number of things except efficiently fixing the economy.

Lastly, I hate being lied to and I hate even more that either my fellow countrymen don’t know or don’t care that they are being lied to.  That the government lies, is nothing new, that they aren’t taking time to craft credible lies has me more than just frustrated.  If the government spends a dollar today for a service that in turn creates a job, someone is employed today that otherwise might not be.  But doesn’t that person need a job tomorrow?  If there is no market basis for the job that has been created and the government is the only customer that will ever require that job, haven’t we simply permanently expanded government?  Can anyone really envision a time when President Obama, or his successor, will ever say, “unemployment is down to 2.5% and since we artificially created 3.6 million jobs in 2009 now we are going to eliminate those jobs to prevent inflation and shrink the size of government?”  So, while the cover story is plausible “we want to save or create jobs” the net result is a permanent expansion of government such that a large portion of the $780 Billion will have to become a permanent part of the federal budget to continue to pay for the jobs created by the government that the marketplace doesn’t need.  Yet, no politician is saying this…sins of omission I guess.