Help Wanted - Born Again Americans Urgently Needed

For nearly two weeks now, I've had a battle royal going on in my head between my voice of reason and my voice of WTF. If you don't know, WTF stands for What The F__k! The voice of WTF won out.

Every day I read on the Internet the principle stories in The Washington Post, CNN International, The Fox News, and the Wall Street Journal. Also, I read a number blogs by conservative pundits and a few by liberal pundits. At the end of the day I find myself screaming inside my head: WTF has happened to America!

It pains me to say this but the majority of Americans have become whining, irresponsible parasites. The majority of Americans want government to rescue them from any and all calamities that life brings their way. Many big unions and many big businesses are guilty of the same. And the political elite love it because this means bigger government, more money to spend and thereby more and more power and control over the American people.

You say " Come on Jim. Sure there are some Americans that think that way; but not a majority." Sorry; but our Congressmen are elected by majority vote from each of their districts. Only Congress can make laws and raise taxes. We can not deny our responsibility.

We didn't become whinning irresponsible parasites over night. The liberals ( read liberals to mean Marxist/Socialist ) have been working diligently for years to get us to this point. By means of our system of education and by way of the predominantly liberal media, they have, over time, succeeded in changing our culture. We Conservatives shake our heads and wonder when will this craziness end. Unless a majority of us become "Born Again Americans" dedicated to the principles of our founding fathers and take responsibility for ourselves, it will end very very badly.

I do see one bright spot out there, the Tea Party Patriots. They are a little helter-skelter but that's alright. They are on the right track. I hope many more Americans will get active in their local Tea Party. Hopefully they will never become a political party but instead grow to become a powerful watch dog over our politicians in Wasington D.C.

I leave you with three pertinent quotes:

" Government is not reason, it is not eloquent, it is Force. Like fire, it is a
dangerous servant and a fearful master." - George Washington

" A government big enough to give you everything you want is a government big
enough to take from you everything you have." - Gerald Ford

" A constitution that doesn't mean what it says, means nothing at all." -
Unknown

Enough said for today.

Sense or nonsense?

It's Not Rocket Science

We all complain, with good reason, about the problems of big government's involvement in our daily lives and the high cost of all the various taxes that we pay, and these days, of course, we complain about the state of the economy and the lack of any clear plan on how to fix it.

Recently I read an article by Jim Gamman , in the blog American Thinker, that talked about why so much manufacturing has disappeared from the American scene and gone to other countries. The reason, of course is that we are no longer competitive with these countries. As he says, we typically blame this inability to compete on the fact that labor costs are so much lower in these other countries. But according to Jim, the higher cost of labor is not what makes us uncompetitive. It's the much higher costs for raw materials in the U.S. The reason we pay so much more all has to do with the hidden cost of taxes and the costs of compliance with a myriad of government regulations. In other words, the reason that America can't compete in the world economy is the cost burden of the U.S. Government on busibess.

This revelation made quite an impression on me. Thinking about what Jim Gamman had to say, I arrived at the conclusion that America's problem can be fixed. It's not rocket science. It's just common sense. The only difficulty would be finding enough politicians with the courage to do it. Let me explain.

If ours is a government of the people, by the people, and for the people, then whatever We The People ask of government We The People should be willing to pay for. A simple concept. Like I said, it's not rocket science. Here's my three point plan.

1.) Eliminate all corporate taxes, all business taxes, and all forms of income taxes.

2.) All costs for complying with government mandates and regulations would be paid for by the local, state, or federal government responsible for the mandate or regulation. Businesses would submit independently audited invoices for their compliance costs to the appropriate government entity for reimbursement.

3.) Federal, State, and Local governments would fund all of their operating costs by way of a retail sales taxes ( bushesses that buy wholsale woud not pay sales tax ), which would be reflected in every sales receipt. Note: Food and medicines would be exempt from sales tax.

A simple plan, right? Don't be to quick to write it off. Think about it first.

Points 1 and 2 would make the United States the most competitive business environment in the world. Manufacturing would return to America with a vengeance. There would be an investment and business boom like we've never seen before. Full employment would be a matter of course. Also, the costs for American produced goods and services would fall dramatically. Note: If We the People demand certain regulaations be put on corporations or busnesses, then We the People will pay for it in the Federal sales tax.

As regards point 3, bear in mind that I've not advocated any reduction in government or programs, or anything else. Government would be just as big and just as costly as it is now. The difference is that every time we made a purchase, we would see exactly what government is costing each and every one of us. We just might decide we didn't need all those things we've been asking government to do for us ( or that the government has said they must do for our own good).

Enough said.

Sense or nonsense?

Fed Speak, You've Gotta Love It!

Barneke responds to the latest results on second quarter GDP growth of 1.6% as opposed to the 2.4% that the Fed had been forecasting. Clearly Barneke has mastered the art of Fed Speak. The following are some examples along with my interpretations:

Barneke describes the 1.6% result for the second quarter as being "somewhat less vigorous" than expected. In English that means it was a friggin disaster. 1.6% is only 33% below the Feds forecast. A little more than "somewhat less vigorous" I'd say.

Trying to calm market jitters, he goes on to say "The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation....We do....The issue is instead whether, at any given juncture, the benefits of each tool, in terms of additional stimulus, outweigh the the associated costs or risks of using the tool." Wow! That is quite a mouth full. I take this to mean that he believes that the Fed is damned if it does and damned if it doesn't and he has no idea what to do next.

Barneke went on to say that Fed policymakers "will certainly use its tools as needed to maintain price stability....and to promote the continuation of the economic recovery." Assuming that he is still talking about the U.S. economy, I think this is Fed Speak for "Evey man for himself, things are about to get real ugly."

As for the notion that some economist believe the Fed should temporarily increase its target for inflation, Barneke responded "I see no support for this option on the Federal Open Market Committee." This obviously means that the Fed is never going to admit that it may have been wrong.

There are many more examples of Fed Speak, in the article cited above, that you can read an interpret for yourself.

I shouldn't be so hard on the Fed chairman, he is after all only trying to keep Wall Street and the rest of the world's market from panicking and to that extent it appears that he has succeeded for the time being.

Enough said for today.

Sense or nonsense?

Limited Purpose Banking - The Time May Be Right

Two years of recession and the Fed seems not to know what to try next. Our political elite can only suggest that the the stimulus wasn't big enough and therefore more of the same should be done. The conservative voices continue to ring clear about the errors of the current approach and cry for less government and less taxes, which would be great; but we are really talking about is a complete overhaul of government and creating or recreating a whole new American consciousness and that type of revolution takes a lot of time. So mean while back at the ranch, we need to be doing something positive as of yesterday!

About a month ago, I came across an article, written by Professor Laurence Kotlikoff and Christopher Chamley. The article is written as an Action Memorandum to Secretary of Treasury, Timothy Geithner. The good Professor starts out by very politely explaining

"you appear to be misdiagnosing the problem and consequently applying
medicine that won't work." Kotlikoff goes on to explain that the the problem is
not liquidity, the problem is trust."

The article was written back in Ma y of 2009 and he was referring to the well earned lack of trust in the financial sector. His solution to resolving this lack of trust is to institute " limited purpose banking". If you are not familiar with this concept of banking, this article is a great place to start.

Although Kotlikoff was focused on the lack of trust in the financial world, I think the lack of trust is much broader. Currently the banks are sitting on trillions of dollars; they don't trust government and the unknown new financial system of controls that are coming. Business is sitting on trillions of dollars and they don't trust government or the bankers for good reason. The American people are saving instead of spending because they don't trust government to know what they are doing and they don't trust the financial manipulators either. There would appear to be plenty of money everywhere, but there is no trust and the economy is practically at a standstill.

Putting aside the changes that will occur with the November elections, the conservatives are not going to be able to make the sweeping changes that are necessary any time soon. But the American people with their lack of trust of government in general are desperate to hear just one good idea that they can clearly understand and that makes sense to them. They want something they can grab a hold of and say " Yes, this will work. Let's do it and let's do it right now."

I think limited purpose banking just might be the idea that the American people could get behind. It's easy to understand and it will make sense to them. Imagine , no more bank failures, no more market manipulations, no more fractional reserve banking, and it would greatly reduces the ways that the Fed would have to screw up the economy. Promoting and selling this idea will give a lot of credibility to the conservative movement.
The journey of rebuilding America in the image of our Founding Fathers, like all journeys, must start with the first step. Maybe limited purpose banking could be that first step.

Enough said for today.

Sense or nonsense?

The Freedom Project

I'm dedicating today's posting to a blog I just came across called " The Freedom Project " ( http://freemktprojectcom/ ). The blog is published by one Pat Slattery who states that the purpose of The Freedom Project is "to promote free market capitalism as the economic system that is best able to produce wealth....for the people of the United States of America and the world." There is something about the simplicity of this statement of purpose that I find appealing. Also, the title is perfect in my opinion because " Freedom " only truly exist in a free market economy; every degree of socialism is that much less freedom and that much more government control over our lives.

So, I looked forward to reading some of Pat's most recent postings and I wasn't disappointed. This past Sunday, 22 August, the post was titled "Blaming Business is Absurd". The issue raised in a nut shell is: Why is business so vilified in this country especially by the elite in government and the news media but also by the public in general? This is not only an excellent question it is an important question that too often is not addressed by mainstreams conservative thinkers and writers. Free market capitalism can not hope to win the battle against the ever growing socialist tendencies in this country unless this question is honestly answered and a workable plan is put in motion to overcome this erroneous perception.

I certainly am not going to pretend that I have the answers; but maybe I can get the dialog ball rolling with a few opinions:

1.) We free marketers must accept that we have, both historically and currently, a number of unscrupulous actors that continually give capitalism a bad name. The actions of Goldman Sachs and friends in manipulating and defrauding their investors and the Erron scandal are just two of the more recent scandals. But it's not just big business its also local businessmen when the they get caught in a corruption scandal. These events make big news and it is understandable that the public begins to think that all business as corrupt. Maybe the the more important voices of free enterprise need to be much more vocal in condemning these criminal activities.

2.) The media are by in large biased. But that doesn't mean they won't accept a letter to the editor for publication. These letters should be less about attacking government policy and more about the virtues of free enterprise and smaller government. It will take some imagination to formulate our message in a manner that doesn't come across so typically cold and heartless. Not easy I know.

3.) Our children graduate from high school and for that matter from college with very little understanding of the importance of free enterprise. Well, I suppose that's an understatement, right? We're not likely to have much luck in getting the public schools to alter their curriculum but maybe there is another approach. What if retired businessmen and women offered to volunteer their time to teach a course on the role of business in the community and in the country that the students could take for extra credit.

4.) The liberals, the left, the socialist or what ever it is that we're calling them these days, are represented in government by the Democratic Party and, therefore, have a powerful voice in the direction of policy in this country. On the other hand, we the right, the conservatives, the free marketers, or what ever we are calling ourselves these days, have no representation in government and, therefore, no voice in policy making. The Republican Party use to be our voice but that has changed over the years and I suppose that we have mainly ourselves to blame for that. I think that we must become much more politically active from grass roots on up. Possibly we need to take some lessons from the Tea Party movement, but hopefully much more focused. Forming a third party might have some merit; not so much in the idea that we can elect enough candidates to have any real impact, but in the leverage we might gain in getting the Republicans to put up more candidates that truly believe in free enterprise and free market capitalism.

Well, that's enough for today.

Sense or nonsense?

Transparency and Honesty; is that too much to ask of government?

Its an unfortunate fact that the majority of Americans do not take the time or do not make the effort to analyse and understand what government is or is not doing and the impact that these actions have on their daily lives. In part this is because we are all too busy with our daily lives to have the time that it takes to analyse and understand what government is doing to us and it does require a lot of time; it's not easy. We've elected people and pay people to look after our interest. But are they looking after our interest or are they more interested in their own position of power and increasing that power. Over the years, the government; the elected officials and the bureaucracies that they have created, have intentionally tried to make government a mystery to the vast majority of its citizens. Hence the title of this essay. It is clear to me that apparently it is too much to ask of government to be transparent and honest with the American people.

What changes would make government more transparent and honest? I have some ideas.


The first change that I would recommend is to take the Federal Reserve System out of the hands of the private investment bankers and adsorb it as the fourth branch of government. Their is no reason on God's green earth that the United States should have to buy their money from the now privately owned Fed. As it is , the Fed is not responsible to anyone, their actions are secret, and they can not even be audited. The new Fed, as the fourth branch of government, would need to be independent of the President and of the Legislature; but unlike the Supreme Court, they would be responsible to the people. I suggest an elected board of directors; one from each state. The Board would be charged with hiring and firing the management of the Fed. The Board would meet no more than once a month to review and approve the Fed¡s actions. Whenever the economy had grown to the point that additional dollars were needed in circulation, the Board would review and approve the Fed's recommendation; the new dollars would then be spent into circulation by the Legislature on projects for the benefit of the people and the President would retain veto power over the Legislature. Board members would serve for a maximum of four years with half the seats being elected every two years. Similar to a State of the Union address, the president of the Fed would make an annual report to a joint session of both Houses and the President.

The second change I would recommend is giving the President the power of line item veto. This way there would be only one person responsible if hidden pork legislation is passed into law or in spending appropriations bills. It is incredible how much crap our Congressmen and Senators try to hide from us.

The third change I would recommend has to do with hidden taxes. Take for example something simple like gasoline. Do you know when you drive up to the pump what the price of the gasoline is per gallon and what the tax is per gallon. When you ask for a receipt, it should show how much your paying for the product and how much your paying in taxes. All sales and excise taxes should be clearly stated on every receipt. This thought leads me to my principle recommendation on taxes. I suggest that the only tax that any government can demand of it's citizens is a sales tax because sales taxes are the most visible and transparent of all taxes. What I'm saying is that all income taxes should be abolished and all business and corporate taxes should be abolished as well. Why would I want to do away with business and corporate taxes? Because businesses and corporations don't pay taxes; but instead act as an unpaid tax collection agency for the Federal government. The cost of these taxes and the cost they incur in complying with the tax laws are reflected in the price of the goods and/or services that they sell to us. We the People pay these hidden taxes every time we buy a good or a service. Imagine if businesses and corporations didn't pay taxes how much cheaper everything would be. That just might spur investment and job growth like nothing ever did before. Imagine, also, If government at every level, but especially the Federal government, had to come up with a sales tax to cover 100% of the of their cost, what an eye opener that would be to the voting public. If every sales receipt was required to show an itemized tally of the price of the product or service, the local sales tax, the state sales tax, and the federal sales tax, we would finally know what we were paying for government services an we could better determine if we thought we were getting our moneys worth and if not , maybe we would get off our duffs and do something about it.

So these are my three recommendations for making government ant taxes more transparent. In and of themselves they don't make government more honest but with the far greater transparency, maybe we can do a better job of keeping them honest. Surely people smarter than me can come up other ways to improve government and make for a more economically sound future for all of us.

Enough said.

Sense or nonsense?

The Year That Changed U.S. History

I haven't made any postings in a while. I've been busy trying to understand what has gone wrong with the United States. I don't mean just in recent times but for many years. In the last few weeks, I've read again the Constitution, the Bill of Rights and all the other Amendments and I'm about 25% through reading of the Federalist Papers. My intention was to reacquaint myself with the original intent of our founding fathers. Besides all these documents that have to do with the Constitution, I've also read the history of the Federal Reserve System.

Politicians have reaped havoc with the original intent of the founding fathers, for a federal government of defined and limited powers, from day one. Politicians, in general, have mostly put the interest of their own personal power above the interest of the nation. This is not news to anybody. But 1913 seems to have been the year that the original intent of the Constitution was completely abandoned. This is the year that the16th Amendment was ratified establishing the right of the Federal government to tax all forms of income , the 17th Amendment was also ratified this year which provided for the election of Senators by popular vote rather than being appointed by the various state legislatures, and this is the year that Congress passed the law establishing the Federal Reserve System. I've no doubt that the Founding Fathers would have found these changes appalling. These three changes set the stage for the ever increasing power of the central government and the subsequent decline of the power of the states.

Income Taxes

Laws giving the federal government the power to tax income ( individual and corporate ) were passed more than once prior to 1913 but were struck down by the Supreme Court as being unconstitutional. The progressives, i.e., socialist of the time, didn't give up until they were finally able to get their way when 36 states ratified the 16th Amendment. This is what the conservatives of the day had to say: " ...a first step toward complete confiscation of private property....to oppress the middle classes and increase the lower class who would have to depend on government for their survival.". Those in favor of bigger government now had the tool to forever fund their programs. Programs ostensibly to benefit those who can't take care of themselves; but what they really want is to make their constituents dependent on them for their well being and thereby guaranteeing their continued reelection and thereby increasing their personal power. When the conservatives come out against these programs that waste money and resources and in the long run make for a weaker country, they are pilloried as cold and heartless and greedy. Those on the left loved to tell the public that under conservative administrations, the rich get richer and the poor get poorer and they love to point out that the majority of the wealth in the country is in the hands of a small percentage of the population. These people better hope they never achieve their goal of becoming a socialist country because then they will see very clearly how few will be the people that control all of the wealth. They will also see how little incentive there is for people to work and be productive. Conservatives, on the other hand, have just as much empathy for the poor or more than do the socialist. The difference is that conservatives know that progress comes from jobs and jobs come from investment and investment comes from wealth. Taxes and the threat of more taxes are disincentive to investment and more and more social programs are a disincentive for people to give their maximum effort to care for themselves. Remember, government can't give anything to their citizens without first taking it from their citizens. Someone by the name of Harriet Rubin is credited for saying: " Power is about what you control....Freedom is about what you unleash.".

Election of Senators

The 17th Amendment provides for the election Senators by popular vote of each states residents rather than being appointed by the legislatures of each state. That's not a bad thing, right? We are after all a democracy, right? No, we are not a democracy we are a republic and I'll leave it to you to investigate the difference between the two, if you don't already know. What is important here is that the founding fathers had very good reasons for preferring that Senators would be appointed by their respective states rather than being elected.
Bare in mind that these men were representatives of the original thirteen states and were united in the goal to create a federal government that would unite them into one nation; but in doing so they wanted only to give such powers to this federal government to do, for the good of all states, what they could not reasonably do for themselves and nothing more. One of the ways that they intended to keep the federal government from trying to grab more and more power was to be sure that the states themselves were represented in this central government. The purpose for having two houses in the legislature was for the Representatives would represent the people and the Senators would represent the states, i.e., state's rights. Effectively the Senators were to be employees of their respective states and subject to recall if their state was not in agreement with their actions. Not a perfect system but what system is. I dare say that if were not for the 17th Amendment, we probably would not have any of these unfunded mandates from the Federal government that are helping so many states to go bankrupt.

Federal Reserve System

Now we come to the Federal Reserve System. Creating the Federal Reserve System was probably the most crippling blow of all. I wonder how many Americans realize that the Federal Reserve is not an agency of the Federal government but is instead a private corporation who's shareholders are the principle investment banks of the world, such as, Rothschild's, Lazard Brothers, Warburg Bank, Chase Manhattan,and Goldman Sachs and many some what lesser banks. That's right. The worlds biggest banks own the U.S. monetary system and as best as I can determine, they control the monetary systems of Europe too. It seems insane but is true. The government does get to appoint a Board of governors and the chairman of the board. But guess where they come from . Yup. They invariably come from the investment banking sector. The Feds operation are secret and they are not responsible to anyone; not to the Congress nor to the President. The government is not even allowed to audit them. They control fiscal policy and they have the power to create money out of thin air, and more; they need only ask and the Treasury will print what ever number of dollars they ask for, free. They in turn can use these dollars to purchase government bonds from the Treasury, which must be booked as a debt. The government now owes this money with interest to the Fed even though the Fed did nothing to earn that money in the first place. Beautiful! The Fed determines the interest rate that banks banks must pay for over night loans and, there by, the interest rate that governments, industry and individuals must pay for borrowed funds. In general, if the the Fed perceives the economy to be sluggish, they lower interest rates and vice verse if they perceive the economy to be growing to fast. The idea behind the Fed or any other central bank is to try to maintain a stable currency. I guess that's why the dollar has lost 95% of its value since the Fed came into existence.

Jeff Fisher is an ex-hedge fund manager that sometimes writes articles for LewRockwell.Com. A while back he wrote an article titled " The Dollars Third and Final Act". Fisher asserts that the U.S. is currently submerged in its third credit crisis since the creation of the Federal Reserve System. The first crisis resulted in the Great Depression. The second resulted in the stagflation of the 1970s. The third crisis is what we are currently living through. According to Fisher " All three episodes were the inevitable result of the prior credit inflation orchestrated by the Federal Reserve System." I highly recommend that you read the entire article. I t is very well written. Fisher, however, is not very optimistic for the future. I include here his summary.

" In summary, for the U.S. economy to improve, many unlikely things must occur.

Saving must rise, productive capital must be accumulated, government must shrink to a fraction of its present size in real terms, and the Fed must stabilize the dollar.

Centuries ago, men realized that for there to be peace, Church and State had to be separated.

In order for civilization to survive going forward, the Market and State must be separated.

The role of government in the economy must be eliminated.

The age of central banks and central planning must end.

I think you can see why Mr. Fisher is not optimistic.

The Feds discount rate is effective zero at the present time. The only arrow left in their quiver to continue this credit inflation is to start the printing presses and create more greenbacks that will be necessary to fund the governments apatite for deficit spending. Things are out of control. David Stockton, former Reagan Budget Director points out: " It takes $25 in Federal deficit to produce $1 of GDP.". Not exactly a formula for success. One of the popular phrases of the moment is " the Fed is pushing on a string". Well, Obama and Company are also pushing an a string.

This brings me to a dilemma that I've been wrestling with. I can understand why politicians behave like idiots. What I can't understand is how the Fed can behave like an idiot. The people who run the Fed and their owners are extremely astute money people. Yet it seems the the Fed is and always has acted in a manner that would appear to be against the interest of their owners let alone the Nation. I don't see the logic. I mean these investment bankers, one would believe, are the capitalist of all capitalist. So why do they appear to be acting against their own interest? It doesn't make sense unless they have some ulterior motive. There are many who say that these investment bankers want to collapse the major economies of the world so that they can institute a system of one currency for the world and eventually one government for the world. Sounds like the basis for a Hollywood film, but who knows. Like I said, their actions seem to defy logic.

Enough said.

Sense or nonsense?

Republicans, who and/or what do they represent?

I've been wrestling with a conundrum: Why have the liberals been so much more successful in pushing their agenda than the conservatives?

I grew up believing that the Democrats were the party of the liberals and stood for more government involvement in the lives of our citizenry and, therefore, stood for more spending and more taxes; Republicans were the the party of the conservatives and stood for less government involvement in our lives and, therefore, less spending and less taxes. After much thought, I've come to the conclusion that what I learned growing up was true for the Democrats but not for the Republicans. In other words, I've come to the conclusion that conservatives don't have a political party and, therefore, they have representation in the seats of power of the United States government.

Okay. I'll grant you that we've had a few conservatives in elected office, but in reality not many. The vast majority of our Republican politicians talk a good game but when they get to Washington D.C. its a different story. I'll even admit the the Republicans, when they've had enough seats, have occasionally pushed through a tax cut. But, when it comes to spending and size of government, they are dam near as bad as the Democrats. That is why I say that the conservatives have no party to truly represent them in our government.

Its time that the true conservatives took control of the Republican Party. I'm talking about an actual coup. We need to dump all of these false conservatives and back candidates that when elected will maintain true conservative ideals. That's the only way we are going to counter-balance the liberals on the other side of the aisle.

Enough said.

Sense or nonsense?

The Republicans Talk a Good Game, but....

The Republicans talk a good game about being more fiscally responsible than the Democrats; but when they do get control of the legislature their performance is less than brilliant. In truth, most of the time, there is not a dimes worth of difference between the two parties.

Sometimes I dream that "We The People" take matters into our own hands and through a grass roots effort we add another amendment to our Bill of Rights; That no proposed tax becomes law unless approved by a referendum of the people.

Well, if your going to dream, dream big.

Sense or nonsense?

On American Health Care Reform

Up front I want to admit that I'm not up to speed on the details of the governments new health care program but one doesn't need to know the details to know that will turn out to be a bureaucratic nightmare that will end up being counter productive. I do. however, understand the the President's motivation for pushing this program through. Health care cost in America are truly high and an unbearable burden for many Americans. So its hard to argue against the idea that something had to be done.

Recently I watched a video of an interview that Warren Buffet gave a while back. At one point in the interview Mr. Buffit was asked his opinion of Obamma's health care initiative. Paraphrasing, Mr Buffit said if Plan A is to do nothing and Plan B is the President's health care package, he would opt for Plan B; but what he would really like would be a Plan C, a plan to reduce the cost of health care in America. he pointed out that health care cost in America are equal to 17% of GDP while in the rest of the world health care cost were only 9% of GDP. Also, he noted that, on a per capita basis, America had far fewer medical doctors and medical facilities than in these other countries. Unfortunately, the interviewer didn't pursue the subject further. I would have loved to have asked Mr. Buffit a few questions.

When Mr. Buffit refers to the rest of the world, I have to assume he is talking about the developed world where in most if not all of these countries have socialized health care. So how is it possible that in these countries spend less of their GDP on health care than the United States? Essentially, what Mr. Buffit said was that the problem with health care costs in America is a problem of supply and demand; we have a high demand for medical services and, because there are too few doctors and facilities, health care costs are high. In other words, there is not enough competition in the American health care industry.

So why are there too few doctors and medical facilities in America? In my opinion, the cause for these deficiencies can be laid at the feet of the AMA, the American Medical Association. Although the AMA has consistently denied it, they have for many years had monopolistic control over accreditation of medical schools and in the the number of new applicants that are accepted into medical school each year. Its in their self interest to do so; keep competition down keep income up. To be sure, this debate over the AMA has flared up many times in modern American history to no avail. And I believe it would be useless to continue trying to get the AMA to change their ways.

So what is my point? My point is that America does not need the AMA's approval to solve this problem. If we can agree that the problem is too few doctors and too few medical facilities, then let's do something about it. With private funds (preferable) or government funds (not so good) or with a combination of private and government funds let's fund, staff and equip more medical schools and start producing more doctors and let's build more medical facilities. If we did this, American health care cost would tumble and we wouldn't need a bureaucratic high cost government program that will only end up costing America more than it cost now.

Enough said.

Sense or nonsense?

If we want to change government policy, we have to do a much better job of selling our ideas.

One of blogs I follow is :

Questions and Observations

Free Markets, Free People

http://www.qando.net/

It is written by Bruce Mc Quain and I'm a fan. Yesterday, he made a post titled "Another Great Depression or just another slow Recovery". In his usual skillful manner, he explains the fallacy of past and current government policy as it relates to the economy. In the course of his discussion he makes reference to a quote of Donald Luskin which I want to share:

"The only way to get out of debt is to earn money."

"The only way to get out of a recession is to grow."

"If you kill growth you are in trouble."

As Bruce says, current government policies are killing growth. He then poses the question " So what can government do?" To which he answers, "Cut business taxes. Get out of the way." Thus providing incentives for for business to expand and hire. Clearly, no fiscal conservative is going to argue with Bruce's recommendation. I too agree with Bruce; but I was compelled to make a comment to his blog post ; and I want to share those thoughts here.

We have been tauting this same message for who knows how many years; but very few people are buying our ideas. Why not? We have some very smart people on our side. We know we are right. So why don't our ideas sell? Its not because the majority of people are unable to understand or that the majority of politicians are stupid. I say the failure is ours. We have done a horrible job in selling or ideas. When our pundits talk about our ideas, we come across cold, hard bastards that don't give a damn about those who suffer the most; all we care about is that the fat cats get fatter. And we know that that is how we come across. So I say we need to look for better ways to package our ideas in a more palatable manner. We, and especially our pundits, need to learn to speak in language that almost anybody can understand.i if we're to have any hope in selling our ideas.

Before I retired, I was an engineer/executive in the mining industry for many years. Numerous times in my career I would receive reports from young engineers recommending that the company invest in an idea of theirs to increase production or reduce cost or in some way benefit the company. I would often reject these ideas even though, as an engineer, I knew they were good ideas; because I knew that the engineer's report was not going to convince anybody on the board of directors to approve the request for capital. I would call the engineer to my office and explain that he could have the best idea in the world, but he didn't sell that idea then it was worthless. He would lose because he wouldn't get the recognition for a good idea and the company would lose for missing out on the benefits that the idea would have provided. I would then send them away to rewrite their report with the following suggestions:

1. Describe the situation as it currently is.

2. Explain the problem.

3. Explain the options to resolve the problem.

4. Explain why the option that you recommended is the best.

5. Most of all, use language that anybody can understand and be as brief possible.

I believe that our pundits when writing or talking about our ideas on economic policy could benefit by applying these same principles to what they write or what they say.

Another area where I think we are failing is we don't admit to the world or to ourselves that we have some very unscrupulous players in the market place; some investment bankers just for example. We know this. The public knows this, as well as the politicians. We need, in my opinion, develop ways to police those who abuse the public trust and if not, we should keep our mouths shut about government intervention when they decide to take more aggressive steps.

Enough said.

Sense or nonsense?

Is Goldman Sachs the Worst of the Bad Guys?

I've been busy reading and learning more about the financial and economic crisis that we're living through. In an earlier posting I described how the deflation of the housing bubble was what triggered this crisis. What I now understand is that it was the investment bankers who were the major force involved in inflating this bubble in the the first place and one investment banker stands out as the biggest and worst of the bad guys, Goldman Sachs, and more, this was not the first bubble they had blown up with their manipulation of the markets.



For those who don't know, investment banks are not like commercial banks where you have your checking and savings accounts. Investment banks do not accept deposits. .They provide various services to the corporate and financial world. One of their principal businesses is underwriting new stock offerings, IPO's, and in more recent years they've gotten into commodity trading in a big way. Another important part of their business is creating or inventing new financial instruments , which they believe they can convince investors that they can't live without including this new type of investment in their portfolio.



Much of what I'm about to say about investment banks in general and Goldman Sachs in particular, I got from two sources, one, a New York Times blog called Deal Book and the second source was an article titled " The Great American Bubble Machine" written by Matt Taibbi for none other than Rolling Stone.com. Mr. Taibbi is clearly not a friend of free enterprise/capitalist economics. But that's okay. As I've said before, sometimes those on the left have something to say that we on the right should listen to.



Let me share a couple of quotes from Mr. Taibbi. The first quote refers to what the Secretary of Treasury had to say about the crisis in 2008.



" Last year, when Hank Paulson told us all that the planet would explode if we didn't fork over a gazillion dollars to Wall Street immediately....the entire rational....was that Wall Street once rescued, would pump money back into the economy, create jobs, and initiate widespread recovery. This , we were told, was the reason we needed to pilfer massive amounts of middle-class tax revenue and hand it over to the same guys who had just blown-up the financial world. We save their asses and they would save ours. That was the deal."



I still believe that the government had no choice but to bail them out. The alternative would have been even worse for us. But what about where Taibbi accusation that these were the people who were responsible for just blowing up the financial world. We shall see. Now for the second quote.



" From tech stocks to high gas prices, Goldman Sachs has engineered every major manipulation since the Great Depression _ and they're about to do it again."



So here is what I learned starting with the Internet stock bubble that burst in the 80's. Goldman Sachs was the primary underwriter of Internet IPO's ( initial public offerings ) and they were very successful in spite the fact that most of these new companies failed. Why? Because they were using practices known as " laddering" and " spinning". Suffice it to say that these practises drove prices up for these new stock with no justified basis. These practises are illegal. Goldman was sued in federal court where without admitting any wrong doing they agreed to a settlement for $110 million. Seems like a lot right? No. They made billions while the NASDAQ alone lost $5 trillion when the bubble burst. That is right; Goldman Sachs made billions while the investors lost trillions. The $110 million fine was a joke.



What about the housing bubble? Early in this decade a Goldman Sachs wizard came up with a two pronged plan. First they would convince commercial banks and other lending institutions to approve mortgages for people with little or even bad credit ratings which they would put together in packages called Collateralized Debt Obligations and sell them to investor as supposedly sound investments. Goldman also pressured the rating agencies, Moody and Standard & Poors, to give these instruments AAA rating. With that rating they had no trouble selling these CDO's that were in fact backed by junk mortgages. One of rating agencies went so far as to say that they estimated there would be no more than 10% defaults. It turned out that there were 18% defaults in only 18 months. The second prong of the plan was that Goldman convinced AIG and other insurance underwriters to issue insurance against default of these mortgages using instruments they called " credit default swaps", which are difficult to explain; but Mr. Taibbi used the following description:



" The swaps were essentially a race track bet between AIG and Goldman. Goldman was betting there would be a lot of defaults and AIG was betting there would not be a lot of defaults."



Goldman Sachs was betting against the very thing that they were promoting to their investors. This fraud, right? Yes it is. And about five years too late they were sued in federal court. But by the peak of the housing boom, in 2006, Goldman Sachs had already underwrote $76.5 billion worth of mortgage backed securities a third of which were backed by these sub-prime mortgages. Many of the investors were pension funds and insurance companies. As for the law suit in federal court, again Goldman admitted no wrong doing but did settle the dispute for $500 million. Again it sounds like a lot of money but to Goldman Sachs it was chump change. One of their executives was heard to say " for us it was a low cost no-brainer".



With people and businesses like this its no wonder free enterprise/capitalism are getting such a bad name. A whole bunch of these people belong in jail for defrauding the public and they should loose the wealth they accumulated in this manner. Maybe that would finally get their attention.



While the housing bubble was growing, there was an oil bubble growing also. Everyone thought it was a problem too much demand and too little. Apparently another Goldman wizard had an idea to make some more big bucks. This guy goes to the the Commodities Futures Trading Commission, CFTC, who has over site and regulating powers over the commodities markets, to petition the CFTC to allow J Aaron Company, a subsidiary of Goldman Sachs dedicated to commodities trading, to call itself a "physical hedger". Hedging was originally approved in the 30's as a means to smooth out large price swings and, thereby, provide a tool for producers and buyers to protect themselves. Goldman got their approval and they immediately began promoting oil futures as a way to benefit from ever increasing oil prices, which they would well into bonuses. the future due to economic growth in India and China. Sounds like a good plan, right? The problem reached a head in 2008 when oil prices reached $147 a barrel and gasoline in the US was over $4 a gallon. Well what could anybody do? There was too much demand and too little supply, right? Wrong. It turns out there were far far more futures being traded than there were real oil buyers. Congressman Stupak of Michigan, who serves on the House energy committee, got it right. He said



"We have the highest supply of oil in the last 20 years now and demand is at a 10 year low. And we're all paying $4 per gallon for gasoline only because the investment bankers want more money for bonuses."



The fact was an average barrel of oil was being traded 27 times before it actually reached a buyer to be consumed. So, when the bubble burst oil fell until reach $33 a barrel. These guys really are good at what they do. They manipulate the markets and get filthy rich and you and I pay for it. Do you think its time to put some control on these people? I do.



So the house of cards falls and the government, i,e, the tax payers to bail everybody out.

Paulson, Treasury Secretary and and ex-muckitymuck of Goldman Sachs, helps finance Bank of Americas buyout of Bear Sterns; but he decides to let Lehman Brothers, Goldman's biggest competitor, go under. He then decides we have bailout AIG and they receive $85 billion. This is nice they then use this bailout money to pay $13 billion for the credit default swaps that Goldman is holding. Once again Goldman Sachs comes out the big winner. But Goldman isn't done yet, not by a long shot. The government has another bailout plan;The $700 billion Troubled Asset Relief Program or TARP. Now, investment banks are not eligible for these funds, so what do our friends Goldman Sachs do, they decide they are no longer an investment bank but a bank holding company. This idea gets quick government approval and they are now eligible for $10 billion in low interest TARP funds. These people have no shame!

Whats the next bubble? Not to worry. Goldman Sachs already knows exactly what is going to be the next bubble and they intend to get a big piece of it. They have spent a few million dollars over the last couple of years promoting government mandates to lower carbon emission that in part responsible for global warming. They are doing this because they are such a socially minded company, right? Wrong. The administration is planning to propose a law limiting carbon emissions from coal plants, utilities, and natural gas distributors, whereby, if a company goes over their limit for carbon emissions they will have to but credits from companies that have been able to stay under their allotment. Estimates vary from about $640 billion to $1,8 trillion of these credits will be necessary over the first seven years of the program. Our green fiends at Goldman Sachs are planning to turn these carbon emission credits into the next high flying commodities futures trading game. They see this as the biggest and best cash generator yet. This is crazy even if we all agree that reducing carbon emissions is a good idea. What the administration is proposing is essentially to impose a tax on companies to get them to reduce their emissions. Fine! But in this plan its not the government who will be collecting the tax and use the funds generated for the national good. Instead it will be Wall Street (Goldman and friends) who will be collecting the tax to pay themselves huge bonuses for being so green. America we some how must get our law maker's attention and demand real reforms and control over these characters. You think? Is Goldman Sachs the worst of the bad guys? I think so.

There you have it. Sense or Nonsense?

Ramblings

I thought I would start off with a couple of quotations that I came across that caught my attention. The second quotation certainly applies to where I live.



" Don't try saving yourself without trying to save the rest of society, because you may end up having everything where nothing is worth having." (Socrates )



" It may be dangerous to be right when the government is wrong " ( Voltaire )



Um. Food for thought, don't you think?



Moving on. I some how found myself, this morning, thinking about the magnetic polarity of the earth. I'm sure it's something that has been on the minds of almost everyone, right? Well be that as it may, that is what I was thinking about. More specifically, I was wondering if the poles have always been where they are or have they at some point in the history of the planet been, for example, where the current equator is or where Miami is. You understand my dilemma. So, as always, I asked Google to check it out. As I was scanning the summaries of the multitude of options that Google presented, I came across several that made reference to the fact that the magnetic poles were actually in constant motion; that is, they are moving from one place to another in a relatively small area. Another option noted that the polarity of the earth flips every five hundred thousand to a million years. That looked interesting and I was about to open it when I was distracted by a link to another page upon which I clicked and I immediately lost all interest in the magnetic poles of the earth.



I found myself at http://www.physorg.com/ an absolutely wonderful place. If you like reading about whats going on at the cutting edge of science and technology, I highly recommend this web page.Here they have the latest news from, it appears to me, every science and technology known to mankind. It's just amazing. For me it was like a child that just stumbled into a room filled with the greatest toys in the world and he can't decide which toy to play with first. I had a hard time deciding what I wanted to read about first. Finally I choose on and when I looked up three hours had gone by. This is great stuff. To be sure, much of it was beyond my grasp but generally I understood enough to stay interested. This page is definitely in my list of favorites. You might want to check it for yourselves.

I hope these ramblings haven't been to boring. I'll get back to some heavier stuff soon I promise. I want take a crack at investment bankers. I'm sure they had as much or more to do with this financial and economic crisis than the commercial banks; but right now I only know enough about investment banks to be dangerous. Not to worry. Google will get me to where I want to be. Plenty of people a lot smarter than me have already taken them to task. That¡s okay. I still want to take my shot. Stay tuned.

So there you have it. Sense or nonsense?

Some Strange Numbers

The other day I was reading something that made reference to the number Phi and I was trying to remember what I knew about Phi which is not to be confused with Pi. So, nothing to do but check it out on the Internet. Well, I found out a whole lot more than I really wanted to know. It seems there is a whole cult that has developed around this number. I'm going to share just a little of what I learned or some cases relearned. If your curious to know more go to http://www.goldennumber.com/.


Phi like Pi is what is called an irrational number in that it has no end. Pi, as you know, is the circumference of a circle divided by its diameter which is 3.14159.....ad infinitum.Phi is credited to the ancient Greek mathematician Euclid, the father of geometry. Euclid discovered the following: if you draw a straight horizontal line on a peace of paper and you want to find the exact center of this line it can be done with a simple compass. With the compass point at one end of the line, strike an arc both above and below the line. Then do the same thing with the point of the compass at the other end of the line. The result will be two sets of arcs that intersect each other and if we then draw a line connecting these two points of intersection you will have a straight line that crosses the original line, in a perpendicular manner, at the exact middle of the original line. What Euclid discovered was the ratio of these two lines ( the length of the longer line divided by the length of the shorter line ), no matter how far the arc intersections were from the the original line and no matter the length of the original line, was always the same; 1.618033....ad infinitum. This number took the name Phi. Euclid also determined that Phi is the only number that is equal to one plus its own reciprocal, in other words, 1/Phi is equal 0.618033.... and, therefore, Phi = 1 + 1/Phi. This discovery of Phi received a lot of attention. Phi became known as the golden or Divine ratio and rectangles with base and sides that met this ratio became known as golden rectangles which greatly influenced ancient Greek and Roman architecture. Well, Phi is definitely a cool number, but hang on, things get more curious as time goes on.


In the twelfth century, a mathematician by the name Leonardo Fabonacci with a curious sequence of numbers that henceforth bare his name. Every number in a Fabonacci sequence is the sum of the previous two numbers, i.e.,

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, ......

What's cool about the Fabonacci sequence is that if you take any pair of Fabonacci numbers and divide the larger by the smaller you get a number very similar to Phi and the further out in the Fabonacci sequence you go this ratio gets closer and closer to Phi. In other words, these ratios of Fabonacci numbers converge on Phi. Well, now people began see Phi and Fabonacci numbers as something mystical; they saw Phi and Fabonacci ratios every where, the shape of the galaxies, between the earth and the moon, in plant life and animals and etc. In the renaissance age artist including Leonardo da Vincci, use the Phi ratios in their constructs of human figures in their art. In other words they used these ratios to determine things, such as, the length of the face relative to the width, the position of the eyes, the position and width of mouth and all of the various proportions of the body. Critics claim that these proportions are very pleasing to the eye.

Like I said at the beginning, I've learned more than I really wanted to know. But what is strange to me personally is that only learned about Phi for the first time when I was about fifty years old. I say strange because I am an engineer and I spent a fair amount of time studying science and mathematics and never once did I come across Phi. Oh well, I'm already tired of Phi.

There is, however, a number Ive always found interesting and you may as well. This number doesn't have a name that I am aware of. I can't even remember where or when I first came across this number but it was a long time ago. The number is 142857. What is interesting about this number are its multiples as you can see in the following table:

1142857 x 2 = 285714

142857 x 3 = 428571

142857 x 4 = 571428

142857 x 5 = 714285

142857 x 6 = 857142

142857 x 7 = 99999

142857 x 8 = 1142856

142857 x 9 = 1285713

As you can see, for multiples 2 through 6 all of the results contain the exact same digits as the original number; only the sequence starts at a different point in each case. When we multiply by 7 we obviously get the source of our mysterious number because 999999 divided by 7 is 142857. If we look close at the multiples of 8 and 9 we note the the results now have seven digits instead of six and if we sum the first and the last digit will have the number that we are missing from the sequence. You've got to admit this is a cool number.

Enough for numbers! Sense or nonsense? You be the judge.

More Reflections on the Financial Crisis

After posting yesterday's blog on the financial crisis, I couldn't stop thinking about how serious this problem is for the entire world. It worries me that the inflexibility in the positions of the liberal left thinkers and the conservative right thinkers is such that a coherent resolution to the crisis may not be forthcoming. I'm reminded of the " whose ox is getting gored syndrome". If the left believe a policy will result in their ox getting gored, they are going to fight it with all that they have. And equally for the right, if they believe a given policy will result in their ox getting gored, they will do everything possible to stop it.

Nobody has a monopoly on good ideas, nobody. Its not a matter of your ox or my ox. There is only ox and its' OUR OX and our ox is getting gored. I believe this crisis runs much deeper than we know. Now may be our only chance to get the fix right.

Sense or nonsense?

Financial Crisis _ The End for Democratic Capitalism?

When the financial crisis graped the headlines, it was in the top of news here in Venezuela, also. Unfortunately,details about the cause and what was being done to correct the situation were sketchy at best. About all I knew was that there was a collapse in the housing market which put many financial institutions on the brink of bankruptcy and the government was rushing to bailout these financial institutions to avert an even worst crisis. And more, like dominoes the rest of the developed world fell into the same kettle of soup. So now that I finally have a computer, I decided to learn more about what had happened and what was being done to right the ship.



It wasn't difficult to see that it was, indeed, the bursting of the real estate bubble in the United States that triggered this crisis. However, I suspect, from all my reading, that the financial institutions and markets around the world were in a some what fragile state that if it had not been the U. S. housing market collapse, it soon would have been some other cause that would have triggered the crisis.



But what caused the so called housing market bubble and why did the bubble burst? From what I could gather, it comes down to greed , speculation, and liberal lending policies with little or no control.



It all starts with the lenders. A number of years ago Some smart investment banker suggest that there was money to be made in real estate mortgages. If a large number of mortgages were put together in packages for investors to invest in. These packages would be attractive if there was default in a few mortgages the impact would be small on the whole package, i.e., low risk. Ratted AAA, these mortgage REITs ( Real Estate Investment Trusts ) became very popular. some time latter an investment banker got the idea that even more money in higher risk mortgages. the idea was to give mortgage loans to people who couldn't ordinarily qualify for a mortgage by giving them loans that start out with low interest rates which change to higher interest rates as time goes on. After all housing just keep going up so if there are or when there are defaults, the higher value home can be sold to pay off the mortgage. These REITs also got high ratings Some say due to coercion by the big investment banking houses ). And everybody is happy. An estimated 5 million low income people that were previously renting a home were now home owners; they were happy. The banks and savings and loans were happy because they really didn't have to worry about the credit worthiness to their clients because they had no intention of holding onto the mortgages; they were going to sell the mortgages to investment bankers; their profits came from loan origination fees, the more loans they made the more origination fees thy collected. The investment bankers are happy because they are not worried about the credit worthiness behind these mortgages either because they are going to sell them off in the form of REITs and collect their commissions; the more REITs they sell the more commissions they receive. The end investors, the ones that are actualy holding the mortgages, they are happy be cause housing prices keep going up on speculation so their share values keep going up.

So what happened? The best that I can tell is the demand for housing ( People rushing to buy before prices went even higher´, house ownership was always a good investment, interest rates were low, so better buy now. ) caused contractors and developers to build more and more houses on speculation and they often did it with borrowed money. Unfortunately, by 2006 the supply of new houses had greatly exceeded the demand. One expert wrote that they were building houses faster than new families were being formed to fill them. The result is that housing prices start to fall, fear starts to pervade the markets, the new high risk home owners find themselves in a real bind, their mortgage interest rates have gone up and at he same time the market value of their homes has fallen below their outstanding loans; they begin to default in large numbers. By 2008, the snowball that has been rolling down hill for a year and a half and has been affecting confidence in all market segments rolls off the proverbial cliff. Now all financial institutions are in over their heads. Presto! World Wide Financial Crisis.

Why world wide? Because these REITs had become a favorite by financial institutions around the world. And why not? They had AAA rating and were backed by high value real estate in the United States. What could be better, right?

People are scared and rightly so. They want to know that their governments are going fix this problem and hopefully in a manner that this won't happen again. So what's been done and what more needs to be done?

The first thing that was done was that governments rushed in with $100's of billions of dollars to bailout their financial institutions. now, there are many that say that this is not fair. Why should we be using tax payer money to bailout the S.O.B.s that got us into this mess. Well these people are right; it's not fair. But we can't blame government. They had absolutely no other options. I f they hadn't done the bailout we would all be in much worst shape than we are now. The consensus of the experts seem to be that the bailout is just a temporary solution; but there is no consensus on what needs to be done in the medium and long term. The "experts" and those that have put a lot of thought into this problem fall int three groups, as best as I can tell. On the left we have the Marxist/socialist/communist government do everything types; while on the right we have the democratic capitalist/free market/government get out of the way types; and the third large group that are totally confused. What hope is there for us mere mortals? So if the "experts" can't come up with a solution that's rational, I'll just have come up with my own.

First a disclaimer. I am not an economist or anything close to an economist. Also, I am definitely a capitalist ( there doesn't seem to be any middle ground on this issue ). Part of the difficulty is both the left and the right are extremely rigid. Neither side is willing to admit that the other side may have some valid points. Before I go on I want to explain why I'm a capitalist.

The Marxist/communist types are fond of pointing out how under democratic capitalism there have been and endless stream of recessions and one depression which result invariably in that those at or near the bottom of the economic ladder are always the ones that suffer the most and government always has to use the tax payers money to bailout the fat cats. Well you know what? They are right. But, I spent a month in Russia a couple of years after the fall of the Soviet Union and I saw first hand the results of seventy years of communism. Also, I came to live in Venezuela in the year 6 BC (Before Chavez ) and so I witnessed how the economic base of this country has been destroyed and the destruction of the legislative, judicial and military institutions. The suffering and misery occasioned at times by democratic capitalism is nothing compared to what happens under extreme socialism.

Okay. How do I propose to fix the problems. First of all, I think that we on the right, the free market democratic capitalist, are the only ones that have a chance of fixing the problems; and we have to start by admitting that we have been part of the problem. We know that capitalism isn't perfect but we've done damn little to make it better. So here I go, this " condanado viejo" offers up the following:

1._ When the left points its finger at the right saying that wealth distribution under democratic capitalism is not equatable, they are right and we know they are right and yet we do almost nothing. Democratic capitalism works best in countries where the majority of the citizens are in the economic middle class. They have a small piece of the pie and they live reasonably well Also, many of those in the middle class feel and believe that if they prepare themselves and work hard , they may become rich, if that's their goal; and they are right, it happens all the time. However, in developing countries and third world countries where the vast majority of their citizens are poor and relatively ignorant ( please bare in mind that ignorant does not equate to stupidity ) democratic capitalism hasn't worked so well. These countries are very vulnerable when a charismatic populist comes along and tells the poor that they deserve the power in the country because they are the majority. Believe me its an easy sell. I have witnessed it and am witnessing it as I write these words. So then, I say with all my heart and sole that we on the right must do much much more to develop and promote ideas that will seriously help the poor to improve their quality of life. It is in our best interest to do so. Because if we don't we run the risk that they will become our worst enemies and they out number us by a long shot.

2._ We on the right must recognize that there needs to be more control on our financial institutions. I'm not saying anything new. Most businesses and all corporations are, for example, required to use approved accounting standards in their reporting of their results and they receive independent audits to ensure that they are complying. There needs to be a similar system of standards and audits in the area of credit in the financial institutions.

3._ Speculation in the stock markets and commodity markets, I believe, is not a good for capitalism in the long run. Markets get distorted and at times are manipulated and this can have serious consecuences. To me it seems that capital gains tax could be a very good tool to at least curb the speculation. If the capital gains tax was, for example, very stiff on assets held for six months or less and a little less stiff on assets held for six months to one year and progressively less until on assets held for at least two years the capital gains tax would be very little. Well you get the idea. I wonder, when did investing become gambling. Everybody is looking for a quick profit instead of deciding after due diligence that this company has a good product, has good manage met and the outlook is for a good future. I want to be an owner of this company. Warren Buffet became and was for many years the richest man in the world and to my knowledge he never once bought a stock speculating that he could make a quick profit. Warren Buffet is an investor. I've known CEO's who sent 95% of their time managing for the next quarter and 5% on long term planning. They were under pressure from their shareholders to do so. I say that these shareholders were not investors they are speculators that goes not just for individual share holders but for the big fund managers as well.

4._ Democratic capitalism often suffers ( it gives the left ammunition to use against us ) from highly publicized scandels for wrong doing in the highest echelons of business. I don't have any suggestions myself other than to say those much smarter than I, need to tink about how we can clean-up our act in this area.

Well there you have it. Sense or non-sense? You decide.

U. S. Drug Policy _ What's It Worth?

I've always been a conservative when it has come to economic policy and on politics in general. On social issues I too have been conservative with the exception of a women's right to an abortion. I've always supported a woman's right to choose. I was a hawk during the Vietnam war, the Gulf war and the war in Afghanistan. The war in Iraq is a different matter. On the issue of drugs I've always supported the so called war on drugs. The number of lives ruined and lost due to drug use is appalling to say the least.

However, on the issue of drugs, I've changed my mind 180 degrees. After all the years and the billions of dollars spent, I think we have to admit that the war on drugs has been a complete and utter failure. Not just in the United States but in the world. I suppose it's understandable. There is just too much easy money in drug trafficking. Arrest a ton of small time dealers and an occasional king pin and the vacancies are filled immediately if not sooner.

Ladies and gentlemen it is more than time to make a change in our approach to the issue of drugs. I believe a drastic change is in order. I, Jim Gourdie, have deride on numerous occasions the liberal drug policies of Holland and Portugal; and now I'm saying that these have not gone far enough. I'm saying it's time to legalize all drugs and control their sale in the same way we do with alcoholic beverages and cigarettes. Clearly, this is not a new idea. A number of people have advocated idea for years and I have always scorned them. Well now I'm one of them.

Having lived in Venezuela for the last seventeen years, I'm accustomed to read and to listen to Spanish language news not only from Venezuela but also from Mexico, El Salvador Bolivia and Colombia. This is what has changed my perspective on this issue. It is staggering the number of lives ruined and lost on a daily bases due to drug trafficking. These countries are the principle sources of the drugs that enter the United States. The cartels and mafias are all ways fighting for control of this lucrative business. They are killing each other and anyone else that happens to be in the way. Wtih their never ending supply of U.S. dollars they are able to corrupt government officials as well as police and military officials; and those they can't corrupt they kill. In Mexico, El Salvador and Colombia, drug mafias have taken control of entire cities. There is one city of five hundred thousand that I recently read about in Mexico not far from Loredo, Texas, where the town's people have set up a Twitter network to warn each other of the mafias movements so that people can hopefully stay out of harms way. These people live in constant fear for their lives. In Colombia there is the gorillas army known as the FARC which in English stands for the Revolutionary Armed Forces of Colombia. The FARC was formed over fifty years ago by left wing extremist for the intended purpose of over throwing the elected government for their own political interest. They eventually got into drug trafficking in order to finance their cause. But over time the FARC became just one more drug cartel And so in Colombia the kidnappings, the bombings and the murder just keep on happening.

America is by far the biggest market for drugs in the world. Therefore, it is the American drug consumer that is financing the drug related terror that reigns in these drug producing countries. Because this business is being financed by Americans, it is in my opinion, Americas responsibility to do something about it and the so called war on drugs is clearly not the answer. The war on drugs has not worked, is not working and shows no signs that it will ever work. By making drugs legal and relatively cheap, the drug trafficking profits will dry up and the cartels and mafias will no longer have a reason to exist.

The billions of dollars that the United States is spending on its war on drugs could be redirected to social programs to help people kick their drug habits and on programs to help steer children away from trying drugs in the first place. Think of all the violent deaths that could be prevented not only in the United States but also in all of the drug producing countries by putting the drug traffickers out of business. As for the argument that drug use will increase if the are legalized, I'm not buying it. The preponderance of evidence is that this has not been the case in Holland or Portugal.

So is the U. S. drug policy worth anything? Not from where I'm standing.

I s Chavez Really That Dumb?

I've been living in Venezuela for all the Chavez years and then some and I have to say its been interesting but also very sad.

Venezuela enjoyed 40 years of democracy before Chavez but it wasn't exactly a shinning example of democracy. It was a democracy where the "haves" continually got more and the "have nots" stayed in their place. The "haves" believed that although the "have nots" were an 80% majority in the country, most of them didn't vote so they , the "haves", didn't have to worry about them, the "have nots". Well, the "haves" should have been worried because a man by the name of Hugo Chavez Frias had plans for the "have nots". Chavez came upon the political scene in 1998, fresh out of prison after having been pardoned by president Caldera for leading an attempted military coup in 1992 against, then president, Carlos Andreas Perez. He decides that because he wasn't able to take power by force, he would try his luck at doing it democratically. So what does he do? Well, what he doesn't do is waste one minute campaigning to the economic power base of the country, the "haves", the oligarchs as he likes to call them, but instead spends all of time talking to the poor majority, the "have nots", and he tells them it is time for a change, it's time that Venezuela had a government that governed for the majority, the "have nots", and not for the minority, the "haves", the rich, the oligarchs. I'm here to tell you, it was an easy sell and, as they say, the rest is history. I don't have the energy to explain here all that Chavez has done to destroy the economic base of the country, of its institutions, and of the basic human rights of freedom of speech and and the right to descent.

In the approximately 12 years that Chavez has been in office, he hasn't actually done much of anything to improve the quality of live for the poor the "have nots" still have nothing. However, he has been successful, for the most part, of convincing the "have nots", that he and his revolutionary government have done a lot for them. This was able to do, in part because he has thrown them a few crumbs but, mostly because he is consummate con artist; and that is a fact. Over the years, what has been, for lack of a better word, entertaining is all the really dumb things he has said and done, and I mean seriously dumb. I want to share with you his latest dumb plan; a real cake taker if there's ever been one.

Earlier this week Chavez announced a plan to combat capitalism from the bottom up; his words not mine. His plan is that the "have nots" should use the system of "trueque" between themselves and, also, in certain state owned food markets. What is "trueque"? Trueque is barter. Believe me, he is serious about this. Folks, barter is humans exchanged what they had for what they needed back before money was invented. Monet isn't something that was invented by capitalism; it was invented by humans to make commerce among themselves easier, to make their lives easier. Money was invented before Moses was born. Is trueque how Chavez sees Venezuela progressing? Is this what Chavez means when he talks about his vision of "Socialism for the Twenty First Century"? Maybe he means twenty first century B.C.

Try to picture this. Your a poor Venezuelan living in the country side where you have a little patch of land where you grow corn. One day your wife says that she wants to cook some beef stew for the family for that afternoon. So, dutiful husband that you are, you throw 30 pounds of corn into a sack and you hump it around to various neighbors or into the village market looking for someone that has meat and is willing to trade some for corn. And when you finally find someone willing to make a trade, you have to fight it out over how many pounds of corn equate to a pound of meat. Yes sir, this is progress. NOT!!! So, is Chavez really that dumb or is this just one more con against the "have nots" in a long line of cons? Stay tuned.

The War in Iraq _ When is Enough Enough?

Look, I'm a conservative. Friends have described me in the past as being somewhere to the right of Attila the Hun. But this war in Iraq, please! We all know that Bush took us into this war under false pretences ( Arms of mass destruction, where? ). So be it, we went to war. My question is; when do we declare victory and come home? We destroyed Saddam's military in short order. Saddam was captured, tried and hung. We helped Iraq create a new constitution based on democratic principles and to hold their first free elections. So what are we still doing there? Let's get the ground forces out of there. If they need American advisers, provide advisers; but no ground troops. The tribes and religious sects in Iraq have been fighting for thousands of years ( Except under Saddam's iron fist; now there is food for thought. ). Maybe they're not ready for democracy. Maybe they never will be. So maybe we should pull out our troops but maintain satellite surveillance and other intelligence gathering and if necessary we lob in a few smart bombs to help in keeping a level fighting field for the Iraqis; but no more.

Or maybe there's another reason for our presence in Iraq, you think? Is it possible that the real reason for our presence in Iraq is that Iraqi oil is of vital national interest? Maybe it is. But, if that is the case, let us admit it. Admit it to the American people and to the world. Then, if there is enough support for this "vital national interest", there is only one thing to do and that is to take the damn oil fields. Establish a sufficiently large buffer zone around the fields and throw all Iraqis out and if anyone tries to inter this zone without an explicit invitation from the U.S. government or its representative in the area they die. Import whom ever is needed to operate the oil fields in a professional manner, sell the oil production at OPEC prices or a slightly lower if you please, cover all of our operating and security costs and give what is left over to the Iraq government. That should take care of our vital national interest.

Told you that I was a conservative.