The King's Speech

It’s déjà vu all over again.

President Obama recently gave his umpteenth speech about the bleak situation we have with jobs and the economy and what needs to be done to make things better. That’ll solve our economic problems – another speech.

The next day, the stock market dropped three hundred points.

Obama proposed his latest and greatest plan to fix the economy, and it was for more of the same: massive government spending, throwing money at his favored groups, demonizing “the rich”, repairing the infrastructure, touting “green jobs” as the savior of the economy, demanding that Congress pass his proposal immediately, blah, blah, blah.

You may have detected that I am more than a little skeptical, which I am, because we have been down this road before with Obama. I’m sure you all remember the last stimulus, in 2009. It was twice as big as this one; we were told at the time that it would revive the economy and keep unemployment under eight percent. We were also told back then that that stimulus, like this one, had to be passed immediately in order to avoid financial calamity. Now, two years later, unemployment is stuck at over nine percent, the economy has flat lined, the housing market is non-existent, and there is almost no good economic news. Everything that Obama and crew told us the last stimulus would prevent has happened! So why would anybody still listen to these people when it comes to the economy and jobs? They are obviously clueless.

I actually read in the paper after Obama’s speech that an economist at Moody’s Analytics said this latest stimulus plan would reduce the unemployment rate to, you guessed it, eight percent!!

Of late, Obama has developed a new concern for the federal budget deficit, or at least he wants us to think so. In his speech, he said that the new spending called for in his current plan will not increase the deficit because everything in his bill will be “paid for”. He didn’t tell us how it would be paid for, though; he promised to do that later.

You can’t make this stuff up.

No matter which way one looks at Obama’s new plan, you find absurdities. Let’s start on a broad, overall scale and then work our way down to some of the specifics.

OK, from the 30,000 foot level, as they say, let’s look at this plan. It’s another government stimulus, much like the last one, only this one is smaller by half. It’s about half as big as the 2009 stimulus, and that one, by any objective measure, was a total failure. Here’s the absurdity: If a big stimulus has already failed, why will a smaller one now work? The only logical argument one could make is that the last stimulus failed because it wasn’t big enough, so now we need a larger one. But a smaller one --- ? Absurd.

Let’s go on to some of the specifics of the new plan.

It calls for government spending to keep teachers, firemen, and police on the job. But why do we only want to keep these groups employed? With the jobs picture being as bleak as it is, we need to do something to increase job creation across the board; we need to get everyone back to work. We need to create economic conditions such that all companies, large and small, in every industry, in every location, will be able to expand and start hiring. It makes no economic sense whatsoever to restrict job creation efforts to just some segments of the work force.

Now let’s look at the proposed tax breaks in Obama’s plan for companies that hire or increase wages.

I worked in the corporate world for over thirty years as an engineer and manager at various levels up to vice president. During that time, I must have hired literally hundreds of people. Never, not once, did I or anyone I knew or observed ever hire somebody because of a tax break, nor would we have. That’s not why businesses and companies hire.

Hiring is a serious matter to companies. It involves taking on a significant new expense that will be there far into the future. Note: I’m not talking about temporary or seasonal help here. Companies are looking out into the future, not just the short term. They don’t like to have to lay people off, so they only hire when they are convinced that they can afford it in the long term and that the additional sales will be there to pay for it. Hiring is a business decision, not a public service matter.

People are hired because the company has more work than it can handle, or because the company is confident that additional business is coming, or because they see a new business opportunity, or they want to do a better job of servicing customers. Those are the reasons that companies hire, certainly not because of some one time tax break or other such gimmick.

People who think that such short term tweaking of tax provisions here and there will stimulate broad scale hiring and reduce unemployment in the long term have absolutely no knowledge of how the business world operates. In the real world, that kind of an approach is pure nonsense.

Then there is the part of Obama’s new plan about giving a tax break to companies that increase workers’ wages. This is so idiotic it defies belief. How could increasing wages possibly spur hiring? If anything, such an action would have the opposite effect, since the more a company pays existing employees, the less money it has to hire new ones. Furthermore, the tax break is a, again, one-time thing, but the increased wages are permanent, so no business will pay the slightest attention to this provision of Obama’s new plan.

Obama wants to, once again, extend unemployment benefits. Regardless of the merits of this proposal on humanitarian grounds, as far as job creation is concerned, it’s another absurdity. Paying people not to work for an even longer period of time will obviously not get them a job. Our goal in this area shouldn’t be to keep people on the unemployment roles for a long time; or goal should be to get them off of unemployment because they have gone back to work. The unemployed don’t need another government handout; they need a job. Extending unemployment benefits will not get them onto somebody’s payroll; if anything, it might discourage them from looking hard.

I have a suggestion for President Obama: If you want to stimulate the economy and job creation across the board, stop doing those things that stymie that. Mr. Obama, you’re part of the problem, and if you truly care about job creation, here are some things you could stop doing.

First, stop demonizing “the rich”. We continually hear you talking about how the rich don’t pay their fair share, that they are greedy, that they got where they are because they won life’s lottery rather than due to their own hard work, etc. Why would anybody, such as a sole proprietor or a small business, who can afford to hire someone actually do it when they feel they are being targeted by the government? So just stop it, Mr. Obama.

Next Mr. Obama, stop punishing companies that you regard as unworthy or that your political cronies don’t like.
Your National Labor Relations Board recently sued Boeing for moving a factory from a unionized state to a right-to-work state, which was displeasing to your union buddies.

Gibson Guitar was raided by the government because of some obscure law about wood that they import from India.
Coal users and producers have been on your hit list for years. You famously stated that you want to bankrupt the coal industry, because you think they are polluters. Your EPA recently issued new emission standards for coal-fired power plants, which will result in the closing of plants and the loss of jobs.

You apparently don’t like oil drillers, either, as you have stopped any new offshore oil exploration or drilling, loosing potentially tens of thousands of high paying jobs.

Mr. Obama, if you really care about jobs, just stop this jihad against companies and businesses.

Once you have stopped you job-killing behavior, Mr. Obama, here are two positive actions and one attitude adjustment you could undertake. These alone would have a game-changing effect on the U.S. economy and job creation.

Number 1. The U.S. has the highest corporate income tax rate in the world – 35%. Cut it. You could follow the example of Canada, and use their 16% rate. With this one action, you’d see so much increased business activity and the hiring that goes along with it that your head would swim.

Next, take a machete to onerous government regulations on business. A good start would be to cut the EPA staff by, say, half, and then go from there on a rampage through other government regulators. Companies would save millions, which they would be more than glad to use on business development. This, too, would promote economic expansion and job creation in a significant fashion.

Finally, Mr. Obama, have an epiphany. Start looking at companies and businesses of all sizes as the drivers of our economic prosperity that they are. Come to realize that the private economy, not government, creates wealth. Celebrate our free enterprise system and the magnificent benefits we all receive from it.

Big Education

Radford University (RU) raised tuition by 8% this year, after an 11.3% increase last year. That’s a 19.3% increase in just two years. Other Virginia colleges and universities have had similar tuition increases in recent years, as have colleges around the country. One year of a college education now typically costs between $20,000 and $50,000, which comes out to $80,000 to $200,000 for the four years it normally takes to graduate.

My entire undergraduate education at the University of Virginia cost me a total of about 12 or $13,000 (that’s for tuition, fees, room, food, books, everything). Now at UVA, it’s going to cost you $25,000 a year, at least. That’s a 669% increase (since 1969).

Here is a test: Why do we not hear politicians, newspapers, TV talking heads, pundits, and all the chattering class fulminating about “big education” and price gouging and demanding investigations, and all that?

Exegesis on "ed"

This is the one that pushed me over the edge.

Yesterday, I went to McDonald’s. This is something I do now and then as a reward for having done some especially hard work. I had been in the vineyard all day pruning the vines and picking off bad grapes one-by-one, getting ready for the harvest. So, on the way home, I stopped at McDonald’s to get a small burger, small fries, and a soda, a line-up that would be heavenly after a hot day in the field.

And then the trouble started.

I am particular about what is put on my hamburger. I want lettuce, tomato, and onion on it, but nothing else. Nothing else; especially not mayonnaise, mustard, or ketchup. So, on that day, I innocently ordered a burger with lettuce, tomato, and onion only, as I have done many times before. But this time, things progressed differently. The lovely young lady behind the counter asked if I wanted leaf lettuce or shred lettuce on my burger. I said that I’d have shredded lettuce, she punched it in, and it came up on the screen: shred lettuce. I saw it with my own two eyes: shred lettuce. I wasn’t just misunderstanding her; they were actually calling it “shred lettuce”.

So I now must address this issue, which has been tormenting me for years: the omission of “ed” in words that cry out for it to be there. I can no longer let it go. Which is one of my problems; I can’t let anything go. Really, I get concerned about such matters, because they are important to an inquisitive and disciplined mind. Yes, the proper use of “ed” is critical, because if we don’t pay attention to such details in matters of linguistics, before long we’ll all be talking baby talk.

By the way, I never talked baby talk to my babies. I conjugated verbs to them instead, but that’s another story.

Back to “shred lettuce”. Don’t the people running McDonald’s know that “shred lettuce” is what you do in order to get “shredded lettuce” to put on burgers? How can they not know this?

This is not the only time I’ve been haunted by a missing “ed”.

I actually saw a sign at a local produce stand that read, ”tree ripen peaches”. I am not making this up; it was right there on the sign. Don’t the fresh produce mongers know that “ripen” is the present tense of the verb “to ripen”; “ripened” is the past tense and is also used in the past perfect and future perfect tenses. “Ripen” means it’s occurring now; “ripened” means it has already happened. Voila! Peaches that have been left on the tree until they are fully ripened rather than being picked green are called “tree ripened”, because that’s what happened to them. I couldn’t sleep that night.

There are more. All of these are real life examples I have personally observed, much to my consternation.

When you drink cold tea with ice in it, you are consuming “iced tea”, not “ice tea”. Food that is put into cans is “canned food”. Staying with the food theme, potatoes that are mashed are ------ mashed potatoes! I have seen “mash potatoes” on a menu, and I had to bite my tongue in order to avoid making a scene. Don’t get me started on “bake potato”, because it won’t be pretty. How about “toss salad”, again, right there on a menu. What am I supposed to do, throw the salad around or something? No, it has already been “tossed” in the making, so it’s called “tossed salad”. How hard is this?

Thankfully, the cereal makers understand this issue and correctly label their boxes “shredded wheat” so I don’t have to start my day by foaming at the mouth on those mornings when I have this particular cereal for breakfast.

And if you do or make something the way it was done in days gone by, that item is “old fashioned”, as in: I am old fashioned about the proper use of the ed suffix.

Reliving all of these horrors has drained my psychic energy. I’m emotionally exhausted. But it has been worth it, because now I’m sure the world will understand this issue and it’s importance. Finally, everyone will diligently use, and pronounce in an exaggerated fashion, the “ed” that is so needed at the end of certain words.

Now, if I can just get people to understand that they don’t “graduate” high school or college, they “graduate FROM” a school, my work will be done.

Saved From The Edison Light Bulb

While the politicians in Washington haven’t been able to do anything serious about unemployment, the economy, or the out-of-control government spending, it is reassuring to keep in mind that they can, in fact, solve big, important, pressing problems from time to time. Congress can rise to the occasion. For example, come January 1, Congress’s solution to one of the most serous problems to confront America in recent times will kick in. As of that date, a bill passed by Congress will save us from a deathly hazard that threatens “the nation’s future and collective health”, as the luminaries at the L. A. Times put it. That threat is the light bulb invented by Thomas Edison.

Take heart, my beleaguered friends. Your 401k may have tanked, you may not have a job or any prospects for one, the U.S. Government may have less cash on hand than Apple Computer, you may have to pay an amount for your little cherubim’s college education that would have gotten a building named after you in the old days, the comrads in Washington may want to raise your taxes to cover their profligate spending because you don’t pay what they consider to be your “fair share”, Iran may be about to nuke up, the country may lurch from economic and budgetary crisis to crisis, but at least you no longer have to worry about incandescent light bulbs. Those are the ones that have that horrid little filament in them. You know, the type of light bulbs we’ve been using for the last 130 years or so.

I’m sure you have been worried about them, unless you are a dim bulb indeed. As you no doubt know, incandescent light bulbs are energy hogs of the worst sort. They suck up energy like Fat Albert chowing down on the vittles over at the all-you-can-eat catfish and hush puppy shack. You have noticed that incandescent light bulbs do that, haven’t you? Pay no attention to your air conditioner or heat pump; it’s those evil light bulbs that are wreaking destruction on you and the world.

But you have been saved. You no longer have to live in fear of incandescent light bulbs. You can now rest easy; CFL’s (compact fluorescent lamps) have arrived just in the nick of time.

Umm, well, those CFL’s do have some very minor problems, but you needn’t worry your pretty little self about any of that.

What are those problems, you say? My, my, my, aren’t you the curious one. It’s nothing, really, nothing.

Oh, OK, since you insist.

First of all, CFL’s contain mercury, an extremely dangerous substance. It’s a small amount, to be sure, but it’s mercury none the less.

If, God forbid, one of those Earth-saving CFL’s happens to break in your house, people and pets must immediately evacuate (avoiding the “breakage area” on the way out), windows and/or doors should be opened to air the place out, central heating or air conditioning is to be turned off, and then you are to follow the seven step Hazmat clean-up procedure published by the EPA. If you use a vacuum cleaner in the clean-up process, the vacuum cleaner bag must be sealed in a plastic bag and immediately removed from the house.

Because of this problem with broken CFL’s, the EPA also recommends that a drop cloth be used when replacing a CFL, in case it is dropped and broken.

Since the CFL’s contain mercury, disposal is also a problem. Again, one CFL contains only a very small amount of mercury, but with the millions upon millions of them that will be used over the years, the total amount of mercury involved is significant. If the used bulbs are thrown into the trash, you’d better make sure you don’t use a trash compactor that will crush them. Even if the used CFL’s make it out to curbside unbroken, they will get deposited in a landfill to be pushed around by a bulldozer that will no doubt break them, and all of that mercury will eventually seep into the ground water. Or you could take your used CFL’s to a recycling center (being sure to tell them what you have), and let them worry about it.

Other than all of that mercury stuff, the CFL’s are just great.

Well, there is one other very trivial problem. Some CFL’s have been known to smoke or catch on fire. The August 2011 issue of Consumer Reports had an article under the title “Bulbs pose fire hazard” discussing this and identifying the CFL’s that have been recalled.

Did I mention that CFL’s typically cost several times as much as an incandescent bulb? No matter, you’ll recoup that extra cost by means of reduced electricity usage and longer bulb life.

Maybe.

The Department of Energy has said that mandatory use of CFL’s will save 15 quadrillion BTU’s over the next thirty years, or about 0.013 percent of U.S. energy usage. You will personally save pennies upon pennies in your monthly electric bill.

But your saving could well be eaten up by the greater cost of the CFL’s, since it turns out that they are not lasting nearly as long as expected. Pacific Gas & Electric (PG&E) in California has reported that CFL’s are lasting an average of 6.3 years verses the 9.4 that they initially estimated, or thirty-three percent less. An article in the Weekly Standard reported that a quarter of CFL’s only achieved about 40% of their projected life span. It seems that the life span tests were done under ideal conditions; e.g., turning the lamp on and leaving it on continuously. Surprise, surprise; in the real world, lights aren’t used that way. They are turned on and off, sometimes frequently, and that kind of usage reduces their life span. This is something that the incandescent people at GE and Sylvania have known for at least a hundred years, but it somehow escaped the notice of the CFL people until after they had convinced Congress to pass a law on the matter.

The last light bulb factory in the U.S. has closed, and it is most likely that CFL’s will ultimately be made only in China. The additional transportation costs should be factored into the CFL cost saving calculation, but it is difficult to do as accurately. The additional cost is there, though. And so much for “buying local”.

In any event, please join me in giving thanks that we live in a country where we have a government wise and caring enough to save us from incandescent light bulbs. That is of great comfort to me as I consider all of the other problems we face in this country.

Obama's Bus Tour

President Obama has embarked on a bus tour of the Midwest. Who is the only other national political figure to go on a bus tour in the recent times? Sarah Palin, of course. And the media ridiculed her. But now, Obama is following Sarah Palin's lead.

Debt Ceiling Deal: Nothing Is Being Cut

Here is some real eye-opening news.

During the last few weeks, there has been a non-stop soap opera in Washington about the federal government’s “debt ceiling”. Much of the debate has been about whether the government should cut spending or raise taxes or do some combination of both in order to get the deficit under control. We’ve heard about this plan that will cut X trillion in spending, and that plan that will cut Y trillion, and the compromise plan that will cut Z trillion.

You know all of that; it’s not news.

Here’s the news that has barely been mentioned because the big-spending, big government, career politicians don’t want you to be aware of it: Nothing is being cut, in any of these plans. Nothing.

Then why do we hear from supposedly legitimate news media that federal spending is being cut, with the only debate about how much, you ask. Dear reader, let me explain.

The federal budget is on autopilot that results in across-the-board increases occurring every year, automatically. It’s called “base line budgeting”, and here’s how it works.

Every year, the proposed federal budget increases from the previous year by eight percent. This increased budget proposal becomes the “baseline” for budget negotiations. If it is suggested that the budget should not increase by the proposed amount but by some lesser amount instead, which is still an increase over the previous year, that suggestion is scored by the Congressional Budget Office (CBO) as a “cut”.

Stay with me on this, because it’s vitally important.

Let’s put some hypothetical numbers on it as an example. We’ll say that last year’s federal budget was $100 (you can put as many zeros on that as you want). The budget proposal for this year will come out initially as $108. If this proposed budget were reduced to, say, $105, it would be billed as a cut.

Hypothetical Example – Federal Budget Process
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Last year’s federal budget: $100
Initial budget proposal for this year (the baseline): $108
Final budget for this year: $105
Scored as a $3 cut.

That’s right, even though the federal budget went up from one year to the next in this example, it’s called a “cut” in politician-ese. That’s how baseline budgeting works; it’s designed to mislead the public so that politicians can claim they’re cutting the budget when in actuality the budget is going up.

Now for the coup-de-grace. Under all the plans being debated recently in Congress concerning the federal debt ceiling, government spending will rise across the board, in some estimates by seven to nine trillion dollars over the next ten years. Nothing is being cut! Yet we hear about how these various plans will cut spending by so many trillion. That’s the intended effect of baseline budgeting, letting politicians call an increase a cut.

Let’s move on to two other fundamental dishonesties that are rampant in the debt ceiling debate.

There has been a lot of talk about the U.S. Government’s credit rating possibly being lowered from AAA to AA+. What is this all about?

When a lender loans money to a borrower, the lender wants to know ahead of time the likelihood of the borrower being able to pay back the loan and the interest. That need led to credit ratings.

If a borrower is unable to pay the interest or principle on the loan, they are said to have defaulted on the loan.

Everyone probably knows about their credit score and how a good score makes it easier for an individual to borrow money and to get a lower interest rate. That’s because the higher a person’s credit score is, the less likely they will default on a loan.

Government entities (and companies) are rated in a similar manner by the major credit agencies, Moody’s and Standard and Poors (S&P). Triple A is the highest rating. The U.S. Government has always had a AAA rating because there is almost no chance that it won’t be able to pay the interest on borrowed money or the principle amount when the time comes.

Throughout this federal debt ceiling saga, one of the major reasons given as to why we must raise the debt ceiling is to prevent the federal government from defaulting on it’s loans (bonds), and to keep its credit rating from being downgraded.

The truth is that even if the debt ceiling is not raised, the government will not default on it’s bonds. There will still be tax money coming in, and there will be enough to pay the interest on the bonds, even though other areas of spending would have to go without in that scenario. But a default would not occur.

Next truth factoid: No matter which plan concerning the debt ceiling is finally adopted, the U.S. Government’s credit rating will go down. S&P has already said that neither of the final two proposed plans reduces federal spending enough such that Uncle Sam’s AAA rating can be maintained.

Here are the salient points we can distill out of all of this blathering and disingenuineness about the debt ceiling:
1. Nothing is being cut.
2. The federal government will not default on its loans (bonds).
3. The federal government’s credit rating will be downgraded no matter which debt ceiling plan Congress adopts since none of them are serious about balancing the federal budget.

Obama Voted Against Raising the Debt Ceiling As A Senator

"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government's reckless fiscal policies. Increasing America's debt weakens us domestically and internationally. Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. America deserves better."

Barack Obama, circa 2006