Saturday, August 20, 2005


Pain for all in Gaza
By H.D.S. Greenway August 19, 2005

Decolonization is never easy when there are settled populations of the colonizers to be considered, as the British and French found in Africa.

If there was a godfather to the settler movement it was Ariel Sharon, who once advised settlers to grab every hilltop in the occupied territories. Thus is the sense of betrayal magnified.

If there is only a token Israeli withdrawal -- if Gaza is being given up only to strengthen Israel's grip on the West Bank -- then there will be no peace. No one expects complete withdrawal from the West Bank anymore, but there has to be a viable and contiguous space for a Palestinian state on the West Bank for peace to have a chance, and that will be no easy task for Israel.

It is an excellent Piece which outlines the social and political considerations involved in the forcible extraction of the Israeli settlers. The Piece failed to note that a Civil War risk exists not only for the Palestinians, but also for the Israelis, both based upon the Fundamentalists v. the Secular elements. We could find dual Civil Wars occurring within the constricted space of the area.

The economic implications of this forced separation may be even more telling in the long-run. Neither so-defined nation created has the economic Reserves or Resources to sustain the Withdrawal. Reestablishing the Settlers on Israeli soil will require a vast expenditure of Funds in construction effort, while losing their ongoing economic production for a lengthy period. The previous Productivity of these Settlers will be lost to the Palestinians so that all of Israel will endure some loss of Living Standard. The Palestinians remain unrehearsed in the Managerial skills needed to continue the previous Productivity, and their Living Standard is also likely to fall. Both Nations will need outside assistance for a continual period, and One or Both will probably need it forever; as neither are really a sustainable Economy. lgl

Friday, August 19, 2005

Defense Spending

U.S. Department of Defense
Office of the Assistant Secretary of Defense (Public Affairs)News Release

SARs summarize the latest estimates of cost, schedule, and technical status. These reports are prepared annually in conjunction with the President's budget. Subsequent quarterly exception reports are required only for those programs experiencing unit cost increases of at least 15 percent or schedule delays of at least six months. Quarterly SARs are also submitted for initial reports, final reports, and for programs that are rebaselined at major milestone decisions.

December 2004 (88 programs) $ 1,472,184.3 estimated Millions
June 2005 (85 programs) $1,474,049.4 estimated Millions

We are not technically at War with Anyone, and the Combat losses We suffer come from the same old Combat patrolling of soldiers in the field, which all the fancy gadgetry cannot alter.

What are the root causes of the huge expenditure?

Top Ten Department of Energy Radioactive Pork Projects in the 2006 Budget: Wasteful and Dangerous
August 2005

This report identifies seven nuclear weapons and three nuclear energy programs in the Department of EnergyÂ’s (DOEÂ’s) Fiscal Year (FY) 2006 requested budget that are wasteful and deserve cutting or outright elimination. Cutting them would result in immediate savings of more than $1.8 billion. These cuts are a step in the right direction to reduce federal deficits and form the basis for better nuclear policy.

1. Life Extension Programs
FY 2006 Budget $348.3 million
$1.49 billion through 2010
2. The Reliable Replacement Warhead
FY 2006 Budget $9.35 million
$97 million through 2010
(both redundant under the Stockpile Systems Programs).
3. Robust Nuclear Earth Penetrator
FY 2006 Budget $8.5 million (DOE & DOD)
FY 2007 $14 million (DOE alone)
(used only to kill the Enemy, as the destruction would desolate the area after; it could not be used around any Population center, and American Troops would have to take great risks to assure the Bomb did the job and took out the Enemy)
4. Modern Pit Facility
FY 2006 Budget $7.69 million
$125.8 million through 2010
(eventual Cost $4bn and contamination of facility disposal Costs simply to rebuild plutonium triggers for old Warheads)
5. Enhanced Nuclear Test Readiness
FY 2006 Budget $25 million
$121.6 million through 2010
(simply to maintain capability to resume underground nuclear weapons testing currently banned by Treaty)
6. National Ignition Facility
FY 2006 Budget $142 million
$262 million through 2010
(Sc-fi giant Laser program to protect the Nuclear Stockpile. Would not negate current Security Costs, simply another Toy to play with.)
7. Tritium
FY 2006 Budget $87.5 million
$448.6 million through 2010
(stuff to make nuclear warheads destroy a greater area, 10 mile circumference not enough)
8. Plutonium Fuel Fabrication Facility (MOX)
FY 2006 Budget $338.5 million
( the Plutonium fuel manufacturing is actually beneficial, though they are right about canceling current levels of Weapons Grade plutonium manufacture)
9. Yucca Mountain
FY 2006 Budget $651.4 million
(must continue as on-Site storage not an Option, but Transport still unreliable, and Yucca Mountain is an environmental Joke)
10. Nuclear Energy Revival
FY2006 Budget $191 million
(This is the only Sure way to eliminate contamination, and literally, not enough is spent on it)

The DoD currently has (One Privileged Source) who states there are 314 of such Programs; at least half of which should be canceled. The Game Plan should be to inform the DoD (We are talking of the U.S. Congress here backed by the President) that the Defense Budget must come in under one trillion dollars. Programs need be shut down, Expenditure levels must be reduced for a slower rate of development, and the basic Maintenance programs for Troops in the field must be on Schedule. lgl

Thursday, August 18, 2005


Producer Price Index News Release text
AUGUST 17, 2005

The year over year percentage increases tell the entire story:

the finished goods index increased 4.6 percent
finished energy goods advanced 15.2 percent
The index for intermediate goods climbed 6.5 percent
prices received by crude goods producers rose 8.4 percent

Inflation resides in these numbers, and must eventually be reflected in the Consumer Price Index. One might ask why it does not show up now. The Answer is: Because We are too busy running American businesses out of Business. We utilize cheap World Production centers to undercut domestic Production facilities, creating almost complete Price Inelasticity for their Products, so rising Costs grind them into bankruptcy or folding. Their elimination suppresses the PPI readings of associated Production materials:

Prices for materials for durable manufacturing decreased 0.9 percent in July, following a 0.5-percent decline in the prior month

June and July remain the most productive months of the Year. A decline during these months can be translated into a definition of a shrinking market. This reduced market comes from loss of Productive capacity, not from cheaper Mining and Milling Costs or greater productivity:

In July, the Producer Price Index for Total Mining Industries was 194.1 (December 1984=100), 24.7 percent above its year-ago level.

A Price rise of this magnitude means functionally that Production Costs have not gone down, and that the Mining Industries will rationally maintain full employment of Production capacity. The lowering of Prices at this Stage means the total Market is shrinking in volume by loss of Participants. Our Production facilities are decaying at rapid pace, and there is a price to be paid. The lack of industrial capacity will magnify the Inflation when it reaches the Consumer Price Index eventually, as cheap Imports turn into demons seeking to devour your Pocketbook, and George W. cannot sell any more Treasuries, as foreigners find little value in support of the Dollar when Americans have ceased buying Imports at such heightened rates. lgl

Wednesday, August 17, 2005

The War in DOD

DOD Has Begun to
Improve Supply
Operations, but
Further Actions Are
Needed to Sustain
These Efforts
Report to the Subcommittee on
Readiness, Committee on Armed
Services, House of Representatives

Problems in the supply distribution
system dating back to the Persian
Gulf War have impeded the ability
of the Department of Defense
(DOD) to provide effective and
timely logistics support to the

What is the hangup? The DPO and the Defense Logistics Executive each claim final authority and responsibility (think final Word) for the Logistics organizational construct. Why? It is basically a bureaucratic battle between the military command of DPO and the Civil Servant Civilians of the Army Undersecretary's office. The Secretary of Defense will not clearly outline responsibility for political reasons: This area is the precise location of Patronage in the DOD. The DPO wants improvement in Supply distribution, utilizing the best seeming Contractors of the moment. The Defense Logistics Executive buys political support for the Administration, and buys lucrative employment for Defense Civil Servants once they leave Government Service. Military personnel, on the other hand, show no less affection for purchase of lucrative employment upon retirement from military service.

The SOD (Secretary of Defense) refuses to clarify roles of accountability, because the Defense Logistics Executive is under his direct domination, while he must get Military Command to convene a military review board to remove any element of the DPO. He can still utilize the DPO to pressure the Defense Logistics Executive, and he can review actual Deployed Troop Supply needs from DPO demands. The entire matrix complicates as the President and White House demand the SOD attain certain levels of political support from the award of Supply Contracts. The GAO (General Accounting Office) serves the U.S. Congress, and must present a Report detailing the most efficient Working system devisable; themselves knowing full well their Superiors are equally demanding of political support from Contract awards--working with either the DPO, the Defense Logistics Executive, or the SOD. It's a Wonderful Life--see the movie.

It still doesn't accomplish supply of Troops in the field. lgl

Tuesday, August 16, 2005


United States Government Accountability Office
Washington, DC 20548
August 12, 2005

The Honorable Donald H. Rumsfeld
The Secretary of Defense

Subject: Defense Management: Munit ons Requirements and Combatant
CommanderÂ’s Needs Still Require Linkage

In October 2002 we reported1 that inadequate linkage existed between near-term
munitions needs of the combatant commanders and the purchases made by the
military services.

The gist of the 9-page letter states that DOD Instruction 3000.4, DOD failed in oversight capacity, and a Conference held in November 2004 determined to reissue it. The GAO has currently found that the reissuance also failed to correct the problem. They found the basic problem was the lack of Combat Commander participation in the Risk Assessment needs for the munitions. The Letter also complained that defense agencies were not complying with the reissued Instruction, most specifically Purchase decisions had to rely on previous Year data.

A previous Post by this Author noted the Defense Dept. currently maintains three Plants for the production of Small and Medium caliber ammunition, and this was insufficient. Defense has had to turn to Private Contractors for the necessary supply, and most Sources could not meet the requirements of the Military. This Shortage of Production facilities exists in all areas of Munitions Purchase. The failure of defense agencies to comply with the terms of the Instruction comes from upper-level refusal to okay Purchase levels demanding Munitions plant expansion owned by the Government, or more importantly, from requiring the reopening or creation of new Plant facilities.

This remains an important Issue, as the National Security of the United States is at risk. lgl

Monday, August 15, 2005

Tax Picture

Forecasters Predict Drop in Deficit
Published: August 15, 2005

The CBO said Monday the Deficit has dropped from $412 billion Y2004 to $331 billion Y2005, and will be $314 billion in Y2006. The article omits to mention this will be over a trillion dollar loss over three years. The CBO omits to mention that with current passed legislation going into effect, the loss before Bush leaves office will be a $2 trillion loss.

Death Tax? Double Tax? For Most, It's No Tax
Published: August 14, 2005

This articles explains how the Republicans plan to shave another $70 billion/per year off the Tax revenues taken in, not computed by the CBO in the analysis on Monday. This Author would advise All to read this article, as it outlined how few Households remain impacted by the Estate Tax.

The worst aspect on the current proposed Tax reduction consists in the Tax consortium which the Republicans organized to get all their Tax legislation since Bush's first Tax Cut. Small Business, small Farmers, Professionals, and high-paid Labor were all enticed with the promise of Tax breaks. Everyone was to get a Tax break, and they were to support Everyone else getting a Tax break. None of the small Taxpayers have yet to receive remission of even One month's income, but the High-Rollers have received many times the small Taxpayer's average yearly Income. It is a sick Joke. lgl

Sunday, August 14, 2005

The Mercs

The Other Army
Published: August 14, 2005

An excellent piece on the role of private security companies in Iraq and Afghanistan. The real factor in private security success comes in the level of actual military training received by these Employees, who sometimes have up to four times the military training and experience as to their contemporaries in deployed military units. No one knows how many private security personnel have been killed in Iraq and Afghanistan--the Article mentions between 160-200; a number which this Author thinks is a little high, but not by much.

Why do they use private security forces? The answer is easy to state, but hard to understand. The Generals use private security as Bodyguards, because they are more successful (competent). American companies operating in these Countries employ these private security agents because they are better than military unit protection (a Squad of private security agents will guard a Convoy, where military doctrine would insist on a Platoon or Company), while it would take the military a week to organize the Convoy route order.

Why do the Private Security Employees hire on? The Money, and little else. American companies operating in Iraq spend about 25% of their total Contracts on security. American Government Agencies and Agents spend almost an equivalent amount on private security. The Article mentions that Employees average $400-700/Day that could go higher; this Author suggests this is only Entry-level, Second Tour veterans probably do $200/Day better.

Why should We be grateful to these Security services?

U.S. Struggling to Get Soldiers Updated Armor
Published: August 14, 2005

Typical Defense Snafu. lgl

Saturday, August 13, 2005

Erosion of Growth

Japan's April-June economic growth reflected only a 1.1% yearly growth rate. Japanese Investment and Capital Construction, on the other hand, can be estimated as moderately heavy. The Japanese economy remains the most Energy-efficient economy in the World, with least Energy use per Production unit. Japan's Consumer credit stands as sophisticated as American Credit, but requires greater solvency from the Consumer.

American consumption suffers from American Business desire for Volume, not Quality, in the extension of Credit. American Credit vendors often mislead Consumers, offering Upgrades in Credit limits; knowing full well Consumers cannot match such a level of monthly repayment. Housing no longer serves as American economic salvation, as American Housing Costs have been rising much faster than Real Takehome Wages for several years. Home Buyers will still purchase and construct, but at either greater risk or much slower. American economic growth, while still present, shows indications of being hollow(less real Profit).

(The Author is irritated, as he had to rewrite this Post. His maching ate the last one) lgl

Friday, August 12, 2005

A Contractor Army

This Author has long been an advocate of return of the military draft. The Draft provides a far greater mix of skills (specifically a range of those skills). This mixture presents a vital element in Tactics affecting Command decision, with lowered expectation of immediate success in Mission achievement. This leads to Commander-level conservation of resources (they don't get their troops blown away on unaccomplishable Objectives). It alters Training procedure: the training is far more intense, but limited to direct necessary components of the military craft. Troops, on the other hand, feel heightened Paranoia from the existence of the Draft, even when they are Volunteers; the presence of unwilling Participants curbs Everyone's intent to be a hero, with expressed contempt for Mission achievement at the risk of Injury or Death.

How Should
the Army Use
Contractors on
the Battlefield?
Assessing Comparative Risk
in Sourcing Decisions
ISBN: 0-8330-3736-6

This Work (the Author has only read the Summary) provides another approach, simply through the analysis of Risk in the use of Contractors on the Battlefield. The Summary (and likely the Book) is written in the academic bureaucratize with which One must have some experience to integrate the material, but defines a method by which a mix of Volunteer and Draft army could provide greater success to military endeavors.

This Author's Concept:

Army Recruitment and Training should be removed from the Military, and revert to Private Contractors, who will be granted a per head fee for the recruitment and training of Recruits in the basic military skills (supervised by military personnel). Secondary Training can also be contracted, not simply in military skills, but in Occupational skills needed by both Military and Private Sector. Young High School Graduates would get a Signing bonus for Training attendance, plus a low Wage equivalent to Minimum Wage, but with Housing, Food, Health Care, etc.--a prime source to save for College or setting up a private Household. The Recruits escape mandatory service in the Military, though they gain the equivalent Training at advantage to themselves.

This would not be a Pilot program for the Military. The Goal would be to train as many High School Graduates as possible in the basic military skills, as many as needed in the basic Occupational MOS skills, then contract with the Graduates of these Training facilities for specific Tours--whether at Home or Overseas deployment. Bonuses would be paid for Tour enlistment, and Wages would defined by MOS skill levels. The Military could utilize the Training process Score levels of Recruits in search for qualified applicants, and would be allowed to offer retension bonuses to active Touring soldiers. Troops would be making more mature and active decision in their participation, and less likely to accept bad Risk levels. The Military gains trained, more mature Troops at minimum Cost; also the possibility of a Military Draft of trained Personnel in case of need. lgl

Thursday, August 11, 2005

Hamlet Encore

This Author was perplexed about choice of Subject, wondering about $66/barrel Oil, Brazil raising its Minimum Wage, falling Jobless claims, the massive Chinese Trade Surplus for July, the erosion of American Refining capacity, or a Reuters' Report that the International Energy Agency plans on raising its projected World Oil consumption again. None held especial appeal to the Author, who is feeling a tad depressed anyway; considering a friend called, stating the Author should attend a Senior Citizen Wellness program.

Is there any Good News out there today?
The Answer is Little!

The Yuan appears to be sticky without Chinese Central Bank aid, and the Dollar is dropping against other Currencies. The Iraq domestic occupation is getting bloodier every Week, and oh, ask Rumsfeld; there will have to be another Special Appropriation this Year. The IRS is not braying about Tax revenues pouring in, because they are not. American Gasoline consumption is rising, and American Gas Stocks are declining. Is this beginning to sound like the Grinch who stole Christmas?

The most disheartening element lies in the lack of Corrective measures taken by Anyone, with blame to Everyone. Congress and Advertisers have just started a new battle over the Roberts' nomination. The passed Energy bill gives nonexistent funds to Corporate entities, but not research; it containing absolutely no help for strained Refining capacity, or attempts to curb American Oil consumption. There is much comment on the Chinese Trade Surplus, but where oh where is there discussion of the American Trade Deficit (hint: a lot of VIPs do not like the numbers). Can George W. play the fiddle as well as Nero? lgl

Wednesday, August 10, 2005

Oil and Speculation

Oil Prices Rise Following Mixed Report
Published: August 10, 2005

On Tuesday, the Energy Department slashed its 2005 world oil demand growth forecast by nearly a quarter, mostly resulting from slower-than-expected Chinese growth. World oil demand will grow by 1.7 million barrels a day this year, to 84.2 million barrels a day, the department's statistics arm said. Last month, it forecast growth of 2.2 million barrels a day

The agency data showed a 2.1 million barrel decrease in the nation's supply of gasoline, putting inventories at 203.1 million barrels, or 4 percent below last year.

While oil prices are about 40 percent higher than a year ago, they would need to surpass $90 a barrel to exceed the inflation-adjusted peak set in 1980.

The first item indicates that the price of Crude is actually greater than is to be expected, due mainly to Speculation in Oil (think Hedge Funds). The second item states Government action should be instituted immediately; this Author suggests a 10 gallon maximum purchase limit for All except commercial heavy haulers. The third item shows the lack of astute Economic knowledge. Inflation impact varies across Product, with Price impact heaviest in the necessary components. Energy Inflation impact probably stands as the worst area.

Inflation in Energy has impact which eats up Cash reserves of Commercial enterprise faster than almost any other element, except for primary component Production materials. Industries faced with Product Price inelasticity may require years to equalize Profits again. Industries with high Product Price elasticity will quickly assume unwarranted Profit margins, enticing them to overinvest; distorting a balanced Capital construction picture to the point that excess Production capacity develops in Product Price elastic industries, and lack of Production capacity artificially propels Shortages and undesirable Pricing in inelastic Product Price industries.

The Oil Refining industry faces the later condition today. Previous World Oil consumption generated high Crude Oil prices--remember Crude Oil is the Refining industry's primary Production material. The national Oil Refining industry faces extraordinary Construction Costs due to environmental regulation and Local resistance to Refinery construction. They face underutilized Refining capacity from foreign Competitors, said Supply restricting national Refining capacity to a inelastic Product Pricing schedule. National Refining capacity needs to expand Production capacity, but does not possess the Profits aggregation or Credit capacity to fund this expansion due to the low Marginal rates of their Profits.

What causes the low marginal rates of Oil Refining Profits?

Product Price Inelasticity, high Crude Oil Prices, and Environmental regulation. The first cannot be helped, and the Later should not be altered. The only Salvation comes in lowering Crude Oil prices; it is here that Profits can be generated to fund expansion of Refining capacity. Is it World Oil demand which generates the high Crude Oil prices? No! It is Hedge Fund Speculation which forces Crude Oil pricing up. lgl

Tuesday, August 09, 2005

Labor Turnaround?

Productivity growth at 2.2% with Labor Unit Cost up 2.9%, in the face of Unit Labor Cost having risen 4.3% year over year; complicated by the fact most of the Labor Cost came not from Wage increases, but Benefit Costs. What does this say? Workers are losing ground, while Corporate Health and Insurance are demanding higher Profits and rates of compensation. Then $64/barrel Oil enters the Picture, and The Fed has to raise Interest rates to curb Inflation while providing support for the Dollar.

What is the Outlook?

Workers are going to raise Wage Demands to pay for the increased Living Expenses generated by higher Energy Costs and higher Credit Costs. Employers will continue to drop Benefits from their Employment package--the major element being Health Insurance. The elimination of Employee health insurance will lead to larger Wage demands, sharp reduction in Health Care utilization, and vastly increased reliance upon Emergency Room care. Employers will be forced to pass Product production costs along to the Consumer, while providing less Service to both Consumer and Employee. Health Care industry Profits will decline by an expected 30%, and should decline by 80%. Tax liability will rise dramatically, no matter what the Tax rates, as Government debt spirals without effective Tax rates.

This Author believes that base of Power will shift from Employer and Corporation to Labor. Oil price and consumption will stay high, while Profits will decline in the Oil industry; Crude Oil prices will remain high because of Hedge Fund speculation until American Refining capacity matches American Energy demands. Hedge Funds, though, are not a good Bet; they will lose as much as they gain, as other industry Profits drop. Labor, abused by loss of Benefits and higher Living Costs, will demand a slower Production schedule, more Help, and a standardized Workweek. Employers will have to concede, as they must get Labor's concession to loss of Benefits. Productivity will become negative growth.

Solution: Effective Tax Rates (Sometime this Author will explain that) lgl

Monday, August 08, 2005

Computer Literate

This Author seems like the last individual to accuse Anyone of Computer illiteracy, he attending College at a time when Fortran and Pascal served as absolutely essential systems to be mastered. Then he did think to read:
July 2005
Spot and Alternative Marketing
Arrangements in the Livestock
and Meat Industries
Interim Report 310 Pages

The Report was done for the Dept. of Agriculture. It could be this Author does not possess the current updated Adobe Reader; yet, it does not detract from the fact he found no accessible Bookmarks, Links to sections of the Report, or even sections assigned a Page number in the Table of Contents. It makes it relatively hard to preview the document.

The data covered in the Report, on the other hand, can be of interest to Those who can find it. How do the private marketing arrangements between Producer and Intermediary distributors affect final Consumer Price for Product? "Spot" Markets and marketing arrangements do raise the Cost to Consumers, this is known, but the Why and How Much remain the essential questions.

Such arrangements operate in all basic Commodities markets, and it is exactly herein that Hedge Funds attempt to make the vast gains for which they thirst. Sweet Crude has topped $64/barrel, of which most Economists would assign at least $25/barrel as pure speculation. The Author suggests intense study of the area of marketing arrangements and Cash markets. lgl

Sunday, August 07, 2005


Globalization of Materials R&D: Time for a National Strategy
(Free Executive Summary)

Where is the United States at in the World of R&D. Most pertinent Quote:

Conclusion. The results of MSE R&D continue to enhance U.S. national security and
homeland defense by adding improved materials capabilities to the weapons and
protective systems used by today’s war fighter. The evolution of materials research in
the United States and abroad will affect the nation’s ability not only to defend against
emerging threats of the 21st century but also to ensure a healthy economy as a basic
underpinning of national security. Because knowledge and the intellectual capacity to
generate new knowledge are proliferating across the world, because innovation and
development cycles are becoming shorter, and because U.S. dependence on foreign
sources of innovation is increasing, the lead in critical technologies enjoyed thus far by
the U.S. defense and intelligence communities will be seriously eroded without mitigating

The disturbing element to this Author lies in the fact he was reading identical Pap in the 1970s. Reality must set in sometime; let Us see if the Author can help:

Point One states there is an absolute limit to the development of any Technology, no further amount of effort or funding can extract greater benefit. Point Two states there is a point far short of the absolute limit where it becomes uneconomical to even develop the Technology to such an advanced degree. Point Three states that any Technological system built in excess of this point of economic exploitation will cost too much, and do too little--there being no bang for the buck. Point Four states American Defence and Intelligence will again have to oppose Enemy forces which are as equally well-equiped as We are, and then, efficient and effective Strategic and Tactical concerns will again dominate. American Defense should plan and train for this contingent, which this Author expects to occur somewhere around 2020.

The United States could continue to lead in R&D if Funds were properly directed to vital research areas. The Author has long advocated creation of a 'Surface Carbon construct' artificial Fuel to replace Oil Products. He has advocated the research for, design, and development of plastic replacements for Timber products--made from current hard Waste products like old building materials. He advocates a goal of 30% replacement of current electrical generation with Wind and Water Generation technologies. This is only the Tip of the Iceberg, what the Public can see and understand. Further Technology gain can come from Zero Pollution Manufacturing through underground, enclosed Production lines, where all Production (including Maintenance) is mechanized and run from Computer Work Stations.

Far-fetched? The actual Design and Manufacture of the Capital Production equipment for such Production would be cheaper and more Energy-efficient, Quality Control of Product would be cheaper, and Labor would not have to know more than how to run a Work Station computer system with High School Reading skills for integration of Maintenance and Set-Up Manuals. The Benefits would be complete control of Pollution emision, and compaction of the Production area; to the point, a Plant could not only put the Work Stations aboveground, but utilize the land for Agriculture, or sell for Homes. Present R&D funding goes to build fancier UAVs(Unmanned Aircraft Vehicles), rather than something economically beneficial. lgl

Saturday, August 06, 2005

Corporate Profits and Government Stretching the Truth

EPI Snapshot August 3, 2005.

The private sector has 1.2 million fewer non-defense-related jobs today than it had four years ago. Only as a result of increases in government spending over the past four years, mostly on defense, does the private sector have more jobs now than it did before the recession.

Including defense-related jobs, by the end of the fiscal year the private sector is likely to have about 170,000 more jobs than four years ago.2 If private-sector jobs continue to grow at their recent pace through fiscal year 2005, the private sector will have 111.4 million jobs compared to 111.2 million in fiscal year 2001

Defense spending gave its largest single-year boost to private-sector jobs in the fiscal year that ended in September 2004. In that year alone, defense spending directly generated almost half a million jobs (495,000). The multiplier effect from that spending no doubt contributed to the other 434,000 jobs added in the private sector that year. By contrast, in this fiscal year, additional defense spending is supporting only 70,000 more jobs, a small fraction of the 2 million private-sector jobs being added this year.

At the current pace of job creation, it will be another five or six months before non-defense-related jobs recover to the level of four years ago.

The Government suddenly finds a lot more Private Sector Jobs for May, June, and July. Check the dates of publication.
Why are companies seeking higher profit margins?

Be sure to also attend the Brad DeLong link, and read the entirety of Brad's Post. The first Question is about Oil industry Profits under higher crude oil pricing, and Brad gives an interesting evaluation.

Tyler Cowen makes his own evaluation of the theories:

I will classify myself as 60% a finance economist, 5% a Galbraithian, 20% for "breach of trust," 5% to the Volcker disinflation, and 10% I will assign to "cultural change." The advent of information technology matters as well, but arguably this falls under "finance economist."

This Author dismisses the claims of the finance economists: The Managers have always been in Charge, ever since the days of the Robber-Barons. Managers most resemble Carny Schills, taking the Rubes (Stockholders) for everything they could get; whether by selling them worthless Stock, shorting their Dividends, or simply paying themselves all the Profits as Salary. Government alteration of Accounting rules or Law hold equally little significance to this Author, as only "Nuts and bolts" prattle which does not bother the real thieves. The Volcher disinflation was of vast importance in loss of Labor Power, but Shareholders did not find themselves the Kings of the Economy. I agree with Tyler that cultural change making about 10% of the difference, this change being the vast increase in Households holding Stock. The real culprit was indeed breach of trust, in that one group of sharks threw out another of predators, and raped the Corporate concerns--Worker, Shareholder, and previous Management. lgl

Thursday, August 04, 2005


The Genuine Progress Indicator
1950-2002 (2004 Update)
Sustainability Indicators Program
March 2004

National accounting should be at
least as realistic as traditional
business accounting, so that
revenues and expenses are
differentiated. It should also be
more comprehensive, so that
economic policies harmonize full
employment, resource
conservation, and other social
goals instead of pitting them
against one another.

The first sentence in the above Quote is correct, as Economists should cease including remedial Costs as provision of Goods and Services. The list excluded would be that dismissed by the GPI (General Progress Indicator):

The GPI then subtracts three categories of expenses that do not improve

1. defensive expenditures, defined as money spent to maintain the
household’s level of comfort, security, or satisfaction, in the face of
declines in quality of life due to such factors as crime, auto accidents, or
pollution. Examples include personal water filters, locks or security
systems, hospital bills from auto accidents, or the cost of repainting
houses damaged by air pollution.

2. social costs, such as the cost of divorce, crime, or loss of leisure time.

3. the depreciation of environmental assets and natural resources, including
loss of farmland, wetlands, and old-growth forests; reduction of stocks
of natural resources, such as fossil fuels; and damaging effects of wastes
and pollution.

The second sentence of the above Quote expresses why the GPI is dismissed in favor of the GDP by Economists. Volunteerism and Family life are social elements which would be basically maintained under any economic conditions. Placing a Dollar value upon these services only confuse the evaluation of the state of the economy. The associated Income Distribution values are very important, but such a Scale value does not supply information important to the health of the economy; much as Idealists adore Wealth Distribution schemes. The only Wealth Distribution scheme which is effective remains fair Tax rates without legislated Tax exemptions, Tax deductions, or Tax credits. lgl

The Challenge of Economics

July 23, 2005
Is Something the Matter With Economics?
Michael Blowhard writes:

An article which should be pondered, then rejected; but you should understand why.
For Those who cannot figure out Why to reject the above article, try

What is wrong with neoclassical economics?
Cost-benefit analysis
Dan Phaneuf

Cost-Benefit Analysis stands as the real Worksled of Economics. It is here that the real decisions which impact (generate the real data inputted into the neoclassical models) find their origin. Dan Phaneuf provides a true insight into the process. No model is perfect, and most models produce extraneous values which must be determined at false in the comparisons which are the basic academic's job.

Review materials provided by this Author simply to show that even the Adults are confused. lgl

Medicare at 40:

Past Accomplishments and Future Challenges

According to the latest projections by the
AARP Public Policy Institute, in 2003, non-institutionalized Medicare beneficiaries age 65 and
older spent 22 percent of their income (or $3,455), on average, for health care, including
Medicare cost-sharing, Part B and private insurance premiums, and the costs of goods and
services not covered by Medicare.15 (This estimate excludes the cost of long-term nursing home care and the costs of home care.)

According to the most recent projections of national health expenditures, Medicare
spending is projected to grow by 7.3 percent annually between 2006 and 2014

Medicare program spending is highly concentrated in beneficiaries with chronic conditions: about one-quarter (23%) of Medicare beneficiaries have at least 5 chronic conditions and account for about two-thirds (68%) of Medicare fee-for-service expenditures

A clear Statement of Medicare positioning in the current health care world. The Study makes much of the prospective patient system, which is only a corruption of the average per-visit payment system, solely for the purpose of granting the health care industry higher levels of payment. The Average Per-Visit system could pay $100/Patient Clinic/Doctor visit, care for all Patients (not just Medicare patients), and provide all Expense and Doctor recompensation; the Doctors allowed to determine specific method of treatment. $1000/Outpatient Hospital Visit would care for all Patients (again beyond Medicare), and pay for Hospital Outcare. $2000/Hospital Day would pay for all Patient care, if Government or Medicare paid upfront for all expensive Hospital equipment; this bought competitively and distributed evenly, with Medicare preemption right to treatment use. Estimated Medicare Savings per year: $85 billion with individual enrollee savings of $880 with attendent average Medicare use per year. lgl

Wednesday, August 03, 2005

DOD Ammunition

July 2005
DOD Meeting Small
and Medium Caliber
Ammunition Needs,
but Additional Actions
Are Necessary

Ammunition supply stands as absolutely essential in maintenance of an effective Military force. The Republican President, backed by a Republican-dominated Congress, is managing to bottleneck this military component.

Between fiscal years 2000 and 2005, total requirements for small caliber
ammunitions more than doubled, from about 730 million to nearly 1.8 billion
rounds, while total requirements for medium caliber ammunitions increased
from 11.7 million rounds to almost 22 million rounds.

First, the PEO plans to increase Lake
City’s production capacity to 1.5 billion rounds per year by March 2006
through additional modernization. Moreover, the PEO is in the process of
selecting a commercial contractor that will provide an additional
300 million small caliber ammunition rounds per year. This commercial
producer will serve as a second source in addition to Lake City, to meet
small caliber ammunition needs. The contract is to be awarded in mid
2005, with initial deliveries to start in January 2007. Also, the PEO is
requiring that this commercial source be able to supply an additional
200 million rounds of small caliber ammunition, if requirements continue
to increase.

In the event that future small caliber ammunition requirements were to
decrease, which would likely happen if war fighting operations were
scaled back, the PEO plans to reduce the amount of ammunition produced
at Lake City, while maintaining the 300 million rounds of ammunition
production provided by the commercial producer. According to a PEO
official, the reduction at Lake City will be accomplished by reducing the
number of work shifts rather than by storing or mothballing equipment.

Where is the Problem?

Current DOD ammunition requirements rival the needs of WWII, when more than a dozen Ammunition plants operated. Three Government-owned plants still operate, but the most important one cannot meet current Ammunition needs. The Republican-run DOD would farm out Ammunition needs to private Business--even worse--foreign Production capacity. The majority of Production must still be met by three Plants, extremely subject to Military or Terrorist attack; Production which the Military has to possess. Foreign Suppliers can be invested by Enemy forces, be blockaded from delivery, or alter their own Production delivery to serve Interests counter to American national policy.

We need three Plants to supply medium caliber Ammunition, not the underdeveloped two Plants which We possess. We also need three Plants to supply small caliber Ammunition, not the singular, over-extended Plant We have at Lake City. Dispersal of Ammunition Supply capacity is essential. These new Plants need to be Government-owned, and subject to being taken over, and directly run by the Military. Any Military authority, inside or outside the Government, will state extended Lines of Communication are most attackable by any Enemy. No One in their right mind would buy Ammunition half a World away, to import it, then send it clear across the World. lgl

Tuesday, August 02, 2005


Don't get into a lather over sweatshops
By Benjamin Powell and David Skarbek

Powell and Skarbek simply collated data to prove what all Economists suspected. Sweatshops are located where they will produce the highest Profits for the Owners, coincident with paying the highest Wages to Workers. Attempts to curtail purchase of Sweatshop Goods injure Workers, Sweatshop Owners, and the economies where the Sweatshops are located. These endeavors are not the answer!

There are ways to distinctly affect Sweatshop operations. It requires a two-pronged attack on old business practices. The Standard Sweatshop Workday is twelve hours, not the ten hours suggested in the Article. The goal is to force Sweatshop Operators to give their Workers only a Eight-Hour day. Why? Preliminary sketch modeling by this Author suggests Worker pay will be reduced 22%, but the number of Workers employed will increase over 60%, while the after-Spread Pay must still be higher than the national Average pay to gain Workers. The Employers must migrate to a Two-Shift schedule in order to maintain Production levels, must improve Work conditions with the addition of Lights to maintain Second-Shift production (higher Production levels with Lights will engender Lights staying on both Shifts). The heavier investment in Plant will lead Sweatshop Operators to differential Pay for experienced Labor, easing of Piece-Production demands on Workers, and ease harsh Work conditions. Notice all this was achieved by a simple Work Schedule change, not by asking Anyone to be better People.

The Two-Pronged Effort to get the Worldwide Eight-Hour Workshift is to achieve Labor Treaty accords signed by all nations. National Signatories can be gained by Trade barriers if not signed. These Signatures, though, do not assure Sweatshop compliance with the Accords. Labor Organizations, of the WTO, must maintain standing supervisory personnel to assure compliance (these need not be numerous or expensive, 150 trained individuals could supervise almost all Sweatshops in the World). Rapid Post transfers, and possibly short-Period of Careers, will limit the corruption of such a Supervisory force. The World becomes a better place. lgl

Monday, August 01, 2005

Legislative bureaucracy

Japan imposed Steel tariffs, joining most of the World, simply because the Byrd amendment will not die. Bush waits until Congress stands in Recess, before he can appoint his own U.N. Envoy. Congress can only seem to pass omnibus bills--where every Senator and Representative gets to write two Pages of his own copy. Is it true that they used a Semi-tractor to haul the Energy bill to the White House?

Congress is currently in Recess, as previously mentioned, and the Nation is probably safer for that fact. This Author advocated the use of closing Military bases to build Cracking Plants and Refineries. There is rationale even for leaving the bases open, building the Refining capacity, and leasing the Plants to private Contractors. The Military could be assured of sufficient Output in national emergency, provide greater security for Plant facilities, and utilize Government Upgrade and Maintenance schedules to minimize Fire/Explosion hazards. Congress, though, would have to do something rarely done--Act. lgl