Tuesday, February 28, 2006

Author Brainstorm

The NYTimes has a good article on Dupont's work in Biotechnology, and it was emphasized that a major problem with fossil fuels was it used more Oil to transport Corn or other Vegatable materials to Processing plants, than is saved in use of fossil fuels. The Author's mind began to spin on this tidbit.

I sometimes fancy myself as an Engineer, and grew up on a farm; a place where cobbling together for some function was often necessary. A Concept suddenly gelled in my mind, and now it is time to consider why it might not work. I made the decision, which I will probably regret (I having some problem with Logic), to allow Readers an insight into my Thought processes.

1) Ground Vegatable matter would be compacted in form, possibly of even greater volume per cubic yard than Oil. This idea stated with knowledge that Seed crops hold the same Transport Costs whenever they are transferred off the farms--which they must be!
2) Modern Grinders can be very compact in size (could even fit within the space beneath Sleeper compartment beds), and are very efficient in operation (could be run off the Semi-tractor engine with little consumption of fuel, and release little dust). Very little fuel value would be lost with Grinding on site. Pump hoses could be carried beneath the trailer, and attachment of said hoses can be made efficient, easy, and biologically safe. Total Grind time to fill a trailer could be reduced to under Two hours, with a potentially tripling of volume weight with Ground material. Fuel consumption in Grinding and Transport would remain basically the same.
3) Relatively little change in Grain and Vegatation handling would be needed, simply a filler bin which could be connected to the hoses.
4) Actual weight of the Grinder and Hoses would not exceed 600 lb. (estimate). Estimated Cost of the above Grinder and Hoses would not exceed $2000 (estimate).

Now comes the determination of whether this Author is again full of it. lgl

Monday, February 27, 2006

Cable Rates

This Author, like most of Cable users in the Country, has just paid another Cable bill that had significantly rose in price. Lack of regulation in the industry allows Charges equal to what the Market will bear, but is this the best Outcome? I pay for both Internet access and Cable TV. The Cost has exceeded $100 per month for myself the first time.

We talk of Companies granted Monopoly privileges without constraint on the Pricing of Services. The Company I utilize because I must has a history of rapid expansion without consideration of Cost, resorting to Charge increase on Consumers of their Services. They also have a history of paying higher Profit ratios as Dividends than most industries. Their history of Executive salaries must simply embarrass even them. Is this a Record to be proud of?

There are definite hazards to the Course evolving, both economic and political. Many people, due to inability to pay for exorbitant Information Costs, must operate without researchable information. Common access to News services and Programming leads to Consensus on Social, Political, and Economic issues. Public Opinion should be relatively on the same Page, even if contestatory in tone. There is also a real generated Problem when you rob the Poor of even basic forms of entertainment. The Bell may toll for Those demanding excessive Profits! lgl

Sunday, February 26, 2006

Equity Risk Premiums

Daniel Altman had an article in the NYTimes today, sketching the concept of equity risk premiums--mentioning some Economists believe these premiums have been fairly stable throughout the history of the American economy; and this Author considers them basically right in their analysis. This, though, leaves a Problem: Why are the Returns on Stock so much higher than on Bonds, where it widely exceeds the equity risk premiums?

The Answer is fairly simple: Modern Corporate America has abandoned Business Management, to become Stock Salesmen. The rationale is equally simple: the award of massive amounts of Stock Options and Stock Grants. Their Jobs have advanced from efficient management, to managing their own portfolios for greatest gain.

What has this done to Management practice?

The goal of Corporate Management has shifted from longterm stability of Corporate production, to the position of earning the highest immediate Profits to maintain an inflated Stock Share price. Layoffs and Downsizing are good, as it allows for rapid Savings, raising the Profits picture--and the Stock price. Production is outsourced, even when Quality Control deteriorates, because it lowers Production Costs--raising Profits and Stock price. Products use inferior materials and Labor in Production--again an increase in Profits and Stock price. Corporate Investment is chosen for immediate payoff of Profits; it being immaterial that long Investment ventures are abandoned, or that the new Production does not fit within Corporate Marketing or Distribution networks. High Stock price remains tied to record Corporate expansion rates, whether such expansion makes sense or not. It is a wonderful World We live in, if We can survive the avarice of Our Corporate Boards. lgl

Saturday, February 25, 2006

Money Supply Growth

This Author has chosen a Subject today which he knows little about; but that is a fact that hasn't bothered him severely in the Past. Still, the Money Supply calculations are really tricky, basically because no one really has a handle on what are the Generators of the Money Supply. It is an area where you can have your own Pet Theory.

I have always chosen Business Profits as Generator of the Money Supply, thinking where real Business profits increase in Percentage, so does the Money Supply. Many Economists, on the other hand, have differing ideas--citing Wage increases, reduced Interest rates, rise in Trade Sales, and even good old concessions to Labor. There are other exotic theories outstanding, held even by venerated Economists; but I may has exhausted the Majority opinions.

Some things should be known about Money Supply growth. The clear leader is that such growth without a corresponding growth in Investment will develop into Inflation. All funds, however generated, inevitably settle into allocation somewhere: this meaning that if they are not invested, they will eventually descend on Consumer Prices. This is an Event structure which Everyone finds appalling.

The second major element to Money Supply growth or decline stands as Money Supply will not shrink until and unless there are economic losses which decrease the economic profits produced in running the economy. I use the term 'economic' here to denote Business Profits decline is not meant. The survival or failure of individual Enterprise has no meaning here. The salieant point is that the Profit ratio per usage of Production unit remains constant in the seperate economic sectors. The Creative Destructionists have won again.

It is time this Author leaves off talking. lgl

Friday, February 24, 2006

Durable Goods Fall

The Good News comes from the bad numbers deriving from lack of airplane sales, the Bad News comes from lack of Computer and Machinery sales--down 10% and 2.5%. There is a general downturn off last year, especially bad as the last Quarter had only a 1.1% economic growth rate revised. The Saudi explosion does not help Business stability in investment decisions, with the quick, adverse reaction of the Spot Market.

The immediate News only reflect longterm trends which will increasingly clarify with the passage of Time. This will likely be the Year when Trained Labor personnel will start to leave the Labor Rolls faster than younger Labor cadres can be trained to replace them. Production will suffer from this, the damage only showing up in bad economic numbers like the ones received today. There is a possibility, not really statistically quantifiable, that Year 2005 was the high point in economic growth for the American economy.

There may be economic gains from the longterm trends, though, as business practice alters to meet the increasing demands for Labor. The growth in Luxury Goods production will likely reverse, bringing stability of Production rates, technological maximization, and reduction in Resource usage. Wages will likely turn around as well, centering around a Mean and Median with less skew of periphical boundaries. Services practices will become centered upon standardized treatment and practice, with a dismissal of extreme practices Charges. This will bring down the Cost of Medical treatments, Communication charges, Transportation Costs, and cheaper Building practices. The Economy will evolve to do more with less. lgl

Thursday, February 23, 2006

Falling Family Income

The Fed has come out with its Consumer Finances survey for 2004, and Family Income dropped 2.3% when adjusted for Inflation. This is not really new or unexpected, simply a verfication of what Economists expected, considering the slow rise in Personal Income alongside of rapidly rising Prices--especially in Energy and Food. The magnitude of the drop, though, leads one to endure some Chills.

The loss has been totally financied by Consumer debt increases, which cannot continue forever. Debt loads among the Consuming Public are at historic Highs in absolute terms, and reaching toward historic Highs in terms of percentage of total Income. Something will have to 'give' sometime. The Fallout from that collapse may be very economically injurious.

What Scenarios could We possibly expect from such a collapse?

1) Our Current Accounts deficit will not alter drastically--itself a Problem--as World Consumers of American Goods will stop Buying when American Consumers stop Buying.
2) There will be significant Layoffs in Retail and Merchandizing, those areas most likely to produce additional Welfare transfer payments.
3) Corporations will reduce their Production schedules, as they lose Sales in their most lucrative, Cash Cow products.
4) High-Income increases--which buoy up the bad news of overall Family Income--will start to decline as the proceeds from Corporate Profits disappear.

Government will not even much affect the Above conditions, as its own Debt ratio is too high, and Expenditure levels are already excessive. Economic policy based upon Government action in the Markets are destined to failure. What Americans really need Now is less Consumption, and more Paying Down of Debt--both Government and Personal. lgl

Wednesday, February 22, 2006

Leading Indicators

The Economy seems a bit foozy when the January evaluation of the Leading Indicators is made. The big Movers were a drop in Unemployment Claims and growth in the Money Supply, without which there was not much gain except to make up for the poor December numbers. It appears that the Economy lacks a clear directional course, with concurrent increase in the Money Supply; another way of saying We are building Inflationary pressure.

Interest rate hikes will do no one any good, and many significant injury. It will not even curb Inflation, if increase in the Money Supply without equal growth in the Economy continues. Financial funds are always allocated, even if to the disadvantage of the Economy. The Fed should be very careful about setting Interest rates; now is a time for Tax hikes, though no Economist would agree. The best Tax hike would be announcement that the Bush Tax Cuts are going to expire according to current Schedule, rather than made permanent. It delays actual collection of Tax revenues in the immediate future, promoting the Economy, but initiates expansion of Private Service and Operating Capital funds. There is a Time to Live, and a Time to Die; I think the Bush Tax Cuts have served whatever purpose they ever served. lgl

Tuesday, February 21, 2006


This Author has promised himself for a Week that he would not write a discussion on other Countries adopting the American Dollar, in place of their own native Currency. The Subject, though, simply proved too tempting a topic. I will therefore begin to make a fool of myself.

Currency adoptions have consequences for both the adopter and adoptee. They are both Political and Economic in nature. The adoption stabilizes the economy of the nation who uses a more stable economy with a loss of national prestige. Creditors are more leniant in renogiation of national debt, along with private native foreign debt. There is a sudden and abrupt curb upon native inflation, as the unstabilized Currency is taken out of play. There is a sudden increase in national Credit rating, as the greater stability is observed with a suddenly-expanded number of potential Lenders; the later more willing to extend Credit in terms of Currency evaluations which they commonly deal. All of the Above can be a definite economic gain to the native economy.

The Currency-holder nation may not be as concurrently blessed by the venture. They suddenly find a degradation of their own Currency, with an increased Debt load denominated in their own Currency. Their Credit rating starts to slide, as the greater Debt load reverberates throughout the World economy. The stability of their Currency still depends upon the viability of their own economy, but suffers from a vastly-expanded Debt load. Interest rates endure upward pressures in the Short-Run, and deflationary pressures in the Long-Run; most notable within the realm of the Currency-holder's own economy. This comes from the higher demonimated Debt ratio combined with expanded interest in stabilization of the Currency. The result is the Currency-holder pays too much for Operating Credit in the Short-Run, and insufficient interest rates for Capital formation in the Long-Run. Operating Productions Costs become more expensive, while Capital formation Returns wind up smaller than expected. It becomes fundamentally an equation where Operating Expenses are inflated, while Long-Term Profits fall. A bad Scenario for any economy. lgl

Monday, February 20, 2006

Mea Culpa Complex

Prominant Journalists now call for the American Association of Journalists to renounce its predecessory Organization for failing to help displaced Jews during WWII. Let Us examine this? We are talking about incidents occurring during Our grandparents and great grandparents era. We are accussing an Organization not then in existence, of crimes commited by another organization, said Organization founding being because of the disintergration of the prior Organization, basically because of the event incidents condemned. Yet the current Organization should suffer some punishment as the incidents took place.

What was the milieu in which the Incidents took place?

It was a time and place where Racism was rampant throughout the World. The Klu Klux Klan was probably the third most politically powerful entity in the Country, falling behind the Democrats and Republicans. Racists were everywhere, and powerfully placed. There were two Supreme Court Justices who belonged to the Ku Kluxers, which is never mentioned in polite company. Probably about twenty percent of Congress had some affiliation to the Klan during this Period of American history. This Author's closest neighbor as a child was a Grand Wizard of the Klan in his home state during this Period. He was a sort of likable old man in his declining years, and his wife often gave this Author Cookies and Milk (the Author was raised Roman Catholic by the way).

This Author handles this mea culpa bull the way he handles accusations from black people. His earliest ancestor arrived in this Country in 1841, and never owned a slave; being a steelworker in an Penn. steel mill. This Author had four ancestors serve in the Union forces in the Civil War, and most of his ancestors emigrated to this Country after blacks were freed from slavery. None of my family ever lived in Jim Crow States, at least not until such laws were repealed. Some of my family, including myself, had some involvement in the Civil Rights movement of the 1960s. We do not need the Guilt Trip, Thank You, and you can have it back. lgl

Sunday, February 19, 2006

Memo to Homeland Security

Intelligence Evaluation of the Current Nigerian Terrorist Attacks:

Terrorists have always possessed a political agenda they promoted, or at least attempted to promote, by the use of Terror against innocent Citizenry. Prior Urban Terrorism, therefore, has always been shortlived, most of the time lasting only until arrests were make capturing the cell elements conducting the Terrorism. There has never been levels of Terrorism in history, which previously expressed the durative survival of the current Terrorism. Another operative element may have entered the matrix!

Four of the last Nigerian Terrorist attacks coincided with a drop in Spot Market prices for Oil. Extended examination of Nigerian Terrorism finds a relative correlation between Nigerian Terrorist incident and major Economic events. There has been previous evidence in history where Economic interests and participants funded Terrorist efforts to promote their own economic agenda. Al Quada elements have also always possessed intimate association with the wealthier elements of the Saudi business and economic community. Terrorism may have become an instrument of Market-altering economic policy.


Investigation of Terrorist activities should be examined statistically for correlation of Event and Economic trend. Further study should be undertaken to fix the exact Cost picture of formenting various types of Terrorism, what possible financial and economic gains could be realized by Who, and how much it would cost these elements to foster such Terrorist acts. Attention should be directed specifically to what elements of the Economic spectrum could most profit from acts of Terrorism, and whether Terrorist funding is therefore profitable to themselves. lgl

Saturday, February 18, 2006

Tax Compliance

This Author doesn't know if it is just him, or that certain Subjects have a periodic dating; but he possesses the tendency to run into groups of articles on some element of the economy. Today, it was about Tax Compliance. The real problem lies in the futility of the discussion, in the absence of effective Tax rates. Most Commentators cannot percieve the inadequacy of the Subject, which consitutes a Return of funds, less than half of the current National Deficit for one Year, over a Ten-year Period. Reorganization will only marginally improve the imbalance, and worthy of pursuit only if Government Spending is cut or Tax loopholes eliminated.

Tax revenues will have to be raised, both in Tax rate and in recovery, or the Government will gravitate to a total loss of all Revenues due to increased Interest rate bite from Debt. Bankers, if not Economists, will explain the value of staying ahead of the Curve, rather than falling behind it. What is the differnece between a Thirty-Year Old family man buying a $2 million home, and a Fifty-Year Old family man buying the same Property? Nothing except in the Later case, the Mortgage is very likely to have already been paid by the sale of a previously-owned home. It may seem like nothing, but the Interest on the Mortgage is likely to equal three times the yearly Income of the Thirty-Year Old. Governments can get themselves pinned by the same excesses.

The Philosophy "Make it First, then Spend it!" may have been lost in this Country, but it most assuredly should have been retained by Government. The Value of raising Taxes is obvious, though often denied: Governments can save not only the Interest expended on the Debt from Surplus financing Tax rates, but attains an equal amount which can be expended for Social Ends. Denial of this Gain comes from the Spendthrift nature of Politicians, with no One willing to allow Politicians access to greater funding. This Gordian Knot must be broken! lgl

Friday, February 17, 2006

Oddball Conjecture

This is the second attempt, as my Computer wants to eat my work this morning; the Author is irritated to repeat what was extremely off the wall.

I was studying the Papers this morning, learning about the 0.4% rise in the PPI, when an idea hit me, and I am still trying to evaluate such a regulation.

Thesis: A federal regulation is passed into law, stating all Stock must be sold between $0.00 and $20.00 per Share, else the Stock-issueing Corporation must sell additional Stock to bring Stock Price within range of the Market regulation. There is also the Contratemps, of persistent and regulated Stock Buybacks.

What would such federal action accomplish?

Market selling would be rationalized to great degree, with Accounting switched from the heavy perponderance on financial Accounting and assessment of fees, to the easier simple accumulation of Share numbers. Traditional Indexes, like DOW-JONES, would be easier to interpet--possessing a definite range which would not inflate with the Economy. Comparison work between Market indexes and the CPI and PPI finds greater ease and higher correlation. The IRS would have a Comparison Chart to evaluate submitted Income reports of Corporations. The final gift would be all Market participants would find easier discernment between Market trends and Speculation.

Now that the Author has Economists rolling in the isles, he will quit. lgl

Thursday, February 16, 2006

Retread Solutions

The NYTimes had an article by Robert H. Frank about a heavy Gas tax, which would be reimbursed to Taxpayers by lower Income taxes. It sounds good, but relies on a complaint Congress which would not spend the additional funds. It seems better to lower the Gas tax from $2/gallon to $.70/gallon, and inform the Taxpayers they will not get it back. This curbs Inflation, cuts Gas consumption, and raises Tax revenues to reduce the Debt.

Pacification in Algeria,
David Galula

Galula was a very efficient and knowledgeable French small Unit commander during the Algerian rebellion. His ideas remain innovative even in this Day, and is probably the reason the Rand Corporation republished the Work for its hoped influence on the Iraqi occupation. I am quite content with the Galula methodology concerning pacification procedures, but will inform All of its insufficiency. Proper pacification procedure must look even further back in history to British occupation forms in India.

The Occupier, which the United States Military is today in Iraq, must integrate Native allegiance into a rigid military structure. The exact nature of this structure was only ever adopted by the British. Acceptable Candidates must be drafted into a Native force, subjected to a harsh military Code of Conduct, and utilized whenever possible to interact with the Native population. The key element of success in this endeavor comes from these Native units being commanded (both Officers and NCOs) by trained Occupier forces. The combination of Native units commanded by Occupiers, and real Occupier units to control and discipline the Native units, will generate the acceptable discipline and military policy sought by the Occupiers. Then, and only then, can Galula's ideas be effected. lgl

Wednesday, February 15, 2006

Undiscussed Effects of real Tax rates

Everyone who studies current Economic and Business trends understands the basic format under which Taxes are discussed. The trouble is People concentrate on areas which reinforce their own positions, providing no analysis of impacts standing as oppositional or neutral to their own positions. This Post will try to outline some of the undiscussed.

1) Tax practice affects Business practices: The existence of Tax loopholes do more than just give Businesses more money to Invest. The existence of the Tax loopholes eliminates Business desire to curb Expenses, leads Business to invest in uneconomic ventures solely for Tax loophole advantage, and makes Business practice a propellant of Inflation.

2) No one actually discusses why the wealthiest Economy in existence should have Public Debt as a significant percentage of GDP. They also fail to discuss the value of Economic policy which insists on advancing Public Debt ratios. We have forgotten any Concept of a self-sustaining Economy which actually makes longterm Profit overall. Exploration of the above Concept could itself propel a different outlook, with construction of potential economic models.

3) Current Tax practice encourages a Spend It Now philosophy among both Business and Consumer, with a Government pat on the head in the form of low Taxes; leaving some down-the-road myth of efficient Economy to pay off the Expenditures of Today. Again, this mythic Economy is not modeled.

4) The Bush administration has just proposed Dynamic Analysis of Tax Cuts as a propaganda organ of the Administration. It will have economic soundness if it also examines the inflationary impact which Tax Cuts incite in the Economy.

5) Tax policy is also not examined for its destructive capacity in the realm of marginal-Profit industries. An incredible amount of American industry has been forced to close down over the last Thirty years, mainly because they could not match the Profits return for Investors, or the Wage packages of Labor, generated by major Profit sectors wanting to inflate their Operating Costs for Tax purposes.

Any Economist, if truthful and wanting to advance the Dismal Science, could articulate many more than these five Issues, and all Issues have a derogatory impact upon the American economy. We need to change Our Storytelling. lgl

Tuesday, February 14, 2006

Violation of Legal Intent

Current news discusses Kerr suit in the Courts to defy the Interior Dept. on payment of royalties for Oil and Gas in the Gulf of Mexico, and the WTO is implementing Trade sanctions on the United States because of the Jobs Creation Act. What does this mean? The Oil industry is making the highest Profits in history, and the WTO is discriminating against the United States--knowing full well that foreign nations' violation of WTO standards cost the United States far more than it will ever recover by subsidizing Boeing. Both are Cases where Petitioners are using the Letter of the Law to defeat the Intent of the Law.

What can the United States do about this?

The Courts can take the position that a Federal Dept. is correct in its administrative rulings, if Corporations still present a high Profit ratio after the administration ruling. It is not a question of Law, but of balance and fairness. The Government has the right to tax, and extraordinary Court interference violates such right. It is a question of whether the Companies under review pay, or do not pay, their fair share of the tax burden imposed on other Companies in other industries as a percentage of Sales and Profits.

This Author has always thought the United States should withdraw from the WTO. He perceives a role for Protectionist Trade policy which other Economists deny. The most prosperous nation will always finds discrimination against itself in any Trade union, where the Trade advantages of the wealthier nation can be outvoted by the smaller nations. A less-marked reaction would be retaliation, with Trade sanctions limiting the access of WTO nations to the American markets, until such time as discrimination against American Products are addressed by the WTO--with full payment of American losses from discriminatory practice by WTO members. lgl

Monday, February 13, 2006

Inflation Philosophy

Chasing Full Employment
Published: February 12, 2006

A fairly decent Read on the manner in which Full Employment and Inflation have been considered in earlier years. This Author has always felt that the Claim that Full Employment was a major factor on Inflation is wrong. Inflation does not find generation in the supply of Basic Living services. The elements of mass production technology, Resource conservation, and durability remain the latest and best across the production cycle, because of the need for such provision. Unemployed Labor must still retain about 70% of such services, paid through Government welfare, or through family associations. They would not seem to be a Generator of Inflation, though this Author lacks statistical proof.

I believe it is the lack of real Investment opprotunity which is the prime generator of Inflation. Real Investment opprotunity being defined as any Investment which will provide genuine Production Profit ratios over the lifespan of the Investment. The greatest element in Inflation is the vast Price increases in Speciality-Product luxury Goods. They have Production cycles where Resource wastage is common, Productivity Labor values are low, with unnatural Markups throughout the Distribution chain. Most Consumers will spend excess Profits, Wages, and other funds, when real Investment opprotunity is insufficient to absorb the additional funds.

Labor is not the culprit in their Consumption patterns, per sec. It might be a lack of Business initiative or imagination, it could be an excess of Profits through monopolistic Price scheduling practices, or it might be Oversupply with excessive Resource draft; but it is doubtful it is the fault of the ordinary Consumer. The Economy malfunctions, not because of the Blue Collar segment of the Labor Force, but from the misdecisions of the While Collar management. lgl

Sunday, February 12, 2006

Deficit Payment


Do future generations pay for deficits?.
It is the question asked by Tyler Cowen at Marginal Revolution. He considers a number of scenarios, and an intermix of these scenarios. The real problem lies in consideration of present effect in this analysis. It must be studied from the viewpoint of the future generations. What is the image which the future will hold of Us?

We present a sorry spectacle for the future. We raise vast amounts of Debt, with absolutely no consideration of Credit viability loss. Is there an end to the credit We can acquire? Nation after nation on this Earth has failed in the arena of Debt, invariably at the point where Debt Service absorbed too great a portion of the tax revenues. We can accept 10-12% of all Federal tax revenues going to Debt Service, but can We double, or worse triple, such activity? The basic foundation of tax revenues is Taxes, which must be raised to keep Debt Service limits manageable.

A lot of Commentators contend Government Expenditures will decrease in future years, but is this a realistic assumption? When is the last Year that Congress spent less than the Year before? The Answer will really surprise Everyone! Conservatives even imagine We can eradicate Political Pork, probably the greatest Joke in the political spectrum. Fiscal responsibility has to start at some point. lgl

Saturday, February 11, 2006

Breakdown of the Bush Budget

Thanks to the Economist's View for a review of the Bush cuts at:

Bush would see an end to the Public Broadcast network, trying to cancel $398 million from its organized programs. Bush' dedication to Education seems to have a bias against all but the most technological aspects of Science and Engineering, while cutting Education efforts by $10856 million. Honesty forces this Author to admit he would have cut the list by $300 million, and could probably find an additional $2 bn to cut with research. Labor and the Consumer are both in for a hit, as Rural needs and the Consumer are abandoned to their predators. Labor to lose a couple billion in access to skills possible for Job acquirement, and Consumers left to their own devices in getting Services and quarranteed Products.

Bush wants to let rural Housing burn, and recreational facilities (except for the super-Rich) should not be protected. Major Contracts in Home Security and Defense must be defended rigoursly, but there is no need for Police in the streets. Drug addicts need only to find a cheaper Pusher, as Bush sees no need to get the addicts off their addiction. Environmental Quality seems like a dirty word or phrase in the White House, with vast slashing of funds.

The hardest element of the Bush philosophy to stomach, though, may be the Bush belief only Scientists, Engineers, and MBAs need a Job; because he is trying to see no one else has the ability to find one. lgl

Friday, February 10, 2006

Bush Position on the Debt

George W. Bush has not been known to update his basic Concepts base in Real Time. This stands particularly true when dealing with economic beliefs. Dick Cheney may be even more hidebound than his obtensible Boss, though it can be said Cheney exerts a considerable influence. Something could be said for the traditional American alienation between President and Vice-President. Integration of the Vice-Presidency into the current Administration forestalls expansion of Content and Makeup of Advisors to the President, while the Later cannot just get rid of a Vice-President, as he would any other Cabinet officer or Advisor who has proved to be a failure.

Dick Cheney came into Office believing that National Debt did not matter, continual growth could be sustained until the end of Time. He has worked continually to insure his Boss, George W. Bush, held to the ideological line. Economists and Accountants have tried to outline for these two officials the danger coming from the growth of Debt. Interest rates will eventually rebound with overdraft of funds, and Service of the Debt will absorb Governmental revenues to an ever-increasing degree. Their view on Trade is equally set in concrete! They see only the advance of Business Profits from Free Trade, without troubling themselves about adverse economic conditions generated; while high Expenditures grant large amounts of Pork to spread around, producing political support for their administration.

The generous viewpoints of unlimited Debt plus Free Trade produce a mixture which economically unviable. Free Trade allows unlimited invasion of American markets by foreign competition, while selling of Federal debt to foreigners generates Investment capacity for foreign Profits of Dollars earned in the American markets. The interaction of the two economic policies produce a matrix where the Federal Government actually underwrites foreign competition in American markets. Republicans will never admit it, but the later Bush administration is as bad as the economic administration since Reagan; both the worst since the pre-Depression administration of Herbert Hoover. lgl

Thursday, February 09, 2006

Pension Relief

The NYTimes had an article today on Pensions, outlining the common components of distress in the current pension system. Short study on the Internet will provide Anyone with a wealth of data. The provision of Health Care and Pensions have become a hazard-prone occupation. This Author thinks to provide a clearer understanding of the Problem (and will probably fail).

Health Care for Retirees faces skyrocketing Price increases in the health care industry, led by the vast run-up in Drug Costs incited by the Patent system currently in place; industries are pressed even in the provision of health care for present Employees, and are beginning to offer Co-Payment for services along with higher premiums for the employee. This will continue until Congress regulates Patent royalties--probably a demand that R&D and Production Costs be amortized over a Twenty year period with appropriate Product pricing.

Pensions are another matter, and the switch to (401)k Plans will not markedly help to handle the Problem. It derives because of Advertising practice in America, which offers Retirees a full range of entertainments at high Pricing; so high, in fact, that adoption of such entertainment actually increases the Living Costs of Retirees after retirement. Health Care and Basic Services follow the trend of Entertainment industries, bringing overall increases in Living Costs. (401)k Plans will not help much, as no Economist expects We will see the high Profits in the Markets as have been seen, because of the huge retirement from the Labor force coming, with little room left to increase Productivity levels; We are likely to witness high levels of technological advancement, but none which will actively advance Productivity. The only area such can be increased is Energy conservation, and Energy production is addicted to old technologies due to the high Capital Costs involved.

The United States needs a unitary Retirement program, and We have one, but it is insufficient under the current economic pressures acting through the economy. Social Security, Medicare, and Medicaid all originated in an era where Health Care was not increasing in Price relatively faster than the rest of the Economy. The Ageing and Retirement of the Population has created an artificial shortage in the Health Care industry, while the switch to Private provision of such Care has introduced the additional Cost of Profits into such Care. The argument of provision of better Care does not enter into this Argument, and such claims have not been decisively proven. It is known Private Care Providers will cut Services and Care to maintain their high Profit ratios. Reform must be introduced, whether it is regulation of Private Providers, or reintroduction of Public institutional Care. Case in Point: the return of multiple Patient wards in hospitals could possibly cut the Bed cost by 20%.

America has become used to the personalized care offered by the Private Sector in practically all aspects of the economy. Americans' greatest gripe is the lines of People waiting for service in Government agencies. Yet One must argue that America have seen the Years of Fat Cows as had Egypt in the Bible, and must face the Years of Lean Cows. Practices will have to change, as We need mass production practices in far more areas than simple manufacturing sectors. lgl

Wednesday, February 08, 2006

Markets and Institutional Investment

Both Oil and Base Metals are on a wild swing again--at a time both are still overpriced in terms of Production Costs for Extraction and Distribution. Everyone knows where the distortion comes from, which happens to be Institutional investment plunging. Institutional investment operates according to investment models, with integral Call signs for Selling and Buying. The trouble, here, lies in Call signs being based upon previous Market patterns of short duration--most of the time of less than 18 months. Long-term trends alter the Call signs, while their usage artifically pegs Market pricing (not based on actual Market conditions).

How does Regulators or Markets counter such inappropriate Market positioning?

Truth states there is little to be done without Regulation. The most effective method is requiring license to participate in the Markets, which places a premium on simple speculation in the Products. Licensing Costs would be low in Cost for actual users of the Materials or Products, as they have a defined End-use for the materials, while licensing Costs for non-actual users would be based on a Percentage-Charge on resale of the Product. Extractors of Materials would also need license, but possess freedom from license charge, with proof of actual extraction of the materials by Billing Lists.

Is it time for more Regulation and Fee Payments?

This can only be determined by assessment of the additional Costs to Production Consumers, over and above the Suppliers' actual Production Costs. No Economic studies currently concentrate on the cost of Speculators in the Market, and their effect on the Production Costs of End-Users of the Product. Most Economists, as well as Everyone else, cannot today easily identify the magnitude of these Costs. They should be able to do so, as such Speculation should provide at least a Ten percent return on Investment. lgl

Tuesday, February 07, 2006

Debt Ceiling

Treasury Secretary Snow has anounced that the Debt ceiling must be raised from its current position of $8.1+ trillion before mid-March, else the Federal Government will be unable to meet its obligations. The Author believes that a Response should be extended to the proposed Bush 2007 Budget. The Debt Ceiling might be the exact place to provide the Response.

What happens if the Debt Ceiling increase is refused?

The entire situation is dumped back on President and Congress. They would have to make Program Cuts, else no one is paid! What will this mean? Congress is up for Election this Year--all Representatives, and one-third of the Senators. They would not be able to cut popular programs, or they would be saying Goodbye to their Jobs.

Where could the Program Cuts come from then?

They would have to come from the Profits-rich Defense and Home Security contracts to Corporations, possibly through legislation enacting that such Contracts must be priced to make only 8% Profit on all Work. This would only gain about $80 bn toward Budget management. Cancellation of over-expensive Weapons contracts could cancel some $350 bn over the next five years. Elimination of the Bush Tax Cuts would save at least $1.5 trillion over the next ten years, and proper elimination of Lobbyied Tax Cuts for Business could pick up an additional $3 trillion over the next Score of years. Business might not like return to the Year 2000 in terms of taxation and Economic performance, but the American citizenry may feel different.

How can We force hold on the Debt Ceiling?

An email campaign on members of Congress, one with commitment: stating that as Voters, no one will reelect any member of Congress who votes for expansion of the Debt Ceiling. Calmly inform their elected officials will be remembered in November, and the American Voter has had enough of the wastage of their funds and financial credit in the interest of Corporations and lobbyists. Receipt of 50-60 million emails to Congress should change attitudes on Capital Hill. The one thing which must be accepted by American Voters is they must carry out their threat, if members of Congress defy their Constituents. lgl

Monday, February 06, 2006

The Bush Budget Proposal

The NYTimes lead article discusses the Bush Budget Proposal. The weak of heart (like myself) should brace themselves to read that he wants $2.77 trillion for the next fiscal Year. This Budget includes $36 bn in Medicare cuts--a totally unpassable bill in Congress without fundamental change in the program--so add the $36 billion back on. The administration will ask for $120 billion for Iraq and Afghanistan for operations into 2007; remember the Days when these Incursions (Wars) were not to cost even $100 bn, and We would not have significant Casualties? Then there is the great Whizbang, where the Deficit is going to be cut in half, but Tax revenues are down, Spending is up, and in the short-term, the current deficit will be $460+ billion.

New Estimates of the Budget Outlook:
Plus Ça Change, Plus C’est la Même Chose
Alan J. Auerbach, William G. Gale, and Peter R. Orszag1
January 31, 2006

This remains a more-detailed study of Bush financing. Short passages of interest:

About 58 percent of the deterioration in the official baseline figures since 2001 is
due to lower revenues, and 42 percent is due to higher spending.

decline can be attributed to legislated tax cuts (29 percent), other declines in
revenue (28 percent), legislated spending increases (36 percent) and other changes
in spending (6 percent). Declines in revenue have also accounted for most of the
deterioration in actual budget outcomes (as opposed to 10-year projections)
between 2000 and 2006. Tax revenues as a share of GDP have fallen
dramatically since 2000, and are low relative to their average value between 1960
and 2000. Spending as a share of GDP has risen somewhat since 2000, but
nonetheless remains at or below its average level between 1960 and 2000.

Outside of the retirement trust funds, the adjusted 10-year budget faces a deficit of
$7.8 trillion over the next decade (4.6 percent of GDP). Thus, a simple way to
summarize the fiscal status of the government is to note that the retirement trust
funds face substantial long-term deficits, and under realistic assumptions about
current policy, the rest of government faces deficits in excess of 4 percent of GDP
over the next decade.

The Bush Tax Cuts have been a disaster! They have not produced the Capitalization of American industry to make it competitive with foreign manufacture--check the Current Accounts Deficit. They have not been coupled with Federal Spending Cuts, and worse; the Administration picks and choses when they will include Spending in the Budget. The absolute worst, though, consists of the Administration doing everything to maintain and extend the Tax Cuts, while using their Expiration date statistics to hide the real Deficit levels. lgl

Sunday, February 05, 2006

Order Code RL33228
Federal Spending by Agency and
Budget Function, FY2001-FY2005

As shares of the economy, total federal outlays were 20.2% of GDP in 2005.
The largest budget function, Social Security, was 4.3% of GDP.

the six largest functions accounted for most of federal spending as
a share of GDP by a substantial amount. The largest six combined were 17.1% of
GDP in 2005; the remaining 12 functions with positive outlays made up 3.6% of
GDP in that year.

The CRS Report gives a good overview of the Economy in a relatively straightforward account. It also provides some understanding that 'Business as Usual' cannot be continued, with Federal Spending less than $1 trillion in 1985 and over $2.2 trillion Today. The real Culprits are Social Security, Defense, and Interest on the Debt. Each are overblown, and We need to consider structural changes.

The long-term method to eliminate the Interest is to equitably raise Taxes. Repayment of the National Debt based on a rational schedule would not be difficult, or an injury to the Economy, despite the protest of Economists. It would entail discrimination against foreign Goods--at Odds with current Free Trade policy--and cancellation of Tax favoratism; the true Favorite of only Politicians trying to gain political support.

Parity in Defense forces with foreign military establishments could cut the Defense bill to One-Third of its current Cost, with no relative increase of national Risk; though it raises the Risk factor for deployed Troops, and Generals would again have to relearn the strategic and tactical basics of warfare. The real opposition here comes from the Military/Industrial complex and its employed Lobbying establishment. They would really miss their artificially enlarged Corporate profits.

Social Security Costs (specifically Medicare and Medicaid) could be cut by major degree in switch to General Accounting principles. Patient Care would be paid for by the Instance or Day (think of Doctor Visit, or hospitalized Day). Medical Charges find payment on the basis of Volume, not specific activity. Doctors, Clinics, and Hospitals would charge at personal Profit rates, but only in general--not by specific service. They would be granted a financial reward, but one based on genuine Patient Care, not hidden Profits on specific services. Specialization would still occur, but based on Patient Visit or Hospitalized Day. Doctors, Clinics, and Hospitals would be freed of the impulse to provide total service, and utilize Referrals; this practice would eliminate underemployment of overcapitalized area medical provision. Even major Cities need only one Heart Hospital, or Cancer Hospital. The spread of Doctor specialization would be dictated by Patient need, not the best-paying specializations; it would also increase the level of General Practitioners. lgl

Friday, February 03, 2006

Energy Costs

CBS News ran a story on Seniors turning the Thermostat down in Minn., and still unable to best last Year's utility bills. Where does that leave Us? Communication of the Problem has really not been gained,, but it does exhibit the stresses which are building within the economy. The Budget overdrafts of the School systems was also expressed in the Story, along with the comment that the winter has been mild so far. It begs the Question of whether We can afford a severe winter.

The real gross Problem is the Capital flow out of the Country to pay for the Oil imports. This is eroding the resilence of the American economy, and raising the Cost of total Products imported into the Country. The real secondary Problem is the inability of Grass Roots organizations to handle the added Cost to their stationary budgets. Raising local Taxes or the acquirement of added debt are the only method to transition to flexible budget levels. The plight of the Seniors is as serious in the later scenario as is the plight of the Schools: neither Granma or the kids will ever be allowed to freeze!

We need a real National Energy policy, not platitudes of how We could improve our Energy position in a decade--with massive Spending and enhanced Energy Costs. Both the Economy and the Community will suffer from such idiotic pretension. The Senate passed legislation to push back the AMT, which Savings have already been absorbed by higher Energy Costs. The House, on the other hand, wants to extend the Bush Tax Cuts past 2008, along with pushing back the AMT. It simply portrays a Congress still out of touch with economic events.

We cannot afford a higher Budget deficit, or harsh Winters. We need legislation to curb excess Energy consumption in nonessential areas with Tax incentives directing Energy to needed areas. We need a President who talks of cutting Oil consumption this and next Year, not somewhere after he is sitting on his ranch in Texas. We need a Congress focused on issues which must be resolved to stop human suffering in the near future, not dreaming of saved Taxes down the Road when they retire. This is a time of Decision, and We get the Keystone Kops. lgl

Thursday, February 02, 2006

Need for New Technology

This Author has been reviewing the elements of the Bush energy plan, if One can call it that! The overwhelming aspect of all proposals consists of innate failure without alteration of current technologies. Ethanol and nuclear energy cannot meet the total Demand generated by the American economy under current technological practice.

This Author has been thinking of a new vehicle motor, utilizing a solid fuel. It could be remarkedly similar to the current usage engines, simply needing the addition of a centralized combustion chamber, then using the traditional Value-Piston-Crankshift system of present motors. The fuel would be a variation of Plastic explosive, but one which will only burn in the presense of oxygen and a electrical current spark. The speed of operation would be controlled by oxygen flow, the burn pattern only occurring upon one side of the fuel block. The Fuel blocks themselves could be produced in mass quantities with only a fraction of the content consisting of Natural Gas (hopefully about 11% of total mass).

I have said for years that nuclear fuel elements has to be designed for safe usage--on the order of Computer chips. They must be designed to perclude Meltdown even under exposed to Air conditions, a simple method of introducing Damper rods, and low radiation levels for easy transport and operation of reactors. The primary Mindset which must be altered is the Concept of huge nuclear plants. These Plants require huge Cooling facilities and huge Pressures in energy generation. Designed Fuel Cells could allow for marginal radiation levels, low Steam pressures for generation, and normal levels of electric generation. The End-Goal (probably never realizable) would be a entire nuclear power generator which could be transported on a large Truck bed, and simply plugged in; One which could even endure Traffic accident without adverse leakage or threat.

The Concepts related here may seem unrealizable, but they are not far from what We can attain technologically; We needing only the impetus to develop rational Power strategies. Americans are addicted to large-scale Projects in everything on which the Economy and Society focuses. This will be Our downfall, at least in the arena of Energy. We need simple, small, self-regulating systems if We desire to win the Energy War. It can be done! lgl