Friday, June 30, 2006

Free Trade Thinking

This Author may not have this right, only reading what a Columnist has said; but if it is true, it inspires One. India finally allowed International combines to buy wheat from private farmers, previously limited to Government-controlled transactions last year. This year they find about a 12% rise in Wheat price, a 22% rise in Atta flour price, and a shortfall in Wheat purchases for their Welfare assistance program, so they are violating their own Pesticide regulations to buy Wheat from the Internationals at even higher Prices for Wheat. The interesting fact is the Indian Government refusal to raise the Prices they offer to their own farmers for Wheat. Did I miss something here?

This sounds like another George W. Bushism on Free Trade!

It is a fundamental tenet of the Bush administration that any Trade deal which increases Corporate Profits is wonderful Free Trade, while any infringement on Corporate Profits remains an adulterous Trade barrier. We all remember Bush and Republican Congress forbidding bulk volume negoitiations being used by the Social Security Administration to fund the Proscription D program, fearing the American Workers might only have to pay half of the projected Cost; eliminating the huge Corporate Profits involved. There still is no National Energy Board as sole Importer of Energy resources; such a Board might even be able to dictate Prices to Oil Producers and Oil Companies. George W. Bush stands in the breach, protectioning international Corporate profits.

Some Economist should do a Study, lucky that I am very lazy, studying the P/E ratios and total growth of numerial Stock volumes; to determine how much increase of Product Price/Unit was needed to maintain the P/E ratios now as versus ten years ago. Such an investigation will allow Us to understand how much higher such Profits have to rise, in order to maintain the P/E ratios. A single Worker could support a Family of Four in 1960 by working some 40 hours per week; now the said Worker cannot even pay for the medical insurance, let alone the Mortgage, Utilities, Taxes (remember Property, Sales, Excise, and Income), and Food; forget about Entertainment and Savings. Now I have figured it out: You have to possess $2 million in Stocks, Profits protected, in order to survive. lgl

Thursday, June 29, 2006

The Hypobole

Some articles today highlighted George W. Bush's anger at Newspaper revelation of Federal pursual of financial records of Americans in the War on Terror. This Author will go on Record here, and claim it is all demogogue hyperbole. The Federal Government never hid its desire to track the Money behind al Queda. Second, al Queda itself must be an Intelligence network, as it is engaged in subversion. They keep track of Money flows themselves, and trinanglate the pattern of arrests. They recognize when Money is being tracked, as they are searching for it, faster than Anyone except the American Tracking agents. al Queda will also move its real funds through sympathic financial institutions which will not accept American subpena power. Bush was only angry because the American Public was informed.

The American Public is getting tired of the hyperbole, especially the idiocy which is keeping Oil Prices high. Oil Spot Markets make up very little in total volume of Oil transferred, yet Oil Producers use this hyperbole to demand higher-priced Longterm Contracts for Oil Supply. The functional limit states probably less than $100 million per Trading Day is needed to corner the Spot Markets Worldwide, and most or all funds used can be recouped by Oil sales to Speculators. It is how Oil Producers extort another $20/barrel from American Consumers in the supply of Oil.

American Oil companies should be forewarned of the American reaction, when the Public realizes they are being had. Oil Producers reside elsewhere, but American Oil companies must do business here. Americans react very negatively to fraud and extortion. It is a pity that We currently have a Political and Corporate leadership who are stupid enough not to fear American anger. lgl

Wednesday, June 28, 2006

Interesting Posts

New Life for the Good Old S-Corp hipes for a new bill in the House of Representatives which would alter the mandated regulations of S-Corporations. The basic amendments would allow for unfettered use of passive income, issue preferred Stock, and grants alien nonresidents right to participate in organization of S-Corporations. Guess What? These are the very necessities required to turn S-Corporations into Holding Companies at a lower rate of taxation than normal Corporations. Our dear Legislators at work!

Tax Tradeoffs by Mark Thoma outlines how Our Republican Congress is attempting to cut Domestic programs through passage of the Gregg bill. It might be long, but worth the time of reading it, when One understands the Republicans propose to fund actual Deficit Spending by avenue of eliminations from Domestic programs, this to the tune of over $200 billion per year some time after Bush leaves Office. The Republicans are working hard to entrench Tax Cuts which should never have been passed in the first place, and make poor Americans pay for them.

The real humor of the situation lies in American refusal to denude the Domestic programs on which all Americans depend. Republicans cannot stop angry Americans from coming after the Cash with simple Paperwork--even if they call it law. I herein do propose a new Alternate Alternate Minimum Tax which states simply no American can claim any Tax reduction which allows him to pay less Tax than any Taxpayer making less Income from any Source has been made to pay. Required Make-up payments to be paid the following Year, without deduction of such as Expense. A flat tax will be assessed to all Aliens nonresidents who make Income in the United States of 30%. Resident Aliens to be taxed as Americans. Republican should back off their attack upon the Welfare of the American people, lest they endure real injury. lgl

Special Case of Keynes

A sweet young lady asked me today 'What was Keynesian Theory?' I responded with the old adage that if you don't know what boxing gloves are, you don't know Boxing. I've decided this was probably a rude response, though I still would suggest the lady keep her Day job as a Surgical Nurse. Still, there exists the compulsion to explain this major element of Economics.

Keynes witnessed the huge loss of economic activity from the Great Depression, and proposed Government restart economic activity by deficit spending. Well and Good, that is simple enough. But the Truth states that it isn't. Keynes was never satisfied with this Solution, then or for the rest of his life. Politicians and Business leaders took the Concept and ran with it, without bothering for deep research; this because the Theory meant Votes and Profits for themselves.

No one understood except Keynes, and possibly only this Author, that deficit Government spending to spur economic activity was a Special Case Scenario. Deficit Spending had beneficial effect if and only if there was sharply reduced economic activity, with utilization of economic resources below a level of Say: 70% utilization. At economic resource utilization above this reduced baseline, the Government would be in direct competition with the Private Sector for economic resources: an automatic Inflation generator.

Inflation from this activity could only be stunted by reduced Government Spending, or by raising Tax Rates to bring Government Budgets in balance. The Government Deficit creates an additional Inflation factor as Government bonds begin to imitate Money, but funds whose value has already been spent once by Government, but has draft again by the Private Sector. This artificial Money Supply forestalls a retreat from inflationary pricing until such time as the Private Sector has eradicated the false Draft on resources by Consumption or alternate Investment.

Tax Cuts which produce Government Deficits do not generate economic activity above baseline utilization of economic resources, they only produce longterm Inflation. It is the reason why there has been no Deflation since the Great Depression, not the extension of Consumer Credit--though the later does generate Inflation. lgl

Tuesday, June 27, 2006

Income Tax v. Consumption Tax

I hope Greg Mankiw does not think I am picking on him, or trying to start some Internet war. The Above Post by him is very well written, and unaffected by future events, it would seem likily that Consumption taxes were the way to go. I have some difficulty with it.

Procivility forecasting would suggest that Income Taxes possess almost Six times the suppression of Tax rates, than do Consumption taxes which blend with the Cost of Products, and can be raised without wide Public notification. The suggestion of doubling the Savings rate with the use of Consumption taxation lacks for credence, with the standard practice of Retail raising of Prices to maximize Profit margins, plus the nuevo-rich complex. Negative pressures suggest taxation would increase, be more regressive, and apply Inflationary pressure to complementary taxes such as Property and Excise taxes.

Graphs do not make an Economy, and Tax formulas do not make good or fair Tax policy unless all pressures are considered. lgl


A Concept which will have its Day, even though initial efforts seemed doomed to failure. Industry provides sufficient sulfide pungeate to the atmosphere to provide Sunlight reflection, if this avenue were capable of success. The idea of counteracting the effect of one Greenhouse Gas by artificial injections of another Greenhouse Gas is novel but impractical; it leading only to greater concentration of Greenhouse Gases as Smokestacks and Cars continue to operate. Geoengineering is only going to work based upon defined premises and resultant planning.

Where is the Problem?
The World Economy digs up Carbon deposits, and burns those deposits for Energy. The World needs an alternate Energy source. The buildup of Carbon on the surface of the Earth must be stopped, as oversupply of Carbon literally chokes all life in every form. The problem is not Global Warming per sec, but the buildup of Carbon; We need to stop the draft upon subsurface Carbon deposits.

Then, is Ethanol the Solution?
The Answer is Never. Complete conversion to ethanol fuels would literally eat up the World's Food Supply, by consuming the acreage planted for human food. It does provide Insight, though, leading People to understand Our energy resources must be produced by the Surface of the Earth. Heat, if not over-extreme, helps to generate greater Plant life; the basic Reoxigenator of the planet. Plant life is also the basic venue to return Carbon deposits to the Earth. Any new alternate Energy resource must rely on Plant product on the surface to fulfill all needs of geoengineering.

This Author has proposed the production of liquid Plastic explosive, designed to be less dangerous than Gasoline or Diesel fuels, but produced at equivalent Prices with much less necessary volume and much higher MPG. Earlier, I had proposed huge Algae tanks in oceans, contents to be used as base Product for the refining of fuel; utilizing added Sunlight absorption, while cooling the Oceans to bring less violent Weather patterns. These appear to this Author far more needful of Funding, than either spread of Greenhouse Gases, or burning Carbon emissions reduction. lgl

Monday, June 26, 2006

Free Communications

This Author was feeling excessively happy this Day, before he found more Defibulator/Pacemakers were to be recalled; he having been the recipient of one state of the art contraption in January. I decided it would take a pleasant thought pattern, to readjust the karma. It was found in an article in the NYTimes about municipal network servicing.

We remain addicted to the Cash-Cow mentality associated with modern Communications. Huge Fortunes have accurred from the Tech industry, and an entire new industry has functionally sprung into existence over the last quarter Century. Investors has shivers close to orgaism at hearing of a new piece of Hardware or Software. Even staid Bankers plunge billions of Dollars into projects which could match Windows, Coral, or Adobe. Investment Groups still prefer dealing in Tech Stocks more than Oil, this due to the potential higher longterm Profits. Anyone up for some Time/Warner stock?

But what if Communications were free?

Municipal Services provide Water, Sewer, Garbage Disposal, as well as law enforcement, Landscaping and Maintenance, Community Health Care, etc. There is an Opprotunity Cost here! Soon there will be an almost total switch to Wireless Communications. The Cost of providing Wireless services for Communications will be negliable in provision to other Services provided by Municipalities. Economists will tell People there exists specific economic models to determine whether Products and Services are better provided by the Public sector or the Private sector. Wireless Communications could be the venue for vast Opprotunity Savings.

Would it not be great to have Cable, Phone, and Internet Access paid by Property taxes? There would be a huge removal of Private Sector Profit-taking from successive steps in the Communications process. Municipalities could negotiate Group services at modified Wholesale rates. Cable Programing would have a Marketing constraint placed upon it, now seriously lacking. Phone Service Costs are currently much cheaper by Wireless than with landline, but Consumers pay much more; Wireless companies make their huge Profits from Sign-up Charges, imitating landline Hook-up Costs, where no real Hook-up Costs exist. Going Wireless and Municipal may be the way to go. lgl

Sunday, June 25, 2006

Income Inequality and Corruption

There were several good articles on Income Inequality, and some on Corruption--these focusing on India, in the Papers and on some blogs. Confrontation with the content led this Author to consider the Issues as two Sides of the same Coin. One NYTimes articles discussed how Income Inequality can accelerate due to increasing Wealth allowing for increased lobbying participation, to the End of lobbying Interests gaining a greater share of the Wealth. Corruption, as stated elsewhere, provides the greater danger; as the Poor and Middle Class face corrupt officials with their hand out.

But is Corruption the greater hazard?

Corrupt officials build their own Wealth by charging Appliciants an illegal fee, when they themselves are paid by the Government to provide those Services. Time Out! Government officials in said corrupt nations are paid much less in Salary than Our Government Employees, cognizant that the positions are valuable, due to the ability to generate Income (without Taxation) from Those requiring positional services. All are charged for Services, but Charges are often set by Ability to Pay; corrupt officials desireous of generating the greatest possible Income. Overall Taxes are lower because of the Corruption, there is a fluid on-site determination of finance charges in the bribe; and because of the nature of the payment, there is a degree of decentralization of Wealth, while business transaction Service can be relatively swift with the input of Cash.

Lobbyist political contributions express an observable opposite effect. Contributions will not register with the Bribe-Taker if they are insufficiently large, and all activity directed to Service of the Client needs will be predicated by the amount given. Lobbying funds will not guarrantee Service, the official claiming he must acquire consensus among colleagues, which can often translate into looking for a better Offer. Service lacks assured fulfillment, officialdom will not turn down any Contribution whether he will actively pursue the Service or not, and the entire effort stands useless unless One can outbid the Opposition. Only the Wealthy can participate effectively, and the entirety is a pursuit of centralized Wealth.

Bribe-Giver and Bribe-Taker both face severe Penalty if caught (requiring Public opposition to the Service provision). Corruption does not alter the Tax structure, so both Participants face Taxation if the excess Funds are observed. Political Contributions enjoy Tax immunity, a Policy which is counterproductive to an efficient Tax structure; One should be taxed for the right of preferred political participation and access. Corruption may be evil, but it is an effective system; this known by its longevity. No One in their right minds can consider the Lobbyist system to be effective or beneficial. lgl

Saturday, June 24, 2006

Price Gouging

Greg Mankiw has a Post "Salinger on Price Gouging" which should be read before recourse to my maligning (or is that malignant) statements. The Oil industry has an amazing history, most noted for supplying any volume of fuel demanded, at any Price existent at any time, while finding no losses or Price Gouging at any time; a simply amazing feat considering the Price of Gasoline has varied in my lifetime from $.179 per gallon to $3.269 per gallon. Volume has been known to vary as well, though generally upward, but Volume supplied nevertheless, whether the price was less than a Dollar, or more than $3 per gallon.

Here is the Rub:
If the Oil industry is able to produce a given volume of Gasoline at $3/gallon, and can provide an equivalent volume of Gasoline at $1/gallon; how does the Oil industry expense increase so rapidly as to eliminate Price Gouging as the Price of Gas advances to $3/gallon? Are the Gas Companies truly hiding their losses when the Price of Gasoline is Low, to keep Consumers and Stockholders from fright? Maybe Oil Companies are all Share Cooperatives, whose Employees wait until Product Price is high enough to draw Wages. Maybe it is simply that Company Executives await high Prices to draw their Pay Packages?

It could be, of course, that the Oil industry may utilize Creative Accounting, whose entire Job is to hide Profits whereever and however possible. This is said in Good Spirit, not attempt at dafamation of character, or suggestion of Tax Fraud. It must be reinterated that these Good Citizens, a group who trained and honed our current illustrous President, could not be engaged in ethical malfesiance--so help me, Cheney. lgl

Friday, June 23, 2006

The Heat

We received another dose of World warming from the Scientists this Week, but while attaining Air play, it was provided with little reaction. Why? The real determinant comes in the lack of direct link between Greenhouse Gases and the Warming. This Author has probably generated an immediate ire in his Readership. Still, some facts should be recorded.

1) The Earth has been this warm before, and Scientists can still debate whether it has ever been near the Heat projected for the next Century. One notes a paucity in descriptive material as to the Weather effects of previous Heat Periods.
2) No One has given an effective Proof that the current Heat Period is Man-caused, or more than a normal Earth cycle.

Many Readers may think I am particularly dense in nonacceptance of Scientific data, but in actuality, the data coming through seems more propaganda than information. The data compilation on Heat Centers seems a better criterea field, than Ice cores drilled in the Antartic. The Heat Centers (human density centers) feels like a more contributive factor than does overall Heat. These are affecting Wind patterns along with High and Low Pressure systems. I believe that these Heat Centers, not warmer North Pacific waters, holds the key to Drought conditions in the Southwest. Continuous human density along Our Coastlines may interrupt normal Moisture flows into the hinterland.

This Author has written previously on Fresh Water depletion, and believes Moisture ingress patterns should take highest priority, over Ice core studies and mid-Ocean temperature sampling. We do not need to know today what Weather will be like in a Century, but finding a methodology to get Water to Cattle now appears important. lgl

Thursday, June 22, 2006

Economic Indicators

There has been some Market volitility today, because of reportage of some Economic Indicators have shown a downturn, foreshadowing a potential slowing of economic performance. There is senseless positioning in response to these Indicators, and this Author feels compelled to provide some Insight (probably wrong).

1) Economic Indicators are compiled by Economists, who have a vested Interest in the provision of good numbers. Poor performance is universally from the high end (the least impactual set which can be reported), while economic performance of sharp acceleration (of potential high Inflationary factors) are reported from the low end (again the least impactual set which can be reported honestly).

2) Economic Indicators must align (all going the same way) for successive periods (the number of Periods, mainly Months, depends upon the uniform spread of the numbers) for a discernable Trend to develop. It is only when a Trend develops, that Market transaction decisions based upon Economic Indicators are truly valid.

3) Economic Indicators remain basically based upon Business Management decisions in Production, Distribution, and Sales. It is these decisions which determine the numbers which will later set the Economic Indicators. Business Management decisions vary dramatically over the Short-term, necessitating the arrival of Trends before effective judgements can be made.

Economics stands as the study of Long-term economic performance. One should be wary, but not scared, of the Preliminaries of the Game. lgl

Wednesday, June 21, 2006

Beef, Drugs, and Oil

American beef is scheduled to return to Japanese Retail markets, and Mike Johann's claims Japan will not reinstate any Country-wide ban again; will retain only the power to reject individual shipments of beef. This concession comes only after the fear of American retaliation against Japanese Products became real. The real weight of American Trade is what brought the concession, and Americans need to learn to use Our trade weight.

The AARP, backed by several other non-industry sources, announce a great Surprise: The Drug industry has boosted Drug prices some 3.9% in the First Quarter, the BLS reports of less than 2% mixing Brand-name and generics together to achieve the less inflationary numbers. The Drug industry feels armored, possessing the Proscription D provision that Medicare cannot negotiate volume-purchase agreements at better wholesale prices. This is Congressional prohibition of the use of trade weight. It only adds to the problems of Social Security funding, and does not help the Drug industry in the long-run.

The Saudi minister statement that the price of Oil could triple if the issue between the United States and Iran is not resolved peacefully is again a use of trade weight; it only complicates and solidifies the rogue Iranian position, and the Minister is not America's friend. The United States can live, and even produce, utilizing only 60% of the Oil We now consume; though We would not be friendly with Anyone in the World. This Author is tired of implied Threats being made against the United States.

A more intelligent Administration could work through quiet diplomatic efforts to resolve American trade issues with Our Trading partners. I find myself needful of again eroding Iranian desire to oppose the United States with repellent tirades. North Korea should also take heed. The effective Counter to the Saudi Statement: A 10-Day American Bombing pattern off U.S. Carriers would destroy the Iranian Export balance for 8-12 years. lgl

Tuesday, June 20, 2006

Republicans in Trouble

Republicans in the Senate turned back a Democrat attempt to establish a Committee to review military spending fraud (a like Committee brought Truman to prominance in the 1940s). The Republicans adopted the wrong option, one which will bit them in the rear. Misappropriation of Funds is going to kill the Republicans in the next Presidential election. Misuse of Katrina aid, military mishandling of Contract negotiation and management, Corporate malfesiance in Tax Return declarations, along with Republican ties to the Corporate structure, will wreak havoc come Election time. It will even be embellished that Bush had to cut the Corporate Tax rates simply to get Corporations to bring their Taxable Income home.

Historical study could assist Republicans in understanding exactly where the Threat exists. What Study? The Federalist Party disintegrated basically through their unethical support of Commercial and Business interests to the point that they were perceived as unpatriotic. People might suppose that the Republican Party has a much firmer position than the Federalist Party of bygone Age, but the Federalist Party was the victor of the Revolutionary War, held the Majority in Congress about as long as Republicans have, and actually presented a more sensible program of development than Republicans for American growth. Republicans cannot be seen as hiding Corruption in their own Ranks.

The next Presidential Election will be a crucible likely to destroy aged Parties. Bush will not get Us out of Iraq, having staked his political heritage upon a favorable Outcome there; an Ending seeming increasingly distant, especially if the level of violence does not decrease there. The exciting new Iraqi Government will not be as exciting in a year, without a reduction of the destruction. The Republican Tax initiatives will seem tarnished if Deficits rise, Import Prices increase, there is a disturbance in the International funding of the created Debt, or there is an increase in the rate of Inflation. Russian Steel and Latin American Energy is currently being brought by previous Purchasers of American Treasuries. All of the Above holds real impact for the American lifestyle, the Number One ingredient for the destruction of political Parties. lgl

Sunday, June 18, 2006

Radical Solutions

This Author has been skipping through the Econroundtable tonight, studying the commentary of fellow bloggers. My mind slipped a gear again, and I decided to propound some psuedo-Communist, or maybe just pure anarchistic, ideas for betterment of life. I might have been inspired by the Becker interview to be controversial.

Radical Thoughts:
1) It does not matter whether Private Companies are underpaying for monopoly privileges for Toll roads in Indiana or anywhere else. The core of the matter is the loss of MPG in slowing all vehicles for payment of Tolls. Toll Roads are not Energy-Conservative.
2) PAYGO LAWS are always too technical to accomplish anything; simply inform all legislators by Constitutional amendment that their Salaries will be reduced by the same Percentage that the passed Budgets exceed Tax revenues.
3) LOBBYING power can be reduced by simple method: Set a limit which Campaigns can spend for each Contested Election. Voters would pray for a Campaign Budget allowance only granting Two TV political ads per Candidate per Week for only the Two weeks prior to the Election. The political Parties and PACs must also be controled, so every Ad must be attributed and paid by some Candidate's Campaign Budget under the Above restrictions. Who knows, Candidates might go back to listening to Voters!
4) Passage of a Law stating political campaign Contributions will be double-taxed, instead of exempted, could aid in passage of the Above restriction of Campaign Budget size.
5) A final Constitutional Amendment would state that all Tax exemptions, Deductions, Tax Credits, and Percentage rate of Tax must be repassed every Budget to retain validity.

This Author is feeling a trifle paranoid tonight, leading him to wonder if the assigned Assassination teams will have affiliation with Homeland Security, Defense, or only with Corporate Structure. It could be even more drastic, and no one will pay attention to this Post. lgl

Immigration and Pigou

The NYTimes might not recognize it themselves, but they occasionally focus on one issue every Sunday; today being Immigration. Mexico seems to be enduring the same problems on their southern border, as the United States suffers along the Rio Grande. Another article in the Paper suggests 2nd Generation Immigrants do better than native Contemporaries of equal Age--higher Educational levels, etc. It may be time to apply Pigou positive and negative externalities to the issue of Immigration.

Watch as I blend this argument into a review of Pigouian analysis.

Arnold Kling has an excellent comment on The Pigou Club proposed by Greg Mankiw. I have only one reservation: I have heard the argument of positive and negative externalities numerous times, and have always come away unsatisfied with the conclusions. The negative externalities always seemed quite correct, but the argument for positive externalities has always failed in my judgement. The Former does not automatically imply the Later. It might only be an error in my own analysis, but I think the economic model needs to be reworked on a theoritical level. A detraction of worth does not produce a addition to worth when removed. lgl

Saturday, June 17, 2006

Unions, Buyouts, and Pay Packages

What a way to start a Saturday!

'Video killed the Radio Starts' and Buyouts and Pay Packages killed the Unions. Neither Statement is true, but both hold some element of Reality. Stars had to acquire a visual presence, and Managers had to learn the elements of a Labor Market. No Demise had yet occured, at least, no funeral services have been held. Delta, though, may be attempting an adrenlin rush for the Pilot unions with its cancellation of Pension plans for Pilots--both active and retired. GM and Delphi may also be helping the crippled UAW with their Chip Shots to sidetrack gurranteed benefits. Union leadership, if not Union membership, should be grateful for the backhanded survival lines thrown by Corporate leadership.

Unions will again gain Power, as Corporate leadership destroys the Good Will of their own Employees. Buyouts started out being a good deal, but increasingly become parsimoneous with hidden addendums activating once the Labor rolls are split and disbursed. Unions should fill the void, by setting minimum standards for Buyouts and Pension alterations across the entire Economy--Workers still need an Advocate! lgl

Friday, June 16, 2006

Winter Canola and Frozen Lobster

The Associated Press had two articles today of much interest to an old Farm kid like me. The Whole Foods chain has stopped selling live Lobster and Crab, opting out for fresh kill or frozen crustesceans. The rationale: dropping the poor things in boiling water alive is cruel and inhumane. This may be a laudable sentiment, but mayhaps, some examination of killing methods may be in order. Submersion in boiling water (sudden thermal transference) by this Author's estimate, probably kills in less than 3 seconds with uniform invasion of heat. Decapitation is unworkable with the exoskeleton. Penetration by a pointed Object provides injury only to a specific locale, with a probable 2-minute interval before final nural cessation of impulse. Death by Freezing is a duration process requiring the slow drain of interior body heat, probably not less than 4 minutes in length. Whole Foods could well be condemning the poor creatures to an even more horrid and painful death. Comment should also be made on Corporate enterprise attempting to alter the dietary desires of Customers without their consultation; there is an element of monopolistic control of markets. The Menu might call for Antitrust action, and pass the melted Butter.

The article on Winter Canola provides a more righteous note: Farmers in southern and western Kansas finally finding a second crop to alternate with Winter Wheat, said rotation actually benefiting both crops, and each with a high Market value. Canola seed can make a good feed for livestock, and the Canola seed oil has potential as Cooking Oil and biodiesel base. The interesting element here lies in its potential as a biodiesel base, because it could turn States further north into double-Crop States with benefit for all Crops. This volume of biodiesel base could allow the United States to imitiate Brazil to a far greater degree than currently possible. And here it all started with something called Rapeseed weed. lgl

Thursday, June 15, 2006

Too Many Spin-Doctors?

The latest Inflation reports are bad, but not a total disaster; still, there should be some truth remaining in the data when the Day is finished. I have just read a NYTimes article which stated that year-over-year Core inflation was slightly over 2%. Resurrection of the CBS tag line: Reality Check--the Inflation rate was over 4%, and closer to 5%. Core Inflation figures cannot be utilized in year-over-year evaluations, when the Volitile Product prices have not changed direction, or reduced, over the interval year. Those that contest that We are not in 1966 should realize We are talking about 1967: Military expenditures equally as high, another new Welfare program initiated (Proscription D), a high Inflation rate, and Profit Margins having nowhere to go but down. Manufacturing Orders are up, Unemployment is still high but going down, Commodity prices slowly going down, and a Trade balance reminding of a Friday the 13th movie.

Lowering Unemployment will raise the CPI without much impact from Fed rate increases. Corporate Profit margins of high order will not spur Investment, but Consumption, if there is lack of high-Profit investment in a climate of Consumer belief in loss of purchasing power of the Dollar. Transfer of Government funds to Health Care provision (Proscription D again) will incite a new round of Health Care inflation. Automobile Prices will reverse almost immediately upon a upward trend in Auto Sales. Discussion of Core Inflation will soon be a Lame Duck economic issue.

The real curitive of Inflation is Taxation: a Subject opposed by both President and Congress, to say nothing of State Legislatures. Nothing else will curb Consumption, nothing else will limit Investment to high-Profit Capital ventures. Taxation is the Golden Calf, which Everyone wishes were Iron Pirite. lgl

Wednesday, June 14, 2006

Interesting Chance

The Fed seemed destined to raise the prime rate again. The next Two months may be the time to evaluate what impact Interest rate increases has in actually raising the Inflation rate. It must be remembered that June and July are the two prime months for Household establishment, as Students leave High School, College, and Home for independent living. There should be a surge of Retail Sales to accomodate this leave-taking, and if there is not, it must be attributed as a drop in Retail Sales overall. Retail Sales were functionally flat in May. Under the condition that Retail Sales do stay equivalently flat (plus or minus 0.5% of Total Sales), then all Inflation must come from Core Inflation increases. Volitile Products in both the PPI and CPI must stay flat or decrease during the Period, in order to get a good picture on how an increase in Lending rates affect the real Inflation in both the PPI and CPI. It may be an excellent opprotunity for an economic model experiment in the total economy.

Conditions may be fortunate for this potential isolation of economic factors. Increase in Prices will be isolated solely to increases in Operational Costs, independent of Commodity increases. We can then isolate into Factor Costs for the Inflation. This will give Us some idea of the impact of Operational Funding Costs. We will have a sustaining force to maintain Sales, potential actual declining Commodity Costs, and isolatable Factor Costs. This may be an opprotunity for this author to prove the Fed prime has adverse pressure on Inflation, when the Prime rate is raised above 3.75%.

This Author has always contended the power of the Fed to control Inflation was constricted to a short range of prime rates between 2-3.75%. Rates set below 2%, or set above 3.75%, actually fueled Inflation; the former rate by generating excess economic activity, the later being itself an impulse pressure of Inflation due to its effects on Operating Costs. We might finally get a definitive answer to that Contention. lgl

Tuesday, June 13, 2006

Unsettled Times

Did One notice there was little attempt to withdraw the volitile elements from the Core PPI mix today? The reading of 0.3% for May was bad, but even worse, it came from Core Prices with the volitile Prices declining or moving only marginally. Oil and Gas Reserves also happen to be at a 20-year high, while growth in American demand for Oil is expected to rise only 0.9% this Year; remember they still project a 4% growth rate for the Economy. We must be racing to Work on bicycles.

A piece of advise: Core prices has the tendency of being very sticky in comparison to volitile Prices, so don't expect Price reductions on Retail Goods anytime soon. New Hires are at a miserable rate, so We must all be at Work already (hint: the New Hire rate is at about 40% of the Labor Entrants rate). World Markets have followed the descent of American markets yesterday, so it could be interesting to follow the Subscription rate internationally to absorb new American Public and Private debt. I thinks George W. Bush's chickens are all coming home to roost at once (or is that Cows--Texas must be recognized, you know, though maybe George W. has forgotten).

The secret of success may be to end the Estate Tax and cut Capital Gains, but this Author has some doubts; but Bernacke may be influenced to raised Interest rates again. One cannot forget that Business Inventories are rising, except to Retail Goods. This Author has often speculated how many mistakes would have to be made, in order to recreate The Great Depression. Luckily, there are too many inplace mechanisms to allow for such a happenstance--I think. We might be in for a mild Recession, if Chinese demand for Oil declines because of lower Shipments to the United States due to loss of Consumer Demand. We might equally as well be in for the economic Boom of the Ages--well, I kind of doubt it. I've used IT'S A WONDERFULL LIVE before on this blog, haven't I? lgl

Monday, June 12, 2006

Silver Lining?

This author just finished reading an article by Michael Mandel justifying the increasing Debt load of both the Government and Consumers. It left me rather dissatisfied with the discussion, though I am quite sure his numbers are relatively accurate. I asked myself why it left me feeling like I was eating dirt.

The Answer came easily: The Article assumed the best of everything! It assumed that the value of the Dollar would stay fixed with other Currencies, no matter what events occured. It assumed that the Aging American population would not bring escalating Costs into the matrix. It assumed the World would continue to absorb American debt. It assumed Imports would not increase in Price, as the World contended with their own rising Living Costs with appended increasing Labor Costs. The Article did not mention any of these elements, but the assumptions were still implicit.

This author is getting just like the Democrats, thinking there should be a law for everything; but, there should be a law stating every Economist should be compelled to provide a Three-Case Scenario: Absolute Worst Case, a Moderate Likely Case, and a If Wishes were Horses Case. This means what would happend if everything went wrong, what is probably going to happen knowing how volitile human endeavor can flux, and what would happen if We were in heaven. The law is highly improbable, but could be a great aid in determination of policy. lgl

Sunday, June 11, 2006

Family Dinner

This Author attended a family dinner last night, in which I had the occasion to tell one of my Nephews that I was proud of him for what he had accomplished in the third decade of his life. Two Cavets: I should have repeated the same to my Niece and her Husband, and second; while the Nephew posed some problems in his younger years, those problems probably were no worse than my own at that Age. Anyway, Frank, Polly, and husband Hasten, I am proud of you all!

I wish I could express that same pride in the Economists their Age. There remains too great an adherence to defective or lacking economic models and old ideology. The Spend, Spend, Spend formula of the Reagan era is finally being discounted, but probably only due to the Cheney/Rowe modification Spend, Spend, Spend, but only for Corporate Profits. The inheritance from the Great Depression, Free Trade, remains with Us with little modification by the Kids; who ignore the Protectionist methodology of both the WTO and the G8, and only rant about the low Consumer prices, again blind to the decay of American industry. Suckered by the 401k involvement, the Kids still insist the Economy works well, while real American economic advantage is lost by American Products by unreciprocated hidden foreign Protectionist policy. Everyone concentrates upon the Stock Markets, no one highlighting the genuine loss of real labor participation.

The National Debt stands as a golden rope provided by the World, in hopes We will hang Ourselves. The best composite 13 Years of economic performance ever enjoyed by any nation in the history of this Earth, and We cannot fund Our own Government. This the resultant of adherence to a Tax Policy archaic and injurious even in the time of Kennedy; it supplying only Business Profits and Inflation. The current Lobbyist-set Tax policy must be considered as the product of the economically-Insane. Almost All would proclaim this Author is too downbeat, but Who is going to fund the Deficits in coming Years, after Debt Service exceeds the Military Appropiation? lgl

Saturday, June 10, 2006

The G8 Meeting

The G8 continues in the tradition it has always held, much like the WTO: actually maintaining a Protectionist stance to protect their current advantages held. They are being critical of Russia's insistence on retaining the monopoly of Gazprom in the export of Energy resources from Russia. It is highly advantageous to continue this monopoly for Russia, but a deep disadvantage to the other nations. The Energy Interests still wish to invade Russia, to obtain Monopoly control of World Energy Prices. Hint: American and World Consumers should back this Russian effort.

Germany is reluctant to let Russia repay all of it's debt, because of the loss of future Interest payments. Translated: They insist on a higher share of Russian Oil profits. The Russian Government needs simply to pay off the Debt, then ask Germany if it wants to go to War, economic or militarily, over return of initial Funds.

All of G8 remain critical of China for a most definite reason: Chinese continuation of underbidding G8 nations on foreign Contracts within the Third World. So much for the advantages of Free Trade. There is most definitely no discussion of Chinese Labor violations at the G8 meeting in St. Peterberg, a known betrayal of every Labor Standards Agreement ever signed; real discussion of the Labor Violations could potentially make Chinese Imports more expensive. Did Anyone notice how Protectionist Free Traders can become in the face of potential injury to their own Interests? lgl

Friday, June 09, 2006

The Fed Eye

Bernacke and other Fed officers indicate that the Interest hikes might continue, sending the Markets down. It should behoove Us to examine what type information is bothering the Fed. Consumer non-mortgage loans increased at an adjusted yearly 5.9%. Wholesale sales increased by 1.3% in April. The Trade gap with China, basically composed of Consumer and technological products, increased by 9% to $17 bn in April. Wholesale Inventories grew. Electricity generation consumed some 1.039 billion tons of Coal last year. The entire mix states that Consumers have not been restrained from Spending due to the Interest rate hikes.

Inflationary pressures are building, driven by Oil price which averaged over $57/barrel for the first time. All Signs are green for Inflation to start to accelerate. The Fed, and other Worldwide Central Banks, are getting ready for more Interest hikes, even though the Fed knows its own Rates are too high for effective economic performance.

What is wrong with this Scenario?

The Anwser is simple: lack of adequate taxation. What??? Central Bank Interest Rates are inserted into the Economy prior to the Production Cycle, forcing Business (and Consumer) to treat Interest rates as a Production Cost; One which is also quite effective in generating Inflation pressures. Taxes, on the other hand, are placed on after-Production profits generated. Taxes reduce inflationary pressures by slowing the rate of Investment, and by curtailing the rates of purchasing by Consumers. Economists need to realize that Taxation itself has economic consequences beyond simple Investment expansion.

Passage of Estate Tax repeal sends a far worse economic signal than Fed Interest rates can oppose. Capital Gains taxation should be reinstated with their original rates, along with only Short-term Tax impact delays, if Inflation is to be effectively fought. Conservatives enjoy screaming for Tax cuts, saying it is invariably good for the Economy. This is actually quite untrue, especially with Spendthrift Congress and State Legislatures. lgl

Wednesday, June 07, 2006

Real Energy Initiatives

This Author read an article today which stated Technology Twicks would allow the internal combustion engine to maintain its supremacy for decades. This may not be a viable Option, if the entire World seeks to adopt the American mode of economic performance. Other Alternative Energy Options would fractionalize Energy production, permenantly insuring no Savings-of-Scale in energy production. An Outline of necessities need be formulated.

Standardized Systems of Energy production remain the only viable replacement of the current systems in usage. What do We need?

1) A viable motor to replace the Semi-tractor diesel engine. This could envision a miniature version of the Train electric locomotive. Another option is to retain the standard diesel engine, but instead of a radiator, use the Steam generated to also propel the Drive train--perhaps replacing all fuel at Stoplight idle. Passenger cars could also use the later technology, if an efficient motor can be devised.
2) Electric Wind Generators will only be economic profitable, if they are small in size and cheaply produced, dependent upon multiple-source generation; large Wind Generators will never produce the volume of generation necessary to substitute for Natural Gas, Coal, or Nuclear power. Multiple units will never function adequately unless Electric companies are legally mandated to provide Maintenance personnel.
3) Fuel Savings will never be gained with traditional vehicles unless Transport and Passenger vehicles are separated. This would demand an interior lane on all Interstates limited to solely Truck Transport, and where the Speed Limit must be maintained. A Law should also provision that Truckers can be ticketed for using other than Interstate travel, when it is available. This would mean Local license, or proven lack of Interstate through Transport load. The Fines must be high to insure compliance.
4) Energy companies producing Nuclear power must pay an amount equal to the Fuel Cost used to the Dept. of Energy, which will be used solely to pay for the Costs of Nuclear Waste disposal.
5) A Profits Law should be enacted to set the amount of Profits to be made from Energy production, based as a percentage of total Capital Costs. Losses must be endured by the Companies themselves, any Profits over 10% of total Capital Costs per year, or 20% of gross Volume Prices sold will be taxed at 100%.

Rationalization can be brought to the Energy industry, if Lobbyist activities can be overborne. Such engines as described need only be engineered from a knowledge base already existent. Provision of Truck route bouys up the Construction industry and employment. Safety is promoted in the separation of traffic. It is time to make real Changes. lgl


Yesterday this Author wrote a masterful Piece on the Timing being right for Corporations buying back their Stock. This morning I read that a minority of the Tribune Board opposes their intended Buyback of $2bn of Stock, because of the poor Tax position it would pose for their own Trust organization. The Author finds he must rewrite the lost Post.

1) There are about five real Scenarios for economic performance at any time: Boom, Float, Stagnant, Mild Recession, and Bust.
2) Excess Corporate Stock worsens the Profitability for both organization and Investors under all conditions except the Boom scenario.
3) Corporations overburdened with Stock issuances will devote less funds to both Recapitalization and Investment projects, in order to fund Dividend payments to all Stockholders.
4) This later fact makes the Survivability ratio much lower for Corporation over-capitalized in low-Profit projects, or underfunded in previous Recapitalization accounts, under the conditions of Stagnant, Mild Recession, and Bust. It shortens the duration of the condition of Float.
5) The Market is marginally lower, and most Corporations possess a high degree of liquidity, even if it is only existent Credit. It is perfect weather for Corporate Buybacks.
6) Corporations with an overburden of Stock will quickly impel a Floating Economy into a Stagnant Economy. Stock Overburden throughout the Corporate sector will bring a Boom to an end. Retained Stock overburden will push a Stagnant Economy into at Mild Recession, and easily into a Bust Economy.

It is time for Corporate Buybacks of Stock. They should actually equal the percentage fall of the DOW in percentage of Stock reduction, as long as the DOW falls no more than 8% per month. There will be great resistence from Institutional Investors, who would consequently face an amplified Tax burden which must be paid. Their admonitions should be ignored wherever possible, because failure of Stock reduction can adversely affect economic performance, and hinder severely all Recovery efforts. lgl

Monday, June 05, 2006

Serious and Frivalous

Militias of the Islamic Courts in Somalia finally broke the power of the Warlords, what with the capture of Mogedishu (from the initial reports). This could be more of a problem for the U.S. than was the previous anarchy which existed in the land. Why? The Islamic Court militias were obviously funded from outside sources, and the Warlords ran out of funds with the cessation of American payoffs to the Warlords. The Islamic faction in Chad has also been getting Arms and equipment from outside sources, and have expanded their dominian by the slaughter of Christian villages. Still, why is this a problem for the United States?

The Islamic factions are winning in both Countries, and each will have extreme numbers of unemployed fanatic Veterens, along with great numbers of Mercenaries from the Warlord camps currently or shortly to be unemployed. All of the Above are long-accustomed to the slaughter of Innocents, and at least 25% speak English as well as the average Islamic American. Homeland Security may wish soon that They had the capacity to steal Computer files as skillfully as Those who raided the Veterens Affairs Administration.

Now to the Frivalous:

This Author conceived of a beautiful brainchild today, one bound to anger the Medical profession. All Americans undergo the absolute boredom of waiting in reception areas, and endured the terrible carnage done to personal schedules. I believe Congress should pass into law demand that Medical facilities provide both Computers and Internet Access in all Waiting rooms. I imagine Some believe I am attempting the betterment of life for Americans; but no, I only intend to get the Medical profession as outraged at the Charges for Internet Access as is endured by other Americans. Medical Practicianers remain the worst Scalpers in the Country, they should know how to stop the Price-Gouging of Others. lgl

Sunday, June 04, 2006

My Lai and Haditha

Many in the Liberal community are linking the two Incidents together, and charging it is again a Cover-up. My sympathy lay with the Marine Battlion Commander and two Company Commanders who were relieved. The fault seems to reside in the behavior of one Sargent, and his men in Haditha, who begin to assault Civilians without cause. My Lai was the responsibility of inexperienced troops led by inexperienced Junior officers, all of whom were insufficiently briefed; faced with a situation of excess Civilian prisoners when under the belief of being under heavy attack. The chain of command was charged as the major culprit in both instances, and nothing could be further from the Truth.

It is traditional military policy to restrict individual soldier misconduct in-house whenever possible, with the aforeknowledge that Incidents cannot be undone, and repetition must be stopped at their own Command level. My Lai was the fault of inexperience by the military participants; Haditha was the result of overexperience by the ground-level troops in the field. There are real dangers in multi-Tours of Combat duty. Personnel become disenchanted with high Command leadership, witnessing ever-increasing dangers while Command will not alter their stance at the Policy level to reduce their own risk. Confronted by unit losses, often close friends overdoing their share of dangerous risk, the Survivors often break with organizational mandate--which they perceive as getting them killed. Slaughters should be expected under such circumstances, as individuals soldiers and units attempt anything to alter the risk, or make a military difference.

Haditha also possesses another element which must be explored. Examination of the bodies were delayed, an initial count of the victims was not kept, and there is a rumor some of the bodies bore wounds not inflicted by the weapons mix carried by the Marines in question. The Incident at Haditha did take place, but the scope of the atrocity may have been expanded by Enemy forces; to embarass the United States with the ability to condemn American forces. This Author has no association with any of the Investigations of the Incident at Haditha, but would advise some caution in the usage of condemnation. lgl

Bush Woes

Daniel Gross has a good article in the NYTimes today, talking about the low Bush rating on the economy. He attests correctly that good Economic Indicators are based upon Averaging, and essentially refers favorably only to above-average economic performance, while stagnant sectors are hidden. He does not go into the evaluation, but George W. Bush enjoys the same status as Herbert Hoover--doing the politically-correct economic measures of the Business Elite lobbyists, but ignoring the suffering of the common people. There are Those who would claim this equates to a vast distortion, but, in reality, We are talking about perception here--not truth as it translates into popular support.

Unemployment numbers still ignore the Disenfranchised Workers whose unemployment benefits have run out. Bush allowed American industry to offshore, and advanced Tax policy to make such Offshoring more profitable than domestic manufacturing. His administration continues to denude Welfare programs set up by his predecessors, especially those elements directed towards Worker retraining. He has done nothing to constrain Oil prices or the runup of Utilities Costs; this Author is still looking for a national Energy Board, whose sole purpose would be to negotiate for, and purchase, foreign Energy resources--such a Board being the sole entity allowed to import Energy resources, which it would sell on the open Domestic market. I am quite sure such a Board could get foreign Oil down to around $40/barrel. George W. Bush replaces such Activist policy with a hypocritical allegiance to Free Market theory when no one could even imagine those markets are not manipulated by aligned Market structures and vested interests.

This Author feels that the Republican Party will pay drastically for past Sins, the question remains only When? Reality states that approximately Half of the American labor force has seen Living Costs increase by over 20% in the Bush Presidency, while their Wages functionally stagnate. What has the Economists most concerned lay in the fact that an ever-increasing percentage of the Labor force is joining their ranks. I would suggest to Conservative politicians that Reagan has passed into fond memory, and that the dragons approach. lgl

Saturday, June 03, 2006

Back Online

This Author has endured the honorable distinction of having his hard drive raped and eliminated by way of the 1200/month Viruses written. A very accomplished Computer guru finally reestablished legibility to Internet communications for myself, even if it fails to do anything for this Author's writing potential. Only Those equally as handy as myself with Computers--hardware and software--can appreciate the relief felt.

More intelligent concourse will be attempted in the near future, but there were people who wondered if I was still alive; I should take a Curses--Foiled Again v. Thank God poll. lgl