We are all impacted by the high oil prices. This is a fact of life and something that we will all have to adjust to in the days, weeks, months and years to come. We long for the relatively low oil prices of $2.50/gallon.
Ironically, the world's largest oil producing nation is starting to long for those prices also. The fear that the Saudis have is that the party may be coming to an end. They believe that these extremely high prices may be pushing us to a pain point that causes us to embrace conservation and alternative energies. These solutions would ultimately lead us to use less of their crude oil and therefore reduce the amount of money that flows into their coffers.
When you combine this with the fact that many people are becoming concerned about climate change and that the Saudis best friends in Washington will be packing up and leaving in 6 months, they are starting to see their "perfect storm". Less pro-Saudi political pull, more concern for carbon emissions, and total frustration over high fuel prices they can only come to one logical conclusion - it is better to have lower prices and long term viability than higher prices and global animosity.
Of course if the Saudis can lower the price of crude in the next few months (prior to the November Presidential election) Senator McCain's chances of winning the White House will improve. With gas prices at $4.00+/gallon the Republican party will have a much more challenging time winning the White House.
It will be interesting how this plays out over the next year or two, but one thing is certain. They will do all that they can to maintain their global position which includes lowering crude prices.
Sunday, June 15, 2008
Tuesday, June 10, 2008
Gas, Geopolitics and Oil Tankers at Anchor
We are at record gas prices. Those of us who live in areas that do not have the greatest public transportation systems are too aware of this phenomena. There are a lot of reasons for the high gas prices and up until a few days ago everyone has basically said that it is because of basic economics - supply and demand or advanced economics - futures trading. There is of course some truth to all of this.
In many past oil crisis there have been times when oil tankers were held at anchor waiting for the spot prices of crude to increase. Of course, a rise in the per barrel price of oil can have a significant impact on the value of a tanker full of oil. With the largest oil tankers being able to transport about 500,000 tons of crude oil and a barrel of oil weighing a little less than 300 lbs. you can see that holding a tanker at anchor for a few days can bring a significant windfall profit if the price goes up just a few bucks.
So the question of the day is - are there oil tankers currently being held at anchor during this global oil crisis - truckers in Spain are blocking access to a major city as a protest against the rising diesel costs. Also, many oil tankers being owned by independent oil companies (Companies in Panama own the largest oil tanker fleet). Are they waiting for the highest bidder, such as China or India for their services?
Tanker transportation costs/gallon of gas are very small - around $.02/gallon. This cost is much less than the taxes per gallon that the various layers of governments impose on fuel. The shipping industry itself has always been a small percentage of the fuel prices. However, there are numerous times in history when this industry was controlled or restricted in order to manipulate the value of the commodity that it transports.
Our politicians will address the oil problem in their usual day late and several dollars short manner such as tax the oil companies more (they already made $40B in profit with gas 30% cheaper than it is now).
With the consumer being at the end of the oil food chain and having little or no say in what happens in our "democracy" in Washington, it is going to be an interesting adaptation of our lifestyles to adjust to the higher oil prices.
In many past oil crisis there have been times when oil tankers were held at anchor waiting for the spot prices of crude to increase. Of course, a rise in the per barrel price of oil can have a significant impact on the value of a tanker full of oil. With the largest oil tankers being able to transport about 500,000 tons of crude oil and a barrel of oil weighing a little less than 300 lbs. you can see that holding a tanker at anchor for a few days can bring a significant windfall profit if the price goes up just a few bucks.
So the question of the day is - are there oil tankers currently being held at anchor during this global oil crisis - truckers in Spain are blocking access to a major city as a protest against the rising diesel costs. Also, many oil tankers being owned by independent oil companies (Companies in Panama own the largest oil tanker fleet). Are they waiting for the highest bidder, such as China or India for their services?
Tanker transportation costs/gallon of gas are very small - around $.02/gallon. This cost is much less than the taxes per gallon that the various layers of governments impose on fuel. The shipping industry itself has always been a small percentage of the fuel prices. However, there are numerous times in history when this industry was controlled or restricted in order to manipulate the value of the commodity that it transports.
Our politicians will address the oil problem in their usual day late and several dollars short manner such as tax the oil companies more (they already made $40B in profit with gas 30% cheaper than it is now).
With the consumer being at the end of the oil food chain and having little or no say in what happens in our "democracy" in Washington, it is going to be an interesting adaptation of our lifestyles to adjust to the higher oil prices.
Wednesday, June 4, 2008
Tenacity = Hillary
No matter what you may think about Hillary Clinton, you have to take your hat off to her tenacity. The lady is as determined as they come. She is like the Energizer Bunny - she just keeps going and going. We could all learn from her. When all seems lost and we are at the end of our rope, tie a knot in it and hold on.
Most candidates follow the rules of their party and would have graciously extended an olive branch and conceded after their opponent achieved the required number of delegates (based on the rules). Barack Obama has the delegates and the support of the party (per the stated rules).
It reminds me of Winston Churchill who stated, "Never give in! Never give in! Never, never, never, never... In nothing great or small, large or petty, never give in except to convictions or honor and good sense!"
Hillary is nothing if not rational and smart. Therefore there must be a good reason that she has not yet conceded. Her conviction is that she will be in the White House, some way and some how. That means that she wants the VP nod.
The definition of tenacious used to be not readily letting go of something or giving up. Of course Websters could change and better define that by just posting a picture of Hillary.
Most candidates follow the rules of their party and would have graciously extended an olive branch and conceded after their opponent achieved the required number of delegates (based on the rules). Barack Obama has the delegates and the support of the party (per the stated rules).
It reminds me of Winston Churchill who stated, "Never give in! Never give in! Never, never, never, never... In nothing great or small, large or petty, never give in except to convictions or honor and good sense!"
Hillary is nothing if not rational and smart. Therefore there must be a good reason that she has not yet conceded. Her conviction is that she will be in the White House, some way and some how. That means that she wants the VP nod.
The definition of tenacious used to be not readily letting go of something or giving up. Of course Websters could change and better define that by just posting a picture of Hillary.
Tuesday, May 27, 2008
A modern CCC for our times
I was hiking trough a park near my home yesterday. The hike was very relaxing. The park was created by the CCC. What is the CCC you might ask? That would be a legitimate question for those who don't recall some of the details of the first Franklin D. Roosevelt administration.
Within weeks of moving into the Oval Office, FDR established the Civilian Conservation Corps. It employed young men to do public works and nature conservation projects. Over the CCC's nine year history it employed over 3M men between the ages of 18 and 25. The CCC built bridges, planted trees and created and maintained many state parks.
Though this exact program would not be appropriate today, it could be used as a model with a new twist. Unlike the "Great Depression" when the nation was gripped by a stagnating economy with high unemployment and little immediate potential for recovery there are several sectors of our population who are gripped by a "Great Depression" of the mind which has an even more devastating effect.
A modern day CCC may provide hope and opportunity for some of the 13M men and women who are incarcerated in our prison system. Proper training for infrastructure development and repair, conservation, environmental and agricultural employment opportunities as well as entry level work in these areas could create value.
Value for the individual because they get a choice and a chance, and value for society because we get someone with new hope who chooses to participate versus prey. A big difference - just ask anyone who has ever been a victim of crime or worse, lost a loved one to a repeat offender's poor choices.
There are 100s if not 1000s of civil infrastructure projects that are public works that need to be repaired or replaced. Think of the bridges, water systems and flood controls that need to be repaired. Any increase in sea level will lead to different infrastructure needs, barriers and levees. Though much of the work that has to be done requires special skills with years of training, there is no better place to start than now. Training can happen while the individuals do the manual and menial tasks that are the basics of many apprentice, military, and development programs world wide.
Some will say that this will open the door to cheap labor and possibly more separatism, racism and exploitation. I can only ask if the current system is working to minimize this societal problem or is it inadvertently making it worse. Though it is comfortable (relatively speaking) and easy to avoid changing the system we all know that there is a better way.
The CCC of today would empower young men and women to develop the infrastructure of this nation for the next 200 years. There are many things to be done but the local, state and federal governments - as currently configured and governing - will never get them done.
Let's go for a win-win model. A person gets a chance to make wise choices and society gains. If only society could choose!?
Within weeks of moving into the Oval Office, FDR established the Civilian Conservation Corps. It employed young men to do public works and nature conservation projects. Over the CCC's nine year history it employed over 3M men between the ages of 18 and 25. The CCC built bridges, planted trees and created and maintained many state parks.
Though this exact program would not be appropriate today, it could be used as a model with a new twist. Unlike the "Great Depression" when the nation was gripped by a stagnating economy with high unemployment and little immediate potential for recovery there are several sectors of our population who are gripped by a "Great Depression" of the mind which has an even more devastating effect.
A modern day CCC may provide hope and opportunity for some of the 13M men and women who are incarcerated in our prison system. Proper training for infrastructure development and repair, conservation, environmental and agricultural employment opportunities as well as entry level work in these areas could create value.
Value for the individual because they get a choice and a chance, and value for society because we get someone with new hope who chooses to participate versus prey. A big difference - just ask anyone who has ever been a victim of crime or worse, lost a loved one to a repeat offender's poor choices.
There are 100s if not 1000s of civil infrastructure projects that are public works that need to be repaired or replaced. Think of the bridges, water systems and flood controls that need to be repaired. Any increase in sea level will lead to different infrastructure needs, barriers and levees. Though much of the work that has to be done requires special skills with years of training, there is no better place to start than now. Training can happen while the individuals do the manual and menial tasks that are the basics of many apprentice, military, and development programs world wide.
Some will say that this will open the door to cheap labor and possibly more separatism, racism and exploitation. I can only ask if the current system is working to minimize this societal problem or is it inadvertently making it worse. Though it is comfortable (relatively speaking) and easy to avoid changing the system we all know that there is a better way.
The CCC of today would empower young men and women to develop the infrastructure of this nation for the next 200 years. There are many things to be done but the local, state and federal governments - as currently configured and governing - will never get them done.
Let's go for a win-win model. A person gets a chance to make wise choices and society gains. If only society could choose!?
Monday, May 19, 2008
A penny could cost you more than $10
Surprised? Don't be, although our friendly US Postal Service pushed through another trivial rate hike last week. It won't effect you if you bought the "Forever" Stamps, however for all of us who had other stamps - flags, commemorative, etc... we need another $.01 or 1 cent.
Now how can this rate change cost you more when all you have to do is slap another stamp on your envelope? Well, if you are like a friend of mine and are a procrastinator then you mail your bills in a few days before they are due. If, however, on this rare occasion where the Post Office rules, you don't have enough postage, then your bill may be returned. You'll need an extra stamp and a few extra bucks for the late fee.
A steep price to pay for a government agency that refuses to acknowledge that times are changing. Most of us hate junk mail, however the post office in its continuously out of touch gestures has stated that junk mail is its life blood. Now let me get this straight. A government agency that is supposed to serve the people has decided to raise rates so that they can continue to deliver things to the people that we have repeatedly said that we do not want. Is that arrogance or what?
Instead of raising our rates, how about delivering residential mail twice a week. We communicate in many different ways and fewer of those ways include the post office and their renown efficiencies. Most of us would be just fine (maybe even better off) getting our mail twice a week instead of every day.
This way the Post Office could reduce costs significantly. Postal workers could service various routes on different days and fuel costs would drop considerably. This reduced need could allow them to reduce their staffing needs by both lowering recruitment and allowing attrition of senior postal workers to take effect.
This one simple plan would:
Of course, all of this assumes that the US Postal Service really wants to serve the people that are citizens and customers more than the people that are employees, union reps and industry insiders.
Now how can this rate change cost you more when all you have to do is slap another stamp on your envelope? Well, if you are like a friend of mine and are a procrastinator then you mail your bills in a few days before they are due. If, however, on this rare occasion where the Post Office rules, you don't have enough postage, then your bill may be returned. You'll need an extra stamp and a few extra bucks for the late fee.
A steep price to pay for a government agency that refuses to acknowledge that times are changing. Most of us hate junk mail, however the post office in its continuously out of touch gestures has stated that junk mail is its life blood. Now let me get this straight. A government agency that is supposed to serve the people has decided to raise rates so that they can continue to deliver things to the people that we have repeatedly said that we do not want. Is that arrogance or what?
Instead of raising our rates, how about delivering residential mail twice a week. We communicate in many different ways and fewer of those ways include the post office and their renown efficiencies. Most of us would be just fine (maybe even better off) getting our mail twice a week instead of every day.
This way the Post Office could reduce costs significantly. Postal workers could service various routes on different days and fuel costs would drop considerably. This reduced need could allow them to reduce their staffing needs by both lowering recruitment and allowing attrition of senior postal workers to take effect.
This one simple plan would:
- reduce deliveries
- reduce transportation costs
- reduce labor costs
- get us the mail that we need in a timely manner
Of course, all of this assumes that the US Postal Service really wants to serve the people that are citizens and customers more than the people that are employees, union reps and industry insiders.
Friday, May 16, 2008
Food Aid for the Axis of Evil vs. Education for our Troops
We as citizens of the USA like to see ourselves as humanitarians. That is a very good thing. Sometimes we take that to extremes. Of course we should help China which is undergoing a severe crisis due to the earthquake that struck this month. We should also help Myanmar (Burma) with its cyclone victims. We should offer this help even though we differ with these nations on many issues.
But one thing really astonishes me. We have 1000s if not millions of US citizens who are starving. Many people who receive government assistance cannot afford to buy nutritious food. They are forced to buy food which has questionable nutritional value and which could lead to other health problems that we, the taxpayers, will have to pay to treat.
In light of this, why do we send food to a nation whose policies we have ardently opposed since Harry Truman was President? I am speaking of North Korea. Recently, our leaders approved $500 Million of food aid to North Korea. This is a nation which refuses to take care of itself. Why should we shoulder any responsibility to take care of its citizens before we take care of ours.
Wouldn't that $500 Million be better spent helping our returning troops pursue better lives? Congress is fighting over a revised GI Bill that would help our returning veterans gain college educations. It is inconceivable that in today's tough economic times we can find the money to support a nation that our leaders have deemed a true enemy of our way of life.
Of course the innocent citizens of North Korea should be able to pursue happy, healthy lives. That includes food. That food does not have to come from us. I just can't understand this. It violates the principles upon which we were founded.
But one thing really astonishes me. We have 1000s if not millions of US citizens who are starving. Many people who receive government assistance cannot afford to buy nutritious food. They are forced to buy food which has questionable nutritional value and which could lead to other health problems that we, the taxpayers, will have to pay to treat.
In light of this, why do we send food to a nation whose policies we have ardently opposed since Harry Truman was President? I am speaking of North Korea. Recently, our leaders approved $500 Million of food aid to North Korea. This is a nation which refuses to take care of itself. Why should we shoulder any responsibility to take care of its citizens before we take care of ours.
Wouldn't that $500 Million be better spent helping our returning troops pursue better lives? Congress is fighting over a revised GI Bill that would help our returning veterans gain college educations. It is inconceivable that in today's tough economic times we can find the money to support a nation that our leaders have deemed a true enemy of our way of life.
Of course the innocent citizens of North Korea should be able to pursue happy, healthy lives. That includes food. That food does not have to come from us. I just can't understand this. It violates the principles upon which we were founded.
"If ever this vast country is brought under a single government, it will be one
of the most extensive corruption, indifferent and incapable of a wholesome
care over so wide a spread of surface."
- Thomas Jefferson in 1822
One of our nations founders understood this very well. Maybe it is time that we get back to basics, read the Constitution and adhere to the principles upon which we were founded. This includes taking care of our domestic responsibilities, not those who would rather shoot missiles at us than feed their own people.
of the most extensive corruption, indifferent and incapable of a wholesome
care over so wide a spread of surface."
- Thomas Jefferson in 1822
One of our nations founders understood this very well. Maybe it is time that we get back to basics, read the Constitution and adhere to the principles upon which we were founded. This includes taking care of our domestic responsibilities, not those who would rather shoot missiles at us than feed their own people.
Thursday, May 15, 2008
The parties are falling apart!
The Democrat Party is going through an internal battle that will give historians and political pundits something to pontificate about for the next generation. Even one of the main institutional supporters of the Democrat party are tearing themselves apart as they fight amongst themselves about whom to support and how to support them.
These institutions, known as unions, have not looked out for the interest of their members for years. They have looked out for the interest of their leadership and their survival. Of course, they throw their members a bone every now and then, but there is usually no real meat on that bone.
Unions were once bastions of racism and sexism. Similar to, if not worse than, the general society. Then, miraculously, when it was in their best interest to promote equality for all, they did so (as it increased the pool of dues paying members and thus, their pocketbooks and coffers). For some time after that they were viewed as one of the protectors of civil rights for all - both men and women of all races.
Now, the true nature of the Democrats is coming out and the unions are right there to highlight it. The party that always looks out for the people of this great nation are now fighting over who the people are that they represent. Is it the popular vote or the will of the back room leadership? Is it their long term male supporters or their female supporters? Is it their white members or their minority members? The party is hitting a schism that may be growing pains, but unfortunately appears to be something much more sinister.
At the same time, the Democrat Party rules are so convoluted that you need a panel of lawyers to decode them for use. The rules change so that the Party bosses, not the people can have the final say. That alone suggests that the Party does not trust the will of the people because they are too ignorant (or busy trying to make ends meet and put food on the table) to make the right choices.
On the other hand, we have the Republican Party and their historic allegiance with big business. Lately it seems that the Republican Party has not seen a corporate welfare piece of legislation that it did not like. On the other hand, the citizens must fend for themselves and exercise their right to succeed in this land of the free and home of the brave.
I am not a big supporter of welfare for businesses or individuals. If you need a subsidy - work for it. Oh, then it wouldn't be a subsidy, it would be something that you earned for the value that you gave. Hand outs are just that - handed from the taxpayers of America to those who are obviously not creating value.
We give handouts to businesses and industries that can't or won't compete. The unions usually oppose these handouts unless it helps their members - think the Chrysler bailout of the 1980s (this government welfare kept 1000s of union members working [a good thing] to pay dues to their overseer and benefactor [the union] so that it could fight another day).
Both parties are wrong. What happened to candidates stating their position on the issues and citizens voting based on this? Years ago it was common to hear an old saying that there are two things that you don't talk about - religion and politics.
Well, quite frankly, that is all that there is to talk about lately - at least if you watch CNN or read your local paper. There is of course the latest disaster. This week we get quite a few - cyclones in Myanmar; earthquakes in China; tornadoes, flash floods and brush fires in the US. Even these stories take on a political rather than a humanitarian flavor.
If you are like me, you can't wait for November 5th. The endless campaigning will be over. Hillary Clinton, Barack Obama or John McCain will be our 44th President. And some one (either one of them or Ralph Nader) will start campaigning for 2012.
These institutions, known as unions, have not looked out for the interest of their members for years. They have looked out for the interest of their leadership and their survival. Of course, they throw their members a bone every now and then, but there is usually no real meat on that bone.
Unions were once bastions of racism and sexism. Similar to, if not worse than, the general society. Then, miraculously, when it was in their best interest to promote equality for all, they did so (as it increased the pool of dues paying members and thus, their pocketbooks and coffers). For some time after that they were viewed as one of the protectors of civil rights for all - both men and women of all races.
Now, the true nature of the Democrats is coming out and the unions are right there to highlight it. The party that always looks out for the people of this great nation are now fighting over who the people are that they represent. Is it the popular vote or the will of the back room leadership? Is it their long term male supporters or their female supporters? Is it their white members or their minority members? The party is hitting a schism that may be growing pains, but unfortunately appears to be something much more sinister.
At the same time, the Democrat Party rules are so convoluted that you need a panel of lawyers to decode them for use. The rules change so that the Party bosses, not the people can have the final say. That alone suggests that the Party does not trust the will of the people because they are too ignorant (or busy trying to make ends meet and put food on the table) to make the right choices.
On the other hand, we have the Republican Party and their historic allegiance with big business. Lately it seems that the Republican Party has not seen a corporate welfare piece of legislation that it did not like. On the other hand, the citizens must fend for themselves and exercise their right to succeed in this land of the free and home of the brave.
I am not a big supporter of welfare for businesses or individuals. If you need a subsidy - work for it. Oh, then it wouldn't be a subsidy, it would be something that you earned for the value that you gave. Hand outs are just that - handed from the taxpayers of America to those who are obviously not creating value.
We give handouts to businesses and industries that can't or won't compete. The unions usually oppose these handouts unless it helps their members - think the Chrysler bailout of the 1980s (this government welfare kept 1000s of union members working [a good thing] to pay dues to their overseer and benefactor [the union] so that it could fight another day).
Both parties are wrong. What happened to candidates stating their position on the issues and citizens voting based on this? Years ago it was common to hear an old saying that there are two things that you don't talk about - religion and politics.
Well, quite frankly, that is all that there is to talk about lately - at least if you watch CNN or read your local paper. There is of course the latest disaster. This week we get quite a few - cyclones in Myanmar; earthquakes in China; tornadoes, flash floods and brush fires in the US. Even these stories take on a political rather than a humanitarian flavor.
If you are like me, you can't wait for November 5th. The endless campaigning will be over. Hillary Clinton, Barack Obama or John McCain will be our 44th President. And some one (either one of them or Ralph Nader) will start campaigning for 2012.
Wednesday, May 14, 2008
Who will they look out for?
We all know that the Bush administration has looked out for the energy and oil and gas industries. It was evident when Vice President Cheney would not disclose who advised him on energy policy early in the administration. It was even more evident when oil shot up to over $100 per barrel last month (it was about $10 per barrel in Feb. 1999).
President Clinton who looked out "for the people" did quite a bit for the big money boys of the finance industry. His changes to the finance industry basically repealed the Glass-Steagall Act of 1933 in the late 1990s. This act was put in place as a safeguard against some of the causes of the Great Depression. This was a boon for both investment bankers and commercial bankers. It may be one of the major causes of the lack of oversight that led to the current mortgage crisis. The bankers now entered new markets, developed new ways of doing things and made a ton of money.
Who will the next administration look out for? Will they look out for the people, a specific industry or some other special interest group? Lobbyists, lawyers, trade groups and advocacy groups make it hard for the man on the street to be heard. These Washington insiders work for their own interest - which is their own business and personal wealth creation. This does very little for the good of the voting citizens of America.
All of the candidates have some group, interest or industry to which they owe favors. This is a fact of our modern political system. Of course they all say that they will look out for the citizens of this great nation. The real question is which group of citizens they are referring to.
President Clinton who looked out "for the people" did quite a bit for the big money boys of the finance industry. His changes to the finance industry basically repealed the Glass-Steagall Act of 1933 in the late 1990s. This act was put in place as a safeguard against some of the causes of the Great Depression. This was a boon for both investment bankers and commercial bankers. It may be one of the major causes of the lack of oversight that led to the current mortgage crisis. The bankers now entered new markets, developed new ways of doing things and made a ton of money.
Who will the next administration look out for? Will they look out for the people, a specific industry or some other special interest group? Lobbyists, lawyers, trade groups and advocacy groups make it hard for the man on the street to be heard. These Washington insiders work for their own interest - which is their own business and personal wealth creation. This does very little for the good of the voting citizens of America.
All of the candidates have some group, interest or industry to which they owe favors. This is a fact of our modern political system. Of course they all say that they will look out for the citizens of this great nation. The real question is which group of citizens they are referring to.
Monday, May 12, 2008
Chickens come home to roost?
This quote has gotten a lot of media attention lately. It has been blasted across multiple media formats - radio, television, print and internet in reference to a sermon given by Senator Obama's former pastor.
A new connotation for this quote may be the pending pension and health care fund short falls that are going to hit home and become extremely relevant in the next few years. Many of these funds have used unique accounting methods to balance the deficits created by poor investment performance.
Those accounting methods will all be irrelevant when our parents, friends and mentors don't have the money that they need to live on. They won't have the money that has been promised to them. What do we do then?
Many of these under performing plans and funds were launched during our US "socialist era". After the New Deal and WWII our society changed drastically. Everyone felt that we had to take care of each other on a national level. This was new because until this point most care was local - communities helping their own. These global changes institutionalized care and support and made it national. These changes brought on social security, organized health benefits, and public and private pension funds. This all worked great until the late 1970s. That's when the bloom started to come off of the rose.
In the late 1970s the Great Society, as envisioned by LBJ started to collapse. Industries started to falter (railroad industry and steel industry for example) and people found that their safety nets had holes in it. Unfortunately, these holes were large enough for entire communities to fall through.
This is happening again, except this time it will be much worse. Pension funds may find that they are trillions (not billions) of dollars short of their obligations. This will impact public funds for our retiring teachers, policemen, firemen and other long term public servants. Think Enron without the corporate structure.
Some health care benefits are already experiencing this. Need more proof - look at the benefit plans and funds of many unionized organizations. Teachers, plumbers, police, nurses - just about everybody but our national politicians may well be caught with a short check and a long bill.
People are living longer, healthier, more active lives. They are retiring earlier. So the next time that you hear, "...the chickens have come home to roost..." don't think about terrorism or war or the racial divide. Instead go to your mail and check your pension plan. Then check on their actuarial obligations. You do the math is there enough for all or will something have to change.
A new connotation for this quote may be the pending pension and health care fund short falls that are going to hit home and become extremely relevant in the next few years. Many of these funds have used unique accounting methods to balance the deficits created by poor investment performance.
Those accounting methods will all be irrelevant when our parents, friends and mentors don't have the money that they need to live on. They won't have the money that has been promised to them. What do we do then?
Many of these under performing plans and funds were launched during our US "socialist era". After the New Deal and WWII our society changed drastically. Everyone felt that we had to take care of each other on a national level. This was new because until this point most care was local - communities helping their own. These global changes institutionalized care and support and made it national. These changes brought on social security, organized health benefits, and public and private pension funds. This all worked great until the late 1970s. That's when the bloom started to come off of the rose.
In the late 1970s the Great Society, as envisioned by LBJ started to collapse. Industries started to falter (railroad industry and steel industry for example) and people found that their safety nets had holes in it. Unfortunately, these holes were large enough for entire communities to fall through.
This is happening again, except this time it will be much worse. Pension funds may find that they are trillions (not billions) of dollars short of their obligations. This will impact public funds for our retiring teachers, policemen, firemen and other long term public servants. Think Enron without the corporate structure.
Some health care benefits are already experiencing this. Need more proof - look at the benefit plans and funds of many unionized organizations. Teachers, plumbers, police, nurses - just about everybody but our national politicians may well be caught with a short check and a long bill.
People are living longer, healthier, more active lives. They are retiring earlier. So the next time that you hear, "...the chickens have come home to roost..." don't think about terrorism or war or the racial divide. Instead go to your mail and check your pension plan. Then check on their actuarial obligations. You do the math is there enough for all or will something have to change.
Sunday, May 11, 2008
Is America's decline absolute or relative?
There are lots of columns, articles, narratives and commentaries that lament and postulate over the decline of America's power in the world. Some say that globalization and free trade are causing America to decline. Others say that a disdain for American culture is causing many to reject our ideals and our economic prowess. Still others say that our lust for our new Western religion, "consumerism" is causing us to wane in the eyes of the world.
There may be some truth to all of these perspectives, but it probably depends on your point of view and your motivation for establishing that point of view. If you are a recently laid off factory worker in the Midwestern US than you probably blame globalization for your plight.
If on the other hand you believe that America is being punished for past sins then you probably believe that our culture and consumerism as well as our projection of US power abroad has caused our decline. Many believe that our current national status is very similar to the decline of the Roman Empire.
Is America really declining or is the rest of the world just catching up? Either way this will cause some changes to our way of life that may seem both unfair and uncomfortable, but it does not signal the end of the world as we know it. We have enjoyed a relatively trouble free domestic existence since the end of WWII. True, we have recessions, wars, terrorism and some civil unrest but it has been nothing compared to some of the events that have impacted our friends and foes abroad. We don't have any hints of genocide (although some would say that the increasing imprisonment of African-American males is a form of genocide). True, direct gun to the head genocide happens everyday in some parts of the world, but not here. Just think Serbia, Darfur, or Rwanda for examples of the last 10 - 15 years.
The rest of the world is rising relative to us. The economies of the world are beginning to specialize based on the comparative advantage of nations. This is currently in a state of flux, but the bottom line is that nations will do what they do best and get all of their other needs met from outside their borders. Also, what about the increasing instances of power that is not nation based? There are many organizations that influence events world wide that are not sponsored or a part of any nation state.
The economies of the rest of the world are no longer dependent upon America. Or are they? Where will China sell its products if we stop shopping at Walmart? Where will the Saudis sell their oil if we switch to renewable energy sources for transportation energy needs? London is surpassing New York as the finance center of the world. Will this trend continue?
The pie is getting bigger and America is still getting a pretty big slice. The difference is that many other countries are getting big slices also. Our decline is relative, not absolute. We still have a high GDP and a strong military. We still export our culture more than any other society. Even though Bollywood makes more movies than Hollywood, how many are exported and to where? Movies made in America are still a hot cultural export.
Even those who say that they hate our culture and our way of life still enjoy some vestiges of what America has to offer. Many of our enemies only hate the fact that our culture has impinged upon their culture. They hate us because they cannot shape the thoughts of their land when opposing thoughts are readily accessible through the media and the internet.
America's decline is relative. We are still looked up to, admired and revered. Yes, we have our problems, but every generation since 1776 has had problems. We just have to keep changing for change is a part of being free and living in a democracy.
Thomas Jefferson, one of our best known founding fathers, stated "Each generation has a right to choose for itself the form of government it believes most promotive of its own happiness... A solemn opportunity of doing this every nineteen or twenty years should be provided by the constitution."
There may be some truth to all of these perspectives, but it probably depends on your point of view and your motivation for establishing that point of view. If you are a recently laid off factory worker in the Midwestern US than you probably blame globalization for your plight.
If on the other hand you believe that America is being punished for past sins then you probably believe that our culture and consumerism as well as our projection of US power abroad has caused our decline. Many believe that our current national status is very similar to the decline of the Roman Empire.
Is America really declining or is the rest of the world just catching up? Either way this will cause some changes to our way of life that may seem both unfair and uncomfortable, but it does not signal the end of the world as we know it. We have enjoyed a relatively trouble free domestic existence since the end of WWII. True, we have recessions, wars, terrorism and some civil unrest but it has been nothing compared to some of the events that have impacted our friends and foes abroad. We don't have any hints of genocide (although some would say that the increasing imprisonment of African-American males is a form of genocide). True, direct gun to the head genocide happens everyday in some parts of the world, but not here. Just think Serbia, Darfur, or Rwanda for examples of the last 10 - 15 years.
The rest of the world is rising relative to us. The economies of the world are beginning to specialize based on the comparative advantage of nations. This is currently in a state of flux, but the bottom line is that nations will do what they do best and get all of their other needs met from outside their borders. Also, what about the increasing instances of power that is not nation based? There are many organizations that influence events world wide that are not sponsored or a part of any nation state.
The economies of the rest of the world are no longer dependent upon America. Or are they? Where will China sell its products if we stop shopping at Walmart? Where will the Saudis sell their oil if we switch to renewable energy sources for transportation energy needs? London is surpassing New York as the finance center of the world. Will this trend continue?
The pie is getting bigger and America is still getting a pretty big slice. The difference is that many other countries are getting big slices also. Our decline is relative, not absolute. We still have a high GDP and a strong military. We still export our culture more than any other society. Even though Bollywood makes more movies than Hollywood, how many are exported and to where? Movies made in America are still a hot cultural export.
Even those who say that they hate our culture and our way of life still enjoy some vestiges of what America has to offer. Many of our enemies only hate the fact that our culture has impinged upon their culture. They hate us because they cannot shape the thoughts of their land when opposing thoughts are readily accessible through the media and the internet.
America's decline is relative. We are still looked up to, admired and revered. Yes, we have our problems, but every generation since 1776 has had problems. We just have to keep changing for change is a part of being free and living in a democracy.
Thomas Jefferson, one of our best known founding fathers, stated "Each generation has a right to choose for itself the form of government it believes most promotive of its own happiness... A solemn opportunity of doing this every nineteen or twenty years should be provided by the constitution."
Thursday, May 1, 2008
You know times are tough when...
Oil executives have to tighten their belt during the fastest run up in gas prices in history. Exxon-Mobil which reported profit of $10.9 billion for the last 3 months disappointed investors who were expecting it to earn more. Exxon-Mobil earned $11.7 billion in the 4th quarter of 2007. Keep in mind that these numbers are not annual profit, they are quarterly profit.
Now, let me get this straight. The oil companies say that they are not to blame for the higher prices that we pay at the pump, but they are earning record prices. In my Accounting 101 class I recall learning that profit is the difference between what you buy something for, otherwise known as cost, and what you sell it for - price.
I'm okay with companies making a profit, that is what our system is based on. Profit is necessary to support our way of life, but at some point enough is enough. Some profits are obscene.
That being said, I do not think that the government should limit the amount of profit that a company can make. That seems to be contrary to our free market system. So for those neo-socialists who believe that we should take the profits from companies that make too much - don't cry when your pension fund shrinks because profits are down. We can't have it both ways.
But fair is fair. Companies should be able to make a profit based on the old rule of supply and demand (Econ 101). Maybe Exxon-Mobil is just a poorly managed company that is in the right industry - if it was better managed maybe its "low" profits would not have disappointed Wall Street.
Who wants to bet that the Exxon-Mobil executives don't get big fat bonus checks. That is a bet that I wouldn't make. I'll put that gambling money in my gas tank and help the poor guys out.
Now, let me get this straight. The oil companies say that they are not to blame for the higher prices that we pay at the pump, but they are earning record prices. In my Accounting 101 class I recall learning that profit is the difference between what you buy something for, otherwise known as cost, and what you sell it for - price.
I'm okay with companies making a profit, that is what our system is based on. Profit is necessary to support our way of life, but at some point enough is enough. Some profits are obscene.
That being said, I do not think that the government should limit the amount of profit that a company can make. That seems to be contrary to our free market system. So for those neo-socialists who believe that we should take the profits from companies that make too much - don't cry when your pension fund shrinks because profits are down. We can't have it both ways.
But fair is fair. Companies should be able to make a profit based on the old rule of supply and demand (Econ 101). Maybe Exxon-Mobil is just a poorly managed company that is in the right industry - if it was better managed maybe its "low" profits would not have disappointed Wall Street.
Who wants to bet that the Exxon-Mobil executives don't get big fat bonus checks. That is a bet that I wouldn't make. I'll put that gambling money in my gas tank and help the poor guys out.
Wednesday, April 30, 2008
Go fight, then have a great life - MAYBE!?
Does it shock you that our leaders expect the brave men and women to put everything on the line for our two front war in Iraq and Afghanistan? They serve bravely for extended periods in a war that has lasted longer than WWII.
Then, when they come home, our leaders want to forget them. Taking care of our veteran's physical, emotional, and educational needs are not our problem our government leaders say. Now I ask you, is that fair? Forget fair, is it just and moral?
I am proud of our men and women in uniform. Whether you agree with the war or not, you should be proud of them too. But that's your call.
If we are truly fighting for freedom and our way of life, then we should help those who fight for us. In many cases, we take their youth and leave them broken with no means to get their lives back in order. We should be able to help them return to happy, healthy, and prosperous lives.
Both the current administration and our Congressional leaders have the power to fix this and yet they do not. The brave generation of WWII became very, very prosperous as a result of the GI Bill and other government sponsored programs, yet now we barely want to treat the wounded in uniform (remember the Walter Reed Hospital issues from a few years ago) much less those who are wounded after they leave the military.
I am proud of this country yet I find it hard to come to grips with our leaders who are reluctant to help those who give so much to make this nation strong. It just doesn't seem moral to me.
Then, when they come home, our leaders want to forget them. Taking care of our veteran's physical, emotional, and educational needs are not our problem our government leaders say. Now I ask you, is that fair? Forget fair, is it just and moral?
I am proud of our men and women in uniform. Whether you agree with the war or not, you should be proud of them too. But that's your call.
If we are truly fighting for freedom and our way of life, then we should help those who fight for us. In many cases, we take their youth and leave them broken with no means to get their lives back in order. We should be able to help them return to happy, healthy, and prosperous lives.
Both the current administration and our Congressional leaders have the power to fix this and yet they do not. The brave generation of WWII became very, very prosperous as a result of the GI Bill and other government sponsored programs, yet now we barely want to treat the wounded in uniform (remember the Walter Reed Hospital issues from a few years ago) much less those who are wounded after they leave the military.
I am proud of this country yet I find it hard to come to grips with our leaders who are reluctant to help those who give so much to make this nation strong. It just doesn't seem moral to me.
Tuesday, April 29, 2008
Bush is no Truman
Today our fearless leader gave a speech at the White House aimed to sooth our concerns for the economy. The speech was ever eloquent, as always, but there was something about it that really concerned me.
The President basically shifted the blame for the state of the economy and high gas prices to Congress. He basically stated that Congress did not follow his lead on domestic oil exploration in Alaska or on the use of switch grass for bio-fuel. His thoughts were that if these two initiatives had been accepted than fuel and food prices would not have risen.
To a certain extent he may be right, however is leadership about blame or about action? Wasn't it our 33rd President, Harry Truman, who kept a plaque on his desk that said, "The buck stops here".
Truman did not place blame, he made the tough decisions (right or wrong through the lens of history) and took action. He led the nation through uncertainty and fear.
Well, America is uncertain and fearful of the economy and our global standing, but unfortunately our "leaders" pass the buck, spend our tax dollars like drunken sailors and offer no solutions or leadership. It's a game at which both the President and our Congressional leaders have become quite efficient.
The President basically shifted the blame for the state of the economy and high gas prices to Congress. He basically stated that Congress did not follow his lead on domestic oil exploration in Alaska or on the use of switch grass for bio-fuel. His thoughts were that if these two initiatives had been accepted than fuel and food prices would not have risen.
To a certain extent he may be right, however is leadership about blame or about action? Wasn't it our 33rd President, Harry Truman, who kept a plaque on his desk that said, "The buck stops here".
Truman did not place blame, he made the tough decisions (right or wrong through the lens of history) and took action. He led the nation through uncertainty and fear.
Well, America is uncertain and fearful of the economy and our global standing, but unfortunately our "leaders" pass the buck, spend our tax dollars like drunken sailors and offer no solutions or leadership. It's a game at which both the President and our Congressional leaders have become quite efficient.
Monday, April 28, 2008
Hillary or Barrack?
That is the question. If these two keep it up it will more than likely be John. There are things that I like about all three of them. There are things that I do not like about all three of them. What about you?
Have you really listened to their principles, policies, goals and objectives? Have you really listened to their vision for the country. Yes, we are in a war, actually several wars. Of course we all know about the two front war that our brave men and women in the military are fighting in Afghanistan and Iraq. It doesn't matter how we got there or why we are there, the point is that we are there. We are also in a war against poverty, a war against racism and prejudice, a war on drugs, a war on poor health, a war on environmental pollution and climate change, and probably a few others that escape me right now.
Wow, that's a lot of wars. Are we winning any of them? Which candidate will lead us to victory in one of them? Or does the President really matter in these wars? Will the new leader of the free world be able to impact any of these wars significantly over four years?
Maybe. What would make the new administration successful in your view? Would it be lower energy prices, lower food prices, universal health care, victory in Iraq, peace in the Middle East.
Think about it. Will the next administration be effective? It will definitely be historic in one way or another. Why you say? Well because it will be a first. Either we will have the first woman, the first black or the oldest person ever to take the oath of office in January 2009.
Have you really listened to their principles, policies, goals and objectives? Have you really listened to their vision for the country. Yes, we are in a war, actually several wars. Of course we all know about the two front war that our brave men and women in the military are fighting in Afghanistan and Iraq. It doesn't matter how we got there or why we are there, the point is that we are there. We are also in a war against poverty, a war against racism and prejudice, a war on drugs, a war on poor health, a war on environmental pollution and climate change, and probably a few others that escape me right now.
Wow, that's a lot of wars. Are we winning any of them? Which candidate will lead us to victory in one of them? Or does the President really matter in these wars? Will the new leader of the free world be able to impact any of these wars significantly over four years?
Maybe. What would make the new administration successful in your view? Would it be lower energy prices, lower food prices, universal health care, victory in Iraq, peace in the Middle East.
Think about it. Will the next administration be effective? It will definitely be historic in one way or another. Why you say? Well because it will be a first. Either we will have the first woman, the first black or the oldest person ever to take the oath of office in January 2009.
Thursday, April 24, 2008
Pennsylvania is over - now what??
Fellow independent thinkers. It strikes me quite odd that for three weeks we heard that Pennsylvania would put an end to the Presidential Democrat nominee race. Well, PA was a few days ago, Obama got creamed, and all we hear is that we have four more months of this.
I am an independent. I have voted for Republicans and for Democrats. Four more months of this is driving me away from the news channels that I so love to watch. The crazy thing is that it is driving me to watch more Boomerang. Yep, that's right - I am watching more cartoons.
Unfortunately, the cartoons are not nearly as funny as the candidates and their antics so what is a controlled sporadic supposed to do?
I am an independent. I have voted for Republicans and for Democrats. Four more months of this is driving me away from the news channels that I so love to watch. The crazy thing is that it is driving me to watch more Boomerang. Yep, that's right - I am watching more cartoons.
Unfortunately, the cartoons are not nearly as funny as the candidates and their antics so what is a controlled sporadic supposed to do?
Wednesday, March 5, 2008
It's down the wire.
The Presidential race is getting more interesting every single day. The Democratic Party screams change. It fights itself to see exactly how it wants to make demographic history in this election.
The Republican Party also screams for change. The problem is that it has remade itself overnight going from an anybody but McCain mantra to he is our coalition builder.
All the candidates on both sides of the aisle are great Americans who we should all be proud of. We have a choice between the old and the new, the known and the bold unknown.
Regardless of who our next president may be, one thing is for sure. They will face international uncertainty and financial chaos. They will lead a free world that is fraught with risk and opportunity.
So that is what it means to be down to the wire. We have to make a choice. It doesn't matter who you vote for as long as you vote your principles. If we don't vote, we can blame ourselves. If we do, then we can blame each other.
The Republican Party also screams for change. The problem is that it has remade itself overnight going from an anybody but McCain mantra to he is our coalition builder.
All the candidates on both sides of the aisle are great Americans who we should all be proud of. We have a choice between the old and the new, the known and the bold unknown.
Regardless of who our next president may be, one thing is for sure. They will face international uncertainty and financial chaos. They will lead a free world that is fraught with risk and opportunity.
So that is what it means to be down to the wire. We have to make a choice. It doesn't matter who you vote for as long as you vote your principles. If we don't vote, we can blame ourselves. If we do, then we can blame each other.
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