Responses - Washington's Manipulative Lexicon

Thanks to everyone who expressed such strong feelings re the subject message - it is our country & we have everything to lose if we don't speak up & act accordingly.  Below are two responses that certainly add something to the original message.  I edited the second one that addressed the question re how much of our current problems are our fault for letting it happen - you can read the message in its entirety if you click on to ReturnToExcellence.net. 

 

My personal thanks to the frequent responder in the first message for his kind words.  I promise to never let him or any of you down.  The work & research that goes into presenting these messages is tireless.  "To boast of excellence is easy - to guarantee it is extraordinary" is just one of the many principles I follow in writing this blog.

 

--Response #1---

 

Doug:  I just want to take a moment a let you know how much I enjoy reading your emails.  When I log in and look at my list the first thing I read are your stories.  The Dept. of Energy has always been a thorn in my side.  Like Carter, it is a failure and a waste of money filled with patronage jobs.  All those agencies you mentioned are cousins of Freddy Mac and Fannie Mae.  We are at a crossroads in American history, will we stand up to those Union thugs or will we cave like cheap tents.  If history tells us anything we will fold like a cheap tent.  With most Americans on the receiving end there is no enthusiasm to upset the apple cart. 

Pls keep those news editorials coming. . .

---Response #2---

 Doug,  "Washington's Manipulative Lexicon"....Excellent...!!!

Washington spews a lot of nonsense...most of which is usually a lie...they figure they can throw anything at the people, they won't know or care... Our government will try to get away with whatever We The People ALLOW THEM TO GET AWAY WITH...!!!!!!

 

As we all know Death and Taxes are the only certainties...  The government changes the rules on us all the time and so if the political will is not there...the reality will be here one day real soon...unfortunately these un-representing representatives are without gonads to do the peoples work.  There will come a day when we will be forced to right it, unless We The People get to them first from the voting booth.  Aside from this...I believe there is a nefarious purpose beyond behaving the way they do...there are those that believe in a New World Order. This is a notion that would necessarily have to put down America as a country as something less than exceptional...I do not and most Americans would not accept that notion. Those that do can not really be Americans...really???

 

There are nefarious reasons for the lies we hear from our government day in and day out.

Washington's Manipulative Lexicon

Congressman Frelinghuysen recently wrote to his constituents "As I write this, the federal government could be just one week away from a shutdown of 'non-essential services.'"  Now when you consider that the Constitution was written to delegate few & defined powers to the federal government (Federalist Papers #45 - James Madison) & the fact that every Member of Congress takes an oath of loyalty to uphold the Constitution by supporting & defending it you can start to see just how far off track our nation has come by talking let alone worrying about "non-essential services."  Why do we have "non-essential services?"

Thanks to Ann Coulter for providing a list of departments to eliminate in order to start to re-uphold the Constitution.  We should eliminate the Departments of Health & Human Services, Education, Commerce, Agriculture, Transportation, HUD, the National Endowment of the Arts, the National Endowment of Humanities, & of course the progressive income tax system & replace it with the FairTax (the last one is my idea).  More on the Department of Energy below.

But "non-essential services" is just one of the terms that has gotten out of hand in Washington's manipulative lexicon.

With regard to the budget please consider that our elected reps add to this lexicon by talking-up entitlements as "mandatory spending" that can't be touched.  My letter published in The Reporter in June 2005 pointed out that Social Security benefits are not guaranteed for life.  I referenced Susan Lee's WSJ article dated November 23, 2004 – "Social Security benefits are not guaranteed.  Just like all entitlement programs, they can - & have been – changed by Congress.  The Social Security administration itself says so & so did the Supreme Court when it ruled, in Fleming v. Nestor, that workers & retirees have no legal claim to benefits.  Regardless of how much in taxes they have paid into the system." 

Robert Alexander correctly points out more recently when he wrote "that Social Security & Medicare are driven by spending formulas rather than annual appropriations, but those formulas were established by Congress & the president & they can be changed by Congress & the president.  They are just as discretionary as the 'discretionary' or nonformula based spending.  Referring to these programs as 'mandatory' plays right into the hands of big spenders who want to direct the discussion away from spending cuts & toward tax increases.  'Mandatory' spending isn't a force of nature that's out of control.  It is a problem created by politicians & solvable by politicians, & it could be solved this year if they had the will to do it."

The above removes the terms "non-essential services" & "mandatory spending" from our lexicon & shows that Congress has the power but has never had the will to follow their constitutional oath.

The opposite problem of not cutting spending lies in a very dangerous part of the government lexicon - breaking the "tax free" promise concerning Roth IRAs & Roth 401(k)s.  To help fund projected shortages with Social Security & Medicare Roth IRAs & Roth 401(k)s are sitting there like big turkeys waiting to be taxed - especially as their values grow to huge amounts.  Holders of such accounts will likely lose out.  Can you imagine a future politician trying to defend continuation of tax free treatment for money that has never been taxed in the economic environment we are facing - what a large chunk of money Roth IRAs & Roth 401(k)s are to the politicians who will not be able to resist confiscating large amounts of them. 

Also, we don't need any special lexicon term for raising taxes but the raising of tax rates for traditional IRAs & 401(k)s will also provide a government windfall.  One of the best ways to increase the value of your IRA or 401(k) is to contribute when in a high tax bracket & withdraw @ a lower tax bracket.  The opposite principle can make a loser out of these programs, if Congress raises tax rates, as higher income tax brackets in withdrawal wipes out any investment gains over the years.

As promised the Fire The Night Watchman message included an analysis of the Department of Energy - a department I certainly would include in my list of unconstitutional government programs to be eliminated.  Read the note below & see if you agree - not just with the elimination of the Department of Energy but the entire damn mess described herein & how much of it is our fault for letting it happen. 

---Department Of Energy?---

As we quietly go like sheep to slaughter - Does anybody remember the reason given for the establishment of the Department of Energy ..... during the Carter Administration?

The Department of Energy was instituted on 8/04/1977 to lessen our dependence on foreign oil. 

 

And now 34 years later the budget for this "necessary" department is at $24.2 billion a year.  It has 16,000 federal employees and approximately 100,000 contract employees.  

 

A little over 33 years ago, 30% of our oil consumption was foreign imports.  Today 70% of our oil consumption is foreign imports.  

 

Responses - Fire The Night Watchman

Yesterday's Fire The Night Watchman message was very well received as evidenced by a frequent contributor writing "Very, very good.  Could not do better myself."  There actually is another half to the Night Watchman  message re the Department of Energy that I will share soon.

 

The above photo was sent to us with the note "This financial crisis is forcing State and local agencies to make some tough decisions.  If things continue for much longer, there's a real risk that we may have to lay off Jose."

 

Another subscriber to ReturnToExcellence.net, writing under the pen name John Q. Taxpayer, responded with the message below highlighting arithmetically exactly how unserious BO is about government spending cuts:

 

"It is time to Bite the bullet---We need to cut expenses. I hope you will participate & do your part. 

 

The President ordered his cabinet to cut a $100 million from the $3.5 trillion federal budget.

 

I'm so impressed by this sacrifice that I believe we should do the same with our personal budgets. If you spend about $2000 a month on groceries, household expenses, medicine, utilities, etc, it's time to get out the budget cutting ax, go line by line through your expenses, and cut back!

 

To make the cuts at exactly the same ratio as the President -1/35,000 of your total budget. You will have to cut your spending by SIX CENTS!

 

Yes, you're going to have to get by with $1999.94, but that's what sacrifice is all about. You'll just have to do without some things, that are, frankly, luxuries. (Did the prez actually think no one would do the math?)

 

John Q. Taxpayer"

Fire The Night Watchman

Following his election as Mayor of Chicago on Tuesday Rahm Emanuel held his first news conference on Wednesday & acknowledged that the city's budget had a $1 billion shortfall & that the public employee pensions were underfunded by $20 billion - not @ all surprising considering the latest news across America & Greece? On a good note Mr. Emanuel appears not to want to be a run of the mill politician & says he may conduct a good housecleaning @ City Hall. He cites as an example a reduction of administrative staff regarding the Chicago Police Department adding in recent years "nine to ten people in police bureaucracy without adding a single new beat officer."

We can only hope Mr. Emanuel holds true & does not follow the example below from a subscriber to ReturnToExcellence.net.

---Fire The Night Watchman---

Once upon a time the government had a vast scrap yard in the middle of a desert. Congress said, "Someone may steal from it at night." So they created a night watchman position and hired a person for the job.

Then Congress said, "How does the watchman do his job without instruction?" So they created a planning department and hired two people, one person to write the instructions and one person to do time studies.

Then Congress said, "How will we know the night watchman is doing the tasks correctly?" So they created a Quality Control department and hired two people, one to do the studies and one to write the reports.

Then Congress said, "How are these people going to get paid?" So they created two positions, a time keeper and a payroll officer, then hired two people.

Then Congress said, "Who will be accountable for all of these people?" So they created an administrative section and hired three people, an Administrative Officer, an Assistant Administrative Officer, and a Legal Secretary.

Then Congress said, "We have had this command in operation for one year, and we are $918,000 over budget. We must cut back." So they fired the night watchman.

Update & Response - Neighbor Against Neighbor In Wisconsin & Beyond

The public employee union protests in Wisconsin continue amid reports that two thirds of Wisconsin eighth graders cannot read @ proficient level - makes you wonder how these students got to the eighth grade to begin with? How much worse could Wisconsin do by firing all of the government school teachers?

I belong to a network of Tea Party communication links as well as AFP links. I have received several messages that this Friday @ 12 noon the New Jersey State AFL-CIO is planning to hold a rally in Trenton in support of NJ's public sector unions. It is expected that some of the Wisconsin public employee union members & BO's frequent White House visitor National AFL-CIO President Richard Trumka will be there.

BO's part in all of this lies with the group aptly named "Organizing For America" - the successor to BO's 2008 campaign organization. This group's latest community organization effort was to unload buses full of union favoring protesters in Madison plus running phone banks urging people to support the union members. The group mobilizes BO's supporters for events like these union protests. They are in all 50 states.

Here is a video from one of the Tea Party groups that so clearly shows why the public sector unions want to control the education (or lack thereof) of the citizenry through government schools - it is too mild to call this just a double standard.

I mentioned last night that America is in the last stage of Death Of Democracy - the "apathy to dependence stage." It is so ironic that the protests in Tunisia, Iran, & Libya would all be classified in the "spiritual faith to great courage" stage - just where we were in 1776. People in Cuba who are hearing about all of this but who have not made a move are in the "bondage to spiritual faith" stage. We sure take a lot for granted in 235 short years.

A subscriber to ReturnToExcellence.net sums this up when he wrote: "Doug - The battle in Wisconsin and the battles to be raging in NJ and all over the US are a display to Socialism at work. This is what happens when you run out of other peoples' money. And as George Bernard Shaw said, 'A government that robs Peter to pay Paul will always have the support of Paul."'

Neighbor Against Neighbor In Wisconsin & Beyond

As neighbor stands against neighbor in Wisconsin separated in Madison this past weekend only by a police line I'm sure the 146,000 people in Wisconsin who lost their private sector jobs in the past two years have no pity for the public sector union protesters who are balking @ paying any more of their salaries toward their pensions (currently $1 out of every $58 put into the pension funds) & 12.6% of their healthcare insurance premiums (currently 6%). To put this in perspective the premiums paid by senior citizens on a declining income (not fixed income) amount to 25% of the cost of Medicare B & D (also obviously not sustainable). The millions of people across America who are underemployed & worse yet those who have given up looking for work also cannot be empathetic toward the public sector union protesters - especially when they realize the working members in their families are paying taxes supporting the union generated salaries & benefits of these public sector protesters.

Now just how sympathetic can any of us be with these public sector union members who, whether they were aware of it or not, took a chance that their salaries, pensions, & healthcare benefits that are out of line with the rest of the economy would continue forever. In essence public sector union members tried to get away with something that was too good to last - namely having private sector workers who make far less in wages & who work decades longer support public sector union workers' salaries, pensions, & healthcare benefits - the money is just not there & this is the imbalance.

The above pay gap graph is the most conservative estimate I could find depicting the difference in compensation between the private sector & state & local government workers - it appears to be right for federal public workers. The DOL reports that employees of state & local public sector unions make 33% more in hourly wages on average than private industry workers.

The solution to this impasse must follow one of these alternatives - 1) either raise the taxes of the general population to meet the salary & pension demands of the current & retired public sector employees respectively plus the healthcare & other benefit costs of both of these groups or 2) cut the salaries & benefits of the public sector employees so that affordable taxes can be paid without protest or 3) ask the public sector employees to pay more of their own benefit costs & control their own wage increases. The latter two, as they relate to public employee union collective bargaining, are unacceptable to the protesters & is what the demonstrations are all about.

If you are still working in the private sector in your 60s or 70s let alone people I personally know in their 80s who are still working & paying taxes that support the near full final salary inflation adjusted pensions plus lifetime free healthcare benefits of their much younger public sector employee neighbors' - people employed by public sector unions who retired in their early 50s years ago - it is no wonder you feel the part of a fool - which of course you are. All of this should make people feel resentment unless they do an honest evaluation of their own culpability.

Just like so many things in our lives that go wrong we can only blame ourselves for letting this public sector union problem happen. This union problem is the sort of thing that happens when the people living in the greatest country on Earth let the country deteriorate to an "apathy to dependence stage" of existence. High energy opportunistic union leaders took full advantage of American's apathy & indifference & stretched the perceived opportunity to economic absurdity so that even the least discerning among us has noticed the problem. It is demeaning to hear that public sector salaries & benefits must be cut only because they are so much higher & better than those in the private sector - who should care about the difference between the compensations of the two sectors or what anyone else makes for that matter. If you think the public sector compensation packages can be maintained you would be a fool to seek employment in the private sector & vice versa - you would be as great a fool to sign on to a public sector union package if you visualized your employment compensation abruptly ending or being significantly curtailed with losing protests in the streets of Madison Wisconsin & soon many other towns such as Trenton NJ.

BO has it wrong that Wisconsin Governor Scott Walker is assaulting the unions - it is the union members who have assaulted their neighbors for years & these neighbors have finally realized they have been squeezed dry.

Focus Of Disappointment

Many of our messages leading up to the November 2 election expressed hope that the new senators elected with Tea Party support would caucus with Jim DeMint (SC) & Tom Coburn (OK) to form a solid body of fiscally responsible senators.  I was greatly encouraged when I learned that Rand Paul (KY) had formed a Tea Party Caucus on January 24.  The good news & enthusiasm ends here.

 

Tom Coburn himself has not joined this caucus.  In fact only Senator Mike Lee (UT) has joined Senators Paul & DeMint.  Notable senators who ran with Tea Party support who have not joined this caucus are Marco Rubio (FL) & Ron Johnson (WI).  Business as usual in the Senate with the establishment old-guard Republicans is in place except for DeMint-Paul-Lee.

 

But the more immediate focus of disappointment occurred Friday in the House when 92 Republicans joined every Democrat who voted to defeat an amendment that would cut an additional $22 billion from the 2011 FY spending plan.  This cut would have let Republicans keep their 2010 campaign promises.  Taking the promised total $100 billion out of a $3.8 trillion spending plan does not seem like a hard task if they really wanted to do it.  I don't remember any campaigner saying they would take $100 billion out on a prorated basis for the 7 months left in the current fiscal year with greater cuts to follow in future years.

 

Check the list below for how your representative voted.  To save my neighbors in NJ some time Rodney Frelinghuysen, Leonard Lance, Jon Runyan, & Frank LoBiondo all voted the wrong way. 

 

FINAL VOTE RESULTS FOR ROLL CALL 103 (Republicans in roman; Democrats in italic; Independents underlined)
      H R 1      RECORDED VOTE      18-Feb-2011      2:46 PM
      AUTHOR(S):  Blackburn of Tennessee Amendment No. 104
      QUESTION:  On Agreeing to the Amendment

	Ayes	Noes	PRES	NV
Republican	147	92		1
Democratic		189		4
Independent
TOTALS	147	281		5

---- NOES    281 ---

Ackerman Adams Aderholt Alexander Altmire Andrews Baca Baldwin Barletta Barrow Bass (CA) Bass (NH) Becerra Berg Berkley Berman Biggert Bilbray Bishop (GA) Bishop (NY) Blumenauer Bonner Boren Boswell Brady (PA) Braley (IA) Brown (FL) Butterfield Calvert Camp Cantor Capito Capps Capuano Cardoza Carnahan Carney Carson (IN) Carter Cassidy Castor (FL) Chandler Chu Cicilline Clarke (MI) Clarke (NY) Clay Cleaver Clyburn Cohen Cole Connolly (VA) Conyers Cooper Costa Costello Courtney Cravaack Crawford Crenshaw Critz Crowley Cuellar Culberson Cummings Davis (CA) Davis (IL) DeFazio DeGette DeLauro Denham Dent Deutch Diaz-Balart Dicks Dingell Doggett Dold Donnelly (IN) Doyle Dreier Duffy Edwards Ellison Emerson Engel Eshoo Farr Fattah Filner Fortenberry Frank (MA) Frelinghuysen Fudge

Garamendi Gibson Gingrey (GA) Gonzalez Granger Green, Al Green, Gene Grijalva Grimm Gutierrez Hanabusa Hanna Harman Harper Hastings (FL) Hastings (WA) Heck Heinrich Herrera Beutler Higgins Himes Hinchey Hirono Holden Holt Honda Hoyer Inslee Israel Issa Jackson (IL) Jackson Lee (TX) Johnson (GA) Johnson (IL) Johnson, E. B. Jones Kaptur Keating Kildee Kind King (NY) Kingston Kinzinger (IL) Kissell Kline Kucinich Lance Langevin Larsen (WA) Larson (CT) Latham Lee (CA) Levin Lewis (CA) Lewis (GA) Lipinski LoBiondo Loebsack Lofgren, Zoe Lowey Lucas Luján Lungren, Daniel E. Lynch Maloney Markey Matheson Matsui McCarthy (CA) McCarthy (NY) McDermott McGovern McIntyre McKeon McKinley McNerney Meehan Meeks Michaud Miller (MI) Miller (NC) Miller, George Moore Moran Murphy (CT) Nadler Napolitano Neal Noem Nunes Nunnelee Olson Olver Palazzo

Pallone Pascrell Pastor (AZ) Paulsen Payne Pelosi Perlmutter Peters Peterson Petri Pingree (ME) Polis Posey Price (NC) Quigley Rahall Rangel Reichert Reyes Richardson Richmond Rivera Roby Rogers (AL) Rogers (KY) Rooney Ros-Lehtinen Roskam Ross (AR) Rothman (NJ) Roybal-Allard Runyan Ruppersberger Rush Ryan (OH) Sánchez, Linda T. Sanchez, Loretta Sarbanes Schakowsky Schiff Schilling Schock Schrader Schwartz Scott (VA) Scott, David Sensenbrenner Serrano Sewell Sherman Shuler Shuster Simpson Sires Slaughter Smith (NJ) Smith (WA) Speier Stark Stivers Sullivan Sutton Terry Thompson (CA) Thompson (MS) Thompson (PA) Tierney Tipton Tonko Towns Tsongas Upton Van Hollen Velázquez Visclosky Walden Walz (MN) Wasserman Schultz Waters Watt Waxman Weiner Welch West Westmoreland Wilson (FL) Wolf Womack Woolsey Wu Yarmuth Young (AK) Young (FL)

---- NOT VOTING    5 ---

Giffords Hinojosa

McCollum Owens

Quayle

---

Subscriber Provides Answer To America's Fiscal Problems

No one has ever called BO a deficit hawk & his just released budget for fiscal 2012 that begins on October 1, 2011 keeps his record intact.  For instance there are $8 trillion of cumulative federal deficits that will occur over the next ten years under present law if no action @ all is taken.  Under BO's budget these cumulative deficits are projected to be $7 trillion meaning the fiscal train wreck continues right before our eyes.

 

Republicans talked a good story in the 2010 campaign but now, other than Rand Paul, they are shying away from significant spending cuts.  And for good reason if their primary goal is to get re-elected - appealing to the scores of millions of Americans who receive government checks every month under one program or another does not include cutting their constituents' favorite programs.  Pew Research found that only 12% of people surveyed want to cut spending on Social Security or Medicare & of course this is where the big budget money is.  Do you personally want to rein these programs in or just let them go on hoping the future will be OK?

 

Even one third of people who identify themselves with the Tea Party back off when they realize some of their own government programs could be cut.  These people are with the spending-cut-control program in theory but the practicality of the matter when it directly affects them overrides.  How lazy & short sighted.

 

But the worst part is that BO's budget proposes adding 5,100 IRS agents.  The total 2012 IRS budget will increase to over $13 billion.  Spending $13 billion to find taxes from businesses & high income earners does not sound like a winning economic formula for creating jobs to me.  Also add as many as 16,500 new IRS employees in 2014 to enforce ObamaCare (from an analysis conducted by the House of Representatives' Joint Economic and Ways and Means Committees on March 18, 2010) or to otherwise issue tax credits, penalties, or just help administer the new healthcare law (per FactCheck.org) & there is plenty of room for mischief from these people, however many there are, who will not create wealth or anything else of value.

 

A subscriber to ReturnToExcellence.net has the best & quite possibly the last answer for us re this mess, if we are to come out of it any time soon, when he responded to Sunday's posting re the high percentage of  the working population who are employed by the state in the Middle East & North African countries that are undergoing so much protest & turmoil:

 

"Doug - Thanks for passing along this article.  This has clearly pointed out to me one obvious omission I have made in discussing the need for money to come in to an economy from outside its economic sphere.  What I had said, I guess, sort of implies that government workers paying taxes to employ other government workers certainly does not build an economy any more than us serving one another hamburgers and selling one another products made in China.

 

"This article only goes to further fuel my fire to champion our last hope for saving the American economy and the American dream, and that is the FairTax."

Who Will Be Left To Hire Them?

Dan Henninger's excellent February 10 WSJ Wonderland column entitled "Is Egypt Hopeless" clearly explains the problem with Egypt, Tunisia, & all of the rest of the MENA countries of the Middle East & North Africa such as Jordan, Yemen, & Algeria - anywhere from 35% to 50% of the working population in these countries is employed by the state - in other words only a small percentage of entrepreneurs may actually be left creating wealth or anything else of value. In such an economy you sooner more than likely than later run out of money to pay the government workers no matter how hard or responsibly they seem to work.

Now this statist-bureaucratic formula for failure has been the topic of numerous messages on this blog as it pertains to America. In light of all of this trouble in Egypt it is pitiful that earlier this past week in Washington the President of the American Federation of Government Employees Union and his members were recorded protesting against reining in federal spending including their huge pensions.

Miller Trumps O'Reilly Interview With BO

For anyone who did not see Bill O'Reilly's pre-Super Bowl interview with BO or did not see it in its entirety (including the portions that were not part of the live broadcast) please click on this link .

The interview was seen live by over 19 million people & many more over the internet. It has generated much controversy as being anywhere from too soft to too hard. Since FNC is such a lightning rod for controversy please watch & judge for yourself - which is always the best policy.

Laura Ingraham found fault with the last part of the interview when Bill asked BO if he thought FNC could do a better job reporting the news. Carol hated this soft-ball meaningless question also.

But it was Dennis Miller who trumped the interview process - "It seems to me that it's important to you (Bill) that he (BO) likes you, but that's not what I'm looking for in an interview with Barack Obama. I want him to come in without a tie and leave in a neck brace. When he's meeting O'Reilly, I want him to dread it beforehand, I want him to sweat bullets in the middle of it, and afterwards I want him to say to Axelrod, what did I just say? With Barack Obama, it doesn't come down to whether I like him or not - I see this country as lean and mean, and I want the citizens to be self-reliant. He sees it as soft and he's willing that some of the citizens be dependent. I would have said, Mr. President, there's a big game later today - do you think the winning team should give the losing team enough of their points so that it's a tie because that's fair?"

Ever Wonder When 2 + 2 Did Not Equal 4?

Thanks to our mid-west member who sent along this link of a video showing the amazing precision of the principles of mathematics . It was my study of mathematics during my college days a long time ago that helped form my understanding that there was no beginning of the universe & eternity really exists in two directions (past & future) - ever wonder when 2 + 2 did not equal 4?

In line with all of this is the discovery this past week where astronomers sighted dozens of potential Earth-size planets in orbits around stars other than the sun. These sightings are based on NASA's Kepler space telescope which now has over 1,200 possible worlds in their view. These findings illustrate the infinite nature of the universe & the unlimited potentials that lie ahead.

Bill Hendricks offers the best answer to whether or not intelligent life exists on any of these planets when he writes "I have long maintained that the greatest argument for the existence of intelligent life elsewhere in the universe is the fact that they have not attempted to contact us."

One More Response - Investment - Unemployment Relationship

One more response to the original subject message that adds value for you - the subscriber posted it directly on ReturnToExcellence.net. The first part of the response provides common sense for any economy & it concludes with the answer (secret) for America's.

---Blog Comment Posting---

I have been saying for many years now that there can be no household economy with the husband paying the wife to cook and for wife paying the husband to cut the grass. Money MUST come into the household from an outside source. This is not any different for a City, State or Country. If we fail to "make" products (physical or intellectual) we will never have a viable economy again. No profits, no jobs! I am convinced The FairTax holds the secret for our freedom and free global economy.

Responses - Investment - Unemployment Relationship

I can't begin to tell you the personal heartbreak that Carol & I felt after reading the private & confidential hardships received re the original subject message.  Many educated & highly trained readers of this blog are suffering big time with poor or virtually no economic prospects.  What has happened to our country is a crime.

 

I can let you know of this one though - "Doug:  There are no blue collar jobs AKA factory workers.  America unanimously decided decades ago no smoke stacks and greasy manufacturing plants will be allowed.   We elected leaders who were pro-active in forcefully eliminating these "dirty" companies.  We gave unprecedented powers to government organizations like the EPA to tax and punish these smoke stack companies into bankruptcy.  We (America) accomplished our goal.  Jobs were never part of the equation, you are not advocating a return to the toxic days of the sixties & seventies are you?  Of course, I am playing devil's advocate but we cannot eliminate all of our manufacturing plants then act surprised because America is unemployed.  Remember, we get the government we elect."

Investment - Unemployment Relationship

Click on graphic to enlarge

It is no consolation to the unemployed & underemployed that the government told us today that the unemployment rate for January is 9.0%.  In fact 26 million Americans do not have any employment or suitable employment - this figure includes the 6.5 million people who have given up looking for work.  There are also 43.6 million Americans who receive food stamps - many of whom would like to return to the dignity of earning a living & not being dependent on the government for buying groceries.  Housing prices continue to fall as a result of government intervention but maybe the worst & cruelest of all is that rates on CDs - the bank instruments that so many seniors rely on to supplement their pension & Social Security incomes - are so low that many seniors have seen $5 thousand to $10 thousand of CD interest income ripped from them @ renewal as the Federal Reserve keeps interest rates manipulated artificially low.  But of course this is all by design as BO plans to complete the socialization of America - for starters.

 

For those previously unemployed lucky enough to have found employment the new job has only a fraction of their previous job's earning power in so many cases.  Many underemployed people with multiple masters degrees & previous six figure incomes are working as school janitors, frothing cappuccinos @ Starbucks, or if they live in NJ are pumping gas @ the local convenience store.  People I know who are doing these jobs have told me they have to do what is needed to pay their bills.  The problem is that as time rolls on these drops in wages will be permanent for these people - never to recover in most cases.  In fact things may very well get worse with extremely qualified people being offered absolute peanuts to do even more menial jobs.  Many jobs pay less than the unemployment benefits.

 

Now the government's unemployment percent is one way to look @ the jobloss situation of the past several years.  This rate includes only unemployed people who are looking for work - it does not count those who thought it in their best interest to retire, who went back to school, applied for long term disability, or simply gave up & moved back with relatives if they could find any that would have them.  Homelessness, which is a euphuism for what used to be known as being a bum, is another alternative.

 

The broadest measure of unemployment is the employment to population ratio - the number of people who are employed as a % of the population 16 & older who are not in the military or institutionalized.  This figure is currently 58.3% - the lowest in thirty years when far fewer women were in the labor force.

 

With all of this dismal science information as a backdrop please look @ the above investment-unemployment graph that traces the investment ups with the unemployment downs & vice versa from 1990 to 2010 in perfect harmony.  Solving our employment problem does not have to get any more complicated than that.

Made In America

"I wish they would make cars (or anything) like they did in the old days" is a nostalgic call for the return of manufacturing to America. In truth the number of manufacturing jobs has declined in America but not manufacturing output.

America's manufacturing sector is tantamount to the 4th largest economy in the world based on GDP in 2008 - source Professor Williams:

1. USA = $14 Trillion

2. Japan = $4 T

3. China = $3.7 T

4. USA Manufacturing = $3.7 T

5. Germany = $3.7 T

The growth of international competition in industries such as steel may make it easy to forget that America continues to be a major exporter of aircraft, paper, instruments, plastics, chemicals, software, pharmaceuticals, & high tech components of machinery & equipment. China, who recently surpassed Japan in the above rankings, has much low-cost-unskilled labor so it will export to the USA goods for which large amounts of unskilled labor is used such as apparel, footwear, toys, & the final assembly of electronic machinery & equipment. Source Professor Robert Carbaugh.

As we wait for the January unemployment statistics to be released on Friday I refer you to the March 8, 2010 posting on ReturnToExcellence.net entitled "All You Need To Know About Creating Jobs" - the situation described therein has not changed & won't change any time soon like for the next two years. This posting details how to get Americans back to work so that output & employment both increase.

But getting back to our products the above photo of the 1959 Bel Air is the result of a 40 mph crash test conducted by the Insurance Institute for Highway Safety (IIHS) using a 1959 Bel Air & a 2009 Malibu. Please click on this link to see how far automobile safety has come in 50 years

According to safety engineers @ the scene the driver of the 2009 Malibu would have suffered a slight foot or knee injury in the accident. The driver of the 1959 Bel Air would have died instantly.

The quality of our engineering progress seen in the above mentioned video should make us not long for the old manufacturing days but rather yearn for days of higher productivity that advance our living standards. In this global economy we'll know we really have something when the IIHS tests our products against those from Europe & Asia.