Wednesday, April 29, 2009

The Day Capitalism Died

In a boardroom in Detroit, capitalism took a major step back when GM caved in to big government and big labor.
Under the plan, GM is asking the Treasury Department for an additional $11.6 billion in loans, on top of the $15.4 billion it has already received. It envisions giving the government at least half ownership of the company as payment for half of the loans.

At the same time, GM said it would use stock instead of cash to pay off half the $20.4 billion it owes a United Auto Workers fund to cover retiree health care. That stock would leave the union owning about 39% of GM.

GM told bondholders it wants to swap up to $27 billion in unsecured debt for a 10% company stake.
So the federal government that steals from taxpayers and knows nothing about running a business and the labor union who's motives are job protection for life and high salaries, and knows nothing about running a business, is now in control of a once great business. Those that made real financial investment get ten cents on the dollar.

The only chance this fails is if the bond holders tender less than 90 percent of the debt, forcing GM to file for bankruptcy.

For GM to become a viable business again, bankruptcy is the only answer. The government and unions are not going to run a proper business and build products people will want to buy. Who would buy a product produced by this entity?

Cutting the number of dealers 42 percent and eliminating Pontiac, Saturn, Hummer and Saab are all good moves but will only be the beginning. Buick will be next. And why they need both Chevy and GMC identical products is a head scratcher, branding aside.

With the government in control, what will it do with its profitable SUV lines given its own gas mileage mandates?

The transition to Government Motors, provided it happens, will be a major factor that historians will point to that ended capitalism.

Monday, April 27, 2009

Swine Flu. Red Herring?

Skepticism is my middle name. I have done an incredible amount of reading on the topic of pandemics. I have focused less on the epidemiology perspective (not my area of expertise), more on an illness' impact on a business. What happens if half of a firm's employees are sick and cannot come to work? The challenge here is to reduce the likelihood of if happening to a large number of employees and what contingency plans to invoke.

The government/media complex has a huge record of over-hyping an issue. Whether it is a food supply issue (tomatoes and peppers), unemployment (apparently 8-10% is a depression), terrorism (no hits since 9/11/03 but not because of great government agencies), or disease. This latest swine flu issue seems to be more of a red herring than something that should dominate the news.

The flu appears to have Mexican origins and has moved its way to many nations including the USA. National and world health agencies are engaged to control the outbreak, find the origin, etc.

In the U.S., the bureaucrats at the Department of Homeland Security and the Department of Health and Human Services' CDC are excited about this latest hype. All while Obama plays golf. If it were that serious, would Napoliano tie herself to it?

People get the flu every day and in every nation of the world. People will die from it. What is interesting about this strain is that it seems to have a harsher affect on younger adults.

When the State Department creates travel restrictions, more often than not, it is making a CYA statement. Remember SARS?

This is another way for the news media to create a temporary boost in readers and viewers. For the administration, it is a red herring. An interesting issue but not deserving of the hype and impact to business.

There are many in talk radio that think the government should shut the borders immediatley and screen all entrants via planes and boats. Perhaps they are right but it does not strike me yet as a need to be so paranoid at this time as they do. However to hear Napoliano or Obama say 'not to worry,' causes me to worry.

Sunday, April 26, 2009

USTA, Movie Gallery Pro Classic, Danny Hayes

I want to gives kudos to my cousin Danny. Since 2002, he has been an invaluable volunteer in Dothan, Alabama, at the USTA's Pro Classic Tennis Tournament.

It is truly the spirit of volunteerism, using valuable vacation time from work, covering his travel expenses, and working from sun up to well into the night.

Well done cuz.

Thursday, April 23, 2009

Celebrity Adoption

Adoption for most people is about bringing a child into a loving, nurturing home. People adopt for a number of reasons from biological necessity to general urning for a child.

However I question some of the recent spat of celebrity adoptions. If seems that they are doing it more out of a popularity content -- staying in the news.

When we adopted our fourth child, from Khazakstan, we were given the third-degree by the state. There was an extremely long process that including a social worker coming in and interviewing each of our other children. The dossier process was long and cumbersome. They seem to go out of their way to discourage the action.

It does not bother me that celebrities want to adopt, but it does when their motivation is selfish. More often than not, these are working mothers. The child will be raised by nannies/au pars. The child will have lots of material wealth, the best education, etc. Great. But the end result, as with most celebrity off-spring, regardless of the method, the resulting adult will be a loser just like its adopting parent(s).

This single parent adoptions are also a bit on the extreme side. They also are for selfish purposes and never have the best interest of the child in mind.

All together, they give adoption a bad name. That's what bugs me.

Friday, April 17, 2009

War On Charter Schools

My daughter attends a charter school. For her, it has worked out great. She struggles with reading and math and this particular charter school has some special education specialists that help her every day with reading and math. She would not have received this help in the non-chapter public school -- too many children and not enough teachers.

A year or so ago, in Utah, we had a battle over school vouchers. The UEA and NEA went all out to defeat this option for parents that felt the traditional public schools were not meeting the needs of their children. They could attend private schools, but not with any tax fund help.

People I knew that were anti-vouchers were also anti-charter. For some reason, they believed that charter schools were private, and that the government was taking money from the traditional public schools and giving it to these charter schools. Ignorance is one of our greatest societal problems.

I was reading today in the WSJ an interesting article by Jay Green: The Union War on Charter Schools. The education unions, feeling they have won the war against vouchers have set their sights on charter schools.

Their efforts in some states are seeing funds for public charter schools getting cut, but no cuts or increases in traditional public schools.
The highest quality studies have consistently shown that students learn more in charter schools.

The most telling study is by Harvard economist Tom Kane about charter schools in Boston. It found that students accepted by lottery at independently operated charter schools significantly outperformed students who lost the lottery and returned to district schools. But students accepted by lottery at charters run by the school district with unionized teachers experienced no benefit.
The sad fact is that those involved in the profession of educating our youth are more concerned with job protection than with the well-being of the children. These are common liberal policies -- doing the same failed things over and over again and expecting a different outcome.

Wednesday, April 15, 2009

Rightwing Extremism and DHS

The Department of Homeland Security is warning law enforcement officials about a rise in rightwing extremist activity. This is detailed in the 7 April 2009 document Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment. It was prepared by the Extremism and Radicalization Branch, Homeland Environment Threat Analysis Division, Office of Intelligence and Analysis and coordinated with the FBI.
The DHS/Office of Intelligence and Analysis (I&A) has no specific information that domestic rightwing terrorists are currently planning acts of violence, but rightwing extremists may be gaining new recruits by playing on their fears about several emergent issues. The economic downturn and the election of the first African American president present unique drivers for rightwing radicalization and recruitment.
Sure there are some extremists; there are extremists in every society. But what the DHS is claiming to be extreme is a rather wide swath.

DHS defines right-wing extremism in the U.S. as "divided into those groups, movements and adherents that are primarily hate-oriented (based on hatred of particular religious, racial or ethnic groups) and those that are mainly anti-government, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely. It may include groups and individuals that are dedicated to a single issue, such as opposition to abortion or immigration." But pro-gay marriage, anti-Judeo-Christian, legalization of certain recreational drugs, stop-global warming, gun control advocates, pro-fairness doctrine, pro-abortion, and pro-illegal immigration -- the bastion of left wingers -- are not? (In being fair and balanced, the DHS did warn of left wing cyber attacks in January.)

Terrorism in general is fueled by hopelessness. It happens all over the world in all societies. Why would a young person sacrifice his time, talents and future for a life of destruction? People chose good or evil. Thankfully, most make the right choices. But many are weak. Gangs, terror cells, social and political causes are easy escapes for those wanting an identity -- a place to belong. I think it is a cop-out to assume that the recession is causing this latest "rightwing" activism.

The cause of these tendencies is due to the direction the country is heading. Educated Americans do not want government to have greater control over our lives; want to pay more taxes; want centralized control over major industries; see personal freedom stripped away. It is not because we have a black president; rather his socialist / communist ideology.

From the Declaration of Independence...
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
We will see more states asserting what is rightfully theirs, starting in Texas. We have to respect a governor (Gov. Rick Perry) who reaffirm his states’ rights affirmed by the Tenth Amendment to the U.S. Constitution:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Cybersecurity Act of 2009

The 1 April 2009 Senate Bill S.773 is no joke, though much of might fit that label. The so-called Cybersecurity Act of 2009, sponsored by Sen. John Rockefeller [D, WV] and co-sponsored by Sen. Evan Bayh [D, IN], Sen. Bill Nelson [D, FL] and Sen. Olympia Snowe [R, ME] is designed to:

To ensure the continued free flow of commerce within the United States and with its global trading partners through secure cyber communications, to provide for the continued development and exploitation of the Internet and intranet communications for such purposes, to provide for the development of a cadre of information technology specialists to improve and maintain effective cyber security defenses against disruption, and for other purposes.

Whereas having a national cybersecurity program is merited, one must be careful in how much control to give the federal government. It is one thing for it to put restrictions on the what, when, why and how of federal agency security, it is another when it starts mandating what states, local governments and private businesses must do.

The bill will give the federal government (the President) the power to “order the disconnection of any Federal government or United States critical infrastructure information systems or networks in the interest of national security.” They shut down air traffic in the country in 2003 for a few days after 9/11; this would be similar.

How much power and control would it allocate to the major ISPs? How will the states fund the requirements? Will the business requirements and costs be overbearing for businesses? The federal government did it with Sarbanes-Oxley; this smells similar.

This is one to watch closely. Because it is sponsored by Democrats (Snowe is closer to a Democrat than a Republican), most of their bills look plausible at first glance but are binding and liberty-restricting when the details are examined.

Tuesday, April 14, 2009

Hezbollah Operatives Arrested in Egypt

Egyptian authorities have arrested a few dozen Hezbollah members and sympathizers within Egypt. The Lebanese-based Shite, Iranian-backed, and pro-Hammas terrorist organization was smuggling weapons and ammunition in hope of launching attacks within Egypt.

This is significant because Hezbollah has claimed to be primarily a Lebanese-based group without operatives in other Arab countries.

Of course, the organization denies the claims made against it, though not denying these individuals were associated with the organization.

If Hassan Nasrallah is not a name as known as Osama bin Laden, he soon will. These militant Shites are ramping up. They were also found with $2 million in cash. This did not just fall out the sky; rather from their Persian brethren.

Saturday, April 11, 2009

Blue States Going Broke

One does not need to be a genus to realize that when tax receipts are down, the high-spending blue states are the ones crying the most.
At least 10 states are considering some kind of major increase in sales or income taxes: Arizona, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Washington and Wisconsin. California and New York lawmakers already have agreed on multibillion-dollar tax increases that went into effect earlier this year.(AZ being the historic exception.)
The first instinct is to increase revenue (raising taxes); cutting costs is secondary. Why is it secondary? This goes to the core of liberalism: social services mean individual dependency upon the government. The more dependants, the more votes for spending politicians, aka, Democrats. The ultimate ponzi scheme.

Who will be the targets of the tax increases? Well the highest earners, of course -- the ones that can afford it.

Friday, April 10, 2009

America's Response Symbolic of New Administration

Somalian pirates have been at it for years. They hail from a land of lawlessness and anarchy, where being a criminal is socially desirable. They operate with impunity. For them, crime pays. A few dozen attacks last year off the Somali coast; a dozen or so this year. There is no end in site to this behavior.

-- Ukrainian ship MV Faina seized on 25 September 2008, held until 5 February 2009
-- Saudi tanker Sirius Star held for two months from November 2008; a $3m ransom was negotiated
-- At least 15 pirate attacks reported to International Maritime Bureau during March 2009
- The 32,500-tonne Malaspina Castle, UK-owned but operated by Italians, seized on 6 April 2009.

The latest ship hijacking, Maersk Alabama, is not something any one should be surprised. It has become an issue here because it is an American ship and a test of the Obama administration ability to deal with serious issues.

With Secretary of State Clinton considering piracy a laughing mater, and saying we need to address this as a global body, it tells me they are unwilling to defend Americans abroad.

It also tells me they are afraid of decisive action. Maersk Alabama Capt Richard Phillips gave them an opening as he jumped overboard. They either were not prepared or they did not have shoot-to-kill orders.

This reeks of an OJ Simpson-like pursuit..."let's just follow and watch these people; we don't want anyone to get hurt."

How will this end? Who knows. But it is not going out on a limb to say that America has become viewed as a limp-wristed nation unwilling to demonstrate leadership and take control over crimes on the sea. It is sad when French action to rescue a French-owned vessel from pirates upstages America. Obama just sits idly in his garden living in la-la land.

It would be a waste of money and military resources to insist upon escorts for these ships. These ships on commerce or humanitarian missions need to arm and defend themselves.

It is a show of the times that people are afraid or unwilling to defend their freedom and personal rights. We know that the federal government will not defend us in our time of need.

If I were the Captain, I would have a "killem all" attitude; and if I go down also, so be it. I think he might just be that kind of man.

Update 4/14/09: Navy Seals to the rescue; three dead pirates, one in custody; safe captain.

Tuesday, April 07, 2009

Helicopter Ben and U.S. Monetary Policy

When I think of the economical woes we find ourselves in, the thing that is always on my mind is our monetary policy.

The amount of cash in circulation has increased rather steadily since the mid-80s. If we add the Obama program, that angle is heading straight up to astronomical levels.
Mr. Bernanke is sometimes known as “Helicopter Ben” because he once in an academic paper referred to the use of “helicopters” full of money to rescue an economy from deflation. [He] explain[ed] the Fed’s new policy of buying $300-billion in U.S. treasury bills, not[ing] that the Fed is now more worried about inflation being too low than about it getting too high in the future.
By printing and circulating billions of new dollars, America is at risk of becoming
the fountainhead of a new inflationary outburst. The U.S. dollar is now in decline, gold is moving sharply higher, and new global currency turmoil is on the horizon.
How will the Fed absorb all of this money being placed into circulation? It is unreasonable and unlikely.

America is not done, but it will emerge weaker and less powerful. Its citizens will be less wealthy and more dependent on an inept government for health care, environmental policy, education, energy, banking, and certain manufacturing areas.

Saturday, April 04, 2009

Omnibus Appropriations Act 2009 - Huge Spending Increase

In mid-March, Congress passed (and Obama signed) H.R.1105, the Omnibus Appropriations Act of 2009. It passed 245 - 178 (8 no votes), mostly along party lines with some dissenters (thankfully my Democrat Representative Matheson voted no).

The House Committee on Appropriations under the leadership of Rep David Obey, authorizes the final appropriations for the current fiscal year for the following departments: Agriculture, Commerce/State/Justice, Energy and Water, Financial Services, Interior, Labor/Health and Human Services, Transportation/HUD, State/Foreign Operations and Legislative Branch.

Not surprisingly, the bill increases government spending. The Omnibus bill is $410 billion, an represents an increase of $31.5 billion, or 8.3%, over 2008 appropriations. Many of the allocations are driven by the Left's agenda of environmentalism, global warming, urban programs (aka ACORN), the National Endowment for the Arts, and the billions in earmarks (from the Left and Right). Add to this the "stimulus investment" of $270 billion for these departments. Bottom line: fiscal year 2009 appropriations for these departments will increase 79.6 percent.

The problem is that most in government still think they are the answer to all our woes. They lack the fortitude to create and implement responsible fiscal and monetary policies. They erroneously think that the nation needs this. It is considered inaction to cut spending, taxes, money printing.

This is just another step on the financial spiral toward national bankruptcy?

Friday, April 03, 2009

Food Stamps Recipiant Math Does Not Ad Up

When I read that one in every 10 Americans received food stamps, my first reaction was "that's a lot of people." But when you see the latest unemployment number, 8.5 percent of the people that are deemed eligible for unemployment insurance, the numbers do not add up.

That 8.5 percent is not based on total Americans. The number of people unemployed is 13 million -- people out of work that want to work. The number on food stamps is 32.2 million people.

One would expect a certain percentage of the newly unemployed to seek food stamps. But that does not cover the size of the number that actually receive food stamps. many are habitual users and abusers.

I am not a big fan of government subsidies. But I realize we have lived in a growing socialist society ever since the Wilson Administration. So these social safety nets are to be expected. People need to eat, despite many people's lack of preparation for the time when they are out of work.

The food stamp dilemma is somewhat analogous with the housing problem. Those people that saved their money, made a fair down payment on a house they could reasonably afford, and lived within their means, are left out of the government's bailout programs. It is mainly the irresponsible that benefit. Is there any difference with food stamps?

There is massive food stamp abuse and fraud, from people buying expensive meats and seafood to those receiving assists where it should not be provided. Many of the recipients drive nice cars, have the full cable TV package, and are stocked with ample soda, alcohol and tobacco products.

Don't get me wrong, there are plenty of people that merit food stamp assistance. But there are many in the system abusing it. Ten percent or 32 million is too many, at least twice as large as it should be.

It amazes me that so many people think government is the answer to our social and economic woes. The government is incompetent in just about everything its does. It cannot run a a food stamp program, it certainly will not be able to run an efficient health care system.

NCAA Division III Baseball in the Northwest League

The past weekend, I was in the greater Portland area to watch NCAA Division III baseball within the Northwest League. A neighbor of mine has a son that plays, plays pretty good at that.

Lacking the money Division 1 schools have, the players have a role that goes beyond playing the game. Besides posh facilities and travel amenities, they are responsible for the field. They handle the infield tarp, rake the infield and batting area, paint the bases and home plate, and chalk the foul lines and batter's boxes. They care for the hitting nets. They handle between innings music and the walk-up music for each home player at-bat. They care and wash their own uniforms.

These schools do not offer athletic scholarships. Financial aid is needs-based. Players' families or the players themselves handle their educational costs in whatever means they can -- savings, second mortgages, loans.

I was impressed by the fans -- mainly parents, family members and fellow students. There were probably 200 fans, close to half from the opposing team that was located about two hours aways by car. The bulk of them understand the game of baseball. It is simple to strike up a strategy conversation with just about anyone.

The schools are primarily liberal arts institutions with enrollments in the 1500-3000 range. Many of the schools in the Northwest Conference are affiliated with Christian religions including Quakers (George Fox), Baptist (Linfield), Lutheran (Pacific Lutheran), Presbyterian (Whitworth)and Methodist (Willamette).

The baseball season is short -- around 10 weeks. They tend to play back-to-back double headers. Because they are in the rained-soaked northwest, they have many rain-delays and rain outs. Make-up are the norm. We experienced a double header rain out; they just extended the series another day.

The hitters and fielders a decent, some quite good. What they lack is deep pitching. They usually have one or two decent pitchers but nothing significant beyond that. It is the same everywhere: never enough quality pitching.

Division III baseball is fun. The players are serious; they love the game. Very few will play professionally at any level. They are getting great educations and will contribute to society in other ways, always cherishing their college baseball days.