Saturday, January 28, 2012

President Obama does not understand technology development

Do you remember the rotary engine? It was going to revolutionize the auto industry. It should have, if the potential had developed as expected. Maybe it will someday, although time has a habit of making new ideas like the rotary engine obsolete before its time. Technology does not always go the way that you want it to develop.

History is full of examples of this kind. John Ericsson designed the U.S.S. Monitor. This revolutionary vessel had the worlds’ first rotating turret, something ALL warship design had from that time until the present. He invented a way to absorb the recoil of the guns because the turret did not have the space necessary to use conventional methods. The guns themselves were much more powerful because he had placed white-hot rings around the base. When they cooled, they were able to absorb a much greater shock from the larger powder charge that was loaded into the weapon. Yet John Ericsson also invented a new version of the steam engine. The small models he produced were wonders, but he could never get it to work on a large-scale engine. The invention of the internal combustion engine made his idea obsolete.

The point being that technology development can’t be pre-planned or pre-determined. Nobody could have known the impact of the rotating turret, or the problems in the rotary engine. Nobody can predict how effective solar power or wind power will become. It is foolish to attempt to make an artificial market for products of this type. The market will evolve and grow on its own if the product is useful and economical. Just look at the history of development of new inventions that have taken place in the United States from the early 19th century onward. President Obama either does not understand this concept, or else believes that he can allocate our national resources better than we can.

I keep hearing how the Obama administration is emphasizing so-called ‘green’ energy, like solar and wind power. At the same time, President Obama is attempting to limit the growth of the major, known source of energy in the form of oil. After the Gulf spill, new exploration and development was brought to a halt. The new pipeline that was to go from Canada to the Gulf is on hold. It appears that President Obama believes that he is correct about where to ‘invest’ our national energy resources as opposed to the experts who have been inventing and developing these resources for more than 100 years. At the same time, he is virtually ignoring the ONLY new power source invented in the past 100 years. (Nuclear)

Not that anyone knows which power source will eventually take over the position that oil holds today. The point is that it is better to let those who will benefit the most from new positions to be the ones who will decide where to ‘invest’ the resources of research and development. The history of the United States is VERY clear that PRIVATE ownership of the means of development and production is the most practical and accurate method of invention and production of new energy sources along with just about everything else. The exception is for those whom it is to advantage to have it otherwise. As we are seeing today.

Tuesday, January 24, 2012

President Obama does not know much about finances

It all boils down to what you believe: If you have the ability to obtain an extra $5000.00, do you believe that you can handle this money better than anyone else can? (Government) Our country was founded upon the principal that the private individual (And organization) could and will allocate resources better than government. Our current President does not believe this. He believes that he can spend my money better than I can. A problem here is that President Obama does not understand basic finances.

If you were in financial trouble, whom would you call? I don’t know about you, but I would call a guy who was successful. (Yes, someone who was much ‘richer’ than I) Why would you bring in someone who was broke to help you set your financial house in order? This broke guy would be much more likely to steal some, if not all of what you do have than someone who was ‘rich’ and did not need your money. Besides, a guy who is broke is also much more likely to be envious of what you have than someone does who already has much more than you. On a national level, many people do not believe our country is in financial trouble. Even our President seems to disagree.

President Obama has claimed that he has saved us from falling off an economic cliff. I believe that this guy does not even know what an economic cliff is. After all, he did not have any real money when he took office. He does not have the knowledge and experience to even know what he is speaking about. His actions demonstrate this as well as anything else we can see.

The fact that our current President has not passed a budget in the 3 years that he has been in office tells us a great deal about his economic prowess. How can you get your financial house in order if you don’t know what your economic position is? How can you tell if you are reaching your financial goals if you don’t know what you are spending or what your revenue is? Balance sheets and budgets tell you this. President Obama’s recent call for more spending to ‘stimulate’ our economy tells us that he does not understand the first rule of getting a handle on financial trouble: Restrict spending to the level BELOW what you are taking in. His answer is to just raise income. (Taxes on the ‘rich’) This answer has a twofold problem:

1) It is not always possible to raise income. (You may raise taxes, but the net income generated from this will not necessarily go up)
2) Raising income does not address the real problem of imbalance in spending. In fact, raising income tends to cover up this important issue.

How many times do you hear about that ‘rich’ professional athlete who goes broke within a few years after he/she retires? Or how about the person who won a lottery who went broke? It was not income that was the problem. It was spending on assets that are expensive to maintain. As soon as the income begins to fall, as it inevitably does, they are in trouble because the spending is on a higher, fixed level. This is EXACTLY what President Obama is doing.

Government pensions and interest on our debt are the fastest growing costs. Without restricting spending, it will prove impossible to contain these two important items. As Greece and Italy have found out. And if the U.S. does not change course, we too will find out all about it.

What concerns me here is that so many still believe that Democrats are the ones who will be able to solve this problem. Democrats supposedly represent the ‘poor’ and ‘working classes’; who don’t have much in the way of assets or income. Republicans supposedly represent the ‘rich’ who only want to protect what they have. And yet, why would you choose a side that does not handle resources well over a side that supposedly represents successful financial practices?

The answer is jealousy. If you are envious of the people who have more than you, it makes sense that you would pick someone who tells you how bad these people are and how much better off you would be if you chose a different path. In other words, class warfare. President Obama does not know how to make our country’s economy run better. He is relying upon envy, jealousy and class warfare to keep the support of ‘the working class’, so he can accomplish his agenda. This way, we will all be the same. We will all be broke. Then we will all be better off. This is not financial awareness nor is it financial skill. This is taking advantage of people who do not know any better.

Saturday, January 21, 2012

Investment income

The attention that Mitt Romney is getting because he pays a 15% rate on most of his income illustrates a common problem we have in this country. It is called envy. Another way of putting it: Why should he pay less than I pay?

Unearned income is taxed at a lower rate than earned income. In the distant past, it was not taxed at all. This was because the economic system that we have here in the United States needs capital in order to finance organizations that are the means of production. The idea is that taxes had already been paid on the earnings that had been saved. It was ‘after tax’ and any income generated was payment for the risk assumed by the investor. Even interest earned from a basic savings account is taxed at a 15% rate.

Savings are the product of your ability to spend less than what you make. This is basically what profit is, the difference between what a business spends and what it takes in. In other words, this is where the CAPITAL in capitalism originates. A high savings rate is not just a good thing for our economic system. Saving (profit) is the very lifeblood of the system. Taxing this is fraught with danger in that the system requires a certain level of re-investment just to maintain itself. Otherwise, it begins to shrink and becomes less effective as capital becomes more expensive.

On the other hand, not taxing this allows the system to build upon itself, which is EXACTLY what the United States did for well over the first century of our existence. Capitalism works by the slow accumulation of wealth through the re-investment of savings or profit. This is how the United States built the most powerful economic engine ever devised by man. Taxes are withdrawals from this system. You can do it, but you pay a long-term cost. And if you over withdraw, you can damage the structure to the point of bankruptcy. And we are doing this because some of us are jealous that others have accumulated more than we have. This is class warfare.

I am pleased that Mitt Romney is able to generate enough income that he does not have to work for a living. I wish that I could do the same. I have unearned income that helps my position. I gave up a lot in my past in order to accomplish this. I am also very proud of this. (I have always believed in multiple sources of income) Why should I be envious of others who have more than I? Why should I be jealous if I have to pay a higher percentage on my earned income? And most importantly, why should my interest or unearned income be taxed at the same rate as my earned income? In fact, why is it taxed at all?

I paid tax on the accumulated savings already. And I have assumed risk in the investment that is generating this ‘unearned’ income. I have had numerous failures where I lost my entire investment. Where was our government? I did not see any refund for ANY of my losses. In some cases, I was able to offset some of my losses against other income, but I still lost. That is the chance that I took. Which is why I receive money in the cases where I am successful. And this should be taxed at the same rate as ordinary income where someone else takes the risk and the only risk I assume is my time and labor? No wonder our economy is in such trouble. We have only our envy and jealousy to blame. This is the basis of class warfare.

Wednesday, January 18, 2012

Israel is on the front line

I find it interesting in this presidential election year; the confrontation with Iran is growing so heated. Well, with the course that the U.S. has been taking, it could have only been a matter of time. I guess President Obama does not believe that Iran is really all that much of a threat. Iran certainly is not the threat that the old Soviet Union posed.
After all, the Soviet Union has possessed the ability to devastate all of Europe AND the United States. The result could potentially make the entire planet uninhabitable for human life.

The Soviet Union WAS a very existential threat. However, they wanted their grandchildren to grow up. They proved it in 1962 whey they literally turned THEIR ships around. President Obama apparently believes that if faced with a similar situation, Iran would do the same. I do not, but in any case, Iran is certainly NOT the same threat that the Soviet Union posed. But what about the threat Iran poses to Israel?

Israel is a very small country. Only one or two nuclear explosions would end it all. By comparison, the United States could withstand several and would recover. (I am speaking of the physical damage and leaving out the potential threat of the EMP) The point I am attempting to make here is that although we have a lot to lose if Iran begins to wage nuclear warfare, Israel has more at stake. On top of this, Israel is far more likely to be the target of a nuclear attack than the United States. In other words, Israel is the front line and the United States is the reserve.

If Iran does start a nuclear war; most likely Iran and Israel (As we know them today) will cease to exist. The United States will likely survive. War is always a great gamble. What our current President is effectively doing is betting Israel’s life against the possibility of Iran choosing life, losing ‘face’ and ‘turning their ships around’. The way that I look at this is to not bet someone else's country on it, which is EXACTLY what our current President is doing. At least if you are going to bet someone’s life, it should be your own.

Saturday, January 14, 2012

The war is NOT over

Now that the U.S. has withdrawn from Iraq, we are beginning to wind down our activity in Afghanistan. Osama Bin Laden is dead. It certainly appears that many here in the U.S. believe that the war is over.

Although I did not expect us to get Bin Laden, I have expected President Obama to withdraw from both Iraq and Afghanistan prior to the election cycle of 2012. The death of Bin Laden is a great reason and excuse to execute what I believe was a priority of President Obama during his first term of office. The problem is that this is not the end of the war.

Osama Bin Laden believed himself to be a soldier of Islam. (Although I do not think of him as having been a ‘soldier’, strictly speaking, he was a soldier of Islam) He believed that Islam is a sovereign entity and acted upon it. He believed in ‘occupied’ Muslim land and Muslim ‘waters’. Notice how no nation would accept his body. Even Iran wanted nothing to do with his body, except for insisting that the body be treated in Muslim tradition. Bin Laden was loyal to no real nationality except to an Islamic caliphate. He believed in the national entity of Islamic government and was an Islamic nationalist. This belief is by no means uncommon, although he was more extreme than many and had plenty of resources to be able to act upon those beliefs. This is where the war begins. Take Iraq for example.

The U.S. invasion of Iraq was resisted by not only the Iraqi military/population. After the fall of the Iraqi government, Iraq became ‘occupied’ Muslim land. Therefore, those who believed in Islamic sovereignty fought the United States ‘occupation’. Bin Laden’s forces were actually a minority of those that were deployed against our military. I am not referring to nationalist Iraqis. I consider Sadr to be one of those who fought for Islam, not Iraq. Sadr was an Imam who fielded his own militia to repel the ‘occupiers’ of Muslim lands. The army of Islam was mobilized, much the same as those armies of the Middle Ages had been, and how Islam has historically fielded its armies. Another case in point: Israel.

Arabs don’t really care about the Palestinians by themselves. Otherwise, they would accept the Palestinians within their own countries. They do not because they want to use them to fight the ‘occupiers’ of Muslim lands. In other words, Israel is ‘occupying’ land that Islam had controlled in the past. This is why no peace can be found without the destruction of Israel. A problem here is that even if the land that Israel is on does revert to Muslim control, the war will not be over.

By withdrawal from Iraq and Afghanistan, the United States is not challenging the sovereignty of Islam. Because so many believe in Islam as a national entity, they will continue to wage war against us. The war will only move on to other places where Islamic nationalism conflicts with modern nation-states.

I don't know much about Ron Paul, but he (And the American public) is DEAD wrong about the war in Iraq. We attracted people who want to kill us into Iraq, a desert that is ideal for mechanized warfare, which the U.S. excels at. The match up was good for us, bad for our enemies.

The problem is that we are leaving. The war has not really begun yet and we seem to think that it is over. Our enemy is committing some assets in Afghanistan and Iraq, but the attrition is down. So the extra assets will be deployed elsewhere. Not a good match up for us. Our schools and shopping malls (I count the western world as being us) against their suicide bombers and people armed with machine guns. This war will go on. A major problem here is that time is NOT on our side. It can only be a matter of time before our enemies obtain WMD. Once this happens, all of the wars going on will be minor in comparison to the casualties that will be inflicted.

Wednesday, January 11, 2012


Something BIG is going to happen in the next two years. More likely this year rather than next. We just have too many things going wrong. Poor leadership from the U.S. leads the list. The U.S. debt is only beginning to be burdensome. (By some measures, debt has reached 100% of GDP) The out of control government pensions has only begun to bite. The debt of Europeans is creating 'crisis' after 'crisis'. The U.S. is having economic crisis after crisis as well. Just raising the debt limit is a good example. Then we have Islamic nationalists who are gaining the power of governments at an astonishing rate.

It has been a long time since the world has seen a major war on anything like the levels of the first half of the 20th century. All it is going to take is some unforeseen event that upsets the house of cards. I suspect that it will begin with an economic event. I am a firm believer that people fight over scarce resources more than anything. All it will take is some traumatic economic event. I hope that we will be able to avoid this. From what I am seeing today, I doubt that it can be held off for more than another year or two.

Saturday, January 7, 2012

Who are the 40+% who back President Obama?

Recent polling data has suggested that President Obama’s support has dropped back down into the lower 40s. A question that I have seen asked that got my attention was: Who are these 40 percent who still support him? Why are they so dumb?

1) Large percentages are believers in government running the economy better than the individual or private sector. On the Republican side, we have believers in capitalism.

2) Another sizeable percentage are those who are dependent upon the government for their means. Both are large motivations to see things in a different light than those of us who believe that the history of the United States proves differently. (1 and 2 are probably combined in many cases)

3) Another significant portion are those who vote Democrat in general. No matter what they vote Democrat (I am certain that Republicans have this type of support as well) I count my wife in amongst this group. Her family does not discuss politics. They avoid the subject because it can cause arguments. As a result, all of her family is rarely exposed to opposing points of view. I seek this out. This is why I watch Rachel Maddow, CNN and read articles in the Huffington Post. My family discusses politics and we argue. It is good practice because I do not insult any member of my family. We attack each others position, not the person. (This is probably where my wife’s family has trouble)

Wednesday, January 4, 2012

Rachel Maddow does not know who we have as President

I have viewed a clip that has Rachel Maddow blasting President Obama for signing a law that allows for “prolonged detention”. I find this interesting because Rachel Maddow is a strong supporter of President Obama. It appears that the signing of this law that she recognizes as a threat to our republic is a surprise to her. While it is no surprise to me, I have to admit that I have been surprised by leaders that I support from time to time. But the surprises that I have had to endure are in no way like her surprise. Two examples I can think of.

President George H. Bush when he raised taxes. I believe that he did that to get Congress to agree to go to war against Iraq in 1991, but that is my take. The other surprise was when President Regan said that if we developed a missile defense, it might be a good idea to give that technology to the Soviet Union to enable them to protect themselves. After I thought about it, I understood what his idea was. I have to admit, he was more farsighted than I was because today, the nuclear threat is not so much from nuclear states as it is from Islamic nationalist groups that obtain nuclear weapons. It would be in mankind’s best interest if most, if not all nations have this technology. (Also no surprise: Our current leader is dead set against development in this direction of any kind.)

What interests me the most here is that although I have been surprised by leaders that I have supported, that surprise was not anything that was a real threat to our republic. It must be quite a shock to someone like Rachel Maddow who believes that HER side defends Civil Rights far more than those Republicans to find out that a President that she supports is taking action so blatantly against Civil Freedoms. I doubt that it will change any of her views, as it should. My view has been and still is that Democrat economic theory will eventually be a major cause of the loss of our representative government. I see President Obama as only going about it at a much faster rate than any of his predecessors. The point is that even now, supporters like Rachel Maddow really do not understand the implications of the leadership that they support.