Myth#15 We were innocent in causing the big recession.

Unemployment Pain

10 % unemployment in America.  Horrible.  The real number is much higher if you count those that have given up and those that are underemployed.  The real number is about 17%.  For some minority groups the number is much higher.  With our population growth, we need 125,000 jobs per month created just to hold even on the percent unemployed.  Depressing as it gets.

Have you ever been unemployed.  You want to work, you want to take care of those you love and you have no job.  No one will give you and job and you don't have a clue of what to do.  It absolutely sucks.  It destroys your self worth and it hurts as you see your life savings disappear, your house be repossessed, and your children become homeless.  It is a very helpless feeling that happens to people that have done everything right their entire life, or at least what they were told to do, to see the lives unwind. Go to school, get an education, work hard and everything will be okay, and suddenly it is not okay. 

To a man where his identity in life is what is what he does for a living, it can be absolutely devastating. This can be as bad as not having health insurance, well actually the two go together in this country.  Not having health care is just another thing that happens to the unemployed in this country.

Did the recession cause this problem?  Of course, you say, its obvious.  Not really.  The jobs we had before the recession where not built on reality, they were built on loans from China, et al.  We borrowed money to buy stuff that kept most of us employed.  It was not real, it was not sustainable.  On average, Americans were living 20% above their means buying goods, which of course kept a lot of employed for awhile.

The challenge is simple, seven billion people on the planet want the life style that we have become accustomed to in the U.S. and they are willing to work harder and smarter than us to get there.  In athletics, we say they are hungry.  In contrast, we are not.  We expect the good life, we wait for it to come to us.  We use our military might, mostly in the Middle East, to protect our energy resources to try to maintain the life style we have become accustomed to. 

Side diversion, the 2016 Olympics.  Brazil won the right to host it as we all noticed it.  We were shocked that Chicago, the city of 37 child homicides this year, came in last.  Sadly, that is how the world now sees us, as Has-Beens.  And, there is too much truth to it, i.e., 17% unemployed if you count those who are no longer looking and/or no longer qualified for unemployment.

The government can help and is doing so now with infrastructure projects, and it can do more.  Government has to leverage its actions through small business.  It is simple, helping small business helps create jobs ... since most job creation in this country comes from small business.  What does small business need?  Credit, accelerated depreciation schedules, investment tax credits, medical insurance for its workers, and respect.  The government can also help with education, our only real long term path from being a Has-Been to being the Come-back-Kid.

But, in the end, recovery and full employment has to come from us the people.  We have to stop blaming everyone else for where our path has taken us and turn inward, and as JFK said, "ask not what your country can do for you, but what you can do for your country."

Myth #134 Justice is Black and White: Roman Polanski

The 13 year that was raped by Polanski is now over 40. This reminds me of the German officers that participated in the Holocaust. Some were not caught until they were in their eighties for crimes they committed in their 20's and 30's. Perhaps some of these men had grown into kind people doing great good for the world. Perhaps some had paid all they could pay for the horrific crimes they did and had suffered their punishment just being alive. I don't know, but it is possible.

Yea, Polanski was wrong a long time ago and should not have fled. I am assuming he has led a virtuous life since then, or at least stayed away from minors. The question is, is he the same person that committed the crime. Is revenge and punishment the reason that he needs to go to jail now?

Yes, I think he should be brought back over to face up to his past. But, it is not clear to me that what was decided about 30 years ago should still be the right thing to do now. The victim of the crime, the state, and Polanski need to sit down and do a lot of talking. It would be good to hear some remorse from Polanski, and some insights from the victim, and some flexibility by the law. In short, there should be a process, perhaps even a new trial. I don't know what the right answer should be, perhaps Polanski should go to jail. But, everyone needs to sit down and discuss this and figure out what the right thing to do is -- what makes the world a better and kinder place to live.

I guess I just do not believe in black and white.

Chicago ... Olympics or Children

Chicago ... Olympics or Children

Chicago has had about 37 children killed this year by gang violence.  Black kids mostly, so who cares.  Apparently no one.

Chicago wants the Olympics to come to Chicago in 2016.  Who cares.  All the rich people and people in power that are going to make millions from the big deals that will come down when billions are spent to construct the venue required for the Olympics.  What good does this do the kids that are getting killed.  Nothing, absolutely nothing.

What is important.  The kids or the Olympics. 

Where is our country putting the effort.  Well, it is not the kids.  Where is this country willing to put billions of dollars into to make everything come out all right.  It is not the kids.

Where are our values in America. Where are America's priorities?

Where is our country putting the effort. Well, it is not the kids. Where is this country willing to put billions of dollars into to make everything come out all right. It is not the kids.

Where are our values in America. Where are America's priorities?

What do our actions say

Teaching By Example

I have some great neighbors, they still have a few hill billy genes, but still they are good people. They try to raise their kids the best they can with mixed success. They do a lot of talking to their kids and they have  rules and take interest in their children's lives. It is obvious they love their kids. As a parent with three grown kids I have one strong opinion about raising kids. It is more important the example you lead in living your life than all the rules than can fill a book. For example, my friends smoke. What are the odds of the children smoking?


As a country, the same thing applies. We can talk about democracy, the land of the free, the home of the brave, etc. But, when we forgo the rights of anyone our government accuses of being a terrorist with or without any evidence, then what we say doesn't mean much. When we torture prisoners, then our grand words mean nothing. When we lie about our reason to invade IRAQ then our grand words mean nothing. When we ignore the violence in our big cities like Chicago and then pretend everything is okay because we want to host the 2016 Olympics there, our words ring hollow.


When we say bring us your tired and down trodden and then let 15% of our population have very little health care and provide no childcare for single moms, our words ring hollow. When our religious south talk about being our brothers keepers in their churches and then curse the poor Mexican immigrants, their religion and our country looks pretty lame. When we claim to care about humanity and then pass drug laws that turn Mexico and many other Latin American countries into drug supply centers, one is forced to laugh at our hypocrisy.


How we care for our weakest and our most downtrodden is ultimately how the world will see us. Our battle with the terrorists of the world and the fundamentalist religions of the world is not going to be won with guns and at the moment it is not going to be won with our noble ways. We need to find our values and live them, treating everyone with fairness and with fundamental beliefs that founded this country. We have parted from our basic values before, McCarthism was not that long ago. The way we treated the Japanese living on the west coast during WWII was not that long ago. Sadly, most Americans won't even know what I am talking about since we no longer even known about our heritage.


Do a random act of kindness tomorrow, start turning around America one small step at a time.

What Makes Something Right or Wrong

For many religious people the answer to this question is simple, what does the Bible say, what does the Koran say, then add it to some interpretation and some updating for a centuries and vola, we have a judgment. For instance, the Bible is pretty down on homosexuals and the Koran is pretty down on women being equal. Okay, so maybe I picked some bad examples, but many religious groups have magic books that they look stuff up in to determine what is right and what is wrong.

But, what is the path for us that don't see the light, that are agnostics, or atheists, or even worse scientists or engineers. Where do we look to find out what is right and wrong. First, it is my opinion that we are born with an innate sense of right and wrong that is then reinforced or torn down by those around us, usually our parents.

I also think we can get there my a rational analysis that shows that peaceful coexistence and the traits of the human that makes that possible maximizes the possibility for survival of our species. And if that is not the ultimate goal, then the opposite path, and our destruction, seems in its own construction to be meaningless. What traits make peaceful coexistence possible: cooperation, respect, kindness, love, etc. would all seem to be right and the right thing to do.

There is yet another way. To look at mother nature, to immerse ones self in it and in its details, to find the reason for life and by example what is right and wrong. Look at any mother in nature and how they raise their children. Or wolves that mate for life and live in small communities to help each other survive. Our ants or bees and their complex societies. Or dolphins how they care for the well being of other species, even humans. All we need to know about what is right and wrong is acted out in front of us in the small amount of nature that survives our hard hand, the hard hand of its most powerful member of nature, humans.

A lot of our problems in our culture comes from our disconnection with our roots, nature. We travel on asphalt, live in buildings with artificial environments, spend little time and very little quality time with our mates and family. Vacations are spent in cars, man made amusement parks with their fake water rides, etc, eat in restaurants with their sugar heavy deserts, and never converse with another human about anything important. Our whole existence is about commercialism, the maximum extraction of commodities, fuels, etc. out of the ground for constructing our artificial worlds. We form communities like face-book and thoughts to fill in for the communities we have lost in our race for prosperity, the filling of our lives with imitations of life, which makes me think of the oxymoron of reality TV. Our aliments reflect our loss of our connection with nature, obesity and diabetes are two examples. Cancer one day will surely be linked to the vast use of chemicals that we use carelessly in our lives starting at our birth.

Right and wrong is right out your door in the spirit of the robin that comes in spring, the geese that come in the winter, or the spiders that hunt under your porch. It is with great care that we must use our intelligence in altering our world away from where nature would lead us.

Dire Times and the New Currency, Energy

We are not living in the best of times.  That may be a huge understatement.  Do I think as a country we are going to fall off the cliff.  I guess if I had to pick yes or no, it would be yes.  The yes comes from our inability to see that times have changed, our position in the world has changed. 

We are no longer the richest country in the world by almost any standard.  And our live style is declining by all standards.  Why? Is it us?  Is it our rotten politicans who clearly work no longer for us but to be re-elected?  Well, perhaps in part. Our addiction to consuming and our politicians self interest makes a hard problem almost impossible to solve. 

Energy, cheap energy to be more specific is a thing of the past.  It is no body's fault.  It was given as a gift to us by mother nature and we have squantered most of it ... well, the part that is possible to pump quickly to the surface anyway.  Saudi Arabia is sit sitting on a gold mine, but it is already shrinking so fast that their next generation of the royal family are not getting the stipens they have grown accustomed to.  Bribes to fix stuff in the U.S. political system are not coming as fast as before.  Economic bailouts to buy American military equipment are down.  And, they are having trouble paying off the terrorists to keep them from turning on the hand that feeds them.   But, that is just one small point on the planet.

Nuclear power seems to be the only short term solution and the democrat party will never admit this.  France now gets 72 % of their energy or similar from nuclear power plants.  They now sell power to Europe.  The risks associated with nuclear waste, which are very manageable from my engineering perspective, are small compared to what is going to happen to our society has energy becomes unaffordable.  With affordable energy, all other economic problems are fixable.  Without it, no other economic problem, including health care, is managable.  Our currency is going to go down the tube to prove this point, since it is based on nothing, it has no Energy, the new currency, behind it.

It gives me on satisfaction to say this problem has been coming for a long time and we have been sticking our heads in the soil.  But, that is the way it is.  Carter, Nixon, Clinton, Bush 1 and Bush 2 all gave great speechs about energy and then did very little.  Obama has spoke waxed eloquent on the subject, but it is not his highest priortiy.  If he has to pick medical or energy problems to address with his popularity, the correct long term answer is energy.  It is the foundation on which are society is based.  Energy will give us the "energy" to address the medical problems.  Until then, some rule changes in the medical field would carry us for a few more years and allow us to address the one problem that will not go away, how to power the world we have created on low cost energy.

Well more later.  When I will try to do better stating the obvious.  A world built on cheap energy quits working when cheap energy runs out. 

Nuclear Weapons

Russia and U.S. Presidents are going to get together this month and agree to reduce our deployed, not including stock piled, nuclear weapons to less than 1700 in the near future.

Back in the day when they used to worry about such things, it was estimated that it would take about 100 nuclear bombs to bring on a global winter which would wipe out mankind.  Given the inter-connectivity of life and the delicacy of life in general, this is probably a high side number.  Like it matters.  In any case we will agree to only keep enough nuclear weapons to wipe out the planet 17 times each.  How noble of us.  We (humans) are idiots.

The nuclear club is about seven or eight if you don't count our two newest members Iran and Korea.  The new members are not as revered as old members like Pakistan and China.  Or as righteous as Israel or as just as Great Britain or as proud as France or sacred as Indian, but they are our newest members and deserve all the respect that countries with nuclear weapons deserve.  God bless such self righteous idiots.

Nuclear weapons are like using hangernades to get rid of flies or ants in your house.  And those with those weapons don't want anyone else to have them.  Obviously, one of the most war-like countries in the history of the world (that would be us if you haven't noticed) is to be completely trusted with these toys, but no one else.  Daah.  No one should be trusted with the ability to destroy our planet.  Can you really imagine that we trusted Jehovah Bush with this power. We are idiots.

With kids, and I have learned it applies even to countries, it is not what you preach that matters to most people, it is what you do that matters.  The U.S. speaks great volumes when it agrees to cut the number of nuclear weapons to 1700, if and only if, Russia cuts the number of nuclear weapons to 1700.  Why not be daring, cut out nuclear weapons to 1699, set a real example for the rest of the world.  We are idiots.  Why not cut it to 100, or the correct number to just wipe out the planet once.  If we miss a few people, Russia can take up the slack.  If Martians some day look at our game plan on nuclear weapons there is only one conclusion they can reach. Humans were idiots.

Lost Paradise for Our Children

I am an old fart, in body if not in mind.  I don't much care what happens to me, I have had a great run in my life.  I have lived through the most amazing time in American / World history that will ever be, I think.

I was born right after America with a little (lots) of help from the Russian won the great war against Hitler.  I witnessed the greatest creation of wealth and prosperity the world has ever witnessed.  I witnessed an effort to eliminate prejudice against blacks, gays, women, fat people, etc. An absolutely amazing period in American, and World, History.  Perhaps not since Jesus have people had more hope than we had in the sixties.

In art, we had John Lennon who imagined a world without heaven or hell when it was not popular to do so.  Simple men like Mohammid Ali stood against the government and the killing of people our rulers had decided were evil.  Martin Luther King spoke of the promise land, but like Moses, never got to see it.  Kennedy asked the people to not ask what the country could do for them, but what they could do for their country.  I am afraid the last remarkable thing we will do is to elect Obama.  It is our last gasp, perhaps.

Where did we lose our way.  It is actually quite simple.  We gave up the religion of the Bible and put consumerism in its place.  I do not support either religion, but the masses do.  Perhaps another religion that competed with consumerism is a complete faith in science to solve all our problems.  But, problems of humanity are not external, they are internal, inside the soul, and I use that word with caution. The world as we see it is a reflection of what goes on inside our minds, our souls.  Our thoughts and attitudes ooze from our body and color the world as we see it.

Our economic and social well  being derives from who we are as a people, and that derives from who we are as individuals.  Loving your neighbor is important to insuring our survival as a people and as a way of life.  And, unfortunately, consumerism does not teach such basic truths. The old religion, that I desserted 32 years ago, at least gets this right.  However, the followers of this religon mostly do not apply this principle, so either way, society is doomed.

Now my kids, what kind of world do they inherit.  First, a world that believes in nothing.  Second, they live in a country that is a military superpower but a declining economic superpower.  The superpower part came from a people that dared to dream and believe in a just world.  My children do not give such things much thought and my children are much above the average.  They are great kids.  All of them smart, all of them trying to do what is best and right, which is more than you can say for most. But, they are lost in the quagmire of American life.  The strength of a people come from their beliefs, and sadly our beliefs center around out doing the Jone's.   There are many wonder exceptions around me, but exceptions must become the norm to change the tide.

Our future at the moment depends more on the Chinese than on us.  Its an economic reality.  If you don't know what I am talking about, start reading, figure it out.  The Chinese culture is very old with a lot of wisdom embedded in it.  The current leaders, communists, do not yet reflect the whole of China.  The people of China understand many things they understand about life that we do not understand.  So, them holding the future, or the next hundred years is not necessarily a bad thing for humanity.  It is hard on the white, Anglo-saxon, protestant mentality, but not necessarily bad for the human race. They have a lot to teach us about families, community live, devotion, cooperation, and the good of the whole.

In all, the transition will be tough on my kids.  But, hopefully, they will adapt, accept the new world order and not be stuck with the attitude that we are the greatest.  Not even Mohammid Ali believes in being the greatest in the broader scope of humanity; his humility in later years testifies to this.  In the end, it depends on values, on morals and the courage that comes with living one's life based on principles.  For my kids, I am optimistic that I have helped to give them a set of values that will lead them into this new world.  I am not as optimistic about most of America and their children.  Perhaps this is egotistical, and maybe it is, but I have been fortunate to have children that embody the person(s) I would like to be, perhaps better than I do myself.  Today, Michael Jackson and Fara Facet died.  Michael J didn't seem to me to have a very good life based on what I think I know about him, but who knows.  Fara seemed to be a pretty cool lady.

Socialism for America

There is a lot of fear these days that we are turning socialist, or even worse.  With the government taking over the banks, owning part of the auto makers, and now jumping into modifying medicine, people fear this is the first step in the government taking over the private sector, i.e., socialism.

Well, I would say to those people you have not been paying attention for the last twenty years.  There are three big sources of power in the U.S.,  the two political parties and big business.  The lobbyists are the go-betweens, the grease that makes the machine work.  This was called, the balance of power.  No, the people, the electorate didn't really matter, still don't.  Only 20% of the electorate vote any way, they don't care and they gave up power a long time ago. 

The balance of power has gone amuck since the republicans under their fearless leader shot their wad on Iraq (I almost slipped and said Vietnam, being from that era of time).  All their political capital was used up with the illusion that we, the U.S., still controls the world.  We don't and we control less with every day that passes.  The world is being remade as we speak, primarily by the Chinese, but many others like the Indians or the Middle East are not far behind.  They have the money, we have the debt.  While we worry about petty things like illegal immigrants, with a country we should be in bed with to improve our competitive position with China et al, we haggle over immigrants and continue to fight a war on drugs that has not worked for fifty years.

So now, we are left with just the democrats and big business.  We probably have sixteen years of democrats to look forward to, eight with Obama, eight with Hillary.  Sixteen years is probably enough time to recover from Iraq since eventually the electorate will forget how it all got started, and/or they will remember the democrats were more midgets and funded the effort.

But, what we all forget is that MONEY controls the world.  MONEY and power are very close cousins.  So, who controls the money, China.  China controls the money that the democrats need to continue their illusion of being in control of life in America.  If you are familiar with fishing, I would say that China is about ready to set the hook.  When a big mouth bass picks up your plastic worm on the bottom of the lake, he sucks it in and starts to swim away with it.  If you jerk too soon, you pull the end of the worm out of his mouth.  If you wait too long, he feels the hardness of the hook embedded in the worm and spits it out.  But, if jerk hard at just the right point in time, then the hook pulls through the plastic worm and embeds itself into the jaw of the big mouth bass.

When should the Chinese jerk the line and set the hook.  I would say right after we have sucked in the big juicy worm of health care.  Let us put one more bag goodies on our shoulders that we cannot afford, and then ask the Chinese to fund it by buying our bonds, bonds that we can not possibly repay already.   In this case, setting the hook just requires them to purchase the debt of Europe for a few months instead of U.S. debt and/or move more of their cash into their own domestic economy, which is harder than it sounds while trying to remain in control of all major decisions.  Market chaos could be China's friend, but they are not likely to embrace it too hard or too soon.  In short, we might get lucky and they may not set the hook.

Turning to socialism, nah.  We already have a system.  I struggle for words to describe it, but  lobby-ism, nepotism, oligopoly, etc. are all close cousins.  We don't even have any serious journalism challenging the system, and even if we did, the electorate doesn't read anymore, even the ones that vote.  We get our thirty minutes of news, superficial, negative and self-focused with the illusion that only what happens in the U.S. matters.  The news is only one step ahead of our obsession with reality, or more properly phrased, nonreality shows.  The public is there ready to reprogrammed as required by skills first learned and developed by the marketing people that sold us commercialism, but now used to sell us Presidents and weapons of mass destruction, whatever it is required for us to believe. 

So where does it all lead.  Its simple, are children are going to be indebt to the Chinese.  The Chinese communist party to be more exact.  We have been in the feed yards for twenty years.  We are now fat and ripe, our children have been delivered like veal to the fat business man, and there is really no way out.  I suppose we could all bolt and charge the fence, but I suspect that we could go more like lambs to the slaughter than our forefathers that dumped tea into the ocean.  Hopefully we are at the bottom of the cycle and it is not all doom and gloom like I painted here, but at the moment where we are headed looks like a continuation of where we have been going for twenty years.  And yes, all things are self correcting and eventually the pendulum will swing the other way.  After all, even the dark ages only lasted a few hundred years.

Escaping Capitalism

Capitalism is not a religion, or science, or even a set of rules. But, it is a reality. Capitalism governs the flow of money between makers, consumers, governments, countries, etc. as elequountly as the laws of nature control rain, and water moving between rivers, streams, oceans, the sky and even underground streams. If you disrupt the flow of a steam, say with a damn, the water builds up and for awhile you can deny water access to the river and even the ocean. But, it is all temporary.

By the first level of the laws of capitalism, a lot of banks should have failed. They performed poorly and under free market principles they should have been allowed to fail. But, we decided that we could throw a damn in the river and prevent the natural course of things. Yes, and we have prevented the banks from failing, even though they did a crumpy job at managing risk. In fact, we have reinforced bad behavior. Our children have spat on the floor and have been reward with money from the government. They can do nothing to deserve failure, we will prope them up and guarantee they can fail. The cost, trillions of dollars, for this "no lesson learned" lesson.

How exactly will this play out. I don't know. I know we were afraid to let it play out. We did not trust the basic principals behind capitalism. We decided we could stop the natural order of things, stop those that have been stupid from failing. But, all we have done is dealing with the problem. We think we can write new regulations to keep the same problems from happening again. But, these are secondary laws, much less than the primary laws that says when you take excessive risk and fail you die. Our new regulations will try to make taking excessive risk illegal, but our actions say if you do, we will take care of you, we will hock the American people to take care of you.

An alternative would have been to kick the owners of the bank out, sell their assets to other banks, and insure the accounts of those that used the bank. In other words, take care of those that were harmed and punish those that were stupid and took excessive risks. I suspect those at the top of the banks were really good buddies with a lot of the government officals, in short, they were all part of the good old boy's club.

How will it all come out. I don't know. What I think will happen is the value of our dollar will fall, we will suffer inflation similar to 1974, and we will repeat the same mistakes somewhere in the future, because we avoided the lessons that capitalism was trying to teach us.

Violence in Mexico

 I don't know how many of you have witenessed the violence happening in Mexico.  The police and the drug lords are in a full fleded war.  And guess what, the police are losing.

Of course, we, the Americans, are driving all this with our thirst for drugs: pot and coke being the two highest.  I don't use either now but I have tried both, especially pot.  Of course, I use alcohol, a drug that in my mind is worse than either pot or coke.  And if you throw tobacco into the mix, then pot and coke are health drugs.  And we subsidize tobacco production by giving them subsidies along with other rich farmers.

How hypocritical can we be?  Our hypocricies are costing hundreds of people their lives and is destabilizing an emerging country.

The answer is simple.  Legalize pot and then tax it.  See how that works out and then consider coke.  Make it legal and put the bad guys out of business.  The other option is the drug on wars and we all know how well that is working despite the billions we continue to spend on it each year.

Julie's Health not so Good ... Letter to my son

Mike,

I take Julie to the eye doctor tomorrow.  Julie tried to read her email last night and then came up and took some Alleve and went to bed.  She said her head was still hurting when I went to bed a few hours later.  Julie stayed in bed until 3 pm today, afraid if she tries to use her eyes the pain will return.  At first it was just small type, then newspapers, then emails.  Now, she says she sees a hole in the tv screen.  In retrospect, it has been going on for about a month, but at first the symptoms were similar to mine ... threading a needle with thread, etc.

Julie is also clearing her throat more than normal, her balance is not good, and I believe her cognitive abilities have declined some.  The throat clearing was the first symptom of her cancer last summer ... it was cancer in her lungs.

Your box is on the floor, it has been there for two weeks.  I will try to mail it tomorrow.  I have two addresses, update me on the best address ....

Dad

P.S.  I am going to put this note on the blog along with some pictures.  Ashton has taken it personal mission to watch out for Julie.  He spends most of his day at her side watching her every move.

 

Ashton feeling a little down, below ...

The American Consumer

The American consumer (AC) has kept the world economy going for decades.  However, starting about ten years ago, the consumer kept the world going by using credit. The credit has run out, the world economy has collasped.

We are still taking actions to try to revive the AC.  He is ill, perhaps terminal.  He will never pull the world economy by his coat-tails.  Unless.  Unless, we find away to pay the AC, who is also the AW (the american worker), more money or taxing him less.  This is complicated by the fact that 6 billion workers are all fighting for a job and an improved life.  Those on the bottom are naturally more motivated than us fat cats at the top.  The American Worker, the biggest of fat cats, is possibly going the way of the dinosaur.  Are the corporate VP's going to take less money to give the AW / AC more of the take?  Are all the governments going to tax less to allow the AW / AC to resume his piggish ways?  Are the rest of the WW (world workers) going to roll over and quit trying.  Are more dinosuars going to die to increase the amount of cheap energy (oil)?  Are we going to get smart enough in America to use nuclear energy and reduce the cost of our energy to make it easier on the AW.   I don't think so.  I think the AW, and hence, the AC is screwed.  And for awhile the world will be screwed until we get tv's in all the Chinese and Indian homes and create the new super consumer.

Note from and to My Son

hey dad -so i read the blogs.. actually before you sent your reply

you sound sad... which seems appropriate.  time are getting tough.  i was just talking to a girl that lost both roomates because they cant find work, and she doesnt make enough to pay the rent herself.. one of many stories i have been hearing lately.  everyone seems frazzled -including me -though i am more frazzled by everyone being frazzled than my own siutation.  i am not sure what i should be doing or thinking about at this point.  i stopped smoking pot about a month ago to help, but clarity isn't exactly what i am getting out of it.  i find myself wanting to drink more.  cookies are nice too. 

there are good things happening for me, but the shadows are all obscuring their brilliance.  i am getting closer to actually being able to screen print some stuff -which hopefully i can show you soon.  i am setting up a system to grow more worms and soldier fly larvae (big maggots) as an alternative to grain for chicken feed.  a few other things. 

keep me updated as much as you can- either by continuing on the blog or whatever..  thanks for the offer to come live up there with you -ill keep that in mind.  we are trying to be careful and not actually go broke.  being careful doesnt mean we dont fall though -especially if the ground is shaking.







Mike,

I will be okay.  Just bumped out at the moment.   Hard not to be.

There are market fundamentals behind all of this recession.  But, capitalism is also affected by emotion.  Unbridled  optimism and greed got us into this mess, and pessimism and fear will keep in the mess.  Our job as individuals is to keep the faith and spread a positive outlook.   This is a storm that we have to weather.  

There is a huge correction going on in the world.  The U.S. relative position is declining and resources are being redistributed.  But we still have a substantial advantage with our entrepreneurial culture.  What is very dangerous to our future well being is the attitude that government can solve our problems for us.  It can't.  Instead of doing stuff for us, it has to encourage and enable us move on our own.  Like a parent.  The current attitude that the government can bail us out is a very dangerous path.  The republicans had the torch and they let it go out.  The War undid them.  It became an obsession and they let the rest of the world and our country go down the tube.  The democrats are doing more of what got us in trouble in the first place, excess spending, cheap money, and a belief in itself instead of its people. 

A price will have to be paid for our debts.  I suspect it will come in the form of our dollar becoming de-valuated.  Hyper inflation.   Well this is not helping my state of mind.  

more later, 

dad

Spending our Way to Prosperity

Basics.  I learned long ago that I can do 95% of my job by just understanding the basics of science.  I am a high level knowledge worker, who is above average in capabilities.  Recent graduates often find that their new jobs do not challenge them.  However, this generality does not apply to politicians.  They have one overriding principal, get re-elected.  Promise great things, even things they can't deliver, and when they fail, make bigger promises.

What got the U.S. into the current fix.  Cheap money, the housing bubble, etc., we all know the standard lines.  Let me get down to the real basics: mis-allocation of  resources.  We borrowed and spent trillions of dollars to support an unsustainable life style.  And capitalism and market forces, like it or not, will punish those mis-allocate resources.  Loaning money to someone who can not pay it back is a mis-allocation, i.e., homes, cars, credit cards.  Starting a war we can't afford, and probably can't win by almost any standard, is a mis-allocation.  But there is something even more fundamental going on here.

Did you know last year that Chinese citizens bought more cars than United States citizens?  And, if the Chinese had of been challenging their resources more into their people, instead of supporting our government, the gap in cars, homes, etc. would have been even bigger.  China is the biggest producer of steel, concrete, and many other commodities used to furnish, house, and provide jobs for its people.  China starts up one new coal-fired power plant every week.

Now lets look to the Middle East.  Oil.  Oil equals wealth transfer.  Opulent structures such as ski slopes in a dessert that runs 120 to 140F in the summer.  New cities build by expanding the land into the ocean.  This by any sane measure is a mis-allocation for the human race. Where did this wealth come from?  Well, the number contributor on a per person basis is the United States.  This is where you dollars are being allocated, or should I say mis-allocated.  Will market forces punish this mis-allocation. Feel the pain the United States right now, that is the punishment.

Now our government has just come along a committed to spend a couple of trillion dollars in addition to two wars, an under funded social security system, and enormous interest payments on our debt.  The question is, how much of this money is a mis-allocation.

Do you know that in the past Argentina, Spain, France, England, China, Rome, etc., were all rich countries at one time.  But things changed, the world moved on and the United States got its turn at the top.  But, that is all it is.  It is not something destined to be by the gods for all time.  There is no such thing as a bank, or government that is too big to fail.  The big and the mighty, like the dinosaurs, stick around for awhile based on reputation, past successes, credit, etc.   Everything I see says to me that America is in economic decline.

There are a lot of drivers for our decline, but at a basic level is that we are not producing enough goods and services to pay for our life style.  And, what is the number one thing that we are buying on credit -- energy.  Energy is fundamental to our lifestyle.  Our lifestyle was built on cheap energy.  The day of cheap energy is over.  We are getting a brief reprieve since a person (country) laying on the ground (recession/depression) does not consume as much energy.

Why is energy fundamental.  Because with enough energy, we are now smart enough to make anything: crops, steel, copper, concrete, aluminum, cars, etc.  Sure as ore grades decline, it takes more energy to make copper, steel, etc., but given enough energy we are smart enough to make, to extract from our planet, a living.  This may not always be true, for instance, we may one day over-fish our oceans and destroy our ecology to the point that we can make all we need for seven billion people,  but my opinion is that we are not quite to the tipping point --- yet.  Today, energy is still king.

Whoever has affordable energy resources moving forward will prosper, those that don't will not.  The United States is already one of the most energy efficient countries if you measure it on a measure it against our GNP.  In short, we are efficient at converting raw materials into products.  And we will get better, its in our genes.  So what is the problem.  We consume too many products (translate too much energy) per person.  More than our share based on the energy resources that we have, that the world has.

So out of the $2 trillion we are spending on bailing out our economy and banks, how much is going to alternative energy.  $30 billion dollars.  You might as well go out into your front yard and piss on the ground, that will help us get more energy just as much as $30 billion dollars.  We spend $2 to $3 billion a week on Iraq, not to mention Afganastran  and our general military spending.

Do you realize that France, that we like to make fun of all the time, is much better positioned that the United States with regard to energy.  They make something like 70% of their electricity from nuclear power.  Their mass transit system makes Americans look like idiots.  Our fastest trains go about 100 mph.  World standard is 200 miles per hour.  Take a guess at how much more efficient a train is than a plane in moving people. My best guess is that a train is about 10 times as efficient as a plane in moving people.  I didn't see how much money we are planning on dealing with mass transit, but I suspect it less than the dollars we are spending, and will spend, on pumping up the big three (little three) auto companies.  Again, completely out of touch on what is going on at the global scale.

I have always aliened my opinions with mother nature, market forces, and other global forces (such as globalization) since in the end they always prevail against our feeble efforts as humans.  There are huge drivers, such as the end of cheap energy, that shape our lives.  We either recognize those changes and make adjustments or in the end we are ground up like rocks in front of a glacier.

Home Mortgage Crisis - Who is the Bad Guy

No relief has been offered to the millions of home owners facing eviction. 

There is a smug self-rightousness in America that says they should not have bought a house they couldn't affort. These homeowners that can't now pay their mortgages have become the bad guys to many.  Think again.

Imagine being offered the chance to own a home --- something you never thought possibe.   A place for you and your family.  Sign the dotted-line.  Can you pay this much a month.  Sure no problem.  Of course, this is the wrong question.  The real question is, can you afford this new payment in a year when your ARM mortgage goes from x % to 2X or 3C % rate.  Oh yea, please read the fine print.  Besides, in a few years when things change, life will be better, your job will be better, so don't worry about it.

Who was the bad guy.  The person wanting to buy a home for his family ... the guy trying to live the American dream, or the one that gave him the false hope.

One of the biggest challenges in helping those in trouble with their mortgage is the belief by many Americans that they do no deserve any help. Well guess what.  They should have been smarter, they should not have let their dreams cloud their vision.  But, now helping them helps save America, not helping them lets America keep sliding down the tube.  And, who would you rather help, the Executives at the bank that take the government handouts and then give themselves a bonus, or the common man trying to stay in house and keep his life together?

To me the only question remaining is this ... can Congress make a package to save these mortgage holders that is simple enough to work?  Keep it simple.  If you have a mortgage that is valued higher than the estimated value of your home, you qualify.  If you qualify, you get a 3% loan on the estimated value of your home (from 3 estimators).  That's all.  It has to be that simple to work.

Or we can keep watching the water spin out of the tub.

Israell: Responsibility of the Powerful

With power comes responsibility.   The power in this case is over life and death.  The ultimate power.  And Israel has it.   The people in Gaza are prisoners of Israel, and as such, Israel has a responsibility to care for their well being.

I watched on the news tonight young children holding on to their moms four days after their parents were killed by the Israel military.  And who does Israel think is responsible. Israel's official statement is that Hamas is hiding among the public.  So what.  Hamas is relatively powerless.  Their rockets don't work, they kill almost no one. They are, however, elected leaders of Gaza. 

700 people have been killed by the powerful.  UN relief efforts has been suspended after Israel killed a driver. The political pressure is growing on Israel to stop, although their military wants to destroy Hamas's ability to launch missles.  Of course, to guarantee this, Israel must continue to claim down on the blockade, keeping the Palestinians prisoners indefinitely.  So, what is the long term game plan of Israel.  It appears they do not have one.  They have created a nightmare with no end game.  It is illilogical and borders on being stupid.  No, it is stupid.  It is also inhumane for the powerful to be so calouse and stupid.

Now for the rest of the Muslims.  Saudi Arabia could end this rampage in one day.  Simple.  Shut off the pumps.  Pay the price, shut down the world, or at least, severely cripple it.  Of course, despite the fact that they hate the killing of Muslims, they don't hate it enough to act.  Yea, I understand all, or at least most, of the technical challenges.  Yes it is expensive and would require a huge sacrifice on many fronts.  And even worse, Saudi would release their real power over the world.  But, that kind of courage doesn't happen often, by anyone.

So, those with the power over Israel, the U.S. and Saudi won't act.  Israel will not accept its role as the powerful, the controller of life and death.  So, we all just sit and watch as humans kill humans and other humans provoke the powerful until they die.  It is good we are the most intelligent species on the planet.  Think how we would act if we were stupid.  My guess is not much different than we are all acting now.

Energy Scarcity the New Driver in the World Economies

The last couple of years have been colder than most global warming fans have liked.  My opinion is that the verdict is not in yet -- is the CO2 in the atmosphere rising because the temperature is rising as part of the normal cycle (ice age, thaw, etc.) or is the plant warming because of excess "CO2 gases" in the atmosphere.  But, the details of this discussion are not the point of this discussion.

While I agree that the science behind global warming may be suspect, I believe that our dependence on foreign oil needs to be reduced, nevertheless.   I am one of the those people that believe in the peak oil theory --- that we have reached the maximum oil production for both for technical and political reasons while the demand continues to grow.   China in five years or so will be sucking as much oil as we do.  Our economy falling on its face has just provided a brief reprieve from this "upper limit" on oil production.  (As a corrosion engineer for the oil industry, I see the oil composition on future deposits (five years out), and it is not pretty.  There is a biased look at the International Energy Agency (IEA) report below. The IEA report is more science fiction than the global warming theory by the way. )

I was in Oman this year and witnessed first hand some of the wealth transfer that is occurring from the entire world to the middle east.   Awesome and scary.  Nothing good I am afraid will come of this wealth transfer.

And it is not just oil.  There is a global shortage of energy.  In our technology dominated world, we can do almost anything, except peace, with enough energy.  Grow food, move mountains, build sky scrappers.  But, for the rest of human history, energy is going to be increasingly scarce and expensive.  It is going to limit development in the foreseeable future -- certainly for the rest of my life time.   Back to oil which is on stage now.

I firmly believe oil prices will go through the roof again ($200/barrel) toward the end of 2009.  By 2010 "peak oil" will bump into (1) the declining value of our dollar, (2) projects delayed by the current shortage of demand for oil, and (3) a rebounding U.S. economy to produce what will be called a world-wide shortage of oil and energy.  Short of a new war, ENERGY may finally get the attention it deserves.

If sanity prevailed we would see an increased use of electricity versus other forms of energy and increased production of electricity from coal, natural gas, nuclear, and wind energy.   However, sanity will not prevail in the short-run and instead we will see only significant investment in natural gas (supplemented by LNG) and wind power.  Solar will increase also, but we will struggle to supply 5% of  our needs in my lifetime. On the flip side, there is plenty of room for more energy efficient in air conditioning, building design and for more efficient autos.

 I look at all of this reaction to global warming as a move in generally the right direction for the wrong reasons.  There are some more fundamental problems in our world economy that we are not addressing.  The American Consumer has been the driving force in the world economy for the last forty years.  However, the American Consumer is also the American Worker.  His cut of the pie on both a national and international basis has been declining ... and in the last ten years it has been declining substantially.  Availability of excessive credit allowed the American Consumer to spend more than the American Worker made for over a decade, but that party is almost over.  Improved education of our people can possibly stabilize the decline in the fortunes of the American Worker on the long haul, but another driver for the world economy needs to emerge in the short and intermediate term (0 to 10 years).  Dealing with the upcoming energy shortage could be the driver for the world economy, perhaps, but that seems a little like trying to apply a force with a wet noodle.  Instead, they are parallel problems with solutions needed for both.

Some argue that the Chinese, or Indian, or South American consumer will become the drivers for the world economy.  The current public opinion is that the government is going to be the "driver" in the short term -- now that is a scary thought that I won't go into at the moment.  But, this way of thinking is based on an old model of how the world's economies work.  I am not sure how all of this going to unfold, but whichever countries most sucessfully deal with rising energy requirements as traditional supplies shrink will own this century.  Yes, it is that big.  The consumer dependent model where everyone tries to convince the consumer that he needs what they are selling is near the end.  The new model will address obtaining energy and using it efficiently.  The retail industry will be hit soon and hard by this new reality.  Engineering services, both on the industrial and even for homeowners, should flurish as this new reality emerges. 

This entry is more to introduce the concept than claiming I have it all figured out yet.  Writing is my way of sorting through this messy subject.  Any comments to add clarity to my mind would be appreciated.