I don't think anyone would argue that global warming doesn't occur. The real question is whether periods of warming or cooling are somehow caused by human intervention. Do the greenhouse gases produced by burning fossil fuels really create a significant greenhouse effect, trapping the warmth of solar heating in the atmosphere? Will you destroy the earth by driving your SUV? Will an electric car be better than the SUV? Maybe we should all walk, ride a horse, or ride a bicycle? But what about the extra carbon dioxide you or the horse will exhale when you or the horse exert yourself? These are all very good questions.
Cars used to exhale carbon monoxide. That had the environmentalists all worked up into a lather in the 1970's. You know CO is a poisonous gas that is emitted by your fireplace or gas furnace, and it will kill you if it isn't properly vented. Back in the early 1980's, General Motors engineers invented the catalytic converter that caused a chemical reaction to occur as the exhaust gases passed through it. This reaction converted the poisonous carbon monoxide to harmless carbon dioxide. In fact, carbon dioxide occurs normally in the Earth's atmosphere as does carbon monoxide. According to Wikipedia, carbon dioxide is the fourth largest component of the atmosphere with a proportion of 0.039445%. Carbon monoxide concentration is only 0.00001% of the atmosphere. Carbon dioxide is not only harmless, but it is absolutely required to support plant life on the planet. Animals breathe in oxygen and exhale carbon dioxide, whereas plants do the opposite. By the way, humans aren't the only animals on Earth, and they all exhale just like humans do.
Did anyone ever think that CO2 levels would possibly ebb and flow depending on the balance between plant and animal life on the Earth? If they have, I haven't heard it. Could it be that the population of all humans and other animals on Earth is continuously rising? The humans need more cleared space for buildings, roads, and farmland, so they cut down trees and clear away brush. That reduces the amount of plant life that is eliminating CO2 from the earth, while the CO2 production by the larger populations of animals breathing grows.
I've even thought about the times described in the Old Testament of the Bible where people are said to have lived to be 100's of years old. I used to really wonder how this could be. Were they counting years in a different way back then? Or maybe the atmosphere was very oxygen rich in those times, and people really didn't age as rapidly. Just a thought. Sorry for the digression.
Back to the global warming discussion at hand. Why do we spend billions of dollars trying to figure out how to power our homes and factories and cars without producing CO2? We could spend the billions planting trees everywhere and convert the CO2 to O2 in a totally natural way? In fact, if we really have global warming, isn't the atmosphere just a big self-limiting control system? Won't the warmer temperatures cause more evaporation. That produces more clouds and storms and rain. The extra moisture and warm temperatures will promote plant growth and remove CO2 from the atmosphere. The clouds will shade the Earth's surface from the sun rays and reduce global warming. (Oops, the tree huggers have classified water vapor as a greenhouse gas because it traps heat near the surface of the Earth. I guess they forgot that, while clouds might trap heat, they also prevent heating by blocking the suns rays from making it to the ground.)
In the 1980's, I remember hearing a lot about the aerosol propellants destroying the ozone layer. This was blamed for the rise in skin cancer occurrences. (I guess the rise in the popularity of sun tanning wasn't considered as having any part in this problem.) Now no one talks about the ozone anymore. Has the ozone layer rebounded and replenished itself, or is it just out of vogue to talk about the ozone these days? By the way, the lightning in storms produces ozone. If global warming causes more storms, that would help produce more ozone to replenish the ozone layer in the atmosphere.
Are we spending billions upon billions of dollars in a typical MessAPolitico? Most MessAPolitical solutions don't work, cost too much, or actually make things worse. Well this one is a big one that has all three elements represented. We're killing our economy with over-priced solutions to a problem that probably doesn't exist, and some of the solutions are making things worse.
There's more to cover on this subject. Stay tuned for more posts in the upcoming days. Have a nice warm day in the neighborhood!
Wednesday, May 1, 2013
Monday, April 29, 2013
Should we Give Up on American Manufacturing?
Is it too late to save the manufacturing sector in America? I hope not. A lot of people have earned a good living doing manufacturing jobs over the years. My dad was one of them. That job put food on the table, clothes on our backs, and a roof over our heads. He didn't work in the plant running a machine or assembling the products. He was a tool and die designer working in manufacturing engineering, primarily working with stamping equipment. Most of his jobs were working in the appliance industry or with air conditioning and heating equipment, designing the dies used in the large stamping presses that form steel sheet.
A typical factory has a machine shop that cuts steel or castings to make equipment used in the plant. Some plants are just large machine shops that cut the various products they sell from steel bar or aluminum or iron castings. The various machines used in these plants are purchased from other manufacturing companies, and in the past, these machines were primarily made in the USA.
Various technical disciplines are needed to support the manufacturing equipment. These employees perform maintenance and repairs. When components wear out those are purchased from manufacturers of bearings or seals or hoses, etc. that were also generally other US companies in past years. Salesmen for many different companies call on these factories and sell them lubricants, belting, steel bar, brass forgings, screws, wire, and everything else required to keep the plant operating. The plant itself employs engineers and draftsmen that perform R&D and design new products. The manufacturing engineers figure out how to use machines and tooling to efficiently manufacture the products at the lowest cost possible, while maintaining quality standards. Marketing works with engineering to develop specifications for the new products and design literature or other forms of advertising to promote the products to target customers. A sales force sets up sales calls and shows the product features and benefits to these target customers.
Of course, all plants have a large support staff that are employed as well. That includes human resources (or the personnel department as they used to be called), accounting, information technologies, computer operations, logistics, purchasing, inside sales, and stenographers or secretaries. There were also truck drivers and mechanics and electricians and machinists.
A lot of these folks that used to work in manufacturing didn't care what the minimum wage was. They made more than minimum wage. If they had a skilled technical or professional career, their salary was well above minimum wage. They all got a lot of benefits as well. Health insurance, life insurance, dental insurance, disability insurance, and a pension and/or 401K plan were the norm. These folks didn't collect benefits from the government to get by. They paid into the system with income taxes. Successful companies earned a profit, so they paid taxes as well. The employees didn't generally begrudge the company a healthy profit. After all, a profitable employer meant job security and expansion of the workforce. There were opportunities for advancement.
Today, we hear about excessive profits. The liberal politicians love to talk about the high cost of medical insurance or gasoline or any other the products of any industry under attack. They pontificate about how the high cost is caused by the excessive profits the industry earns, because they charge too much for their goods and services. The large corporations that our parents and some of us worked for are now vilified on a regular basis. Capitalism is the evil they blame for all of our economic woes. All you hear about is that small business creates all of the jobs today. Can small businesses do what used to be done by the large corporations?
Small businesses aren't a bad thing. They perform a lot of services for large corporations, doing things that used to be done by employees of the larger company but now are "farmed out" to more efficient smaller organizations. They employ a lot of people as well. However, offering all of the benefits that employees of the large organizations have is not economical.
Certain types of products aren't feasible to be manufactured by small companies either. These products require a significant investment in R&D. The R&D requires a large staff of engineers and scientists, laboratories with test equipment, and years of development time. Then, a large sales volume is required to amortize the costs of R&D. The manufacturing equipment also requires a very large capital investment and large sales volume to justify the investment. A small corporation doesn't have the capital to make these products happen.
If the politicians running our federal government don't figure out the value of large corporations in America, our standard of living will definitely suffer. This country has a lot of people that used to work in manufacturing. Today they are unemployed or working in low paying, unskilled jobs in the retail sector. Instead of paying a lot of taxes and taking care of themselves, they are suffering. Can this MessAPolitico be stopped? As long as the politicians can blame someone else for their sins, they have no motivation to stop it. They love to have constituents that are beholden to them for everything they have. The main problem with politics today in America is that politicians aren't public servants. They will implement any MessAPolitico that gets them re-elected.
A typical factory has a machine shop that cuts steel or castings to make equipment used in the plant. Some plants are just large machine shops that cut the various products they sell from steel bar or aluminum or iron castings. The various machines used in these plants are purchased from other manufacturing companies, and in the past, these machines were primarily made in the USA.
Various technical disciplines are needed to support the manufacturing equipment. These employees perform maintenance and repairs. When components wear out those are purchased from manufacturers of bearings or seals or hoses, etc. that were also generally other US companies in past years. Salesmen for many different companies call on these factories and sell them lubricants, belting, steel bar, brass forgings, screws, wire, and everything else required to keep the plant operating. The plant itself employs engineers and draftsmen that perform R&D and design new products. The manufacturing engineers figure out how to use machines and tooling to efficiently manufacture the products at the lowest cost possible, while maintaining quality standards. Marketing works with engineering to develop specifications for the new products and design literature or other forms of advertising to promote the products to target customers. A sales force sets up sales calls and shows the product features and benefits to these target customers.
Of course, all plants have a large support staff that are employed as well. That includes human resources (or the personnel department as they used to be called), accounting, information technologies, computer operations, logistics, purchasing, inside sales, and stenographers or secretaries. There were also truck drivers and mechanics and electricians and machinists.
A lot of these folks that used to work in manufacturing didn't care what the minimum wage was. They made more than minimum wage. If they had a skilled technical or professional career, their salary was well above minimum wage. They all got a lot of benefits as well. Health insurance, life insurance, dental insurance, disability insurance, and a pension and/or 401K plan were the norm. These folks didn't collect benefits from the government to get by. They paid into the system with income taxes. Successful companies earned a profit, so they paid taxes as well. The employees didn't generally begrudge the company a healthy profit. After all, a profitable employer meant job security and expansion of the workforce. There were opportunities for advancement.
Today, we hear about excessive profits. The liberal politicians love to talk about the high cost of medical insurance or gasoline or any other the products of any industry under attack. They pontificate about how the high cost is caused by the excessive profits the industry earns, because they charge too much for their goods and services. The large corporations that our parents and some of us worked for are now vilified on a regular basis. Capitalism is the evil they blame for all of our economic woes. All you hear about is that small business creates all of the jobs today. Can small businesses do what used to be done by the large corporations?
Small businesses aren't a bad thing. They perform a lot of services for large corporations, doing things that used to be done by employees of the larger company but now are "farmed out" to more efficient smaller organizations. They employ a lot of people as well. However, offering all of the benefits that employees of the large organizations have is not economical.
Certain types of products aren't feasible to be manufactured by small companies either. These products require a significant investment in R&D. The R&D requires a large staff of engineers and scientists, laboratories with test equipment, and years of development time. Then, a large sales volume is required to amortize the costs of R&D. The manufacturing equipment also requires a very large capital investment and large sales volume to justify the investment. A small corporation doesn't have the capital to make these products happen.
If the politicians running our federal government don't figure out the value of large corporations in America, our standard of living will definitely suffer. This country has a lot of people that used to work in manufacturing. Today they are unemployed or working in low paying, unskilled jobs in the retail sector. Instead of paying a lot of taxes and taking care of themselves, they are suffering. Can this MessAPolitico be stopped? As long as the politicians can blame someone else for their sins, they have no motivation to stop it. They love to have constituents that are beholden to them for everything they have. The main problem with politics today in America is that politicians aren't public servants. They will implement any MessAPolitico that gets them re-elected.
Saturday, April 27, 2013
How Can America Win?
The US stock market seems to think that we are winning. Are we? I'm not sure. Things feel a little better, and the stock market is all about emotions and perceptions. When people start to feel some confidence, they start to spend. When people gain enough economic security, they are willing to buy cars and houses. When consumers begin to spend, manufacturers begin to invest. They invest in machinery and hire people. Our economy could certainly use some positive feelings to get on a full fledged roll. Right now people have some hope, but I wouldn't guess that this thing is on a roll yet.
I know that everyone says that the US economy is changing to a service economy. They say that our manufacturing can't compete in the world market. Today we do have a world market, whereas thirty years ago the US market was largely separate. Most of the industrial products were made in the USA. A lot of the consumer products were also American made.
There was a very vibrant textile industry centered in South Carolina and stretching from southeastern Alabama up through Virginia and into New England. That has left the country for Asia and Latin America. Electric motors for North America were primarily made in the USA, although a couple of manufacturers had opened plants in Mexico. Now that is virtually all gone to Mexico, China, and Poland. Everything from televisions to furniture to air conditioners is imported today. Why? Can America compete in the manufacturing world?
High labor rates in America are not anything new. In the 1970's, we were all worried that all manufacturing would move to Japan, because the workers over there made such low wages. We competed by having high productivity. We did that with automation better manufacturing methods.
Automation doesn't kill jobs; it actually saves jobs and allows manufacturers to pay higher wages and successfully compete. The automation improves quality, while increasing worker output per labor hour. If more parts are built per hour, the labor cost per part drops, and that can allow a manufacturer to pay more while remaining competitive. Higher quality also makes the end product more valuable to the customer, and the higher price keeps the manufacturer profitable. Automation requires capital investment, and significant volume is needed to justify the investment though. It also requires technically savvy employees to design, install, program, and maintain the equipment.
Will automation save the day today? Not as likely. Today, the low cost countries have automation too. So American manufacturing is doomed, right? Well, not necessarily.
America still has a major advantage. We have very plentiful natural resources. America has everything from oil to coal to metals to land for producing food, cotton, and lumber and everything in between. The excellent supplies of these ingredients and raw materials should drive the prices down. Our cost of energy and materials should be the lowest in the world. However, our costs are rising every year, and this MessAPolitico is happening by design.
The environmentalists are perpetuating the global warming hoax. They have made the claim over and over that global warming is man-made. Over and over, they say that burning fossil fuels is producing carbon dioxide. All we hear these days is that carbon is evil. Supposedly, carbon dioxide and other so-called greenhouse gases let the sun rays through to heat the earth and trap the heat, acting like a greenhouse that is warmed in winter. (I guess the cave men ended the ice age by driving their SUV's. Or maybe it was all of the gases they produced farting after eating dinosaur meat and driving the dinosaurs into extinction.)
So the tree hugger solution to the imaginary problem is to drive the price of energy produced by fossil fuel up, up, up. As the price rises, the demand for fossil fuel drops. Higher prices for fossil fuel based energy sources also will eventually make alternative energy viable. Do you realize how expensive our electricity, natural gas, and gasoline will have to get to make these technologies viable? Probably around triple the price of energy today. Our EPA is doing the best they can to make this happen.
We have energy everywhere, but the government says this place and that place over there and these other places over here are all off limits. We can't have a Keystone XL pipeline, because it might cause some vaguely defined environmental disaster in the state of Nebraska. We can't use oil from ANWR because it is a pristine and beautiful area. We shouldn't use hydraulic fracturing because it might damage the ground water. There's no drilling in the ocean -- look at what happened with the BP oil rig off of the Louisiana coast. Are these real environmental concerns? Is the EPA really trying to protect us from these environmental disasters? Probably not. They just want to drive the price up so high that we won't be able to afford to burn fossil fuels.
Of course, these MessAPolitical policies continue to hold back our economy. They have taken away a huge strategic advantage for America. If we could keep the price of electricity and natural gas low compared to the rest of the world, it would be a very important factor in keeping manufacturing jobs in America -- at least in energy intensive industries like steel, aluminum, paper, and chemicals. Of course, consumers that spend less for gasoline and electricity and natural gas have more money in their pockets to spend on other things. That would boost the other industries outside of the energy sector. The cost of shipping and transportation would drop, and that could bring prices down creating more demand for all goods.
The MessAPolitics of tree hugging is killing the economy in America. Hey Washington, WAKE UP! Man-made global warming is a hoax. Don't hold our energy hostage. Set it free to restart the economy. Please, voters remember what I have written the next time you enter a voting booth.
I know that everyone says that the US economy is changing to a service economy. They say that our manufacturing can't compete in the world market. Today we do have a world market, whereas thirty years ago the US market was largely separate. Most of the industrial products were made in the USA. A lot of the consumer products were also American made.
There was a very vibrant textile industry centered in South Carolina and stretching from southeastern Alabama up through Virginia and into New England. That has left the country for Asia and Latin America. Electric motors for North America were primarily made in the USA, although a couple of manufacturers had opened plants in Mexico. Now that is virtually all gone to Mexico, China, and Poland. Everything from televisions to furniture to air conditioners is imported today. Why? Can America compete in the manufacturing world?
High labor rates in America are not anything new. In the 1970's, we were all worried that all manufacturing would move to Japan, because the workers over there made such low wages. We competed by having high productivity. We did that with automation better manufacturing methods.
Automation doesn't kill jobs; it actually saves jobs and allows manufacturers to pay higher wages and successfully compete. The automation improves quality, while increasing worker output per labor hour. If more parts are built per hour, the labor cost per part drops, and that can allow a manufacturer to pay more while remaining competitive. Higher quality also makes the end product more valuable to the customer, and the higher price keeps the manufacturer profitable. Automation requires capital investment, and significant volume is needed to justify the investment though. It also requires technically savvy employees to design, install, program, and maintain the equipment.
Will automation save the day today? Not as likely. Today, the low cost countries have automation too. So American manufacturing is doomed, right? Well, not necessarily.
America still has a major advantage. We have very plentiful natural resources. America has everything from oil to coal to metals to land for producing food, cotton, and lumber and everything in between. The excellent supplies of these ingredients and raw materials should drive the prices down. Our cost of energy and materials should be the lowest in the world. However, our costs are rising every year, and this MessAPolitico is happening by design.
The environmentalists are perpetuating the global warming hoax. They have made the claim over and over that global warming is man-made. Over and over, they say that burning fossil fuels is producing carbon dioxide. All we hear these days is that carbon is evil. Supposedly, carbon dioxide and other so-called greenhouse gases let the sun rays through to heat the earth and trap the heat, acting like a greenhouse that is warmed in winter. (I guess the cave men ended the ice age by driving their SUV's. Or maybe it was all of the gases they produced farting after eating dinosaur meat and driving the dinosaurs into extinction.)
So the tree hugger solution to the imaginary problem is to drive the price of energy produced by fossil fuel up, up, up. As the price rises, the demand for fossil fuel drops. Higher prices for fossil fuel based energy sources also will eventually make alternative energy viable. Do you realize how expensive our electricity, natural gas, and gasoline will have to get to make these technologies viable? Probably around triple the price of energy today. Our EPA is doing the best they can to make this happen.
We have energy everywhere, but the government says this place and that place over there and these other places over here are all off limits. We can't have a Keystone XL pipeline, because it might cause some vaguely defined environmental disaster in the state of Nebraska. We can't use oil from ANWR because it is a pristine and beautiful area. We shouldn't use hydraulic fracturing because it might damage the ground water. There's no drilling in the ocean -- look at what happened with the BP oil rig off of the Louisiana coast. Are these real environmental concerns? Is the EPA really trying to protect us from these environmental disasters? Probably not. They just want to drive the price up so high that we won't be able to afford to burn fossil fuels.
Of course, these MessAPolitical policies continue to hold back our economy. They have taken away a huge strategic advantage for America. If we could keep the price of electricity and natural gas low compared to the rest of the world, it would be a very important factor in keeping manufacturing jobs in America -- at least in energy intensive industries like steel, aluminum, paper, and chemicals. Of course, consumers that spend less for gasoline and electricity and natural gas have more money in their pockets to spend on other things. That would boost the other industries outside of the energy sector. The cost of shipping and transportation would drop, and that could bring prices down creating more demand for all goods.
The MessAPolitics of tree hugging is killing the economy in America. Hey Washington, WAKE UP! Man-made global warming is a hoax. Don't hold our energy hostage. Set it free to restart the economy. Please, voters remember what I have written the next time you enter a voting booth.
Wednesday, April 24, 2013
Is It Our Fault?
A reporter in Islamic headgear attended a white house press conference last week. She asked Jay Carney if he considered civilian casualties in Afghanistan terrorism. Then, Tom Brokaw made a statement in an interview on Meet the Press saying that we need to take a look at our use of drones in the war on terror. Did we do something to deserve this? That's the burning question on the minds of the liberal media.
Most Americans with at least half a brain know the answer to this question. They are angered and frustrated by terrorism. This case is unusual, because there were terrorists left after the act, and they didn't blow themselves up. These cowards went online and learned how to build a weapon of mass destruction. They built a couple of these devices and purposely placed them amongst some regular Americans that were very simply chosen because they were guilty of being Americans. Women, children, or anyone that was just attending a fun event were in the area when the bombs were placed and quickly detonated. Was it an accident that regular civilians were killed in Boston? No. Was this an act of war against the US military? No. It was an act designed to terrorize, kill, and injure a lot of regular people.
Somehow, after the murderous terrorist attack that killed and maimed innocent civilians in Boston, these so-called journalists decided that the bombing could be equated with accidental deaths in a war that we didn't start. The American military does everything possible to avoid civilian casualties in the midst of war, but it is war. Often times, the battle is fought against an enemy that hides around women and children, using them as shields. They know that we will avoid killing the women and children. These guerrillas and terrorists don't give a hoot about the civilians they kill or the ones they use as shields. They don't even care about the kids they send out with bombs to blow themselves up. These journalists have the audacity to blame America for the deaths every time some civilians are killed, even when they are often times the people that were shooting at our soldiers or setting IED's on the side of the road to kill and maim.
I've heard a number of people say that they want the terrorists captured alive to find out why they did it. Is that really in question? It has been widely reported that at least one of these bombers had visited multiple radical Islamic websites. Did they learn terrorism during a trip to Russia? If we can't figure out why these guys did what they did, then it's not all that surprising that we have trouble dealing with the war on terror. These days, about 99% of terrorist attacks are done by Islamic terrorists, but the liberal media desperately hopes that some crazed Tea Party member or a white, gun-loving, redneck will commit the next mass murder. These are the targets of all the early speculation by all liberals. Why? Are these folks idiots? Yes. Yes. Yes!
Political correctness has rendered law enforcement highly ineffective. Targeting prevention efforts at the likely suspects would require far less resources and would be far more effective than the current "shotgun" approach. In the interest of political correctness, a lot of effort has to be expended searching little old ladies or children or anyone else that can be found, just to make sure these efforts are truly random. The other side of this randomization it to purposely not target a lot of good terrorist candidates. We wouldn't want to violate their civil rights or even give the wrong appearance to the world.
Of course, we don't mind violating the constitutional rights of a lot of law abiding citizens that own guns legally. Once again, felons can continue to buy their guns without a background check from one of their buddies on the street. Criminals have never submitted to background checks, and they never will, even with a few new laws.
To add insult to injury, these terrorists came to this country, and immediately received government assistance. That's right, we paid for them to be guests in our country. Then, they decided that they hated America. Instead of going back home to Chechnya, these mental giants decided they would kill a bunch of Americans to pay us back. Why? Because Americans don't live the way they think we should.
This MessAPolitico was caused by a bunch of bleeding heart liberals. With all of the numb skulls running our government at all levels, I don't honestly know how we can right the ship this time. Please America, vote for smart politicians in the next election. (Maybe "smart politicians" is an oxymoron.)
Most Americans with at least half a brain know the answer to this question. They are angered and frustrated by terrorism. This case is unusual, because there were terrorists left after the act, and they didn't blow themselves up. These cowards went online and learned how to build a weapon of mass destruction. They built a couple of these devices and purposely placed them amongst some regular Americans that were very simply chosen because they were guilty of being Americans. Women, children, or anyone that was just attending a fun event were in the area when the bombs were placed and quickly detonated. Was it an accident that regular civilians were killed in Boston? No. Was this an act of war against the US military? No. It was an act designed to terrorize, kill, and injure a lot of regular people.
Somehow, after the murderous terrorist attack that killed and maimed innocent civilians in Boston, these so-called journalists decided that the bombing could be equated with accidental deaths in a war that we didn't start. The American military does everything possible to avoid civilian casualties in the midst of war, but it is war. Often times, the battle is fought against an enemy that hides around women and children, using them as shields. They know that we will avoid killing the women and children. These guerrillas and terrorists don't give a hoot about the civilians they kill or the ones they use as shields. They don't even care about the kids they send out with bombs to blow themselves up. These journalists have the audacity to blame America for the deaths every time some civilians are killed, even when they are often times the people that were shooting at our soldiers or setting IED's on the side of the road to kill and maim.
I've heard a number of people say that they want the terrorists captured alive to find out why they did it. Is that really in question? It has been widely reported that at least one of these bombers had visited multiple radical Islamic websites. Did they learn terrorism during a trip to Russia? If we can't figure out why these guys did what they did, then it's not all that surprising that we have trouble dealing with the war on terror. These days, about 99% of terrorist attacks are done by Islamic terrorists, but the liberal media desperately hopes that some crazed Tea Party member or a white, gun-loving, redneck will commit the next mass murder. These are the targets of all the early speculation by all liberals. Why? Are these folks idiots? Yes. Yes. Yes!
Political correctness has rendered law enforcement highly ineffective. Targeting prevention efforts at the likely suspects would require far less resources and would be far more effective than the current "shotgun" approach. In the interest of political correctness, a lot of effort has to be expended searching little old ladies or children or anyone else that can be found, just to make sure these efforts are truly random. The other side of this randomization it to purposely not target a lot of good terrorist candidates. We wouldn't want to violate their civil rights or even give the wrong appearance to the world.
Of course, we don't mind violating the constitutional rights of a lot of law abiding citizens that own guns legally. Once again, felons can continue to buy their guns without a background check from one of their buddies on the street. Criminals have never submitted to background checks, and they never will, even with a few new laws.
To add insult to injury, these terrorists came to this country, and immediately received government assistance. That's right, we paid for them to be guests in our country. Then, they decided that they hated America. Instead of going back home to Chechnya, these mental giants decided they would kill a bunch of Americans to pay us back. Why? Because Americans don't live the way they think we should.
This MessAPolitico was caused by a bunch of bleeding heart liberals. With all of the numb skulls running our government at all levels, I don't honestly know how we can right the ship this time. Please America, vote for smart politicians in the next election. (Maybe "smart politicians" is an oxymoron.)
Monday, April 22, 2013
Do Oil Companies Make Excessive Profits?
If you read my post about the laws of supply and demand, maybe you can guess where I'm going with this one. Do the oil companies make excessive profits? I don't think so. However, the oil market is ripe with collusion that limits competition, and that collusion hurts the consumers. Consequently, it also hurts the US economy.
Does the collusion occur between oil companies? I firmly believe that it does NOT! So, where do we have collusion? The answer is at OPEC. That is a big one. A huge percentage of the world's oil supply comes from the OPEC countries. These countries have meetings where they all get together to decide how much oil they should produce to keep the price high. OPEC doesn't control 100% of the oil, or these countries would drive the price even higher. It seems that the rest of the world tends to crank up their production whenever the price of oil gets very far above $100 per barrel.
What percentage of the price of a gallon of gasoline is profit for the oil companies? It is generally below 10%. That's hardly an excessive profit margin. In fact, the taxes imposed by our government make Uncle Sam and the states much more insidious. They collect a much larger percentage profit from the gasoline sold than the oil companies. Does the government deserve this big tax collected? They didn't drill and find the oil, pump it out of the ground, transport it to a refinery, refine it, carry it in inventory, ship it to the gasoline station, invest in equipment to pump it and sell it to the consumer, or do anything else of value. By the way, the oil company doesn't pay that tax; you do. Of course, all of the workers in the oil companies, on tankers, in gas stations, etc. etc. pay income taxes as well. Guess what, we pay those too because the cost of labor is built into the price. It looks to me like the government is making all of the excessive profit.
Of course, the government under Barack Obama is doing a lot of other stuff to help us out too. They are doing everything they can to reduce the supply of fossil fuels. The goal is to keep the supply low enough to raise the price of all fossil fuel energy. That's the only way they can make alternative energy even close to competitive and profitable. Since our tax dollars have been used to invest in alternative energy companies and companies that build alternative energy equipment, this is really a form of collusion that is very damaging to the consumer. The "tree hugger" crowd wants to price fossil fuels out of business, and they don't care what that does to the economy. If you lose your job, that's a necessary consequence of saving the earth from that mythical disaster, man-made global warming.
This MessAPolitico is driven by ignorance and greed. There are a lot of people that believe in man-made global warming. There are also a lot of so called scientists at big universities that make a lot of money off of government grants. If you want a grant, you had better make sure your research supports the EPA contention that driving an SUV will destroy the earth. There are all those crony capitalists that are taking government money (our money) and using it to make themselves rich too. Those so-called "green energy" businesses can't stand on their own in the marketplace, and no amount of government investment is going to make the business plans work. But these entrepreneurs won't be starting these businesses without paying themselves big salaries that are paid for by our investments made on our behalf by the US government. If the government succeeds at artificially driving the supply of fossil fuels down by disallowing pipelines or hydraulic fracturing (fracking) or drilling in the ocean or drilling in the ANWR or whatever, then the price may just get high enough to make alternative energy viable financially. The question is very simply this: will our economy still be alive at that point?
All it takes is collusion created by a conflict of interest on the part of the government MessAPolitico. Get the government out of the way! Allow free market capitalism to save our jobs and save our economy.
Does the collusion occur between oil companies? I firmly believe that it does NOT! So, where do we have collusion? The answer is at OPEC. That is a big one. A huge percentage of the world's oil supply comes from the OPEC countries. These countries have meetings where they all get together to decide how much oil they should produce to keep the price high. OPEC doesn't control 100% of the oil, or these countries would drive the price even higher. It seems that the rest of the world tends to crank up their production whenever the price of oil gets very far above $100 per barrel.
What percentage of the price of a gallon of gasoline is profit for the oil companies? It is generally below 10%. That's hardly an excessive profit margin. In fact, the taxes imposed by our government make Uncle Sam and the states much more insidious. They collect a much larger percentage profit from the gasoline sold than the oil companies. Does the government deserve this big tax collected? They didn't drill and find the oil, pump it out of the ground, transport it to a refinery, refine it, carry it in inventory, ship it to the gasoline station, invest in equipment to pump it and sell it to the consumer, or do anything else of value. By the way, the oil company doesn't pay that tax; you do. Of course, all of the workers in the oil companies, on tankers, in gas stations, etc. etc. pay income taxes as well. Guess what, we pay those too because the cost of labor is built into the price. It looks to me like the government is making all of the excessive profit.
Of course, the government under Barack Obama is doing a lot of other stuff to help us out too. They are doing everything they can to reduce the supply of fossil fuels. The goal is to keep the supply low enough to raise the price of all fossil fuel energy. That's the only way they can make alternative energy even close to competitive and profitable. Since our tax dollars have been used to invest in alternative energy companies and companies that build alternative energy equipment, this is really a form of collusion that is very damaging to the consumer. The "tree hugger" crowd wants to price fossil fuels out of business, and they don't care what that does to the economy. If you lose your job, that's a necessary consequence of saving the earth from that mythical disaster, man-made global warming.
This MessAPolitico is driven by ignorance and greed. There are a lot of people that believe in man-made global warming. There are also a lot of so called scientists at big universities that make a lot of money off of government grants. If you want a grant, you had better make sure your research supports the EPA contention that driving an SUV will destroy the earth. There are all those crony capitalists that are taking government money (our money) and using it to make themselves rich too. Those so-called "green energy" businesses can't stand on their own in the marketplace, and no amount of government investment is going to make the business plans work. But these entrepreneurs won't be starting these businesses without paying themselves big salaries that are paid for by our investments made on our behalf by the US government. If the government succeeds at artificially driving the supply of fossil fuels down by disallowing pipelines or hydraulic fracturing (fracking) or drilling in the ocean or drilling in the ANWR or whatever, then the price may just get high enough to make alternative energy viable financially. The question is very simply this: will our economy still be alive at that point?
All it takes is collusion created by a conflict of interest on the part of the government MessAPolitico. Get the government out of the way! Allow free market capitalism to save our jobs and save our economy.
Saturday, April 20, 2013
Supply & Demand is Just a Theory
It seems that everyone you ask claims to know how the laws of supply and demand work. They all say that they understand these laws and believe in them, but do they? Why does everyone believe in this economic theory as long as it works in their favor? As soon as the price goes up on something they want or need, then that was caused by some evil, greedy corporation jacking up the price to make obscene profits.
Are obscene or excessive profits even possible? Some would say it is possible where a monopoly exists. I don't believe it can really happen even then? Having a monopoly would definitely change the dynamic. The company having the monopoly would have total control over their profitability, but they couldn't make unlimited profits. Let me explain.
Think about how the automobile market would be different if there was only one automaker in the world. That automaker could choose to sell their cars for $100,000 each, but how many consumers would be able to afford a car? Chances are, they wouldn't sell very many cars. You couldn't go to another manufacturer if the quality was poor either. However, there still is competition in the marketplace. You would still have the option to ride a motorcycle, ride a bicycle, walk, ride the bus, or take a taxi.
Additionally, would a price of $100,000 each be the point that maximizes the profitability of this single automaker? Probably not. In fact, they would probably offer several different cars to choose from. One model would probably be smaller and less luxurious, offering bare-bones transportation to the low end of the socioeconomic scale. Another model might have a few amenities at a slightly higher price, and it would cater to the massive middle class. Of course, there would still be the luxury model that would likely have the highest profit margin per vehicle, along with a price tag that only a small proportion of the consumers could afford. The cheaper models would generate a lot of volume, so they would likely earn a larger number of profit dollars, even though the percentage profit on each car would be lower. Also, the high volume would drive the cost of production down for all of the different models by increasing the economies of scale (sorry, there's some more of that micro economic theory).
In order for this production and marketing strategy to work, the vehicles would have to be priced low enough that the target market segments for each vehicle could afford to buy it. If they can't, you won't sell any cars. Then, the price has to be attractive to enough consumers compared to the costs of alternative transportation so that they will buy as many cars as you can build. Of course, the company would need to design the car and develop manufacturing processes that keep the cost of manufacturing below the price at which the product can be sold or they won't make a profit at all.
Business analysis would be required. First, the marketing department would do surveys to find out what features the different consumers would like to have and how much they would be willing to pay for the vehicle with different combinations of features. Maybe the cars could even have options to suit different consumers that have differing wants and needs. (What a concept! Tailor the product to individual consumers! Who would have ever thought of that one?) Then, the pricing would determine how many consumers would purchase the vehicle. A calculation using a demand curve generated from the market survey results would determine what volume would maximize profits. (Do you remember the law of diminishing marginal returns?).
Okay, so how can this company get obscene or unlimited profits even in a monopoly like this? Can a true monopoly really even exist? Don't we always have alternatives? In the short run, you may not have a reasonable alternative, but in the long run you do. For instance, if the price of cars was too high, but you worked 20 miles from home, then what could you do? Maybe you could ride the bus, but it takes two hours to get to work and two hours to get home. That's not a very reasonable alternative, but you could sell your house and move to a mile from work. Then you could ride a bicycle or walk or even take a 5 minute bus ride.
The only real insidious market conditions generally don't come from a pure monopoly like the one I have described above. Instead, they occur when all competitors in a particular market collude to control the market. The corrupt group of competitors doesn't have to control 100% of the market to create market conditions that are very favorable to the producers and very unfavorable to the consumer. Even if they only control a very large portion of a market for a commodity that is in great demand, that is bad for the consumer. However, there is still a limit to how much profit can be made, and raising the price will reduce demand. It is unlikely that maximum prices would maximize overall profit.
If a market does allow for a company to make very high profits, how long will that last in a capitalistic economic system? High profits will encourage the company to produce more product themselves to increase profits. Also, other companies will see the high profit potential in this industry and design their own competitive product offering. The consumer benefits in the end, because the increased supply drives prices down, and each competitor will try and cater to a different market segment better than the others do. They are also likely to be shunned by the marketplace if their product quality is substandard, or their prices will be driven downward to compensate. The end result for the consumer will be lower prices, higher quality, and more variety of products to better suit their wants and desires.
So, where does the MessAPolitico come into play here? Well, our illustrious liberal politicians like to talk about how the big, evil corporations are making outrageous profits by stealing from the little guy. Then, they go about passing laws to protect us regular folk with regulations (that drive up the price of automobiles and everything else). These same caring politicians also tell us that they will tax the rich people and their corporations to get that immorally obtained profit back. They will use it to pay for all sorts of "free" services and things for those folks that have been wronged and sent down the path to poverty.
The poor most certainly believe that they deserve this "free" stuff. They also begin to believe that those things they get really are free. A bunch of folks even think that those high corporate taxes are paid by the corporations and the rich folks that own them. Well, the joke's on them, because all of us regular people pay those taxes. That's right. We pay more for all of the stuff we buy from these corporations. We pay for all of the extra costs created by meeting excessive government regulations too. Last, but certainly not least, the higher prices reduce demand, so the people providing the services or manufacturing the products will have fewer jobs.
Anytime the government steps in to help us or protect us or give us "free" stuff, watch out. We're about to fall victim to the law of unintended consequences again! (Hey, maybe I should have made this another installment in my series on unintended consequences.)
Are obscene or excessive profits even possible? Some would say it is possible where a monopoly exists. I don't believe it can really happen even then? Having a monopoly would definitely change the dynamic. The company having the monopoly would have total control over their profitability, but they couldn't make unlimited profits. Let me explain.
Think about how the automobile market would be different if there was only one automaker in the world. That automaker could choose to sell their cars for $100,000 each, but how many consumers would be able to afford a car? Chances are, they wouldn't sell very many cars. You couldn't go to another manufacturer if the quality was poor either. However, there still is competition in the marketplace. You would still have the option to ride a motorcycle, ride a bicycle, walk, ride the bus, or take a taxi.
Additionally, would a price of $100,000 each be the point that maximizes the profitability of this single automaker? Probably not. In fact, they would probably offer several different cars to choose from. One model would probably be smaller and less luxurious, offering bare-bones transportation to the low end of the socioeconomic scale. Another model might have a few amenities at a slightly higher price, and it would cater to the massive middle class. Of course, there would still be the luxury model that would likely have the highest profit margin per vehicle, along with a price tag that only a small proportion of the consumers could afford. The cheaper models would generate a lot of volume, so they would likely earn a larger number of profit dollars, even though the percentage profit on each car would be lower. Also, the high volume would drive the cost of production down for all of the different models by increasing the economies of scale (sorry, there's some more of that micro economic theory).
In order for this production and marketing strategy to work, the vehicles would have to be priced low enough that the target market segments for each vehicle could afford to buy it. If they can't, you won't sell any cars. Then, the price has to be attractive to enough consumers compared to the costs of alternative transportation so that they will buy as many cars as you can build. Of course, the company would need to design the car and develop manufacturing processes that keep the cost of manufacturing below the price at which the product can be sold or they won't make a profit at all.
Business analysis would be required. First, the marketing department would do surveys to find out what features the different consumers would like to have and how much they would be willing to pay for the vehicle with different combinations of features. Maybe the cars could even have options to suit different consumers that have differing wants and needs. (What a concept! Tailor the product to individual consumers! Who would have ever thought of that one?) Then, the pricing would determine how many consumers would purchase the vehicle. A calculation using a demand curve generated from the market survey results would determine what volume would maximize profits. (Do you remember the law of diminishing marginal returns?).
Okay, so how can this company get obscene or unlimited profits even in a monopoly like this? Can a true monopoly really even exist? Don't we always have alternatives? In the short run, you may not have a reasonable alternative, but in the long run you do. For instance, if the price of cars was too high, but you worked 20 miles from home, then what could you do? Maybe you could ride the bus, but it takes two hours to get to work and two hours to get home. That's not a very reasonable alternative, but you could sell your house and move to a mile from work. Then you could ride a bicycle or walk or even take a 5 minute bus ride.
The only real insidious market conditions generally don't come from a pure monopoly like the one I have described above. Instead, they occur when all competitors in a particular market collude to control the market. The corrupt group of competitors doesn't have to control 100% of the market to create market conditions that are very favorable to the producers and very unfavorable to the consumer. Even if they only control a very large portion of a market for a commodity that is in great demand, that is bad for the consumer. However, there is still a limit to how much profit can be made, and raising the price will reduce demand. It is unlikely that maximum prices would maximize overall profit.
If a market does allow for a company to make very high profits, how long will that last in a capitalistic economic system? High profits will encourage the company to produce more product themselves to increase profits. Also, other companies will see the high profit potential in this industry and design their own competitive product offering. The consumer benefits in the end, because the increased supply drives prices down, and each competitor will try and cater to a different market segment better than the others do. They are also likely to be shunned by the marketplace if their product quality is substandard, or their prices will be driven downward to compensate. The end result for the consumer will be lower prices, higher quality, and more variety of products to better suit their wants and desires.
So, where does the MessAPolitico come into play here? Well, our illustrious liberal politicians like to talk about how the big, evil corporations are making outrageous profits by stealing from the little guy. Then, they go about passing laws to protect us regular folk with regulations (that drive up the price of automobiles and everything else). These same caring politicians also tell us that they will tax the rich people and their corporations to get that immorally obtained profit back. They will use it to pay for all sorts of "free" services and things for those folks that have been wronged and sent down the path to poverty.
The poor most certainly believe that they deserve this "free" stuff. They also begin to believe that those things they get really are free. A bunch of folks even think that those high corporate taxes are paid by the corporations and the rich folks that own them. Well, the joke's on them, because all of us regular people pay those taxes. That's right. We pay more for all of the stuff we buy from these corporations. We pay for all of the extra costs created by meeting excessive government regulations too. Last, but certainly not least, the higher prices reduce demand, so the people providing the services or manufacturing the products will have fewer jobs.
Anytime the government steps in to help us or protect us or give us "free" stuff, watch out. We're about to fall victim to the law of unintended consequences again! (Hey, maybe I should have made this another installment in my series on unintended consequences.)
Thursday, April 18, 2013
Why Don't we Socialize the Legal Profession?
I don't think that it's fair for poor people to be denied top-notch legal services in America. If a person of limited means needs legal advice or gets in trouble with the law, why should they have to rely on inexperienced and overworked public defenders. They don't get the superb representation that rich people get, and maybe that's why they end up in jail so much more often.
Even the middle class can spend their life savings on legal fees if they get in a dispute in court. Why should you need to wipe out your savings to stay out of jail or keep your driver's license if you get slapped with a DUI charge? The rich definitely have an advantage in court, because they can afford the best legal defense America has to offer.
These evil rich people and the corporations that they own can also defend themselves if they are sued by the little guy. They show up in court with a team of high priced barristers to argue against one overworked, bargain basement lawyer working on a contingency basis. Because of these advantages, the little guy will just get squashed like a cock roach in the courtroom.
Of course, the lawyers are in court filing suits against the corporations that have somehow inflicted pain, suffering, injury, or death on some poor, innocent plaintiff. Do they file these suits because they are wanting to save the day for these poor people that need help so badly? Maybe some do, but none of these lawyers does it without a fee. They offer to work on a contingency basis, so the little guy doesn't have to pay anything unless they get a settlement or win in court. Regardless of how many or how few hours the lawyer and his team spend on the case, they get 40% of the proceeds. So much for the needs of the plaintiff.
I think that Congress should pass the Obama Legal Defense Act. It should limit how much lawyers can charge for their services. Lawyers and their teams should only be able to charge an hourly rate that is the same regardless of whether there is a large or small amount won in the suit. Poor people should get their defense paid in full by the government, and they can select whichever lawyer they want, because they will all cost the same.
This could end a major MessAPolitico that favors the evil rich people in the world. I'll bet the current system was set up by Republicans to help their evil, rich supporters. I can't wait until the lawmakers in Congress get started on this one!
Even the middle class can spend their life savings on legal fees if they get in a dispute in court. Why should you need to wipe out your savings to stay out of jail or keep your driver's license if you get slapped with a DUI charge? The rich definitely have an advantage in court, because they can afford the best legal defense America has to offer.
These evil rich people and the corporations that they own can also defend themselves if they are sued by the little guy. They show up in court with a team of high priced barristers to argue against one overworked, bargain basement lawyer working on a contingency basis. Because of these advantages, the little guy will just get squashed like a cock roach in the courtroom.
Of course, the lawyers are in court filing suits against the corporations that have somehow inflicted pain, suffering, injury, or death on some poor, innocent plaintiff. Do they file these suits because they are wanting to save the day for these poor people that need help so badly? Maybe some do, but none of these lawyers does it without a fee. They offer to work on a contingency basis, so the little guy doesn't have to pay anything unless they get a settlement or win in court. Regardless of how many or how few hours the lawyer and his team spend on the case, they get 40% of the proceeds. So much for the needs of the plaintiff.
I think that Congress should pass the Obama Legal Defense Act. It should limit how much lawyers can charge for their services. Lawyers and their teams should only be able to charge an hourly rate that is the same regardless of whether there is a large or small amount won in the suit. Poor people should get their defense paid in full by the government, and they can select whichever lawyer they want, because they will all cost the same.
This could end a major MessAPolitico that favors the evil rich people in the world. I'll bet the current system was set up by Republicans to help their evil, rich supporters. I can't wait until the lawmakers in Congress get started on this one!
Subscribe to:
Posts (Atom)