CapitalistMarks

Obama’s Atlas moment — trying to reignite health care.

Posted on 09. Sep, 2009 by scott.

The photo accompanying the article today is from the Doges Palace in Venice.  I have been there and seen it (only after years and years of pestering by my wife — and I can tell you that the alternative to that trip was a golf vacation in Ireland and Scotland, including St. Andrews, so you must see the sacrifice I made) and can tell you that the artist got it right.  Atlas’s face exhibits a visceral agony that you can only detect close up.  He appears to be doing his job and is not finding it easy.

President Obama faces an ‘Atlas’ moment tonight.  He intends to take the world of health care on his shoulders and influence everyone from ‘blue dog’ democrats to liberal republicans and then on to the thinking public.  The question is can he do it?

I find Barack Obama to be the most eloquent and personable President since Ronald Reagan.  He talks to the people and resonates most when he wanders from his teleprompter and just says what is on his mind.  It is a good thing too since his task tonight seems near impossible.

Not since Vietnam has a single topic caused such a great divide among the American people (and our congressmen).  The truly disappointing thing is that the need, the details and the benefits have not been communicated effectively.  In point of fact, few people really understand the issue and are just reacting to the partisan dialogue they hear from the ‘talking  heads’ on TV.  A sad commentary on America.

Atlas er, Obama must change all of this.  He has got to get the people on his side.  And to do this he must persuade or he will not change any minds.  Frankly he needs to talk about the whole issue but he must focus on the important aspects.  To whit:

1) The U.S. is the ONLY developed nation that does NOT provide health care for all of its citizens.  This is not only a huge blot on our image but a tremendously costly mistake because when the uninsured need health care they get it (at taxpayer and or health provider expense) in the most expensive and least effective place — the emergency room.  It is generally free to them BUT someone IS paying for it.

2)  Tort reform.  Our legal system practically encourages trivial and costly lawsuits.  This is exacerbated by the fact that Americans have become an ‘entitled’ people.  They think the blame is ALWAYS on someone else and that that someone else needs to pay and pay big.  Lawyers of course feed on this frenzy and extract exorbitant fees for minimal work (particularly in the case of large medical class action suits).  This needs to be stopped: for our doctors, our hospitals, and our drug companies.  We could adopt the British system of making the loser in any case pay all costs.  But,  since we have gone down this awful road for so long even more drastic action is needed.  There must be real penalties associated with the filers of unjustified lawsuits.  Obama knows this but I wonder if he will go against the powerful trail lawyers lobby?

3) There simply has to be a public component to any health care reform.  I wrote about this previously but public health clinics could work.  There are other ways too.

4)  The most important thing is that somehow the government has to step in and stop the terrible inflation of health costs and health insurance premiums (they are growing much much faster than the real inflation rate).  I can’t go into the details of this (frankly because I just don’t know how to make this happen — I really haven’t devoted time to it . . .yet) but it must happen!

5)  The reform MUST include language that will make it unlawful (with stiff penalties — kind of like the RECO law that goes after organized crime) to cancel any policy except for nonpayment with plenty of previous notice, to refuse a customer based on pre-existing conditions, to refuse drugs or treatments that could save money or lessen suffering, or to refuse treatment that is known to be effective.

6)  Insurance companies must be allowed (and in fact encouraged) to develop nation wide networks so that the competition among them is increased.  This alone could drive costs of insurance to much lower levels.

So, I hope you get the tone of this.  President Obama has a HUGE task in front of him.  It is going to take all of his rhetorical skills and about 110% of his crowd pleasing demeanor to pull it off.

I hope he does it.

You should too.

Our health care system is broken and must be fixed.  NOW . . . not with the hollow promise of considering it some time down the road (like the government always does with Social Security, but that is a problem for another day . . . whoa, I sound just like our weak and ineffective legislators!).

I will be listening intently tonight.

Hope you will be to!

thanks to flickr’s lightmatter for the photo

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The President talks to students. Let them listen!

Posted on 08. Sep, 2009 by scott.

Frankly I can’t imagine why anyone in their right mind would NOT want their children to hear from the President of the United States.  What a rare opportunity.

I fear that some people get so caught up in the partisan dialogue that we are showered with every day . . . in this case from the FOX NEWS network.  Fair and balanced?  Yeah, and they have some land in Florida to sell you too.  Come on, make up your own mind people and don’t let those perpetual contrarians do it for you.

What knuckleheads are opposing this speech to students across the country?  I read parts of it and saw most of it.  I think it is encouraging to know that Barack is interested enough in the kids in our schools to take the time to speak to them.  He wants them to succeed.  He wants them to graduate.  He wants them to stick with it and get the advantage a good education provides and his life story just might do the trick.

There was nothing remotely partisan in his speech.  Only someone who is lost in ideological wasteland (that most of the cable news networks promote) would take such an unreasoned view of this as to not want their kids to watch it.

Jeez Louise folks.  Besides being the President of our nation and the most important person in the world, Barack Obama is an inspiration to people everywhere who want to believe they can achieve anything.  He is a father of two daughters, and from everything I can determine he is a good one too.  He is also a good husband.  He plays basketball and golf.  He would rather negotiate that start a war.  You can say whatever you want about him but the just related facts are enough to warrant ANYONE listening to his advice and counsel.

I did not vote for him (as I have pointed out many times in the past) but I do believe he has the best interests of Americans in his heart  ( I think every President does).  We need to respect him in the position he holds even though we can also disagree with some of the things he is trying to do . . . and some of the things he has done.

Give him a break.  He has at least 3 years and about five months left to serve.  Notice that last word . . . serve.  While there may be a component of selfishness in any politician and particularly the President, there is no doubt in my mind he is trying to do what he thinks is right.  If you oppose his views well then there are many ways you can have your voice heard.  Just don’t fight him at every turn.

And, stop listening to the self-serving talking heads on the cable networks and think and analyze for yourself.  Sit around with some neighbors or co-workers and debate the issues.  Find better ways if you think they are out there . . . just don’t  be like Glen Beck or O’Reilly or Olberman or Maddow.  They only want to sell books or themselves.  Really, when was the last time you heard any of the above come up with a good alternative to what they are complaining about?  And there are dozens more like them out there in the media universe — all of them about the same.

The bottom line:  give President Obama his due.  Let your kids watch his speech.  Stop complaining and do something if you don’t like the way things are going.  But, don’t just cry and moan and oppose everything a good man does just because you don’t agree with some of what he is doing.

Give it some wee weeing, I guess (what the heck did Obama mean by that?  See, he does screw up sometimes).

Man up dudes and ladies.  This is our country and we have a fine man as our President–maybe not the one you wanted but even John McCain admits Obama is doing some good.

So, grow up all you complainers and conspiracy nuts.  Do what is right and not just what comes to mind after being influenced by Glen Beck or some other cuckoo on TV.

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The Dems are flatlining on healthcare!

Posted on 07. Sep, 2009 by scott.

This whole issue of a public option is getting out of control.  Too many people are too strident in their arguments against any consideration of the options from the ‘other side.’  It seems to me that they have been watching too much FOX NEWS and such (come on Glen Beck . . . give us real arguments and real alternatives and not just pernicious and far out rhetoric that appeals to the fringe right — and while you are at it apologize for calling OUR PRESIDENT a ‘racist’).

The fact is that we need health care for every citizen in our country and we need it now.  To fail is to relinquish our position as global leader in many respects (human rights comes to mind).  We are the ONLY developed nation that fails in this respect.

We have heard that a public option could bring down costs and increase competition with insurers.  Both of these statements are true on the face of the arguments.  Competition will bring down costs,and put pressure on insurers to match pricing structure.  That is the way our capitalist system works . . . time and time again.  Let the companies that are not competitive and viable fail.  Let those that can grow.

A public option will provide insurance access to a much broader population and those that opt out should be hit with penalties so that they are no longer a drag on the health care economy (i.e yours and my tax dollars).

As an added incentive the laws should be changed so that there is true insurance competition throughout the nation.

My insurer for example can only insure people in Utah.  What if they have a good and efficient plan and could offer it nation-wide?  What if we allowed every insurer to offer plans nation wide?

Sure there would be consolidation in the industry and that would be good as long as it was controlled.  The fact of the matter is that we treat health care as if it were a regional or individual state issue, but the reality is that it should be treated as if it were a nation-wide public ‘utility.’  With proper controls and regulatory standards this would really work well.

To accomplish this we have to force our legislators to stop paying attention to the health care lobbyists who are lining their pockets with perks and outright $$.  And to accomplish that we need to have term limits that deny any elected official more than two terms.

A further option for the truly poor or economically disadvantaged would be Public Health Clinics and a real Public Health Service (maybe tied into the Veterans Administration or at least similar in structure).  These would be located throughout the nation so that anyone that needs them could have access.  The infrastructure would be paid for by the government and would probably cost less than the current cost of treating those  without insurance in emergency rooms now.

These Public Health Clinics would be staffed by medical personnel whose education is paid for by the government and in return they serve for between 5 and 10 years at reasonable wages and benefits (depending on the cost of their education and other factors).

Anyone could use the clinics but everyone would have to pay something based on their capacity to pay.  The more disposable income the more they pay.  If they are truly poor they would have to either pay a small amount over time or work their way out of the payment by doing menial (or skilled if they possess the capacity) labor in the clinic or in some related facility.

Now, I admit that I haven’t thought all of this completely through, but the principle I am trying to convey is that THERE ARE SOLUTIONS OUT THERE!  We just have to put our minds to finding them and refining them until they are effective for everyone and fair to all.

This means that President Obama should not put artificial time-lines on any bill(s) to be passed and that the Democratic majority MUST listen to ALL proposals.  Further this means that the Republican minority must stop whining and complaining and come up with some viable alternatives.

Everyone must work together to get this done.  Our future depends on it because it is obvious that we can’t continue as we are now.  In the last couple of years my insurance costs have more than doubled!  If this continues for the next decade or so then our nation and our enterprises will be able to afford ONLY health care and NOTHING else (yeah, forget national defense, forget education, forget highways and bridges etc. etc.).

Get the picture.  It is serious.

Call, email and snail-mail.  Let your congressmen know that you won’t stand for inaction.   And, while you are at it send them a copy of this so that they can start considering some serious and viable options.  Give them your thoughts too.  In fact send them to me as well.  Maybe together, we the people, can show our leaders how to do this.

God Bless America!

thanks to flickr’s brykmantra for the photo

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Conspiracy theories fizzile under examination.

Posted on 05. Sep, 2009 by scott.

I’ve written about this before but it deserves to be revisited.  For the original see Barack is American.  A few recent revelations just reminded me of how the media in the U.S. influences people without any effort to verify the sometimes ‘crazy’ things they promote.

This week I learned that two of my neighbors really believe that President Obama was not born in America and is not American.  Yikes, do I have to move?  Apparently they have not seen the numerous copies of his birth certificate that have been shown in various places on the web (see above) and on some responsible news channels (that seems NOT to include FOX, MSNBC or CNN).  I  wondered how anyone could believe that with all his history in government, education, and as a working lawyer.  Heck, his mother was American and that is not in question — so automatically he was born with citizenship.

But, The Economist (I think the best ‘news’ magazine around) wrote an article in their August 22 issue.  It was titled ‘Still crazy after all these years.‘  You owe it to yourself to read it.

As they say, there are ‘perils of losing one’s grip on reality.’

Obama’s detractors have gone overboard already.  ‘Birthers’ say he was not born in America.  The article debunks that with the best discussion so far (of course there is the birth certificate, but these nutzos counter with the fact that anything can be forged or edited to appear correct).

Whew!

Then there are those that say he is the anti-Christ.  Jeez  Louise (maybe that is not a good frustrating epithet to use here).  Apparently these folks (who have way too much time on their hands) claim that in the Bible Jesus is quoted as saying that ‘Satan will come down like lightning from heaven.’  Further they have found that the Hebrew words for lightning and heaven sound ‘a bit like’ Barack Obama.

This is crazy stuff and I wonder what good could come if the folk that cook  up with stuff dedicated their extra time to curing cancer or charting the course for the Fed to wind down the stimulus package.

Let me add some of my own thoughts on this.  I did the research in my Strong’s concordance of the Bible and Vine’s Hebrew and Greek dictionary.

First we should all remember that the New Testament (there are of course no quotes by Jesus in the Old Testament) was written in Greek not Hebrew.  But then I guess these ‘bored’ people forgot that or maybe they thought that since Jesus likely spoke in Aramaic that their conjecture is close enough.

Anyway, in the original Greek the works ‘lightning’ and ‘heaven’ sound nothing like suggested (roughly ‘as-trap-ay’ and ‘oo-ran-os’).  But if you did look to the Hebrew there is some similarity (‘baw-rauk’ and ’shaw-may-yin’).  Not very close, at least the suspect (?) Obama part.

Apparently in conspiracy circles being somewhat close on just one of two critical elements (still ignoring that Jesus did not speak in Hebrew) is close enough.

Well, enough of this craziness.  Ba-rack O-bam-a IS our President, he was born American, and he was born in America (The Economist points out that the day after his birth an announcement to the effect was in the Honolulu Advertiser) you can go to their archives and check for yourselves, but as for me I trust the nearly two-hundred year old Economist to get it right.

So, let’s put this nutty issue to bed and start working on health care, the public debt, trade deficits, term limits and looming tax increases (and that is just to start).  Anyone can be critical without being accurate, but it is better to be part of  ‘the loyal opposition’ and I stress the loyal part.  Our President deserves (and this President has certainly earned) our respect.

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Brazil rising!

Posted on 04. Sep, 2009 by scott.

Many people would look at sugar cane fields like the one above and see a poor country.  But, when you look at it in the context of Brazil, the final BRIC nation I’m going to write about, they would be wrong.

Sugar cane is representative of Brazil as a whole.  Seen as a poor nation crop (whoa, buddy, what about sugar hitting an all time high on the commodities markets? is it because most of Brazil’s goes to ethanol) in Brazil it is seen as the harbinger of national energy independence.

And it is working.

Brazil does not allow cars in the country unless they are capable of running on the cheap and plentiful ethanol that is made from the millions of acres of Sugar cane harvested every year.  You see, sugar cane ethanol is much better than the corn ethanol made in the U.S. — it takes less energy to make and is more efficient.

And if that is not good enough, Brazil has discovered what is perhaps the largest offshore oil-field ever (at record depths though).  Future deep-drill wells will provide billions upon billions of delectable barrels of the black stuff.  The discovery is so valuable (but technically difficult to retrieve) that China is going to invest billions of $$ to help with the process . . . and get a guaranteed % of the oil that is recovered.  Apparently Brazil’s ethanol program is so successful that much of the future oil can be exported.

Does this sound like a forward looking nation at work.  Using others money to ‘mine’ there own resources?  You bet.  Intelligent and lucky — what more could you want?

Much of this is due to the street smart mind of President Luiz Inacio Lula da Silva.

Like India’s leader (Prime Minister Singh) Lula da Silva was born to poverty.  Unlike Singh though Silva did not pursue education (in fact he quit school after 4th grade).  Silva wenty to work at 12 years old shining shoes. At fourteen he became a lathe operator in a factory . . . seemed like the ‘golden grail’ of jobs to him then.  But his hard work and commitment to the other workers got him a job in the union — eventually landing the position of union leader.

Now as President Silva is focusing on the millions of Brazilians who need education and jobs.  Natural resources are being intelligently (some would say) utilized.  Infrastructure is being added and/or improved.  Efficiency is improving.  Exports exceed imports.  And like the rest of the BRIC countries the stock market there is up around 99% since the first of the year.

Brazil is a democratic nation with the largest military in Latin America and the only one to operate an aircraft carrier (take that Hugo Chavez!).  The economy is also the largest in Latin America and ranks tenth globally.  GDP is about the size of Russia and India and is expected to have only a small decline in 2009, although I believe that it will end up being positive (which would leave Russia as the only BRIC country to have negative GDP growth this year).

Until 2005 the economy and banking system was seen by many economists as a disaster, but with the repayment of  a $30 billion IMF loan that year (repaid a year early) financial and economic stability has been widely recognized.  Brazil is the leader in Latin America: economically, politically, and militarily (it is all relative though).  Bush made big mistakes in ‘the south’ over his 8 years and the U.S. has not been seen as a ‘friend’ for years.  Obama is making efforts to improve relations (Cuba is a good example) and hopefully we can establish not just good but great interaction with Brazil.  We need to!

Brazil is rising in global views . . . rightfully so.

Hopefully with the discovery of oil offshore, more of the sugar cane harvest will go back into exports and the price of sugar will retreat from the awful all-time highs.  Then you (and I) will be able to enjoy our Butterfingers and Nestle Crunch’s without paying an arm and a leg.

Bottom line:  the BRIC’s should really be known as the BIC’s (you got that right ‘click with the BIC’s’).  Russia doesn’t belong.  It is not a democratic and capitalist society (admittedly China is not democratic — yet — but with 1.3 billion people and no true western colonial history to jump start it, democracy could take a few more decades).  Those are factors that almost everyone would agree help economic growth and stability.

Pay attention to the BIC’s because they are all rising and gaining importance in world markets.  But . . . any investment in Russia is no better than going for ‘all down’ on red in Vegas.

Don’t say I didn’t tell you so.

Thanks to flickr’s xajondee for the photo

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India’s growing economy.

Posted on 03. Sep, 2009 by scott.

India seems much in the news lately.  Primarily for its enduring disagreements with Pakistan . . . but also because it is one of the BRIC nations and has a growing and (at least on a historical perspective) vibrant economy.

It could be that the above God, Ganesh (the Elephant God), who is the Hindu patron of arts and sciences is having an influence on the populace.  Then again it might be another of the Hindu Gods or any number of them for that matter (there are over 300 million Gods recognized by Hindus).  But I think the primary influence is on the sciences (broadly speaking) because the people are going to school, getting good educations and then going to work.

Known for its huge outsourcing capabilities (as the recipient), it is not just call centers that are helping with economic growth.  Entrepreneurs seem to flourish in the laissez faire environment the government encourages.  In fact it seems they are pampered by the government.  But success is not an unusual story.

Not just little guys either.

Tata Motors, for example,  is well known globally and is most famous for the Nano –  a car that will sell for $2000 and get 62 mpg!  Think of what that will do for India productivity!  Hey, how soon can we import those little suckers??

The technology segment in India is big with a number of significant players and is growing daily thanks to the millions of programmers, web designers and other ‘technophiles’ being cranked by the excellent colleges and universities.  And then there are the outstanding hospitals and health care professionals that make India a prime destination for medical tourists seeking everything from transplants to knee and hip replacements.  At a fraction of the cost of the same care in developed countries.

India seems to have missed much of the trauma of the world-wide recession.  The Bombay Sensex market has doubled since the lows in March.  Unlike China and Russia the increase seems justified.  Indians, at least those that can afford to, are spending and don’t seem worried about the future.  Those that can’t join the consumer crowd are seeing the opportunities and working to get their children educated so that future generations will move up the economic ladder.

The opportunities in India are immense.  Infrastructure is not good and the government can spend decades and Billions of $$ bringing them into the 21st century.  That will create millions of jobs, require boatloads of engineers, architects and other professionals. The net result: a more efficient, educated and capable population.

This potential is not being lost on the government.  The Prime Minister, Dr. Manhoman Singh, the first Sikh in the office, seems to be a genuine leader who has the vast population in mind.  And it is no wonder given his history.  He was born into a village with no electricity and had to study by candlelight.  Yet, he went on to graduate from college.  He then went to England where he graduated from both Oxford and Cambridge.  As an economist with a Ph.D. he seems the perfect person to help India move forward.  Not too liberal and not too conservative.  He is putting the government’s resources to work.

The efforts are working.

The GDP of India is about that of Russia but there is a big difference besides the fact that it is still growing — India has no significant oil reserves and must rely and true manufactured exports and the skills of their work force.  But there are advantages in those differences . . . those 1.1 billion people provide an unlimited workforce and the life expectancy is ten years more for men than in Russia.  That means an added ten years of wisdom and experience–not a small thing for a nation growing as fast as India.

Then there is the fact that India is a true (and incredibly complex but workable) democracy.  The same 1.1 billion people make elections a challenge and then there are the hundreds of political parties.  Indians have been forced to learn how to compromise and resolve differences.  It is the only way to get things done there!  Americans could learn from them, believe me.  Their elections take about a month as polls are moved about the country . . . and they don’t have two years of preliminary electioneering either (another lesson for us).

I think India is for real.  It belongs in the BRIC but maybe only for another ten or so years.  I just don’t think that their progressive government will allow a damaging slow-down.  In the not too distant future India will be numbered among the ‘developed nations.’   Hopefully that progress will include losing the harmful vestiges of the cold war and a much improved Indian-American partnership will be the result.

I think it is cool!

Thanks to flickr’s exfordy for the pic

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U.S. infrastructure disaster coming!!

Posted on 01. Sep, 2009 by scott.

I  am taking a break from discussion of the BRIC countries to bring you some breaking news.

Darn I wish that were really true but the fact is that what I am going to write about today has been a growing problem for decades.

Fact: America’s infrastructure was once the envy of every other nation, but now it is a looming disaster that could destroy our economy and cost hundreds of billions of $$ to fix.  And take decades to correct.

I am talking about our roads (how many tires have you ruined in potholes lately?), our airports (ever heard of passengers having to wait for hours on the tarmac or runway?), our bridges (remember the bridge that collapsed in Minnesota?), our water mains (we are losing billions of gallons to leaks every day), our sewers (leaks here can cause ground water contamination and spread disease), our electric grid (not modern enough or extensive enough to take real advantage of solar or wind power), and, well I could go on but you get the idea.

This was all brought home to me as I watched a two-hour special on the HISTORY channel last night.  It was all about our failing infrastructure and how big the disaster will be if we don’t get a handle on it.  Go to their website and maybe you can view it for yourself (I really hope they rerun it every day for the next month so that the President and Congress can get a handle on the critical problems they are avoiding).

The reality here is that our bridges are not always safe (we know that already) and the overall rating for ALL of our infrastructure as determined by dedicated Civil Engineers is a “D” on a report card.

After watching this show you will be worried every time you drive across a bridge, next to a levy, over a mountain road, or cruise through a tunnel.

There is so much we have to do and our government is ignoring the facts and necessity.

Other governments (China in particular) are spending billions to create jobs in this recession by updating, improving and modernizing their infrastructure.  It is working and they are going to end up with transportation systems (roads, bridges, railroads, airports, tunnels and such) that are far superior to ours. Better communications and utility networks too.

As a result their economies in the future will have a big head-start.  Transportation, communications and utilities are essential for a smooth running economy.  The advantage are obvious and we are falling behind.

High speed rail?  China will have thousands of miles of 200mph tracks laid soon.  What do we have?  None of that capability.  I know the Obama administration released 8 billion $$ for work on this just yesterday but that is a drop in the bucket.  And much of that is focused on making Washington D.C. easier to get to for our legislative leaders.  Yech!

If we are going to go into debt in our country lets do it by improving our infrastructure to the tune of hundreds of billions of $$.  We can use it be getting back the $$ we gave to protect banking and finance executives in their jobs.  From money pumped into GM and Chrysler and other similar short-sighted expenditures of tax $$.

President Obama, Congress . . . watch this program in your fancy private big screen theaters.  Then start to do something about it.

Imagine if we allocated $500 billion to improving and making safe our utility networks, our roads and bridges, our levies and dams, our airports and ports, our water and sewer systems.

Dang there would be a couple of million jobs added in a few months and something real and important would be accomplished.  Something that would pay for itself in improved conditions for everyone in the nation . . . and we would be SO MUCH more competitive and efficient in nearly every aspect of our own commerce let alone the advantages to us in peddling our exports at better prices.

We could increase a declining competitive advantage in global markets if we had better infrastructure across the board AND make our country a safer place to live!

We really need this . . . more than health care, more that cap and trade, more than a declining space program, surely more than a few new private jets for Congress!

Get scared ‘cuz it is a real problem.  Watch the show (no fee paid to me for this promotion — it is simply an excellent bit of TV journalism).

Then get mad and jump all over your congressmen, governors, and even the President himself.

It might be too late in a couple of years.

Coming up next.  Back to the BRIC’s with a look at India.

Check back.

thanks for the photo to salukipilot4590 at flickr

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The Russian mafia/government.

Posted on 01. Sep, 2009 by scott.

Would you buy a car from this man??

Not even with extra cash from the clunkers program.  I look into his eyes and I sure as heck don’t see what Bush imagined.  This is one power hungry and selfish dude.  Oddly he craves public attention even more than Obama.  In Russia he is the nation’s hero and number one celebrity.  And regardless of what anyone says he is running the country and it looks like he will continue to until he dies (might even declare himself the new Emperor?).

He has a deadly system to maintain power.  Anybody that contradicts or opposes him seems to end up dead or in jail (newspeople, politicians, business oligarchs etc.).  Not a nice guy.

Yikes!  And Obama is cozying up to this ‘Don?’

Ah, well, yesterday I wrote about China and today I look at Russia and their place in the economic maelstrom of the current worldwide recession.  It isn’t a pretty picture.  And they definitely don’t deserve to be considered in the otherwise impressive group called ‘BRIC’ (that’s the developing nations of Brazil, Russia, India and China) except they still have a sizable nuclear arsenal . . . and that carries enough weight to makeup for economic and political/social incompetence and crooked dealings.

Russia has about twice the land mass of either the United States or China — it makes Texas look like a kiddie pool. With a population of about 150 million (less than half of the U.S.) you would think the average Russian would prosper.

Not!  Their GDP was down 10.9% in the second quarter.  That is by FAR the worst performance of the BRIC.  I mean things are awful there.

The average life expectancy of a male in Russia is only 59 years!

I admit that Russia is as yet unvisited by me, but the stories I have heard and read about doing business there are frightening.  Their GDP is less than 1 trillion $$.  Per capita GDP is bad — $7,000 (U.S. is about $44,000).  The government controls everything of real value.  Yet their stock market is up 70% so far this year.  You wonder if there is a bubble there?  I imagine so, but who really knows as nothing is transparent in ‘The Motherland.’

Why have they (the Russian people) never prospered since the ‘great revolution’?  It seems perfidy follows generation after generation of their leaders.  The example they set is bad enough, but the high life they live is even worse.  How are these guys heroes to a populace that is still living in an economy with little to show for Putin’s grand plans?

Russia depends on their oil and natural gas exports (nearly 2/3’s of total exports).  And they are just as bad as Venezuela when it comes to nationalizing or controlling  profitable enterprises for the benefit of the few.  Kickbacks and bribes are the norm.  The government is about as democratic as Chavez’s and even less qualified to run the potentially great nation.

I have read a lot about the people of Russia.  They are hardworking and loyal and deserve a break.  But they suffer under any government eventually and Putin’s is the worst since Stalin in my opinion.  The guy stinks of  rotten deals and petty jealousy.  He put one of their greatest entrepreneurs in jail on a whim and took over his multi-billion $$ oil business.  All because the guy was going to run against him in an election.

Every official in Russia has their hand out, from Policemen to taxmen.  The place is rotten with crime, government fraud and flat out dishonest dealings.  I have heard (unattributed) that Putin has amassed a personal fortune in the ten’s of billion of $$.

That kind of leadership simply sucks.

Fact:  Russia doesn’t have a chance in the world economy until they start letting entrepreneurs and outside business interests with skills and capital operate unfettered by government control.

Bottom line: sure Russia had a growing economy when oil prices were high.  BUT, if the rest of the world really takes alternative energy seriously then Russia is in the crapper (I believe that is colloquial Russian).  They haven’t really implemented any realistic stimulus and are continuing to blackmail their neighbors over oil and gas.  Russia’s reputation suffers worse than America’s in global surveys.

Gosh Russia is a wonderful place (think of St. Petersburg or the pristine beauty in the Northeast) but full of rotten apples at the top!

Russian leaders are too egotistical and too interested in lining their own pockets and the pockets of their ‘buddies.’  It has no place in the BRIC nations . . .at least not until it can change to a truly democratic government and get rid of Putin and his KGB cohorts.

Then they can start utilizing the underrated talents of the average Russian and start really benefiting from incredible natural resources.  Oh, and they should start watering down the Vodka they sell and arrest all the “mafia” types.  Then the life expectancy of men just might get up to that of their women (about 73 years — jeez louise there must be a lot of lonely widows in Siberia).

Okay, enough of that — stay tuned for India and Brazil.

Thanks to the world economic forum for the photo from flickr

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China going bust?

Posted on 31. Aug, 2009 by scott.

First of all, the headline today might seem weird for a country with a growing economy (maybe as much as 10% this year) and a stock market that has been up nearly 100% since the first of the year.

But let me give you some of the info behind the headline.

Interestingly, I heard an interview with a Chinese national on TV over the weekend.  I wish I could tell you who and where but it has been lost in the flood of stuff I watched and read.  The key was his statement about China’s lack of a social safety net for their working class citizens.

This discussion really woke me up.  I was surprised, frankly, because this was the first time I have heard this particular issue brought up by an American news channel.  But it is right and with the time I have spent in China I have seen first hand the horrible way they treat their work force (including pay, benefits and bonuses).  Frankly I didn’t like having my products made their because I felt like I WAS TAKING ADVANTAGE.  Truth is that it is the Chinese elite leaders who are the real culprits here.

How does this affect us?

We all know that America’s consumers have been driving the international markets for many decades.  This is coming to a halt as savings have gone from literally negative to approaching double digits.  Americans are feeling insecure (deservedly so) and are starting to put money away for a rainy day (or year or two).  Consequently our economy has come to a screeching halt in the worst recession since the Great Depression.  We are no longer feeding China’s export frenzy.

Of course this has had a tremendous impact on other countries which export goods to us.  The more we save, the less we spend, the less goods fly off the shelves and the less imports there are.

China’s approach to dealing with the recession has been to flood different regions with billions of economic stimulus–most of which was intended to increase employment through important infrastructure projects.  And it worked (unlike Obama’s stimulus so far).  Their economy will definitely grow this year and the U.S. economy is likely to shrink 3-4%.

The positive impact of China’s stimulus has been a boon to their stock market, which doubled in $$ terms in the first 7 months of the year.  But — and this is a big one — in August the Shanghai index fell 25% . . . 10% in just the last few days, including nearly 7% today alone!  Those are scary numbers for those who have been ‘piling’ on in Chinese stocks.

Further, consider that shares in China’s markets trade at an average of 31 times trailing earnings which is more than twice that of the U.S. markets long-term average (around 15).  Add to that the fact that traded Chinese companies have had earnings declines this year of around 20% and you have a possible (?) bubble — – –

Is it an early warning signal of a bust?  Could be.

On top of all this, many economists believe (me included given the penchant for gambling in China) that the tremendous increase in bank loans encouraged by the Chinese government has resulted in at least some of the extra money that was pumped into the system going into stocks rather than for business purposes to grow GDP.  Ouch!  Their bankers may have to take a ‘time out.’

And now, thanks to the above mentioned interview, I can see the writing on the wall and further understand the real risks here.  You see the average Chinese worker has no social safety net at ALL!  No health insurance, no retirement, no job guarantees and no hope that their government is about to offer any.  This means they MUST save for an uncertain future.  And they are not about to go on a spending spree (not the majority anyway).

All this talk of the Chinese consumer stepping up to grow their economy into the world’s second biggest soon is smoke and mirrors right now as long as the employment benefits situation there remains the same.  Sure there is a wealthy and growing upper middle class who will spend but they are a small percentage of the whole.

If you remember last week, I pointed out that 91% of all Chinese multi-millionaires are children of high ranking communist party elite.  The old story of the rich get richer and the poor get poorer only multiplied by 1.3 billion people!  There is something rotten in THAT woodpile!

The Chinese worker must save.  The Chinese government will not continue their effective and costly infrastructure stimulus for much longer.

Then what.

A Chinese bubble will very likely burst.  All because there is no incentive for the 500 million workers to spend their money at KFC let alone the local equivalent of Sears or Target.

What will the damage be?  Surely a steep drop in their markets, but also the possibility of lower wages and lower raw materials for a while, and that could stimulate the export market once again and encourage American’s and Europeans to start buying again.

So the talk of America starting this whole thing might be lost in the future talk of China extending the problems with economic decline.  And that just might help the big industrial nations who have suffered so much initially as Chinese goods get cheaper (and hopefully better — are Chinses Auto imports far off?).

It is all a big ‘circle’ of economic interests.

I think tomorrow and for the next few days I might write about the other BRIC countries and my expectations for their future.  Stay tuned.  Russia.  India.  Brazil.  Coming up next (unless something else catches my fancy).

Toodaloo!

thanks to flickr’s numb3r for the photo

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Barack IS American!

Posted on 20. Aug, 2009 by scott.

My fellow Americans.  It it time to stand up for what is right, to get something done, to end the partisan politics, to ignore the conspiracy theory nuts.

We are the greatest country in the history of the World and yet in this first part of a new century we are failing.

Failing to improve our own lot.  Failing to provide comfort to the poor, the needy the oppressed (in our country and others as well).  There is so much more we could accomplish.  There could be such great examples in our system for others to follow.  There could be true liberty AND social justice.  There could be opportunity.  There could be universal healthcare.  There could be jobs for everyone that wants one.  There could be all the education anyone could want at affordable prices.  There could be universal healthcare.  There could be high-speed rail from New York to Los Angeles.  There could be a cure for cancer, chronic back pain, migraines and more.

There just could be SO MUCH MORE.

And we sit around arguing about whether Obama was born in America.  Or whether the government is going to let your grandma die and a Congressman the same age live.

Why waste the time.  Can’t you nuts that push this crap spend your time on something productive and worthwhile (or at least keep you idiotic and insane opinions to yourselves)?

Look at the picture above.  It is Obama playing the quintessential American sport, and he does it pretty good for a guy that has to worry about the fate of the civilized world 24/7.  Of course he was born here.  Of course he is our President.  Of course he is going to make a few mistakes (he’s human).  And of course he is NOT the anti-Christ, the contra-Mohhamed, the opposite-Buddha or anything else like that.  I’ll tell you what is.  Contention.  Contention is devilish.  It stops any good from happening.

Debate, considerate argument, looking at both sides . . . that gets stuff done.

President Obama is a good man (not perfect), a family man, an honorable husband.  An elected official.  Stop whining about it.  It is good enough for me (and I didn’t vote for him).  It should be good enough for you.  You don’t have to support everything he says or does (I sure as heck don’t).  But support the INTENT TO DO GOOD!!

Getting anything done in this country is hard enough.  We have over 300 million people with disparate backgrounds and views.  Makes it tough.  But we DO have a system that has proven to work in the past and can do so both now and in the future if we let it (and contribute to it intelligently).

Congress, as you all know, is not one of our more functional institutions.  Brought to its knees too often by individual legislator’s desire solely to be re-elected.  So the ‘less’ than prime beings in congress listen to the loudest voices as they seek constant access to votes.  The vociferous minority has too dang much power.  The intelligent and wise majority needs more.

Sure doesn’t help to have nuts raising stupid issues that the media gloms onto and turns from molehills into mountains in their efforts to get viewers and sell more ads.  Octomom?  Birthers?  Space-alien abductees?  Sells papers (well not so much anymore) and ads on TV, but what good is it?

So let’s set the record straight once and for all.  Obama was born here, he was raised by an American Mom and American grand-parents.  He graduated from American schools and has an American law degree and was an American Senator and . . .  dammit, he plays American basketball!!  He plays it too naturally to be a plant. And besides you nutcases, who out there could have been forwarding looking enough to ‘plant’ a secret terrorist in our midst as a baby back in the 50’s expecting him to be PRESIDENT??  In the 90’s maybe, the 50’s???  If you think that is realistic move back to whatever planet you call home.

We need support and loyal opposition both to make things happen  in this country.  Pay particular attention to the ‘loyal’ part.  Opposition just for opposition’s sake is counter productive and downright dumb.  You listening Republicans?  The Repubs didn’t like it when the Dems opposed them in the past . . . but if they are the real ‘Christian’ right can’t they forgive and help us get some real work done?

Not without your help.  Throw the bums out unless they get something done.  Throw ‘em out anyway after two terms (NEVER MORE).

Ignore the nuts.  Complain to the tainted media about stupid stories.  Complain to Congress about self-serving ideology.  Lets get real news, impactful news, meaningful news all the time.

And, let’s get something done for a change!!

thanks for the photo to flickrs’ eyasu.solomon

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