The President’s Plan and the Story of Sam!

Uncle Sam's Pickle

Uncle Sam’s Pickle

The President’s Plan

In the State of the Union speech last evening, the president said many things.  He offered a real plethora, yes a plethora, of programs, benefits, stimulus, taxes, and other things that he believes will improve the lot of Americans–at least some Americans. Many were struck thoughout his speech by the breadth and depth of the things the president wants to spend money on.  He offered programs for immigrants, college students, environmentalists, women, minorities, the elderly, the sick, the middle class, teachers, the unions, the poor, the underserved, the military and just about every Continue reading

President Obama describes his role for the middle class

On July 24, 2012, the San Jose Mercury News ran an article by Josh Richman and Matthew Artz, “Obama’s campaign hits Oakland. “Obama campaign hits Oakland.”

The article covers the typical campaign rhetoric. It has its requisite Romney and republican bashing, has the required promises that he will give us all everything we want if we just give him one more chance, how everything would be better already if it was not for those other guys, and of course it was all wrapped up with a large dose of scare tactics to convince those present in Oakland that the bogymen conservatives were about to take away their babies, Continue reading

The State of Whose Union?

The President Reads the State of the Union Address

I have tried to resist responding to the State of the Union Address last night.  I really have tried!  But, you guessed it, I can’t.  I was so astounded by much of the rhetoric that passed through the President’s lips as unassailable facts I still can’t believe much of it.

As I am want to do, let’s review some real facts for a few minutes….

The President said the State of the Union was getting stronger

Well this really depends on what you choose as your measures and of course how hard you decide to spin them.  Here are some key statistics that were not highlighted in the speech.

Some of the pundits, immediately after the president’s speech, were very quick to remind everyone that President Obama inherited this bad situation.  That’s true, and so have every president since President Lyndon Johnson. in 1964.  The fact that they all have inherited it is not the relevant fact.  It is the fact that every one of them neither fixed it, nor improved it one iota.  In fact here is another little fact.  Everyone of them in some way or another actually contributed to making the situation worse-Republican and Democrat.  All they did was find ways to patch it, give more to those they thought deserved it (meaning would give votes to get it),  printed more money to pay for it, and hoped it didn’t all come apart before they got their golden parachute.  Well it has come apart now, hasn’t it.

“Fairness for all, Responsibility from all”
– President Obama 1/24/2012

Part of the problem I have with last night’s speech is the President stating he is going to make sure there is “fairness” for all.  It is not his wanting for people to have a fair shot that bothers me.  Everyone I know, if asked, would say they want fairness.  But fairness like many other things in life is a frangible and perspective driven concept.  It means different things to different people, and sometimes different things to the same people on different days depending on where they are and whether they are the beneficiary of the supposed fair treatment or not.

I just do not think anyone can give another fairness.  Often, the act of a group, or government, attempting to make something fair takes the form of redistribution or reallocation of something from one group or individual to another.  Look at the controversy surrounding Affirmative Action in Education and the implementation of quotas to make it fair. I am not challenging whether this was a good idea or not,  I am pointing out that in creating a quota to make it “fair” for one person or group, you simply are redirecting the opportunity from another person to this person.  If the person your took it from had nothing to do with the disparity in the first place then they now are being placed in disparity. Even in California, one of the strongholds of humanistic belief and liberal thought, some of our most liberal politicians have recently stated that we all need to get used to disparity.  That after 40 years of public life she now understands disparity must exist ; no mater the cost it cant be eliminated. It seldom works to try to make something fair by treating others unfairly—ask any six year old!

Frankly, if you look at other countries and other systems of government, America is just about as fair as anything could be given human nature in the first place.  I mean really, you think most of Africa is fair?  How about China?  Russia? Saudi Arabia?  Most other places are decidedly less fair than America.  So when people say we have some very deeply built-in unfairness, they usually are speaking in narrow terms.

Historically, if you look at our specific history in a vacuum, we’ve had periods where specific classes, specific races, and specific genders were treated unfairly.  This is very true and not something to be proud of in our newest age of enlightenment.  But once again, the facts are, that while we had these uncomfortable periods of our history, contemporaneously America was still head and shoulders above the rest of the world at the time.  We can always strive to do better , to be better people, to be better to each other, but no government can impose fairness nor can it replace the personal responsibility and character we should all instill in ourselves and our families.

Responsibilities from all

He used the term, “Responsibilities from all”.  The phraseology struck me oddly.  While I suppose it is grammatically correct to say that responsibility comes from somewhere or someone, I am not comfortable with this statement.  After thinking about it this morning, I realize this is because I believe responsibility should be innate in each of us.  That responsibility does not come “from” anywhere.  I feel that responsibility is part of our character and while it may flow from us it does not flow to us.  To try to illustrate this point, let me say that part of my responsibility, as I see it, is to help others.  In fact if I do help others I am being responsible.  I also feel that if I throw a baseball and it bounces and breaks your window, I should be responsible to fix the window. Fault in actions are in some way offset (not excused) by the exercise of responsibility for the fault by, or within, the individual.

I do not feel, however, that if you robbed a liquor store that it becomes my responsibility to pay for it. I assume most feel the same way.  But, I also feel that I am not responsible for any of the third party circumstances that you may have encountered in your life that led you to rob the liquor store.  I worry that the president believes that we are responsible for what others choose to do.  That somehow it is our responsibility to make sure they do not do something harmful or at least find themselves in circumstances that lead them to do something wrong.

In my life,  I have listened to many people justify their bad actions based on some set of circumstances that led them to do what they did.  I have heard things like; I was abused by my parents, my mother was an alcoholic, my tire blew out and because of my crack addiction I did not have enough money to get a cab so I could not get to work. Often, somewhere in each of these excuses became an attempt to transfer the responsibility to me or others because we somehow allowed the parental abuse, the mothers alcoholism, or the existence of crack cocaine– all of which if eliminated from this persons past would have somehow supposedly stopped the bad action in the first place so therefore–ipso facto– it is my fault, or your fault,  they did whatever they did.

I think these are some of the fundamental differences that divide us today.  I think the concept is attractive to take the position that everything that affects me is someone else’s fault or greed. Words like compassion and fair-share sound so good against the backdrop of greed, oppression, poverty and sacrifice.  But frankly, this is not what the fundamental issues we face are about.  It is now about our viability–national and economic.  We have destroyed our economy, and our viability, because we have systematically, over the past 100 years, made decisions for self gratification and personal appeasement of abstract goals that have affected our production, our cost effectiveness and our competitiveness in this new one-world economy.

We used to be the world leader in fisheries, agriculture, clothing, steel, oil, coal, automobiles, aircraft, raw production, basic manufacturing and many others.  But we have made decisions that have altered our ability to be in these industries at all or to be competitive in them.  Child labor laws killed the textile industry in New England, increasing labor costs and environmental laws killed coal, steel, oil and fisheries. Increasing labor costs, over production and now subsidies have effectively killed agriculture.  And overall for the rest the increasing costs in general, including labor costs, taxes, mandated benefits and shrinking labor pool (skilled and unskilled) have killed much of the rest.  Along the way, we have become a nation or middlemen, service providers, who purchase most of what we consume from other countries than we make ourselves.  Each year we bleed cash from our treasury to other nations workers.  Since 1972 this has exceeded $12 trillion.  That 12 trillion dollars more spent in buying stuff from other countries than we have sold to other countries.  This is one huge reason, but by no means the only reason, that we are circling the drain the way we are.

We have abandoned many industries because we felt there was just cause to do so.  Again, I am not saying any of these decisions were good or bad.  You need to make that call for yourself.  But, we have willingly walked away from most of the industries that led us to our short lived prosperity.  As we have embraced the “one-world economy,” we have killed our own production, rapidly and drastically increased our costs, and decided that we no longer can try to influence who goes to college (destined for middle management) and who works in the fields, the factories, and the plants.  In order to feel good, everyone has to go to college.  When we need labor, we relay with a wink, wink — nod-nod on immigration.  Since legal immigration is expensive and takes a long time we have a large illegal immigration problem–and we sit and wonder why!

As we have been indiscriminately printing money since 1974 we have lived in a fantasy land.  It is a wonderful place to be, don’t you see:

  • Everyone goes to college
  • Everyone can own a house
  • Everyone gets a car
  • Everything is fair
  • Everyone is a millionaire
  • Everyone has everything they want
  • No one needs to worry about getting sick
  • No one needs to save – in fact we need to borrow and spend more
  • Someone else will build it
  • Someone else will maintain it and clean it
  • Someone else will pay for it

In this fantasy land, the government will see to it that all the above just happens.  We don’t need to worry or pretty little heads just pay the taxes it will all be fair.

Shrinking Middle Class

The president has brought this up over and over recently.  Our president is a master at using language to infer that the middle class is suffering because of individual greed, because of Wall Street, because of corporations, because of millionaires and billionaires…. The truth of this is that the middle class are suffering because they have lost the value of what they earn disproportionately to everyone else–poor and rich. They are not poor enough to get in on the gravy train that is now the myriad government subsidies that over one-half of the population receive, nor are they rich enough to use investments to hedge the loss of value by playing the inflated earnings game that has been the finance,  investment, and real estate (FIRE) economy game for the past 40 years.  They have been screwed!  One reason the number of the middle class in the population is declining is we are raising the level of eligibility of programs for the poor. And along with that the cost of the additional program subsidies is coming from the middle-class and the rich in the form of taxes and higher costs, the rich just don;t feel it as much because they can invest enough of their money to offset the loss of value. Like the subsidies for industries and the poor, some portion of the new money ends up as liquidity in the stock market because the banks put it there! Can you say Quantitative Easing?

What was not mentioned by the president is equally telling

The Affordable Protection Act, his singularly biggest achievement — if you count it that way, was only mentioned in passing.  His own administration has had to admit that there are many things in the legislation that are either unfordable like CLASS, unworkable like the Medicare M.D. fix and the plan to have the IRS as the reporting agency, or potentially unconstitutional like the insurance mandate.

Medicaid, Medicare, and Social Security, like many other things are items that this president inherited.  Unlike most they are the biggest, and most insidious, causes of the loss of value to the middle-class and the destruction of our economy.  Once again, I am not making a value judgement on these programs or whether or not they should exist.  They simply have become what many feared at the time of their creation, much larger drains on our economy then was planned for.  Also, since most of the money that was created since 1974 has been needed to pay for these entitlements, along with the accumulating trade deficit, they are collectively the main reason that the money came into being and as such the main reason that the real value of the middle class has declined so drastically.

In the end, you have to ask yourself why the president spent so my time decrying the state of our economy, our industry and our people but then offered as a solution a panacea, of no pain, more money, more taxes, more subsidies, more for the poor, more from the rich, more subsidies for non-profitable industries no plan for increasing domestic primary production, and nothing about solutions for the real problems we face?  Well I guess it really is about re-elections not solutions.

In Closing

While the president may have appeared to be the brunt of my ire in this piece, it really is extended to all members of the full-time-professional-political class.  DNC or GOP the rhetoric and practice of opponent vilification and liberal application of what amounts to noting but wall paper paste needs to stop. Real solutions need to be proposed and vetted in this election process.  As a Mugwump, if a candidate does not start to tell me how they are going to fix the real issue and elucidate exactly what the pain points will be for everyone, then I am not voting for them regardless of the party.

If there ends up being no one; then I may not vote for anyone.  If that happens then it probably won’t matter because it will be too late.

“Pass My Job’s Bill NOW!”: Unions and Immigration – two sides of the same coin

Unions and Immigration dominate news along side of jobs

Reader Warning, this may be a long one! Please be patient.  No sound bites here!

The Argument

In his speech today, President Obama, once again called for congress to pass his jobs bill – NOW!.  The President stated that if they do not pass his jobs bill, which he views as perfect – without any flaw – and will, in his opinion, inevitably return us to prosperity, then the American people, who he states are overwhelmingly on his side, will harshly judge the republicans who are simply resisting for idealistic reasons.  He implied that the American people are tired of the republicans looking out for millionaires and billionaires.  He chose his words very carefully to imply that the Solyndra loan was the result of the prior administration’s programs – that he doesn’t own this one.  In doing so, once again he uses language to obscure this administration’s role in this specific loan. A loan that was denied by the prior administration and recommended by his own administration as not ready to be funded – but yet was funded anyway!

If one were to challenge the Presidents statement based on the inference inherent in the phrasing and timing of the language he used, his administration will seek the cover that was carefully crafted into this statement.  Jay Carney likely will respond, “that is not what he said…”  “What he said is that the “loan program” was begun under the prior administration…”  Continuing with the obfuscation, the President then presents “his” argument that this program is designed to make America competitive again.  As he makes this statement it is phrased so that he now owns this ideal of making America competitive. He would like us to believe that now “He” is making America competitive again. But is he?

He also repeated his mantra that, we need to make education more accessible and affordable and make sure every American goes to college.  His Education tzar, Arnie Duncan, in a recent radio interview, stated, that it is the U.S. governments responsibility to “provide a cradle to career assurance!” Is it?

In his speech he goes on to state that they are funding these loans to subsidize industries in order to get us “competitive” in a world where we no longer can compete.  He continues to state that we can’t compete against China who “subsidizes” their industries.  But if you talk to the manufacturers in China, as I have, – who the President claims the Chinese communist government is subsidizing – they will laugh at this assertion.  Again if you dig below the Presidents rhetoric, or if you challenge him on this statement, you find again that his words have been chosen most carefully.  The President’s administration will tell you that what he means is that China, through its Central Bank, is unfairly manipulating its currency.  Why, because they refuse to artificially inflate their currency, and overpay or over-benefit  their workers to become uncompetitive in the one world economy?

The Truth

In a whitepaper published by McKinsey & Company – September 14, 2011, written by Lowell Bryan, Sven Smit, and John Horn; They state that the current economic fundamentals remain unfixed.  Some of their main points include:

  1. Even if the developed governments, including the U.S. government, had been able to pass greater stimulus measures earlier – including isolating toxic assets – this would not have fixed the longer term fundamentals.
  2. The recent focus on debt ceilings in the U.S. and the sovereign debt crisis in southern Europe has also overwhelmed the public debate and shifted away from the failing economic fundamentals.
  3. In the U.S., the downward trend in labor participation has become pronounced.
  4. Structural economic fixes are needed such as;
    1. Stimulating private investment and savings
    2. Undertake an orderly de-leveraging of households (i.e. get Americans to stop borrowing and start saving – the exact opposite of what we are doing)
    3. Increase participation of labor (production level jobs) in the economy (as opposed to middle-level management and non-producing jobs)
    4. Reform long-term entitlement programs and tax policies to reduce the uncompetitive economic cost structure of American Businesses
    5. Reform education to produce more skilled labor
    6. Reform legislation to simplify and speed commercialization of innovation
    7. Rebuild failing infrastructure.

Like the Affordable Care Act, the President wants us to force congress to pass this legislation quickly before, as former speaker of the House, Nancy Pelosi, said we can read what is in it.  More importantly, it is not the reading – but the understanding of whether or not this will work.  The President is becoming very long on his implied -“trust me” plans.  He seems to either not recognize, or not care, that the majority of Americans no longer trust him or his advisers as their track record is putrid at this point.

While the focused effort at fomenting insurrection based on converting class envy into class warfare is getting quite a bit of play in the main stream media, it is not really playing in Peoria, or Winnemucca.  How will Americans feel if this concerted effort to stir up hate and discontent in the willingly disenfranchised boils over into a true insurrection?

The Presidents Jobs Bill, is being resisted, not because of republicans love for millionaires and billionaires or a reliance on them for campaign funding.  All of our professional political class (republicans AND democrats) loves, courts, and whores themselves to the so called millionaires and billionaires.  The bill is being resisted because most economists – outside of the presidents supporters – and good common sense find serious flaw with much of the underlying logic of his plan.  Further, history, including very recent history, shows that many of these approaches are not addressing the fundamentals and do not work.

The Kaiser Excuse

The Solyndra loan is one that this administration, the President, and the Vice President, own  lock-stock-and-barrel!  The prior administration had clearly and distinctly passed on this “so-called” investment.  Upon arrival in DC, and after some very in-judicious meetings with the lead investor – and big Obama bundler – George Kaiser; the administration decided not to simply revive this investment opportunity, but to expedite it and use it as a major public relations asset for both the Vice President and the President.

Now that this issue has blown up in the face of the President, his press secretary has characterized the meetings between George Kaiser and the President as discussions on his “non-profit ‘family foundation'” gifts program.  Once again they use carefully constructed phraseology to obscure the issue.  In this seemingly simple statement, most Americans will draw the connection to the Kaiser Family Foundation.  The Kaiser Family Foundation is a venerated non-profit known for its tremendous philanthropy and commitment to health care and the primary legacy of Henry J. Kaiser.

Houston we have a problem!  George Kaiser is no relation to Henry J. Kaiser nor is he connected in any way to the Kaiser Family Foundation.  He does have a family foundation, and he is a big contributor to charities including his Tulsa Community Foundation.  It is perhaps simply convenience that the administration chose this term to refer to his meetings and our own bad judgement to draw the conclusion that it was not “the” Kaiser Family Foundation – our bad!

All Jobs Are Not Created Equal in Fixing the Economy!

As the President is pushing his Jobs Bill he is really pushing Union jobs.  He is speaking about infrastructure, make work jobs.  Yes, it is true the infrastructure in America is in disrepair and needs to be rehabbed but this does not translate into making America competitive.

In his lecture to America this morning, he stressed the need to make us competitive again in the new world economy which he strongly supports.  We clearly need to become competitive again. And it is also very clear, that we are not competitive with China, Singapore, Taiwan, India, Hong Kong, Malaysia, Mexico, and many other nations around the world.  But will Union jobs and government subsidies really bring us back to being competitive?  The short answer is, no!  Looking at the U.S. Economy on the whole, taking tax money from the U.S., in any form, and passing some of that money back to companies to lower their specific costs or to provide incentives to people in America to buy their products does not make America any more competitive to the rest of the world.  It is just a zero sum game.

Think of this as your own piggy bank.  You have ten pennies in the bank.  If you pull 5 of them out of the bank to give to your friend to buy a stick of gum from you (that you paid three cents for) and you put them back in your piggy bank.  You still have only ten pennies in that bank.  Yet, you not only did not make a profit on the gum, you lost three cents overall.  This is the same shell game.  Lets take a look at some more realistic numbers.

The cost per man-hour to build a car varies widely in the world and even here in the U.S.  No matter whether you are building a luxury car or an inexpensive bare bones vehicle, the cost per man-hour is relatively the same.  It is the number of man-hours, and the price of the basic materials that changes the total cost of the car.  If you look to Detroit, the estimated costs for labor are approximately $85.00 per man-hour to make a car in this shining star of American manufacturing (at least according to the current administration).  If you look to Japan the per man-hour cost averages about $46.00.  If you look to Alabama, where some Japanese car manufacturers have moved their manufacturing the cost is about $28.00.  And some estimate the cost in India, at $18.00.  Is it any wonder that Detroit cars are not competitive in the world market?  And why the difference between Alabama factories and Detroit?  Can you say Unions?

Now I am not against unions – nor am I against union workers.  Unions have done some very good things historically for America’s labor pool – particularly related to dangerous employment conditions and mistreatment.  But Unions have also done some very bad things, perhaps knowingly, to America’s ability to compete in a one world market.

To coin a phrase, this is something we are “fundamentally” ignoring!  Our problem with being labor competitive comes in two basic areas:

  1. We have almost no natural labor pool left
  2. The labor pool we have costs way too much compared to the rest of the world.

There are other things that impact our competitive position in the world like, we no longer produce much in the way of raw materials, much of our business is based on middle-man transactions. And most of what we produce at the higher costs are sold at home doing little to reduce the steadily increasing trade deficit.  While these things are also very important, let us hold them for a later article.  The intent of this article is to focus on jobs and labor and the Presidents increasingly unfathomable position.

Why no labor pool?

Along with the focused drive, since 1972, by the banks and government to get us to stop saving and start spending, and the modification of the push to foster credit based purchasing, we have also been purposely closing trade schools and tech centers and redirecting those who would have gone into the skilled labor category to go to college. We are now a nation that does not value  the base laborer.  The person who creates valuable goods and services with their own hands has been left in the dust and become a second class citizen in a nation of college educated plumbers, welders, carpenters, cabinet makers, taxi drivers, and fast food managers.  I have repeatedly seen companies requiring a college degree for many professions like basic sales that should be more reliant on people skills simply to reduce the number of applications.  Most of the top sales people I have know in my career were without a college degree.  They learned their skills at the school of hard knocks.  I saw at least one such individual rise to one of the top sales positions in one of the top tech companies.  He almost single handedly took this company from a start up spin out to one of the premier producers in its class. In the end he was displaced by a policy decision that now required all executives to have a college degree.  It is no coincidence that within a few years they fell from favor in the market.  In some cases “book learnin'” does not compensate for real in the market experience.

While it is emotionally fulfilling to know these people have gone to college and perhaps studied the teachings of Confucius, or the writings of Chaucer; but has this made them better plumbers of has it just added to the expense of training them and increased their expectations and lifestyle and driven up their cost structures?  Is there value to them from this education?  Of course there is, but is there really value economically to America in their labor role?  No, it is in fact an unnecessary expense economically. Please remember I am not making a moral judgement here and I am not saying people who choose to, or end up forced to, practice a trade should not be allowed to go to college.  I am simply pointing out that this may not be the best economic solution for our world competitiveness problems.

While America has fostered the “everyone goes to college” mantra, closed its labor and trade schools and become dependent on immigration, legal and otherwise, to provide the required base level workers; places like Singapore still track a large percentage of their youth into labor and trade related programs.  Only a select few get stimulated to go to college.  Is this better morally?  Who knows, let the philosophers sort that out.  But economically, they are one of the countries kicking our asses, and we can’t blame that on the “subsidies of communism.”  By the way, kids that really want to go to college can choose to do that in Singapore, they are simply encouraged to go into trades and they venerate their trade workers and laborers.

So why is the President fostering class warfare, cradle to career assurance, union based infrastructure jobs and subsidizing industries to be competitive in the one world market?  Come to think of it why is the President such a supporter of this one world view?

The Reason

To start with,  who is this guy we elected?  Was he a prominent businessman?  No!  Was he a skilled civic executive?  No!  Was he a well  know economic theorist? No!  Was he a person who was well schooled in international relations?  No!  Was he an accomplished leader of any sort?  No! Well Maybe, if you consider he was elected as a state senator and then as a U.S. senator – in both capacities he quickly focused on the next step of his career but he had few accomplishments other than electability.

Look, I am not saying President Obama is incompetent!  I am pointing out that in the related experience he has little to qualify his views on this subject or to make some of the decisions that he appears to be making.  He is in fact relying on others to tell him what to do and these others, like most of our professional political class are corrupted by hidden agenda.

The President was trained as a community activist.  He apparently was very good at that.  What is the primary tool of a community activist?  It is to disrupt the status quo by using class envy as the pivot to foment unrest.  By convincing those that have less, that the ones that have more have attained it to their detriment.  In propagating this issue they gain the leverage, the power, to force changes.  These forced changes do not come about because they have been derived based on reason, due diligence and careful consideration.  They are forced into the stream based solely on the emotion of the moment.  Good community activists can get the minority so agitated that even the mere mention of due diligence or careful consideration becomes more evidence of the supposed evil intent of those who have more.

So why are we surprised to see this now?  And more importantly, why are we so blind to the real implications and the lack of focus on the economic fundamentals?  Could it be that another fundamental issue that is failing us is our education system?  McKinsey seems to think so, but I am not sure their reason coincides with mine or perhaps yours.

Additionally, our President has aspired, in fact worked hard, to become part of our professional political class.  He has in fact obtained the pinnacle of this class.  By doing so, he has assured that his future is taken care of by, and on the backs of, the same people that elected him to this office.  He is beholding to all that got him elected in the first place and is further constrained in his actions by those he will need to get himself reelected.  As I have said before in a prior article “Our Professional Political Class: An Island Cannot Rule a Continent!“, his currency is votes, and he appears willing to pay all of our collective equity in order to continue to gain these votes.

The Reality

I started this essay with the supposition that Unions and Immigration are two sides of the same coin.  While it has taken me much longer than normal to come back to this point, I feel in this case the preamble was both necessary and poignant.  Further, I think that the preamble is where we will find solutions – if we really want to solve this.

Since we have all but eliminated our labor class through the closure of trade schools, technical schools, and primary production industries (like farming, fishing, mining, oil and steel) and attrition through the aging of our population.  We have created a false expectation that everyone should go to college and our economy can not only absorb the expense but also have appropriate jobs available for these college graduates who all expect to be doctors, lawyers, Indian chiefs etc. – anything but “common laborers.”

We are left with no where to go but immigration to find those willing to work in the jobs we don’t want and at wages we can afford to pay, and still find you college educated plumbers willing to buy America’s goods and services.  We have unions who are, by their own claims – their own mantras, only looking out for the workers not American competitiveness.  But many of the workers they increasingly represent are not laborers but middle managers and low level executives.  The Unions, it appears, are dead set against immigration to solve the labor dilemma and they are dead set against relying on one world competitive wages as it would decimate the wages of the working class and the resulting stream of dues the leadership survive on.

Caught in the middle is the President. If our hypothetical coin is a quarter, then the President represents the low grade copper core.  On one side he has the silver representing the unions, the silver on the other side – immigration.  He can actually solve neither and have the solution be in the best interest of Americans.  He is left with obfuscation, and diversion.  He is in crisis mode as his pole numbers collapse.  And in crises he is falling back to the tried and true tool-set of community activists world wide – class warfare. We cannot count on this President, nor this congress, to solve this one.

In the end if we don’t solve it – we will all suffer!  At least he has acknowledged, that we are not competitive in the one world economy.  That is a step.  Not a step for the President, who can’t see or refuses to see the real implications of what he is advocating.  It is a step in that it take one more vague disingenuous argument off the table.  It takes the recently repeated ad nauseaum statement that “we are the most competitive nation in the world” – off the table.

We, now recognize that we need to become competitive again or we lose to those throughout the rest of the world who are willing to do the menial, tough, hard, exhausting jobs that we wont.  We also recognize that most of the rest of the world will do the jobs that we are actually willing to do for far less than we will! .  Until we begin to again rebuild primary production and manufacturing in America, and are able to staff the jobs with workers that are willing to not only do the job efficiently, but also at a pay rate that allows the American production to be cost competitive in the one world economy, we will fail.  No amount of robbing Peter to pay Paul, to build it, or buy it in America, will bring us back to successfully compete with those that will do what it takes for less.

America has an inordinately long row to hoe to get back to where we were.  We need to discontinue myth building, and begin to focus on the pragmatic.  We need to reject the community activist play book of class envy – come – class warfare and focus on resetting expectations.  We need to retrain many workers in production level jobs.  We need to review our educational policies and reopen trade schools.  We need to change the mind-set that everyone should go to college.  Not everyone should go to college.  Sending everyone to college lowers the standards of a college education and in the end lowers the value of education in general.  It is not necessary to get a good base education through the end of high school if everyone is also going to go to college. Also, after we send these kids to college they expect to be pad at rate commensurate with their education and its expense/investment. We need guidance counselors to again guide students into the most appropriate occupations.

Finally, we need to venerate the workers in America – the laborers in America.  We need to reduce the occupation of these required labor jobs by those expensive, excessively educated and overly trained persons with people appropriately costed and trained.  We need to once again elevate the community value of the individuals that convert the raw materials to valuable products, who convert their raw talent and effort to desired commodities. We need to have the unions and all groups, cartels, associations and members to recognize that unless we begin to put our nations ability to compete ahead of entitlements, grants, gifts, gimmes, and subsidies, we will become yet another backwater on the road of history.

I will leave you with this final thought.

It has been estimate that over 1/2 of all Americans receive at least 50% of their compensation directly or indirectly from the federal government or government sponsored programs.  By 2016, it is also estimated that this number will grow to a whopping 65% of the population receiving over 70%.  Our combined trade deficit since 1972 is almost $12 trillion.  In other words, we have purchased from the rest of the world $12 trillion more than we have sold to them.  How long can the business, that is the United States of America, continue to take in so much less than we sell.  This has been the case since prior to 1972, and in order to survive we simply increased the $500 billion in total currency then to over $16 trillion today.  But our piggy bank is empty, since most of this newly created currency has just gone to pay, by today’s numbers, 50% of the population 50% of their wages so they didn’t really notice there was a problem and the professional political class could continue to get their votes.

As Hot-Rod Swales said to me one day in 1965, “It do make you think – don’t it?”

President Obama’s Critical Question

Tonight president Obama asked a very key question. This is one of those great moments where one question that really is one of the key questions was used as a throw-away, feel-good line.

President Obama asked, “Where would America be if we had not passed Medicare and Medicaid?”

This is really a key question, is it not? This question should not be a throw-away line, as it is the underpinning of the base argument, that Medicare and Medicaid have been good for us as a people and for the country. My opinion is this is, in fact, one of the major differences in the grander debate. Clearly, the president believes that the answer to these questions is in the affirmative. But, what if the answer is no? What if the truth is, that Medicare and Medicaid, have driven up our health care costs, disproportionately? What if these programs have fostered an era of unprecedented lack of responsibility? What if these programs have been one of the significant contributors to the base cost of business in America, and are one of the key underlying reasons that America is no longer able to manufacture goods cost-competitively for the rest of the world to purchase from us? What if these programs have so changed the nature of our economy that we now have accumulated a trade deficit in excess of $12 trillion since 1972 and we can’t become a net exporter because our goods are too expensive?

I think these are the key questions that need to be discussed. I submit the president will not like the answer. I also submit neither Presidents Obama nor Bush, nor republicans nor democrats are to blame for the problem. I further submit it is this issue that is the key problem we need to pragmatically solve.

President Obama should get some credit for asking this key question. He should also get some critique for using it as a throw-away feel-good line to rally his base – particularly if the answer is not as he is assuming!

I hope others will help tackle this question in the next few days. I know I will be continuing this dialog in the next few days specifically on this topic. It has been key to my research and understanding on the crisis we have in our health care system, if is one of the core issues discussed in my book and something that I feel we must address.