Archive for May, 2009

Obama Will Now Protect Us in Cyberspace, Too

May 29, 2009

President Obama can do it all.  He can fix the nation’s economy, bailout banks, prearrange bankruptcies for the automakers, and now he can protect us all from “cyberattacks” and the “epidemic of cybercrime.”  He is going to create a “cyberspace czar” to make sure we are all safe.  I say this is more needless government intervention that will not help anything at all, and will lead to a huge waste in taxpayer dollars.

All you have to do is look at the FDA and SEC.  These are two government agencies that are supposed to protect us who fail miserably.

The FDA is supposed to “keep our food safe” but they are always reacting too late.  With the last peanut salmonella scare, they forced the company in Georgia to issue a recall.  If they were supposed to be monitoring our food, shouldn’t they have caught that?  Only after people got sick did they react, and then it took a long time for them to track it back to the plant in Georgia.  What did they do to protect us?

The same goes for the SEC, who are supposed to protect investors from fraud and unethical business practices.  They had information on Bernie Madoff, that basically outlined the entire ponzi scheme, but they chose to ignore it.  They also were way behind on the Enron case, and definitely were absent when dot com companies were defrauding investors left and right.  What protecting did they do?  They talk tough about regulation and oversight, but then they miss a $64 billion ponzi scheme right under their nose.

Now the “cybersecurity czar” is supposed to protect us?  What a joke.  The last president didn’t even use email but now the White House is up to being able to monitor cybercrime?

First of all, most “cybercrime” is fraud that just happens to use the internet.  Check cashing scams and the “long lost relative in Nigeria” scams could happen anywhere.  Also, phishing schemes rely on user error, not hackers.  Unless the White House monitors every email and every click we make, they will not be able to protect the victims of these crimes.

Also, wouldn’t it make sense to leave this task up to the professionals?  There are multimillion dollar companies like Symantec, McAfee and Norton that already patrol cyberspace.  They keep our computers safe and secure.  They have the best people and are on the leading edge of the field.  What good is the government going to do competing against or marginalizing these companies?

When the government recruits their staff, they will lure workers away from these companies with high salaries, paid for by taxpayers.  This will lead to an artificial rise in the cost of labor because government is distorting the price.  This will only hurt the private companies who need to make money to survive.  Since the government can just keep printing money, they can be allowed to misallocate resources in this manner.

Instead of a czar, we need education so people know to update their computers and their virus software.  If they did not go to the phishing sites or be duped into a scheme, we’d be better off.  By creating the czar, we are saying the problems are too big to be solved and that they are just a fact of life, so we need to regulate them.  This is band-aid government at it’s best and it will just lead to a bigger waste of taxpayer money, and no benefit to society as a whole.

Bondholders Are Not Villians

May 27, 2009

I’m tired of hearing about the evil bondholders that are preventing GM from avoiding bankruptcy.  Why not call them what they really are?  They are the creditors to GM.  They lent GM money, and now are being villified for wanting to collect as much of that money as possible.

The Obama administration’s “offer” is for the bondholders to trade their $27 billion in debt for 10% of the failing company.  If they go to bankruptcy, the bondholders might get wiped out completely, but in a real bankruptcy, the bondholders usually get paid back first.  The problem is that this is not an ordinary bankruptcy.  It is rigged to give the government and the unions all the power.  The creditors and stockholders are the ones getting screwed.

Also, the “offer” gives the US and Canadian governments a 69% stake in the company.  So the primary debt holders get 10%, but the government gets 69%?  Who in their right mind would accept this rotten deal?

We all know the problem with GM is that their labor costs are too high.  Rather than actually trying to fix the problem, the government is handing the keys to the car over to the unions.  Since they are in a partnership with Uncle Sam, we now will be bailing them out forever.  The current model is unsustainable, but rather than actually fixing the problem we are setting up for permanent transfer of wealth from our pockets to the unions.

So, instead of just saying “it’s the evil bondholders’ fault,” we need to look at the actual offer and realize the only winners are Obama and the UAW, and the losers are every tax paying citizen of the country.

Are We Really Safer?

May 27, 2009

President Obama and his team have been going back and forth with former VP Dick Cheney on whether or not we are safer as a nation now that Guantanamo Bay has closed and we say, at least, that we will no longer torture.

My answer to this whole debate:  Who cares!

Our safety as a country won’t change at all because we close one prison that holds 240 inmates.  And, our enemies have known for a long time that we torture, so this is nothing new.

The bigger debate should be if we are safer now than we were before we put all of these measures in place after 9/11.  Really, it’s been almost 8 years, and we haven’t gotten too far.  That’s the problem with fighting a war with an ideal.  How do you suppose we actually win a war on “terror?”  It’s the same thing with the new war on greed we have going after all the bailouts.  There is absolutely no way you can win a war on idealology.

I would agree with Ron Paul and others that our actions in the Middle East are actually making the situation worse and making us less safe.  Our intentions there were good, but the blowback is creating more and more people who hate us.  If we drop some bombs on civilians, which we have done numerous times, we are giving hundreds or thousands more people a reason to rise up against us.

There is an easy solution to the problem in the Middle East – Bring our troops home, close our military bases, and stop all foreign aid to Arab nations and Israel.  Let the people of the Middle East rule themselves.

If we are gone, they will have no reason to hate us.  Don’t believe the idea either that they hate “freedom and liberty” and the “American way of life.”  If they hated freedom, why wouldn’t they attack the Netherlands or New Zealand?  What they hate is our foreign policy, our bases in some of the holiest parts of the Muslim world, and our unwavering support for Israel.

Instead of actually getting into a real discussion about foreign policy, though, our media focuses on Guantanamo and that’s it.  It is like the extent of our entire foreign policy is one little prison.

It’s time to wake up and start asking bigger questions.  The sooner we do, the safer we all will be.

Obama’s Misguided Fuel Efficiency Policy

May 19, 2009

Today, President Obama announced his goal to increase fuel efficiency standards in our cars to an average of 35.5 gallons by 2016.  What he didn’t say is that he is going to keep using the horrible and unfair CAFE fuel efficiency standards and how this is going to absolutely kill the American automakers.  His policies are straight out of a “Politics 101” textbook.  They are so naive and idealistic and he does not realize that there are unintended consequences of his policies.

I’m not an expert on fuel efficiency and the auto industry, but a quick search on wikipedia for “CAFE Fuel Standards” was all I needed.  A little research showed me how the rules and regulations are broken.  Instead of addressing the root of the problem with our auto industry and efficiency standards, our President just reaches for pie in the sky goals with no regard for the blowback of his actions.

As I wrote before, the problem with the Corporate Average Fuel Efficiency (CAFE) standards is that they measure the harmonic mean of all the cars sold domestically by automakers.  Since the domestic automakers sell mostly trucks, they then have to sell – not just produce – an equal amount of crappy, fuel efficient cars that no one wants to buy in order to meet the standard.  They end up having to sell these at huge discounts or even at a loss to rental car agencies.  The Big Three lose money on every compact car they make because of labor and union costs, but make money on every truck and SUV they sell.  The importers from Asia and Europe sell mostly compact cars, so they are at an advantage.  They build these cars using the same US labor, but they are not burdened with the labor costs the US automakers are strapped with.   They can meet the fuel standards and be profitable at the same time.

On a side note, we know that US labor costs are not going to go down either.   The United Auto Workers are now majority owners in Chrysler, and will probably come out the same with GM.  With a partnership of labor and the government running the company, how can we expect labor costs to decrease?  Instead, they will continue to increase, and the taxpayers will keep giving them more money to prop them up.

But back to fuel efficiency.  I believe that we need more efficient cars, and we are already on our way there.  Hybrids are all the rage, and the automakers can’t keep up with the demand.  But are hybrids really green?  Massive amounts of energy go into producing the electric batteries they use.  I won’t get into that debate here, but the consumer demand for more efficient cars is very, very strong.

Why not just let the consumer and the market dictate fuel efficiency?  Why do we need laws created by bureaucrats to overregulate the industry?  Look at how competitive and innovative trucks have become in the last year or so.  As gas prices skyrocketed, consumers wanted fuel efficiency.  Toyota came out marketing their Tundra aggressively, and Ford, Chevy and Dodge responded.  All of the commercials touting features and miles per gallon were a testament that the market works and if consumers demand something, the automakers will listen.  It was capitalism and the free markets at their finest!

But why punish our auto industry for making the best trucks?  Even if they get a truck that can average 30 MPG by 2016, they will have sell an equal amount of compact cars that average 40 MPG to meet the tougher standard.  Or, if they can only get 25 MPG out of the truck, they will have to sell even more 40 MPG compacts.  The smaller cars are money losers for the US auto makers, so we are forcing them to make an unprofitable product.  What kind of business can succeed with that kind of regulation placed on them?

If we were to measure anything, we should measure how much progress is being made by a manufacturer for that particular make and model.  If the auto makers make a truck 250% more efficient than last year’s model, they should be rewarded.  If they can’t make money producing small compact cars, don’t force them to make them.  Let the imports fill that market and let the US automakers focus on making their breadwinners, the trucks and SUVs better.

The bottom line is that consumers are already demanding more efficient vehicles.  Let that demand drive what is produced and sold in the US.  Don’t regulate for the sake of regulating and sign the death sentence for the US auto industry.  We need real changes in the policies of our country, not more well intentioned but horribly executed Politics 101, pipe-dream nonsense from our leaders in Washington.

The GOP Needs to Embrace Ron Paul

May 18, 2009

Lately, I’ve been reading articles about the state of dissarray the Republican Party is in, and how there is a leadership void in the party.  The Republican National Committee Chairman, Michael Steele, says he’s the leader.  Rush Limbaugh wants to be the voice of the party.  Ex-Vice President Dick Cheney is going on every talk show he can trying to further push the George Bush Neo-Conservative agenda.  The Democrats have seized on this opportunity and have poked and prodded the GOP into making rash statements and decisions, further pushing them into a hole.

The funny thing, is that the Republican Party has a leader, with millions of followers, but they don’t want to acknowledge him.  The person is Ron Paul, and whether the rest of the GOP likes it or not, he is the true leader of the conservative, constitutionalist, Republican movement.  He understands the issues facing the country, and can back up what he says with his record.

All you have to do is look at all of the talk shows Dr. Paul has been making appearances on lately.  He is the only member of the GOP that is regularly on Fox, CNBC, MSNBC, and CNN.  He also set fundraising records during his Presidential campaign during the Republican primaries.  Plus, he won an NCAA basketball style bracket of GOP contenders on NPR.com by way of the votes of visitors on the site.

With the Democrats and Republicans growing closer together, with only a few billion dollars spending here or there between them, the GOP needs to separate itself and really stand up for the small government our founding fathers envisioned, and the freedom and liberty of all citizens.  With Ron Paul as the head of the GOP, we could get this country back on the right track and back to the way it is supposed to be.  If we keep down the current path, we will see less prosperity, less freedom, and more pain for the American people.  There is an answer to our problems, and the Republicans need to wake up and embrace him.

Obama’s Healthcare “Overhaul”

May 10, 2009

Update – The more I read about this “savings” plan, the more I realize that it is really a way for the healthcare companies to lock in profits for the next 10 years.  You know that any time an industry as big as healthcare voluntarily offers a deal to the government, it is really to benefit themselves.  So, rather than opening a real healthcare debate, they have preemptively offered a $2 trillion savings.  They say “savings” but it is really a reduction in the rate of growth of healthcare spending.  Since the current rate growth is 7%, they are saying that if it was only 1.5%, the country would save $2 trillion in 10 years.  That’s not savings.

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President Obama has announced an “overhaul” of the healthcare system that he touts will save trillions of dollars.  Big healthcare companies are on board as well, because they promise to only raise costs 1.5% a year.  That sounds great, that costs will be controlled, but why should they go up anyway?  This just guarantees a 1.5% increase in their revenue each year.  We should be making huge cuts that result in decreases, not capped increases.

Also, Obama’s plan basically revolves around digitizing our medical records to make hospitals more efficient.  I guess, over the next 200 years, that could save trillions, but what about the up front costs?  There will have to be an increase in cost to digitize all the records and buying equipment to store them.  Who will pick up the tab?  If the government does, then it falls on the taxpayer.  If the government doesn’t, then it will be passed on through premiums.  It’s a lose-lose for the American public.

The only way we will ever control costs and cut health care costs is going to be to get the government and big healthcare providers out of the game.  Until then, costs will continue to skyrocket, and the quality of care will continue to decline.

Obama Cuts 0.47% from Budget

May 6, 2009

Today, word came out that President Obama has cut $17 billion from the 2010 budget.  While that is a lot of money to you and me, it is a measly 0.47% of the $3.55 trillion budget that has been proposed for this year.  Surely, with the way things are going, the 2010 budget figures to be even bigger, so the $17 billion will become an even smaller percentage.

During his campaign, Obama promised to go through the budget, line by line and cut programs that weren’t working or were not necessary.  Looks like he thinks 99.53% of all the government spending is necessary.  And he’ll probably tout this as the “change” he promised and the media and all of his supporters will eat it up.  They’ll just blame the Republicans and Bush for making all the spending “absolutely necessary.”

Just when I think Obama can’t be more of a hypocrite, he does something like this.  Why even announce you’re “cutting” less than one-half of one percent of the budget?  This country is going off a cliff, and Obama isn’t putting on the brakes, he’s flooring the gas.