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Saturday, October 31, 2009

Health Care: The Next Round

Open Letter to Senators Warner and Webb

Thank you for voting against cloture on the Senate Health Care Bill. I do appreciate your willingness to vote against your party so that the American people and members of the Senate have some time to read the bill they will be voting on.

In prior communications, I have expressed my concerns around this unprecedented takeover by government of 17% of our economy. I am not in favor of the bill and do not share many of your views about its perceived benefit. In prior correspondence with you, I have outlined my suggestions for “reforming” health care, and will not repeat them here.

When voting on this matter, please take into consideration the actual “accomplishments” of government run programs:

· In 1965, the "Great Society" was created. Eight billion dollars was spent that year; today we are spending $500B annually.

· In 1977, the Department of Energy was created to "make us independent of foreign oil." Now it is a bureaucracy of 18,000 people with a $25B annual budget. We are still dependent on foreign oil, are not allowed to drill off our own shores (but foreign governments can), and have not built a new nuclear power plant since the late 1970s.

· In 1983, a Trust Fund was created to ensure that Social Security was sound for the retirement of baby boomers in 2011. After 25 years of increased payroll taxes, $2.5T was “borrowed” from that fund and every penny spent on something else. Now we want to” borrow” another $1T to "fix" health care while cutting Medicare entitlements to retiring seniors by $500B.

· In 2008, TARP and "stimulus" bills authorized another $1.5T, which is new debt, has not stimulated much of anything except "creating or saving" government – not private sector – jobs.

Not a good track record. I think you need to cut your losses and go back to old fashioned Keynesian economics. Harding / Coolidge in the mid-1020s, Kennedy in the mid-1960s, Reagan in the early 1980s, and Bush in his first administration – contrary to predictions by opponents – cut taxes and government income rose and economic activity and prosperity increased. Hong Kong became an economic powerhouse under a low flat tax. Estonia, Latvia, Lithuania, and Russia have adopted flat taxes ranging from 13% to 33%, all with very positive economic effects. These successes are being copied by the Ukraine and the Slovak Republics. Canada is starting to dismantle portions of its Universal Health Care system because it does not work. In contrast, Japan tried to “spend” its way out of its 1980 recession and it still has not recovered.

Our recent economic meltdown is not traceable to free enterprise run amok. Damage to large portions of our economy is traceable to government social programs and government regulation that create improper economic incentives: the Community Reinvestment Act’s emphasis on lending to unqualified borrowers; Department of Energy and the Environmental Protection Agency regulations, which are at cross purposes; and government graft and corruption (i.e., 13% graft in Medicare and Medicaid, as documented by independent watchdog agencies), to mention only a few.

The next “bubble” is going to be the American debt. Only capitalism – not socialism – will fix this problem, if it is fixable. To paraphrase Margaret Thatcher, “The problem with [the Democrats' ] socialism is, at some point, you run out of other peoples’ money.” The insertion is mine.

Sunday, October 25, 2009

Which is More Dense: Solar Energy or Politicians?

In a prior article, (Cure for Energy Depression – More Sun?) , I conservatively estimated that 8,800 acres of solar collectors would be needed to replace the generating output of a 50 year old, 2259 Mw fossil plant that sits on 800 acres of land: 400 acres for generation and 400 acres of ecological preserve. Well, now the results are in: Florida Power and Light has just announced the opening of its Arcadia, Florida, DeSoto Next Generation Solar Energy Facility, at which Obama will preside and tout the benefits of solar energy.

According to FP&L information, the DeSoto Next Gen plant will produce 25 Mw, consists of 90,500 solar panels, and sits on 180 acres of land. It will produce “enough electricity for 3,000 homes.”

So, if my math is correct, for a modern, solar plant to produce 2,259 Mw of power, 16,265 acres of land are required (180 x (2,259/25)). If one corrects my original estimate of 8,800 acres by eliminating the fossil plant’s ecological preserve acreage from the calculation, the original calculation yields an estimated 17,600 acres of solar cells. In other words, the electricity need of the 2.7 million people in the Tampa Bay area will require more than 160,000 acres (250 square miles) of solar panels. Alternatively, ten fossil plants – 2,259 Mw capacity each – sitting on a total of 4,000 acres (6.2 square miles) will provide the electricity needs of 2.7 million people.

Okay, so “Next Gen” solar photovoltaic arrays are more efficient than I estimated, or perhaps the solar insolation in Florida is higher than I assumed in my calculation. Still, the estimate is pretty accurate AND it PROVES that solar energy is arguably less dense than most politicians and environmentalists. You will never smelt steel, produce semi-conductors, or manufacture any other high-technology, high energy density products using this form of energy BECAUSE you will run out of land. In fact, any right thinking (pardon the pun) individual, using the same logic an environmentalist would use, should be concerned about denuding large acreages of virgin swamp (or pristine forest, if that is more ecologically appealing to you) to produce “clean energy.”

So which is denser: solar energy or politicians? From an engineering science perspective, solar energy is less dense. From a political science perspective, politicians are less dense. Politicians are not concerned about the science or economics of the situation; they are only concerned about votes. And when it comes to voting, the politicians know they can garner more votes per square mile promoting solar energy at the expense of our economy and our long energy interests.

Friday, October 9, 2009

VDOE Standards of Learning for Economics and Personal Finance

The Virginia Department of Education (VDOE) has requested comments on its proposed economics and personal finance standards of learning. The following comments were provided by me on October 9, 2009. If you are a Virginia resident, I suggest that you review the proposed standards and comment.

Open Letter to Virginia Department of Education Concerning Proposed Standards of Learning for a Public School Curriculum to Teach Economics and Personal Finance

I agree with the VDOE’s goal that an understanding of economics and personal finance is important to young people, as they learn to manage successfully their own time, money, and resources, and become informed citizens in a increasingly globally integrated, interdependent society. However, establishing standards of learning is only the first step in this process. The SOLs, as you have stated them, provide a broad roadmap for what needs to be taught. They do not address the expected outcomes, how it will be taught, or the actual content of instruction. My comments: (1) request clarification on objectives, which appear to be loosely defined, (2) request that VDOE specify the textbooks that will be used, and (3) request that VDOE identify the qualifications of and preparatory instruction that will be provided to teachers who will conduct this very important course.

After a review of the curriculum’s stated objectives, my particular concerns are with specific objectives that explore the interrelationship between a free market economic system and the role of government in that system. Specifically, I am interested in understanding what will be taught in these areas. I am concerned that, like so much of current public education, it can be co-opted by persons who do not share my traditional, historical perspective on the formation and objective success of American free-market economics. Specific comments on the SOLs are:


EFP.7 b) describing government’s role in stabilizing the economy; c) describing sources of government revenue; and d) explaining balanced-budget, deficit, and national debt.

What exactly is to be taught as part of this objective? If the bias is to promote the virtues and success of Keynesian economics as practiced by Roosevelt or the current administration, I would oppose such instruction. However, a balanced discussion that compares and contrasts the practices of the Hoover, Kennedy, Reagan, and G.W. Bush administration to that of Roosevelt, Johnson, Carter, and Obama administrations would be fair. Text references: Folsom, B., New Deal, Raw Deal and Simon, W., A Time for Truth.

EFP.8 in its entirety, which requires the student to demonstrate knowledge of the role of government in a market economy by d.) explaining that governments redistribute wealth.

Again, what is to be taught as part of this objective? While it is a fact the government does redistribute wealth the real question that must be answered is to what purpose and to what extent is this necessary? A good text that addresses the role of government in a free market is Thomas Sowell’s text Basic Economics.

ALL terminal objectives (which is what I assume you have listed in your document) should be broken down into enabling objectives that include a measure of acceptable accomplishment. For example, “Upon completion of this objective, the student will be able to state the three root causes of the Great Depression: (1) ‘Cause 1,’ (2) ‘Cause 2,’ (3) ‘Cause 3’). This would go a long way to “flesh out” what is required and make it clear to the teacher, student, and public if that objective has been accomplished.

Noticeably absent from the learning objectives is a requirement that the students complete an actual income tax return. In this context, it would be good to teach each student that 50% of American taxpayers pay 97% of all federal income tax. Twenty percent pay 3%. Thirty percent either pay nothing or receive transfer of payments (Earned Income Tax Credit) from the top fifty-three percent. This might prove to be an interesting discussion if compared and contrasted to the redistribution of wealth discussion alluded to in EFP 8.

With respect to a text, I recommend that VDOE disclose, at this point in time, the textbooks that will support the curriculum. While I fully anticipate that such a request will be declined because the curriculum will not be taught for several years and it will be argued that it is impossible to select a text at this time, I suggest that you refer to existing texts that you find acceptable today to give the public a feel for content and set an expectation against which the public can judge your final selection. In the absence of any response from VDOE, I recommend that you consider Thomas Sowell’s Basic Economics. The book is unique in that it does not present economics from a mathematical perspective, but utilizes real world examples to illustrate economic principles. It can be understood by anyone using simple logic.

Last, I propose that you disclose required teacher qualifications and the approach, schedule, and training program content that you plan to use in preparing teachers to present this material. This is as important as the instruction itself.

I have posted this letter on my blog and the HR Teaparty blog. I am encouraging other Virginia citizens to review and comment on the proposed SOLs. I have also forwarded a copy of these comments to my state representatives and Del. Bob Tata. I will be following the progress of curriculum implementation closely. Over the past thirty years, traditional values-based Americans have not paid sufficient attention to the actions of government and as a result have ceded the moral high ground to post-modern relativists, who have undermined the nuclear family, the church, education, the media, and government institutions. Control of our economy and the principles that underlie economic freedom are one of their last objectives. Rest assured that I will continue to work diligently to make sure any economics curriculum is taught from a factual and balanced perspective.

Tuesday, October 6, 2009

DNR: Health Care Reform

Open Letter to the Congress of the United States

As we debate whether health care reform lives or dies, I want to reiterate my opposition: Do Not Resuscitate (DNR) the bills in their current form. I believe the current bills should be scrapped, and congress should tackle health care with the following principles in mind.

1. No public option
2. No coverage for illegal aliens.
3. Allow individuals to OWN their own policies with health savings accounts and make them transportable between jobs.
4. No reduction in Medicare, Social Security. If you think $500B over the next 10 years can be saved through reduction in graft and corruption, then go after that. You should be doing that anyway ... that is your job. Funnel ACTUAL savings from your graft and corruption initiatives DIRECTLY to the states so that they can provide catastrophic health services to those without coverage via Medicaid, an EXISTING program. No more government programs that are incapable of paying for themselves... use what you have and use the existing government workforce more efficiently and effectively.
5. Remove barriers to insurance companies so that they can provide coverage across state boundaries.
6. Eliminate pre-existing conditions from insurance policies.
7. Require insurance providers to disclose costs, coverage, and other performance statistics on the internet. Allow insured persons to post their experience with the insurer on the internet.
8. Require posting of drug prices, at the point of provision, on the internet.
9. Create incentives for drug companies, insurance companies, government, and non-profit organizations to invest in student scholarships and health care infrastructure to allow ALL qualified students to go to medical school.
10. Take on the AMA if they proscribe through licensure the MAXIMUM number of doctors entering the profession. Their job should be define and measure competence, not regulate supply in order to artificially raise salaries.
11. Tackle medical malpractice tort reform.
12. Tackle medical regulation reform: I believe the government in general OVER REGULATES industries.

In short, create a FREE Market, where supply and demand can seek a balance. As Ronald Reagan said, "Government is the problem, not the solution."

Friday, October 2, 2009

National Security

Open Letter to the Congress of the United States

My understanding is that the President has held one national security briefing in the last month. The number of Presidential appearances on television and at town halls has been greater than the number of days he has been in office. His administration has spent more time seeking partnerships between government and large business (GE), between government and corrupt private non-profit organizations (ACORN), and between government and federally funded organizations that indoctrinate and promote administration programs (the National Endowment of the Arts), than he has with his cabinet.

Having managed large businesses, I am familiar with the concept of span of control and the need to focus on key issues in order to achieve a business’s core objectives. This president does not appear to appreciate this concept, abrogating his responsibility to DIRECTLY involve himself in the two most important issues facing this country: security and economic recovery. This raises serious questions about who is in charge, in my view. Instead, he wants to “remake” the country by asserting government control over large segments of our economy, bypassing the checks and balances of the constitution through the appointment of “czars” of questionable fealty to historical American principles, and making the world more unsafe by not supporting democratic movements in Georgia, Poland, Czechoslovakia, and Iran.

I suggest that you counsel the president on his responsibilities and faithfully uphold your responsibility to ensure that ALL legislation be passed by congress rather than abrogate this responsibility to the administration’s ever expanding federal regulation. In the absence of perceived progress toward these goals, I will ensure that I exercise the small influence I have on my family, friends, communities, and the organizations that I support to oppose the unconstitutional practices, policies, and profligate spending of this administration. The results of my actions will be measured at the ballot box.

Census

Open Letter to the Congress of the United States

With respect to the upcoming Census, I request that you support legislation that reaffirms the Congress’s position that the Census conforms to the specific requirements of the United States Constitution, as amended. My reading of the document would lead me to believe that said Census (enumeration) would apply only to citizens of the United States, and exclude illegal aliens and other persons who are residing in the United States but are legal citizens of other countries. Also, the Constitution calls for an enumeration: a counting of persons not collection of personal or private information which could be inappropriately used by the government to expand its powers and influence over the personal freedoms which are guaranteed by the Constitution.

With respect to the manner in which this information is collected, the process should be open, visible to the public, and performed by a part of the government that is subject to oversight and control by congress and not by the executive branch. Because of the political value of the census (representation in congress and apportionment of government funds), the process should be a non-partisan as possible.

Senate Climate Control Legislation

I do not support the current Senate bill nor the prior House of Representative’s bill to reduce greenhouse emissions. My opposition is based on actual science not political science. Read on if you are interested in the scientific basis; count the vote if you are only interested in politics.

When my daughter was five, she asked me how the trees flapped their leaves to make the wind blow. She taught me a very valuable lesson: correlation does not mean cause. And so it is with CO2 and global warming. Perhaps it is a lesson that the congress of the United States needs to learn.

As the senate considers fast-tracking a climate bill that will require a 20% decrease in greenhouse gas emissions by 2020 – at an unstated cost to the taxpayer and to our economy – one should ask some fundamental questions about the cause of “global warming,” before taking action. Otherwise, the economic consequences will be more disastrous than the government’s mandate to supplement gasoline with ethanol, providing farmers with economic incentives to allocate up to 30% of the United States arable land to produce less than 50 gallons of fuel per acre. As a result, food prices have risen and actual vehicle miles per gallon have decreased, because ethanol does not contain the same higher heating value (energy content) as carbon-based fuels.

My global warming conclusions are supported by a scientific study, Increased Effects of Increased Atmospheric Carbon Dioxide, by Robinson, A.B., et al, reviewed and endorsed by more than 9,000 Ph.D.s (http://www.petitionproject.org/) , and the testimony of David Evans, the scientist who wrote the carbon accounting model (FullCAM) that measures Australia’s compliance with the Kyoto protocol (http://mises.org/story/2571 and http://mises.org/story/2795).

The conclusion of the Robinson research is that the earth is warming at a rate of 0.5 degrees Centigrade per 100 years, that this trend is naturally occurring, as the earth recovers from what is referred to as the Little Ice Age, and is driven by solar radiation, not man-made CO2 production. The current warming trend can be traced to about 1800. The researchers conclude that over the last 3,000 years, the earth’s temperature has varied within a 3 degree Celsius range. Arctic temperature variation correlates strongly with solar activity and not with world hydrocarbon use.

In fact, the study concludes that overall the climate has improved. The number of tornados has decreased, the number of hurricanes has remained constant, and rainfall has increased. During the past 50 years, atmospheric carbon dioxide has increased 22%, much of that due to human activity, but no correlation exists between temperature increase and carbon dioxide production. In fact the major effect has been to increase plant growth and biological diversity (that is, a positive effect).

Remember ...

"You're entitled to your own opinion, but you're not entitled to your own facts," Sen. Daniel Patrick Moynihan.

"Against public stupidity, the gods themselves are powerless." Schiller.

“Who controls the past controls the future. Who controls the present controls the past.” – George Orwell, 1984

"Statistics are no substitute for judgement," Henry Clay

"The problem with socialism is that you eventually run out of other peoples' money," Margaret Thatcher