Saturday, May 26, 2007

The Reasons We Think America is On the Wrong Course

I was listening to the Michael Medved show yesterday. He does a nice job at talk radio. But he was worked up because the CBS News Poll showed that 72% of Americans surveyed think the U.S. is on the wrong track. (When I went to CBS' site, it looks to me like the number is 69%, but that's an insignicant difference). Medved's view is that income for the poorest citizens are rising (recent government data), unemployment is low, stock market is high, no cold war, so why so pessimistic?



Here are my answers:
  1. Several of our young men and women are being killed every day in a war that we are getting sick of.

  2. The deficit is some unimaginable, staggering number that my generation is imposing on my children.

  3. Social Security is bankrupt and both Congress and the Administration (both previous and current, and both Republican and Democratic) are unwilling to face the issue.

  4. There are virulent infectious agents in hospitals that are resistent to essentially all antibiotics, and the drug companies have little incentive to spend research money on antibiotics, so there aren't many treatments in the pipeline.

  5. At a time that education, including tough courses in math and science, are requisites for jobs in the future, our school system is a mess, while India and China's education system continues to improve.

  6. Al Queda wants to kill as many of us as they can.

  7. Our borders are essentially nothing more than lines on a map, so that millions stroll in every year.

  8. When the police arrest someone they suspect is here illegally, unless they have an Arabic name INS isn't interested in doing anything.

  9. We are paying $65 a barrel for oil so that the countries that harbor people who want to kill us become the richest countries on earth.

  10. We know that we need nuclear power, but a small environmentalist lobby can hold up the majority for decades.

  11. President Richard Nixon declared war on cancer almost forty years ago; the cure rate has only increased slightly and for many forms of cancer not at all.

  12. Largely as a result of government profligacy, the dollar has gone to hell against almost every other major currency.

  13. The percentage of babies born to unwed mothers is shocking despite widespread knowledge that one of the largest categories of poverty is families headed by single mothers.

  14. That rat bastard Osama Bin Laudin is still alive.

  15. People in places like Darfor are dying by the hundreds of thousands and we basically have no idea what to do about it.

  16. The war in Iraq costs about $100 billion a year.

  17. For $100 billion a year for five years, we probably could cure several forms of cancer.

  18. The typical American thinks there are some fairly simple solutions for the immigration issue; our elected officials can't seem to figure out a solution at all.

  19. When we go to an airport we have stand in endless lines, take off our shoes, and throw away perfectly good shampoo and toothpaste.

  20. Despite the billions raised every year by the Federal tax on gasoline that is supposed to go to the Interstate highway system, our highways, once the finest in the world, are increasingly inadequate.

  21. Teenage obesity and diabities is a real problem.
  22. Our fourth biggest oil supplying country is headed by a demogogue who is centralizing power.
  23. Iran is developing nuclear weapons.
  24. North Korea, run by a dictator who could be a SPECTRE character out of an old James Bond novel, has nuclear weapons.
  25. There are both elected and appointed officials in Washington who actually believe that they should pressure China to float the renmenbi against the dollar, expecting the renmenbi to rise (e.g. a falling dollar) would be good long term economic policy.

Wednesday, May 23, 2007

Econorama continued

Senators and Congressmen are falling all over each other to introduce legislation to do something to China for any of a variety of presumed sins.

Many of these are centered on the concept that the Chinese currency - generally called the renminbe- is artificially undervalued, and, if allowed to float on the open market, would zoom in price vs. the dollar, making U.S. exports etc. more competitive.

Let's examine this policy from the opposite perspective - e.g. - the dollar would sink in value versus the Chinese currency. While this might be of some short-term value to some exporters, it is something of a crash diet, resulting in quick, but short-lived, weight loss. Hasn't a bedrock of U.S. policy since Alexander Hamilton was the first Secretary of the Treasury been a strong dollar? Do we think that a weak dollar is in the long-run best interest of America?

Hardly.

There are a number of constructive things Congress can do should it so chose. First, it could shave a couple of hundred billion from Federal Spending. In that case, the U.S. would begin to pay off debt - including the trillion or so owed the Chinese. Currency flows might just begin to reverse. Second, it could champion education in the U.S. Our deteriorating education standards will make it increasingly easy to export ever better jobs off shore to places like China, where not only will labor be cheaper, it will be better educated.

This does not mean spending more with the Federal Department of Education ( I defy any reader to name three beneficial things that department does without Googling the answer). In fact it might well mean dismantling that department and saving the money....

On every matter of economics, business, competition and international marketplaces I find the ignorance of our elected officials to be appalling.

Governor Corzine et al

Apparently, NJ Governor John Corzine joined 26 other state governors to sign a letter to Congress asking them to investigate the oil companies for price gouging.

Since Corzine was a senior executive at Goldman Sachs, where he became a multimillionaire (if indeed not a billionaire), I expected that he had some fundamental grasp of supply and demand, and the price function in a market economy.

Perhaps crashing at 90 miles an hour without a seat belt injured more than just his ribs....I can't believe he doesn't understand economics at that basic level...he is too honorable a man just to grandstand on this issue.....