Will There Be a War?

Watching the reaction of the Russians to the ouster of the former president in the Ukraine makes me worry that we may be seeing the moves that lead to a war.  Russia just happens to announce 'long planned" military exercises near the border with the Ukraine.  Armed men in the Crimeans section of the Ukraine storm government buildings and put up the Russian flag.  When these people are ousted by the police, the Russians will surely protest the "mistreatment" of the ethnic Russians by the Ukrainian government.  Putin gives asylum to the former president and lets him tell the world from Moscow that he is still president of the Ukraine.  What's next?  Will the Russian tanks roll over the border and move on Kiev?  Will the Russians just try to seize the eastern section of the country where Russians are either in the majority or close to it?  And if this happens, will other neighbouring countries just sit by an watch?  Or will countries like Poland, Romania, Kazakhstan and others come to the aid of the Ukrainians?  And what will NATO do?  More to the point, what will president Obama do?

Right now, the entire West ought to announce that any move on the Ukraine by the Russians will be seen as a declaration of war against all of these nations.  Hopefully, if Putin is faced with a united front of opposition to any aggressive move, he will be forced to back down and let the Ukrainians live in peace rather than under Russian domination.  We will have to see.

And for those who argue that there are no national interests at stake here for the USA, they should remember the old saying, "Russia without the Ukraine is a country; Russia with the Ukraine is an empire."  The world has seen enough problems come from the Russian empire.  There is a great international interest not to let that empire be reborn.  Sadly, we have a fool like Obama as president at the moment.  Let's hope that even he can get this one right.

A Turn?

Have we reached the point where the course being followed by America has actually turned?  For a long time we have been told that the country is like an enormous ship and the president has only a small rudder with which to change the course.  He can turn the rudder sharply one way or the other, but the ship will continue in pretty much the same direction without much change.  So now, I am wondering if the efforts by president Obama have managed to fundamentally alter the direction of this country.  Sadly, I think that the answer is yes.

First of all, Obama has managed to keep the economy from rebounding quickly from the recession.  We are still in a stagnant economic mess.  There are few bright spots in the economy.  Everyone is feeling the pain.

Second, Obama has managed to impose limitations which he would call environmental restrictions but which an insightful observer would call the destruction of the coal industry and a move towards higher cost energy.

Third, Obama has managed to destroy the respect of other countries for the USA and to substantially weaken our place in the world.  America's pre-eminent position is not as far out front as it used to be.

These are not minor changes.  For Obama they are positives.  For most Americans, however, they are major negatives.  They will not be easy to undo.

It Looks Worse From Far Away

I am in the town of Puerto Madryn, Argentina today.  It is a beautiful small city in northern Patagonia and the home of one of the largest nesting colonies of penguins in the world.  Sitting here, I feel light years away from home.  Even so, the news of events in the USA is readily available.  I think that the distance helps provide a better perspective on what is happening in Washington and across America.  Today, the big news for me is that the federal government is now reporting that about eleven million employees of small businesses will see their healthcare costs soar due to Obamacare.  Just to be clear, these are not eleven million wealthy employees, but rather an enormous number of middle income and lower income folks who are getting hit with major premium increases due to Obamacare.  Without a doubt, some of these folks will drop coverage altogether due to their inability to pay the cost of the policy.  Once again, Obamacare will be responsible for taking insurance coverage away from hundreds of thousands or even millions of people who used to have it.

What was the point of the law?  Weren't we supposed to see fifteen to thirty million newly insured people added to the rolls of those with coverage while at the same time cutting premium costs by $2500 per family per year?  That was the president's promise which he repeated again and again.  The problem, of course, is that at the moment, the number of folks with coverage has actually been cut as a result of Obamacare and the costs of coverage have increase by more than $2500 per family.  So Obama's promise was not just a bit off; it was completely false.

No thinking America ought to be surprised when we see another lie by Obama uncovered.  Indeed, what surprises me is just how little response there is to the endless stream of lies from the White House.  Are Americans just supposed to sit here and take all the garbage that Obama dishes out?  Are we supposed to accept the concept that it is okay for the president of the United States of America to be a pathological liar?  Must we smile and say "Well, that's politics" when our lives are hurt day after day while we are fed untruths on purpose?  For me, the answer is clearly no.  Obama and his party have spewed enough garbage to last us all a lifetime.  Now it is time to try some truth.  People need to wake up and demand that Obamacare be repealed.

Why Is Anyone Surprised --- CNN Crumbles

Today's news is that Piers Morgan is being dumped by CNN.  Wait, I guess I should say that CNN and Morgan are parting company.  You see, even when it comes to parting company, Morgan and CNN cannot be honest.

Unless something strange happens, this is just the first of many changes at CNN.  Crossfire which appears on CNN at 6:30 Eastern time now has ratings so low that they indicate that not even all the family members of the cast are still watching.  Other shows on the network likewise have anemic ratings.

The simple truth is that no one wants to watch a network that is just "MSNBC lite".  If someone wants slanted news that pretends not to be slanted, there are always ABC, CBS and NBC.  CNN has lost its niche.

Piers Morgan himself was a great exemplar of the failure of the network.  He was boring.  He was a purveyor of spin rather than news.  His guests were lame,  Basically his show was monotonous propaganda.

My guess is that we may soon see a major shift at CNN.  Who knows--instead of news, the network may soon become another QVC or a cartoon network.

A Program For the Future - Getting America Working Again! - 4

An obvious plank in the GOP platform for 2014 is bringing and end to Obamacare.  Clearly, this will be a major issue in the campaign.  Nevertheless, it would be better if the Republicans were to offer their own program for healthcare moving forward. 

The key to a Republican health care platform ought to be that it focus on something different than Obamacare.  The Democrats' plan puts the emphasis on getting everyone insured and mandating insurance policies filled with all sorts of items whether or not the person buying the insurance wants them.  This has driven the cost of insurance for everyone way up, disrupted the healthcare coverage of something like half of all Americans, forced deductibles way up and generally priced healthcare out of the reach of many folks.  Even for those who have been moved into Medicaid, the coverage is not meaningful because so few doctors will now treat patients in that program.

The Republican plan ought to focus on bringing down the cost of healthcare for everyone while still finding a way so that families can avoid disaster if a truly serious health crisis hits.  So how does this translate into specifics?

1.  All of the limitations on health insurance policies should be eliminated except for the following:  after a family has spent $10,000 on healthcare during a year, the insurance policy has to kick in and provide coverage.  This would allow the sale of catastrophic coverage for many people at a greatly reduced price.  All the extras like health club dues, birth control pills, and the like which are not really required for good health need not be included in the policies.  Obviously, policies that include these items can and will still be sold, but the minimum basic policy will just be there to cover catastrophes.  Obama's constant refrain that Americans ought not to be one illness away from bankruptcy should be adequately dealt with by these basic policies.  This structure will also allow the insurance companies to use their clout to negotiate lower rates from doctors which will help keep medical costs down.

2.  Medicaid should be transformed into a designated clinic system.  People on Medicaid who now go to emergency rooms for normal treatments should be directed instead to clinics set up in each county specifically for those in the program.  Moving people into these clinics as patients will allow for massive cost cutting.

3.  All of the massive tax increases designed to fund the Obamacare bureaucracy and subsidies ought to be eliminated to the extent possible.  This should provide a major boost to the economy.

4.  The federal government should provide grants to states to be used to help subsidize those who cannot afford the cost of the catastrophic coverage.  The states can decide if this fund will go to insurance premiums only, deductible coverage or both.  This will let the states experiment to find the best system which can then be copied by the others.

There are, of course, many other pieces that have to go into this system.  Those should be put in place separately.  We have all had enough of "comprehensive" health care reform.  We all know now that "comprehensive" actually means (a) unread by Congress, (b) not fully considered, and (c) the product of some academics with strong opinions who do not understand the real world impact of their ideas.

Obama's Test

The news indicates that the president of the Ukraine has fled the capital.  The Speaker of the Parliament also resigned and a major opposition leader who has been in prison for two years is now being released.  It seems that the "agreement" signed to resolve the crisis has now melted away along with the power of the president.  The murder of protesters by the forces of the president did not work.  Instead, the move just lost him the support of millions of his countrymen.

Hopefully, the president will resign and flee the country.  Without a doubt he will go to Russia.  And that brings up the current problem.  At the same time all this was happening, president Putin of Russia called president Obama and told him that Russia wanted to help implement the agreement (which has now melted away).  It is a big test for Obama.  Allowing the Russians in to help "implement" the agreement will mean greatly increasing the chances of  Russian forces entering into the country to take control.  Obama has to tell the Russians that their presence in the Ukraine is unacceptable to America.  It is a matter for the people of the Ukraine and only them.

Who wants to bet whether or not Obama had the sense to say that?  The odds are probably ten to one that Obama told Putin that it was a great idea to have the Russian assistance.

Squashing The Economy

The Wall Street Journal is reporting that President Obama's new budget will call for higher taxes.  That's right, despite the major tax increases that Obama pushed through in the last five years, he is now going to campaign for more.  Let's forget for the moment that this is just a political move with no hope of success since Congress is never going to pass Obama's proposal.  Let's focus instead on what this request discloses (once again) about Obama.  The truth is that Obama has no idea what is good for the economy.  Just think about where America is at the moment.

1.  It is almost five years since the recession officially ended and employment has not returned yet to pre-recession levels.  This sort of economic stagnation has not happened since the great depression of the 1930s.

2.  The average household income of the American family has gone down by about 10% since Obama took office.  This has reduced the amount of money available to Americans to spend which, in turn, slows economic growth.

3.  With the start of 2014, all sorts of new taxes and costs have kicked into action.  The biggest item sucking money out of the pockets of Americans is the much higher healthcare premiums that many people are paying due to Obamacare.  This does not hit everyone, but it hits a large enough segment of society to have a major negative effect on the economy.  Then there are the Obamacare taxes which come from the higher income folks for the most part but which also hits middle income Americans day in and day out.  Put all these tax and cost increases together and the result is a major reduction in spending power for the American consumer.

4.  The economy was doing a bit better during the second half of 2013 although it was far from robust.  Since the end of 2013, growth has seemed to slow as illustrated by the terrible job creation numbers reported in both December and January.  As has been the case so many times in the last five years, a promising move in the economy seems to have stalled.

5.  Raising taxes yet again would suck another substantial chunk of cash out of the pockets of the American people, thereby preventing the consumer spending which is the lifeblood of our economy.  nevertheless, this is the plan being offered by Obama.

The sad truth is that we have an economic ignoramus as a president.  Everything is politics, and class warfare  (soak the rich) is the political argument on which Obama hangs his hat.  There are times when it is appropriate to raise taxes, but this is not one of them.  In fact, the likely result of a tax increase is that government receipts will fall as a new recession takes hold.  there ought to be someone in Washington who understands this and actually acts for the best interests of the American people.  Instead, we have Obama.  

The Key to Kiev

Can we really be watching the start of another Syria like situation?  Remember that the civil war in Syria began when the government sent snipers to kill protesters and gradually morphed into civil war.  In the Ukraine, we have almost the same thing happening.  Police forces are shooting those protesting and have killed dozens.  Right now, the world is horrified that the Ukrainian president would take such action just to cement ties with Russia.  We are at the point where both America and the EU could make a major move to assist the protesters and help topple the president who would kill his own people to make his political points.  We cannot have another spastic response or non-response like what happened with Syria.  It is just too important.  On a scale of world importance of 1 to 100, Syria may be something like 35, but Ukraine is in the 90s.

We all need to make some noise to get our fearful leader to act.  Let's push Obama to do what is right.

Watching Obama and the Ukraine

The attack on the protests in Kiev of the last few hours are big news around the world.  Right now, I am at the southern tip of South America (Tierra del Fuego) and even here, the story is big news.  The key to what is happening now, however, is that the entire future of the Ukraine as well as the future of Russia and its place in the world are at stake.  On one side in the Ukraine we have the government which has ended ties to the European Union and moved closer to Russia since November (and before).  On the other side are the protests by ordinary Ukrainians who see the move towards Russia as the first step towards the re-establishment of Russian rule over the area.  Remember, the Ukraine was part of the Russian Empire and then the Soviet Union for nearly 300 years.  Even so, the people had a separate identity from the Russians which remained no matter what the Russians did.  During the 1930s, Stalin ran programs from Moscow that led to the starvation of something close to ten million people, most of whom were in the Ukraine.  When the Germans invaded during World War II, the Ukraine saw their forces as liberators of the land from Russian domination.  The enmity towards Russia came out again with the celebrations in Kiev of the collapse of the Union of the Soviet Socialist Republics in 1991.

The current move by the government is a push to end opposition to a renewed control of the country from Moscow.  We may not see actually reunification of Russia and the Ukraine for a while, but if the current course remains unchanged, Putin and his kleptocracy in Moscow will move into actual control of Kiev.

Let's put this into proper perspective for the USA.  Russia without the Ukraine is a strong power, but it cannot be a superpower again.  Russia with the Ukraine under its control is another matter.  Allowing Russia to rule in Kiev would be perhaps the stupidest move that president Obama and his foreign affairs team could ever make.  It would be worse in the long run than a nuclear Iran or a terrorist state in Syria.  In truth, it would be something that could reignite the old Cold War mentality and confrontation.  Remember, there are more than ten other former Soviet republics that are now independent and which have no desire to come back under the control of Moscow.  If they watch the largest and most important of them all, the Ukraine, fall back under Russian control with nothing more than a speech or two from the USA, they will know that they are on their own and will have to kowtow to the Russians accordingly.  Then there are all the old Eastern European satellites that are now free countries.  The lesson of the loss of the Ukraine is another one that would be hard for these folks to miss.

President Obama must manage this situation in a way that helps the Ukrainian people keep away from Russian domination.  It is going to take more than speeches.  America and the world need to see real action from Washington. 

A Program For the Future - Getting America Working Again! - 3

Today we are once again putting forward a suggested platform for the GOP to use in November's election.  America deserves to see how Republicans would use a Senate majority should they win the election.  Our subject today is eliminating government waste.

There is no person in America who could possibly consider the federal government to be generally efficient and effective.  There are simply too many examples of fraud and waste infecting the government.  President Obama actually said at one point that he would go through the federal budget line by line to get rid of wasteful spending.  Of course, he never did anything remotely like that.  When the GOP took control of the House in 2011, the new majority came forward each week with some $2 billion of spending cuts which were intended to get rid of the worst abuses.  Then, after the big fight in the summer of 2011 over the budget, the GOP dropped that idea. 

The Republicans ought to pledge once again to eliminate waste.  This pledge should come with the following specifics:

1.  The goal ought to be to cut spending by each federal agency by 2%.

2.  Programs that simply do not work ought to be eliminated.  That can be done by cutting off all spending for them. 

3.  Inefficient programs ought to be reorganized.  There are limits to what can be done, but a Republican congressional majority ought to be able to put some order into the chaos.  For example, there is no need to have 105 separate federal job training programs.  It would do fine to consolidate these existing programs into 4 or 5 and to get rid of the extra bureaucratic management while keeping the same level of training.  Such a move would save much more than the 2% goal and would not reduce job training one bit.

4.  Misguided programs ought to be redirected.  Using job training programs once again as the example, a federal program to train workers to do jobs that are no longer needed is not a good idea.  Existing programs ought to be redirected to prepare workers for jobs that are in demand instead.  Such a move would not increase or reduce spending, but it would make the program much more effective.

The bottom line is that the Republicans ought to promise to revisit existing programs rather than just focusing on new ones.  Many of the older programs have outlived their usefulness or need to be modified to improve their effect. 

This type of change is one that the GOP ought to be able to accomplish even if president Obama opposes the modifications.  After all, Congress can just pass a budget that requires a redirection of spending.  If Obama wants to veto the spending bills, he can do so, but it will be hard to win the PR battle on that one.

A Program For the Future - Getting America Working Again! - 2

So far in our series of proposals for the GOP to use in this fall's campaign, we have discussed modification of the US tax code, a change designed to help promote economic growth.

Today, the focus moves to energy.  Right now, America is enjoying a boom in energy production which is happening despite all the efforts by president Obama and the Democrats to slow that boom down.  It is amazing to watch Obama talk about increased oil and gas output when that entire increase comes from areas that he cannot control while production on federal land (where Obama's policies are key) is down about 15% during his term in office.  Lower production means that hundreds of thousands of jobs that otherwise would have been created have been stopped by Obama.  Lower production due to Obama's policies mean higher prices for everyone at the gas pump and on their home heating or electricity bills.  Indeed, the people about whom Obama claims to care the most are the very ones who are getting squeezed day after day by high energy prices.

The Republicans need to present a clear and coherent message on energy that ought to include the following:

1.  The Keystone Pipeline will be built.

2.  Drilling on federal lands and areas without special circumstances should be expedited.  Due consideration should remain for environmental issues, and the drilling allowed must meet conservation requirements.  Nevertheless, the endless delays and regulations that come from the environmental impacts on drilling must be eliminated.

3.  Federal programs that pump billions of dollars into ventures in "green" energy must end.  The federal government can fund research into energy sources and methods, but it should steer clear of funneling billions into private ventures.  It is particularly important that the huge subsidies given to ventures that just happen to be owned by big political backers of the president be ended.

4.  Energy conservation and new technology should be promoted.  Those efforts, however, should be limited to research and leading by example.  In other words, the federal government can switch its fleet of trucks over to operation on natural gas to show how it can be done, but it ought not subsidize the conversion of fleet by private companies.

5.  Exports of natural gas should be promoted where possible.  America is now the clear world leader in production of natural gas.  We should build on that lead to increase American incomes and job creation here at home.  We should also export the natural gas production to reduce the power of countries with oil based economies like Iran, Venezuela, Russia, etc.  Further, lowering the world price of energy through increased production will help bring prosperity to places that will buy more products from America, thus further improving our economy.

6.  The war on coal has to end.  While environmental standards are needed to keep the use of coal from polluting the atmosphere, those standards must be reasonable.  Obama's EPA must not be allowed to destroy the coal industry just to satisfy the extreme environmentalist lobby.

7.  The reduction in energy prices resulting from higher production must function to reduce the prices paid at the gas pump and to the electric utility companies.  Every American needs to share in the bonanza that our energy resources are producing.  The easiest way to spread this wealth is to get gas prices low.

A Different Perspective on the World

I spent most of today in Puerto Montt and the lake district in southern Chile.  There really is nothing like being 5000 miles from home to give one a completely different perspective on the world.  It is not just that I am out of the USA.  On top of that, I am also out of the land of the endless news loops.  No one in Chile (at least no one I met) cared at all what was said on the Sunday shows yesterday in the USA.  The day to day disputes about small points or phony issues have no impact around here.  The folks that I spoke to in the area were concerned about only two issues regarding the USA.  The first was whether or not America would regain its economic growth.  This is not a small issue for the Chileans.  A faster growth rate in the USA helps the economy of Chile more than almost any other economic event coming from outside the country.  The second concern I heard was whether or not America still cared about the rest of the world.  The perception exists in Chile that the USA is pulling back from its commitments around the globe.  We are no longer concerned about our friends in the same way that we used to be.  I have to say that I was surprised to hear regular people say this.  That means that the foreign policy (or lack thereof) followed by president Obama and his administration has been perceived in South America at least as one of withdrawal from the world.  No one could argue that this is a good development.

A Program For the Future - Getting America Working Again!

As we move closer to November, it is time for the GOP to step forward with a conservative program for the nation.  The Republicans need to tell America how they would use control of the Senate if the voters return that power to them.  In that way, the new majority will have a mandate from the voters to accomplish certain changes.  President Obama will likely oppose these changes, but at least it will be clear that he is thwarting the will of the voters.

In the next weeks I plan to offer my suggestions for this program.  I call it "Getting America Working Again".

The first program to be offered has to be one that promotes the creation of new jobs.  America has spent too many years under president Obama with only feeble job growth.  Right now, after five plus years of Obama's economic programs (or more precisely, the lack of any such program), the nation still has fewer people employed than was the case at the start of the recession.  It is a sorry record so bad that one needs to go all the way back 80 years to the Depression to find anything comparable.

So how do the Republicans combat the stagnation of America's economic might under Obama?  There are a great many things that could be done, but we ought to start with the one where Congress can have the most impact.  My first choice is the restructuring of the tax code.  The Republicans ought to pledge to revise the tax code to achieve the following goals:

1.  Special tax breaks for the well connected ought to be eliminated.  There is no reason why a huge company like GE (whose chairman is a big Obama supporter) should earn 14 billion dollars but pay no taxes while a small business without connections earns one hundred thousand dollars and pays a big chunk of that in taxes.

2.  People in the "underground" economy who avoid paying taxes should be brought into the tax base.  There is no reason why the tax code should make it easy for people or companies to cheat and evade taxation.  The honest people of America should not be left to support the crooks.

3.  The corporate tax system has to be revised so that it no longer promotes the movement of American companies and American jobs overseas.  If the tax rate differences between the USA and other countries were reversed, we could soon see a huge wave of foreign investment which would add hundreds of thousands or millions of jobs here at home.

4.  Tax rates should be lowered on activities that lead to the creation of new jobs and economic activity.  This is not "tax cuts for the wealthy".  The total revenue obtained from the tax system should remain the same; the sources, however, should be redistributed so that it taxation does not discourage economic growth.

5.  The tax code should be simplified.  There is no need for America to spend so many billions of dollars each year trying to comply with the requirements of a byzantine labyrinth of a system. 

No Time for Himes

I received an email this morning from Dan Debicella who is running for Congress in my district against incumbent Jim Himes.  Himes has held the office for a few terms and is heavily favored to keep it this year.  The fourth district of Connecticut was Republican for many years, but in the recent past it has turned into a Democrat seat.  Still, the battle this year is shaping up as one that may surprise some observers.

Himes has a problem.  He has moved into a leadership position among Democrats in the House (as some sort of fund raiser).  At the same time, however, he has done very little for his constituents.  And it seems that he is getting worried about November.

Himes just introduced a bill in Congress to establish "National Charles Darwin Day".  That is not a joke; he really did that.  With all that is going on that needs attention, a holiday to honor Charles Darwin hardly seems important.  It functions only as a political weapon.  Those who do not believe in evolution may be upset at the idea of the federal government honoring Darwin.  It would be a silly dispute, to put it mildly, but it would distract from the poor economy, Obamacare and the decline of America around the world (about which Himes has done nothing and seems to have no suggestions.) 

Of course, the problem is that in the New York suburbs in Connecticut, there really is not much debate about evolution or Darwin.  Himes may be trying to use a phony issue like those which were bandied about in 2012, but it would have to be an issue about which the voters here actually care.  My guess is that a poll of Fairfield County residents would find not one in one thousands who would consider national Charles Darwin Day worthy of a second glance.

It is sad that we have to have a representative who thinks so little of his constituents that he tries garbage like this to divide people.  National Charles Darwin Day is silly, even if one accepts evolution.  It ranks right up there next to National Potato Week.  Himes should spend his time working on real issues that concern real people.

 

The Armanino Earnings

Since I have written about Armanino Foods of Distinction for years, I know that there may be some folks who come to this blog to see my comments about the latest outstanding earnings report coming from the company.  Those comments are posted at Financial Acceleration, where I now have my stock market commentary.  Here is the link for those who are interested.