When did the President change his race?

As you know, this Blog is dedicated to critical thinking. Here is the latest attack by the media and our elected officials on our abilities to exercise this skill set. The standard bearer of this attack has become former President Jimmy Carter who said on NBC Nightly News:

I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man, that he's African-American.

Now, let's see this quote from the stand point of critical thinking. President Obama entered the oval office with an approval rating over 80%. Today, according to Rasmussen, 48% of voters say they at least somewhat approve of the President's performance. Fifty-one percent (51%) now disapprove. If this shift in the President's approval rating is tied to racism, when, after obtaining the oval office, did the President change his race?

Now that's the hoop they want us to jump thru! If, as I suppose, the President has not changed his race since taking office, perhaps, it is more the policies that President Obama embraces and champions that has affected his approval rating over any concern of his ethnic background.

Cash for Clunkers Repeats Mistakes

We have all witnessed the government's attempts to stimulate car sales through it's Cash for Clunkers program. The stated purpose of this program is to stimulate the economy and create more jobs. The intended purpose for this program is to reduce carbon emissions by replacing low efficiency older cars with modern cars which are certified to achieve a very high efficiency as measured in miles per gallon.

In reality, this program continues to contribute to the very factors that led to the economic melt-down last fall. Remember that the move to provide more and more credit to consumers did not really create new demand but simply moved demand forward in time. When the use of credit had maxed out, demand fell precipitously. How does this apply to the Cash for Clunkers program?

The current efforts to incentivize consumers into purchasing a new car is shifting demand in time. The cars that are being sold now would have been purchased in the future - you know that time when the automotive companies, emerging from bankruptcy have the hot new product lines for sale. What will happen to these corporations when the demand for the new cars has already been filled by the participants of the Cash for Clunkers program?

But consider the program from a completely different vantage. How would the program differ if it had been run from a free enterprise viewpoint as opposed to a government give-away? To start with, the free enterprise version would not target the new car sales, only. The current program requires buyers to either have the cash to make a purchase now, or to borrow the cash needed to take advantage of the incentive. These new cars are not cheap and will lose a significant percentage of their value the moment they are driven off the lot. The increased debt load on the buyers will effect their long-term security as well. The cars (clunkers) traded in must be processed so that the engine and drive train can not be reused.

In a free enterprise environment, the incentives placed on the new cars, would also generate an increase of used cars for resale. Increased inventory provides more choice and usually lowers prices. Citizens who could not afford a new car, or who chose to not take on additional debt at this time, could perhaps upgrade from even older (and even less efficient) cars by buying someone else's better clunker to replace their own clunker.

These used car purchases would provide an additional demand for jobs in sales, in maintenance and repair. The clunkers which were not re-sellable would be sent to junk yards with working parts (instead of having the engine and drive trains destroyed) which could be used to keep cars going during this recession at a reduced cost for all of those families whose finances are being challenged. Again, these maintenance jobs would continue to sustain employment. The benefits of the program would flow throughout all levels of our society and economy.

Another interesting aspect of the current cash for clunkers policy is the impact it could have on the dealerships' cash flow. I heard a radio interview with the owner of a Ford Dealership who was talking about the inability to get questions answered regarding the program. The phone numbers he was given was always busy or never answered. This dealership had almost $250,000 of their own money tied up in new cars on the road, waiting for government reimbursement. What would be the implications if someone decided to reimburse the GM and Chrysler dealers first and the stretch out the time to pay the other dealerships. This cash flow crisis could wipe out car dealerships that currently compete with the government owned automotive companies. Is the program being administered this way? I don't know if there is sufficient evidence either way. Could the program be administered this way, in a minute it could. This is the obvious problem of governmental ownership of businesses in the free market system!

So, once again we are taught the lesson that government can not incent the economy effectively. Instead, government always picks winners and losers. In the process, government adds layers of inefficiency and adds cost without benefit. And the taxpayers always lose!

Government Spending is Unstainable

Well, the reports are out today that our government's estimates of spending were off ... by $89 Billion dollars too low. That is $89,000,000,000! The result is that in the current year, our government will collect in revenue only $ .54 for each $1.00 it spends. Think about it ... the government will collect only half of what it spends this year. What are the implications of this fact?

Think about your business or your own family budget. If you spend twice as much as you earn, it has to be paid back at some future point, with interest. You can not go forever spending more than you make. In fact, despite all that others have said, the real root of our current economic collapse is that we Americans spent more on credit than we could afford ... and it finally caught up with us.

Is the same situation catching up to our government? China, who has been the leader in buying US debt has put us on notice that it is not interested in buying more. Who is going to fund our government's runaway spending? There are only 110,000,000 taxpayers in this country. President Obama promised to reduce taxes on 95% of them. In light of these facts, who is jumping thru hoops now? There is no way to reduce taxes on 95% of the taxpayers and at the same time increase deficit spending at the rate we see it happening today. Any reduction will surely have to be followed by increases to pay just the interest on this deficit. Anyone with common sense can see that this plan will not work. The time to stop is now. We must curtail the deficit spending being carried out by our government. What are you going to do about this situation today?

Drill where the oil is!

The American public is finally demanding that the restrictions on drilling for our own oil be lifted. This demand is being ignored by some politicians. They argue that the oil companies have thousands of acres under lease on which they are not drilling. Why lease them more?

This argument shows that the politician is either ignorant ... or he/she thinks we are. For a quick analogy, let's say that a family member needs a kidney transplant. Your kidneys have been found to be compatible and you have decided to give up one for a transplant. The doctor performing the transplant needs your whole body on the operating table. But there is only one of two places on your body where he will be able to locate and remove a kidney.

Oil is found in pools. These pools get trapped within specific geological structures under ground. Over the years, oil companies have developed ways to identify the most likely places to find oil. When they lease land for exploration, it is for the purpose of trying to find geological formations which are most likely to have trapped oil. These formations normally represent a very small percentage of the total land mass of the lease. Once potential sites are located, the oil company must determine that the oil, if present, can be economically removed. There are many oil deposits that are known but are too expensive to recover.

The oil fields off the continental shelves and in the Arctic (which are currently the center of debate) are much more likely to produce large quantities of oil, and can be drilled for substantially lower cost than much of the land currently under lease. The bottom line is this - oil prices will come down as we produce more from our domestic supply. The cheapest and fastest way to achieve this result is to allow oil companies to drill where the oil is .. not where it is not! Any politician that tells you the oil companies have enough leases is just trying to get you to jump thru hoops!

Did the Israelites really walk through the Red Sea?

A recent show, airing on the History Channel, had experts taking exception to the Bible's miraculous account of the Red Sea crossing. These so called experts stated that the word translated Red was actually Reed. The Reed Sea, according to their research, was a shallow salt water marsh east of the Nile which dried up when the wind blew the water out into the Mediterranean. The Israelites were able to cross the dried up marsh before a change in the wind permitted the water to come back in. The incoming water, according to these experts, saturated the ground so quickly that the Egyptian war chariots got stuck in the mud of the marsh. By the time the chariots were able to clear the marsh, the Israelites had been able to get away.



Since the Reed Sea was so shallow, the elimination of the entire Egyptian army was simply not possible. These experts claimed that the time it took the Egyptians to get unstuck was sufficient for the Israelites to lose themselves in the country side. It was the arny's inability to locate them that led to the survival of the Jewish nation.

This argument does not stand up to the smell test!

Let's apply a little bit of mental gymnastics and see if this presentation is really more believeable than the Biblical account. The nation of Isreal was between 1.2 and 2 million people. That is approximately the number of people living in Nashville, Tennessee and its five surrounding counties. These people included young and old, mostly traveling on foot. These people also had large flocks of sheep and goats, herds of cattle and donkeys, camels and wagons. Stop and think for a moment. Trained soldiers would have been able to follow the trail with their eyes closed!! Just the animal droppings would have been sufficient to follow the nation of Israel. Chariots would have closed the gap rapidly, and the distruction of the Israelites would have been assured. In fact, the only way to save the nation of Israel was accurately recorded in the Bible.



How 'bout that hoop?

Why should negative home equity be a surprise?

Recently, a cable news network channel led a feature with the information that the percentage of American homes with negative equity (a home for which more money is owed than the property is worth) is the highest it has been in more than 50 years. The statement was made in an effort to lead the viewer into assuming that the national economy was in a melt down.

What piece of information was left out of this statistic?

A thoughtful viewer would have realized that we have just come through a period of time never before seen our economic history. For more than 10 years, home buyers have been able to purchase homes for no money down. In some cases, lenders have written mortgages for 125% of the value of the house. The proliferation of HEL(L) or Home Equity Loans and the number of programs encouraging home owners to unlock the hidden equity in their home have created an environment where having equity in a home is considered an unsound use of your capital. No wonder we have the highest level of negative equity in the home real estate sector.

The reporter tried to use the statistic to demonstrate the poor condition of the national economy. Anyone exercising their brain would realize that the statistic is more a reflection of many in our economy who can't or won't say no to buying what they can not afford.

How 'bout that hoop?