Wednesday, April 30, 2008

Will the Real Obama Stand Up?

I have to say that the current flap over the Reverend Wright seems overblown in a lot of ways. Frankly, I think that Obama's answer, "Those aren't my thoughts and those aren't my words." ought to put the whole thing to rest. I mean, can we really hold politicians accountable for the acts and words of persons with which they have some association, no matter how indirect or remote? I for one wouldn't want to be held accountable for the words or actions of my friends and family, merely because I have some association with them. Jesus, can you imagine? If you want to run for high office, you restrict your associations to priests and nuns - no, even that might not be safe!

I understand the argument that there is some reflection of character in the friends and associates you keep. But, there is a large distinction between actively embracing someone's ideas, working with them to realize those ideas versus merely listening to someone spout racist or politically incorrect drivel and remaining their friend in spite of their flaws. This is a tempest in a tea pot.

Obama has a real opportunity here if he wishes to take advantage. He can use this entire episode to create a stark contrast between himself and the kind of stereotypical vision of black clergy that many whites have - the kind of thing that really does scare them in to voting against someone because of race.

Tuesday, April 29, 2008

Hard Times Coming?

The news yesterday had two articles that caught my eye and scared me down to my bones. The first discussed the potential that gasoline prices in the US could reach $10/gal in 2- 3 years. The second discussed the potential for oil to go over $200/barrel - mostly due to the declining value of the dollar. A decline in the value of the dollar by 1% increases the cost of a barrel of oil by $4.00 Gloomy to say the least.

Suppose the cost of gasoline is $10/gal. What would that mean in reality on the ground here in the US? Think you could afford to fill your gas tank for $150, twice a week? Would that mean lots of people staying home and tele-commuting via computer? What if there aren't enough ports to access the network at your business if everyone is trying to work from home? What aout food. Fresh food would become unavailable. In fact, most goods of all kinds that are transported by truck would be either unavailable or prohibitively expensive. Locally grown food would likely be the only choice.

Imagine how life would be here in the United States, an entire nation that was built without regard to the energy cost to move from one place to another. Malls and big box stores in the suburbs would be empty - people avoiding any kind of driving that is unnecessary. People in low wage jobs unable to afford to go to work if they drive, so mass transit is crowded beyond endurance. Bicycles and scooters taking the place of cars on the streets. Local vendors selling locally grown food, while the big supermarkets shelves are bare. Roads empty of trucks and cars. Maybe farmers pulling trains of hay racks behind their tractors, loaded with people, a new sort of mass transit improvised out of necessity.

Most of all, people would be miserable. I have read that the United States is only two meals away from revolution. With gas at $10/gallon, the US is probably only 10 miles from a revolution.

Monday, April 28, 2008

Universal Health Care

The debate on universal health care usually breaks down along partisan lines when it requires everyone to participate and the government to pay for all without regard to needs or means. On its face, some sort of universal health care is an idea with great merit. The argument extends well beyond your basic low income, "I can't afford health care" entitlement recipient. Take for example those otherwise middle class and reasonably paid persons that wish to change jobs (i.e., employers), but have an existing condition that will not be covered by the new employer's health insurance carrier - because it is an existing condition. So that person is stuck, no movement possible. Or a more futuristic scenario in this world of genetic engineering. Suppose genetic testing required as a condition of your prospective employment discovers that you have some probability to develop XYZ-disease in the future, so you become untouchable. No new job - or potentially dismissed from a current job or insurance coverage denied for that condition while at the current job . Notwithstanding the discrimination argument that is obvious, such a scenario is entirely plausible.

So let's postulate what reforms and what reasonable criteria a universal health care program must meet to provide for the basic needs of the citizenry, provide for personal responsibility, be compassionate to those that cannot do for themselves, and not become a draining behemoth that siphons unsustainable amounts of funding from the federal treasury:

1. Portability - must be in place always when moving from one job or place to another.
2. Must provide at least for basic health maintenance services and catastrophic event (i.e., over say a cost of $2000) health care coverage.
3. Must be market based to control costs.
4. Must be open and available to all US citizens, but enrollment cannot be mandatory.
5. It must discourage frivolous litigation.

The system I envision would be essentially a HMO type of system with the only required federal government administration being contract administration and means determination. The contract would be competitively bid to all interested health care providers (i.e., Blue Cross, etc.) to provide a basic level of coverage to include annual physicals, routine out patient office visits and procedures, and catastrophic event coverage. The contract duration could be 5 years, or longer. Providers are required to provide coverage to anyone who applies for the bid unit price (an annual per person or per family cost). Additional "menu" style coverages can be purchased by anyone as desired, but additional menu coverages will not be subsidized. . All coverage is portable from job to job. For the basic coverage, anyone without the means to purchase (as determined by a means test) will receive a subsidy from the federal government that varies from 0% to 100% depending on household income and number in the household. The means test will set some upper income level, above which the subscriber would receive no federal government subsidy - say $40,000 for a family of four and $20,000 for a single subscriber. Employers can purchase from this program for their employees if desired (this would encourage low wage jobs to provide as a benefit). No one is required to subscribe, but anyone is able to subscribe. In other words if you can find a better deal in the open market, including if your employer can find a better deal, then you are not requried to subscribe to the government program.

Lastly, there will have to be a simultaneous reform of tort litigation as pertains to health care damage claims. The basic reform would be to limit damage awards to compensatory damages for income lost and/or suffering, and forbid punitive damages entirely. Additionally, the reform should place a burden on the plaintiffs that discourages frivilous litigation. Mandating that the loosing party in litigation pay all legal expenses incurred by both parties would achieve that effect.

I think that the program described above would provide a means for universal health care that meets the criteria outlined above, and is reasonably possible to develop.

Friday, April 25, 2008

Global Food Crisis

While it seems early in this "crisis cycle" of which there seems to be an endless parade in the MSM, I thought I'd comment on the current global food crisis. Apparently the food cricis is now "eclipsing" the climate change crisis. Funny, American farmers finally start getting a reasonable return for a bushel of starch grain that can be converted to ethanol and the entire world goes into convulsions blaming them for their greed as the cause of a looming food shortage. Never mind that the cost of gasoline, diesel, fertilizer and other petro products that are necessary to the production of grain shoot through the roof as a barrel of oil goes triples in cost in the space of three years. On a comparison basis, I understand that 4oo lbs of corn (aproximately the caloric need of an adult human for a single year) will produce 25 gallons of ethanol. At 56 lbs/bushel for corn, that is about 1/3 bushel per gallon of ethanol. Ethanol is probably more valuable than gasoline ($3.40 a gallon - today's price), but lets assume that it is the same value. That means that a bushel of corn at today's market price of $6.00/bushel is producing at least $10.20 worth of ethanol. There is some cost of production at the still that is unaccounted for here, but it seems like a reasonable value in today's market place.

As the above chart produced by the FDA shows, corn divered to ethanol production in the US is currently probably less than 20% of total production. However, corn production can and has increased by this amount. The efficiency of ethanol production per bushel of corn is already increasing since 2005. Moreover, as the market for ethanol grows, other feedstock sources that are currently waste products, such as corn stover, can move to fill the source material requirements of the industry. This article by Clifford May confirms with facts and statistics that diversion of feed grains to ethanol production is not the cause of food price increases. Here is a quote from another article found here:
"The doubling of rice prices cannot therefore be explained by a sudden shift in supply and demand. And the same is true of oil, since the global growth of oil output in the past two years has been substantially faster than the growth of consumption. The key factor, as in the last great commodity inflation of the 1970s, appears not to be any immediate supply shortage but panic buying by consumers, governments and financial investors, in anticipation of possible future shortages of supply."
Maybe the solution is to develop greater domestic energy resources like arctic and offshore oil and gas fields, wind, coal, nuclear, solar. Then the demand and unit price for hydrocarbon energy from the Middle East will decline causing a corresponding reduction in market demand for ethanol. That would in turn divert more starch grains to food production.

Thursday, April 24, 2008

A True Man of Steel

As I think about the kind of man John McCain is and what kind of president he would be, I can't help but think how pitiful and small Hillary or Obama seem juxtaposed against him. Here is a man who is truly made of grissle and steel. Try to imagine the pure guts it takes to spend 5 years in a North Vietnamese prison camp, turning down the opportunity to go home after a year out of loyalty to his fellow prisoners. McCain opposes torture, and probably for good reason - he was tortured, daily. Really tortured, not being subjected to loud music, or made to stay up past his bedtime, or even having to wear underwear on his head. But real torture, like getting beaten with bamboo clubs - daily. Torture like being bound and hung up like a meat sack for days. P.J. O'Rourke has an eloquent article here in the Weekly Standard that speaks to McCains toughness, guts, loyalty, honor and integrity.

So what do you think was Hillary's biggest test of character - choosing the right time to fire the Whitehouse travel staff, where to place those billing records and still have plausable deniability? Maybe it was the whole "Bill and the Oval office BJ" thing? Doesn't sound like much up against McCain.

Obama? The greatest test of his character was having to answer Charlie Gibson about William Ayres and Reverend Wright on national TV during a debate. Either that or refraining from slapping Hillary every time she smirked and said, "If I'm not mistaken..."

Dems, the Primary, and My Prediction

Well the PA primary is over and time for a few thoughts. My impression of the entire Democratice Primary race is one of watching a train wreck occur in slow motion. Why the Democratic ledership allowed these two to become dominant and the final choices in this race is absolutely mind boggling. But it is really too late, there is no white knight to ride into the convention and rescue the Dems from their own foolishness.

First, Hillary. Its clear she is determined to drive the bus off the cliff. She'll pursue this nomination to the bitter end, even though there is a miniscule chance that she will end the primary season with either a greater share of the popular vote or more pledged delegates. I suppose the strategy is to make a play for the Superdelegates to award her the nomination, and when they don't and Obama looses, make the pitch for the nomination in 2012 that they should'a listened to her. The results in Pennsylvania showed that her support came from the same demographics and in almost identical percentages and in Ohio - net effect no real gains. Her sole chance to win the nomination appears to rest on convincing the superdelegates that Obama is unelectable. Frankly, I think she is right on point but for reasons that are different than hers. She believes that the negative issues out there, i.e., Reverend Wright, Bittergate, William Ayers, etc. will sink him. But really the polling data suggests that the reason he would loose is that if Obama gets the nomination, substantial percentages of her supporters (on the order of 30%) would either not support him or would not vote. But the alternative of Hillary gaining the nomination is even worse. A 49% dissapproval out of the blocks, hard polarization of viewpoints within the electorate concerning Hillary and Bill and the Clinton scene, and more intellegently, her positions on the issues will sink her.

Obama, on the other hand, is charismatic, dynamic and inspiring. Unfortunately, all of the aforementioned negative issues and more to come will be on him like a stink from day one of the general election campaign. And, more troubling, he really does seem to lack substance. It appears that there truly has been a media love fest with Obama for the past several months, but I think that even the MSM is now getting a clue and starting to see the stains on his background and the lack of real substantive plans and direction in how to achieve all of the really inspiring things that he talks about. Unfortunately (or fortunately) I think that he out managed Hillary during this primary campaign, and he is now beyond her reach. It seems unlikely in the extreme that the Superdelegates will throw him under the bus in favor of Hillary, alienate an huge constituency (African Americans), and expose themselves to charges of disenfranchisment of the electorate and stealing an election.

My prediction - Obama will be the Democratic nominee. McCain will win the general election, and win BIG!