Piecing together a cabinet

Obama is certainly burning the midnight oil trying to get his cabinet together - sooner rather than later. Yet already we see the indication that his ride on the unicorn may be short lived. Already there are rumblings that he must appoint an equal number of black officeholders to match that of the ill-fated Bush administration. Since Bush appointed several major cabinet posts to black candidates, is this to be the new quota? What about Hispanics? Then there are political considerations.

In times like these the qualification of the candidates should matter more than anything. Sure, Lincoln appointed a cabinet of people that were his rivals. Each person in his cabinet though he was better qualified to be President of the United States. Yet, looking at his cabinet picks, even if these people were not his rivals, most were also very good picks. William Seward at State gave great advice to Lincoln and his successors. When Lincoln wanted to issue the Emancipation Proclamation it was Seward that advised him to wait for a victory, or else it would appear to be a last cry of desperation - especially after the Fredricksburg disaster. Instead after the union victory at Antietam Lincoln issued the emancipation order from a position of strength instead of weakness. Salmon Chase at treasury was also fairly competent - his face appearing on the first US paper money - the greenback. Over the duration of the war prices rose 100%, yet with unconstrained paper money in circulation for the first time since the disastrous Revolutionary War Continentals, this was a decent performance. Simon Cameron, at War Dept? Well that was not so good. As Lincoln said "the only thing he wouldn't steal is a red-hot stove." He did not last long as he was replaced by the more competent Stanton.

So what gives Hillary qualifications to be Secretary of State? Especially when in the bull pen sits Richard Holebrooke - the man that rammed home the Dayton accords facing off against the Serbian leader Slobodan Milosevic ending the Bosnian war. He served a long tenure in the foreign office and the UN and has many accomplishments in both Asia and Europe being undersecretary of both regions. Plus, as a bonus he also knows international finance having been an investment banker working for Credit Suisse and Wall Street firms including, well Lehman Brothers. Here is a man with the strength, intelligence and savy for the job. In a time of financial crisis and with huge problems in Asia and the need for a tough negotiator - here is is. Is he to be relegated to being an advisor?

Hillary would no doubt bring energy to job, but little else. Oh, I forgot Bill, she would bring Bill along for the ride. This may be beneficial for late night comedians and Saturday Night Live but it bodes ill for this administration. What type of negotiations has she handled? Another candidate with less than stellar appeal is good old John Kerry, who has been eyeing this post as his reward for supporting Obama during the campaign. Now, is not the time for second best or a political pay-back.

With our economy imploding we also want the Treasury to have the most solid of candidates. Paul Volker would be a good candidate, but he is a little old for the stress. Then there is Larry Summers, who is the most qualified person for the position. Of course there is the issue of his foot in mouth problem that happened during his tenure at Harvard. Here he looked at the statistics and did not take heed of the PC and would up getting hammered by women's groups for saying women may have less innate abilities relative to science and engineering. He got hammered and had to do penance for a few years, stepping down from his Harvard Presidency. He is the certainly the most up to the task for what is at hand.

When Lincoln took office he also said he was afraid there was not enough "teats for the pigs". This is certainly even more true today. Emulating Lincoln is a nice touch, but if Old Abe had his choice it would be Holebrooke and Summers and certainly not Hillary and Bill. Mary Todd certainly gave him trouble enough.

Fixing GM - Fools Errand or No Choice Proposition

General Motors is not the behemoth is once was but it certainly employs a lot of people directly as employees, indirectly through its thousands of suppliers or even more indirectly through the earning power of these people that are kept gainfully employed spending money and keeping our floundering economy afloat. After scorning its lackluster models for years, many of us feel we should just let it die. Then again, since we all seem to be trying to keep our necks above water, if this Titanic does indeed go down will all be sucked into the vortex behind it. Hank Paulson thought the Lehman debacle would be a manageable bankruptcy. After all, they had months to prepare for it. Instead it blew a hole right through our financial system seizing up our money markets and leaving us tottering. Right now, with our economy listing heavily to port, can we sustain another torpedo shot in the bow? I am not ready for that, but is there anything that all the kings horses and all the kings men can do to put this cracked up company back in shape?

GM is a screwed up company for many reasons - its unions, its management and the government of the United States.

Having worked in a union shop, with UAW no less, I have personally seen what transpires under the union label. The basic mode of operation that describes the union shop I worked in was to milk the company as much as possible while doing as little as possible in the hope that management would relent and give them paid, time and half and double time overtime. When a union employee, usually a younger employee, wanted to do more than what was expected of him - he was actually disciplined or ostracized by the other union members. Since seniority is king in a union shop, these workers were inevitably weeded out. Last hired - first fired! Senior union members were free to read newspapers, phone in stock orders or in one memorable episode work on machining custom knife blanks into machetes with rosewood handles. In order to get work moving management resorted to a TLO - temporary lay off. In a TLO the generally older union guy agrees to stay home, "Laid off" on 90% pay, receiving money from state unemployment insurance and the rest from the company, only to go back to work in a few months. Later, more and more work was just outsourced to avoid them. Younger workers found their career prospects were gone. This month the site of my former plant is being bulldozed, a national historic site that built much of the equipment that won WWII.

The unions have complicated the work rules, rewarded workers purely on seniority ruining any incentive to get the work done leaving them incapable of competing against foreign workers that are all too willing to do whatever it takes to get themselves ahead. The only way to get ahead in a union shop is to play the game and bank the years until you are untouchable - or so you thought until the whole industry dies. Pension, retiree medical and other benefits are similarly skewed so that GM and the other US auto makers are at a considerable cost disadvantage with any other producer. Note that Toyota and other foreign companies actually produce cars in the USA - in states like Alabama far from the UAW stronghold of Michigan - soon to be a howling wasteland.

Let us not forget management. GM management is like most management in the United States - they mostly care about short term numbers and not making good products or taking care of customers. Listening to the siren song of Wall Street when times are good leaves them in the dust when times turn bad. Fuel efficient cars - we can't do those, there is no market for them because gas is cheap. They seek to maximize profits and their own bonuses. Since we import something like 70% of our oil, their business model was totally dependant on cheap oil prices. Risk management - bah humbug, profit maximus rules the day. Is this the first time this has happened to the US auto industry? No, back in the 70s we saw the same sorry story. Detroit got waxed then just the same and when oil went back down they resumed business as usual. These auto makers are so adverse to change they lobbied for years against seat belts. Then they lobbied against higher fuel efficiency standards.

Lastly, United States government does not make it easier for any company to compete in a world marketplace. Most countries do not burden their job producers with high taxes and the need to provide health care for their workers. These two strikes put them at a distinct disadvantage. Business taxes are very high in the USA, and this is part of the shell game. Everyone thinks that someone else is paying this tax. Instead it is paid for by consumers in higher cost and employees in jobs lost to cheaper regions. As even McCain stammered out about Ireland - lower taxes is one of the tools that the emerald isle used to attract foreign companies to relocate there - which they did. We get the reverse of the coin - our companies flee. The other huge burden of health care, is paid by the people in the form of taxes in other countries, or in the case of China perhaps not at all. This anomaly owns its existence to WWII where wage and price controls forced companies to use their benefit package as the means of attracting scarce workers.

The US also let Detroit whine and complain about fuel standards and other things that would inconvenience their bottom line. Instead the USA ignored the fact that we have slipped from being a self-sufficient nation to being a nation at the mercy of foreign powers. Our political leadership is clueless and only interested in short term electoral advantages.

It is interesting that the democratic party has endorsed the concept that strengthening unions will help us restore our economy in a global marketplace when these same unions have helped crippled our economy and made us noncompetitive. They intend to push legislation that will allow union organizers to force employees to vote in open ballot on whether their plant should be unionized. Vote no and have your tires slashed, your home vandalized and be ostracized in public while receiving anonymous phone calls. Its been a long time since the service department at Ford was a goon squad tasked with beating up union organizers. Now it seems coercion is to be a legitimate tool of union organizers. All in this land of freedom. Barak Obama has stated he will sign this type of legislation.

I don't know how much success the government will have in running the auto industry. Even this new administration seems about to make some very bad decisions.

We are all stuck between a rock and a hard place.

Al Gore's Inconvenient Blind Spot

Al Gore deserves much credit for making people aware of the dangers of climate change. Through his book, his documentary and many speeches and writings he is a man on a mission. Just this week he once again wrote another Op Ed piece in the NY Times, however with the bottom falling out of the US economic tub, where will the resources will come for this immediate action? More interesting is what solutions he has left out of his plan.

Gore suggests many actions that should be taken - mostly renewable energy and conservation. He even goes on to suggest small things like encouraging composting, which offer only a tiny benefit. The one really big feature lacking throughout his plans is any mention of nuclear energy. This technology has matured tremendously since Hollywood and its Luddites allies branded it as dangerous and a threat to humankind. After Three Mile Island, fear of the China Syndrome took hold, if there was an accident it would burn a hole right through to China! Jane Fonda had made her last big contribution to the environment - too bad it boomeranged around her neck.

Instead no further plants were built and the fully completed $6 Billion Shoreham plant was mothballed by none other than Mario Cuomo who refused to approve its emergency evacuation plan, preventing it from obtaining an operating license and killing the project. The citizens paid a heavy burden in increased utility bills to flush a brand new plant down the toilet, but perhaps the biggest loser has been the environment. Instead of the sinister forces of unseen radiation from nuclear power, localized around nuclear plants, we have let loose a force that is changing our world from pole to pole. Yet, today nobody knows exactly how dire the implications are for our civilization and our planet. The fact that all the feedback loops and other effects are not known is even more terrifying.

Instead of improving our nuclear infrastructure we have pumped hundreds of millions of tons CO2 into the air, emissions that never would have happened without the fear mongers and insipid politicians. Since coal fired plants in the west also result in mercury in the fish we eat, we can thank Mario for the increase in mercury in our fish as well. Instead of zero greenhouse gas emission nuclear plants instead we got more coal, oil and gas fired plants.

Today 2/3s of our power is from fossil fuels and over half of that is from coal. Looking back at the Shorham plant and the output of typical coal burning plants, the 2,045 MegaWatt Shoreham plant would have produced the equivalent of a couple of big coal plants pumping out an equivalent 14 Million tons of CO2 and 82,000 tones of Sulfur Dioxide a year. So over the time since its closing in 1989, Mario's executive action has personally injected 266 Million Tons of CO2 into the atmosphere to achieve the same electrical generating capacity. Since the Shoreham fiasco essentially stopped all nuclear projects in the country, Mario can claim credit for injecting multiple Billions of tons of CO2 into the atmosphere. In fact, compared to Mario, George Bush and his energy cronies are pikers in the global warming hall of shame.

Today France produces 77% of its power from nuclear plants. They want to get 100%. Many countries around the world are planning new plants. Here in the "Greatest Nation" we have deadlock. We want the power - just not the plants to produce it, nor the electrical grid to deliver it. We are still deadlocked by these "environmentalists" who oppose one of the biggest tools in our arsenal to stop global warming. By all means windmills and solar are great ideas, but we should use all the tools available to us.

So Al, you should learn from George Bush and not be so stubborn and pigheaded. Otherwise you might earn the distinction now owned by Mario CO2 Cuomo, the man responsible for the biggest increase in greenhouse gases in history.

Taking Away Our 401Ks

The dust has barely settled on the election of 2008 and we hear the first rumblings of what we most fear - the democratic overreach. With huge looming budget deficits and a long pent up demand for new social spending the democrats are looking to increase the limits on their charge cards. The tool that has caught their eye is our 401Ks, the same vehicle many of us have been planning to ride into the sunset of our lives.

Unless we are employed by the government with a gold plated pension with cost of living adjustments and free medical insurance, we have only our lowly 401K to provide for our golden years. In the private sector where most people struggle to find employment, pensions are now a thing of the past and even then without a cost of living adjustment they are a risky benefit to trust retiring on.

Reprentatives George Miller and Jim McDermott are looking to remove the tax deductibility of 401K plans for employers. Instead they would like you to pay into a "guaranteed retirement account administered by the Social Security Administration" - and they propose to give us a $600 a year annual subsidy in its place!

Once employers lose their tax breaks for our matching contributions, kiss these matching contribution goodbye. Don't expect company pensions to come back either. They also propose encouraging us to "invest" in "special" government bonds that are guaranteed to achieve a 3% rate of return. What is the asset they hope to tap into? It's our children of course who will be saddled with the bill, nothing is going to be put aside but a pile of IOUS for them to pay. Instead there will be more money to be spent.

Recently this same strategy has been exercised in Argentina where the government of Cristina Fernandez is attempting to seize all private pension plans in an effort to avert a government default on its debts. Under the banner of protecting the workers retirement money the government instead wants to take their money and give them newly printed government bonds in return allowing them to spend the cash, plug their budget shortfalls and spend more money on what they desire.

It's only fitting that a government such as ours would follow the lead of Argentina and seize people's retirement money. The Social Security system itself was set up on the ponzi principal that as long as population kept going up, up, up, current retirees would be paid for by a larger number of younger workers. This bubble of demographics ended some time ago with the end of the baby boom. No assets have ever been set aside except IOUS with our kids names on them. Where once six or seven workers paid for one retiree, we will have one or two workers responsible for each retiree. Instead of a 1% payroll tax like many retirees enjoyed they may see 15% or higher. These younger Americans will have little choice but to lead lesser lives and put off their own families as they labor under the burdens they are now being assigned.

With the reliability of Social Security becoming more dubious every day and with the 401K as our only real chance that we (us non-government workers), have to provide for ourselves in our golden years, these moves seem destined to leave us either working until we drop or to become wards of the state. We can visualize this the world of the future where only government workers will ever be able to retire and live off the fruits of their labor. Instead government will suck us all dry.

Will Obama follow in the path of these hungry democrats? We'll all see come January.

Republicans Enter The Wilderness

Barring the return of Jesus Christ raining thunderbolts upon the Democrats, the Republican era will draw to a close today. Ordinarily a long period in the wilderness would be a good thing for a party that has lost its roots and in dire need of a long rehabilitation. The Republican party, formerly regarded as the Grown Up Party once believed in a small well-run government that kept out of the daily lives of its citizens. They had strong libertarian roots exemplified by Barry Goldwater one of the father's of the conservative movement. They were the bulwark that prevented the well-intentioned but often disastrous instincts of the Democrats from being fulfilled.

In today's Republican party Barry Goldwater would be derided as a libertine and a godless man. Here is how Goldwater saw the religious right:

"However, on religious issues there can be little or no compromise. There is no position on which people are so immovable as their religious beliefs. There is no more powerful ally one can claim in a debate than Jesus Christ, or God, or Allah, or whatever one calls this supreme being. But like any powerful weapon, the use of God's name on one's behalf should be used sparingly. The religious factions that are growing throughout our land are not using their religious clout with wisdom. They are trying to force government leaders into following their position 100 percent. . .

"And from where do they presume to claim the right to dictate their moral beliefs to me? And I am even more angry as a legislator who must endure the threats of every religious group who thinks it has some God-granted right to control my vote on every roll call in the Senate. I am warning them today: I will fight them every step of the way if they try to dictate their moral convictions to all Americans in the name of 'conservatism.'"

Today, this man would have resigned from the Republican party in an instant. This is the bitter fruit that Jerry Falwell has bequeath upon the Republican party - no longer anchored in the fundamentals of business sense and good limited government it is now a caricature of its former self - a sectional, Christian religious party made up almost entirely of white men in a country that is growing more diverse every day. This is a party going nowhere fast.

As the party of Lincoln the sectional flavors recently added to the Republican party are especially troubling. Pandering to "the Base" (note that Al Qaeda also means "the Base"), they deride the Northeast and the West Coast and claim moral superiority for the "heartland". Their rhetoric borrows heavily from that of the old Confederacy which incessantly raised many of the same issues against the North and Yankees in particular.

In this new Republican party, people are broken down into the good Americans and the godless ones. They would like to decide many things on your behalf including your reproductive choices, end of life decisions, how you raise your children, what books they read in school while introducing religion to your kid's science classes. This was formerly the party of limited government!

It makes sense that with their primary focus shifting towards religion the former virtue of prudence in finance and restraint in goverance finance leaving Americans to live free and independent lives would lose favor. Religion demands conformity and obedience.

In an ideal world, the Republicans would lose big time today, go into the wilderness to regroup and retool. They would atone for their sins and come back after the Democrats inexorably run the country further into the ground. This time it appears to be different. The Republicans dying by the sword today are the more rational and palatable ones in the party. New England appears about to be completely sterilized of Republicans. The safe Republican seats remain in the "heartland". Thus, after this fiasco the Republican party is more likely to be even more puritanical and less likely to be a successful counterweight to the Democrats.

For years our elected representatives have been sacrificing the future for the benefit of their re-election. We have dug our country into a deep hole. Check out this link. With looming liabilities of over $52 Trillion dollars we face a steep decline in our standard of living over the next few decades. Are the Democrats the ones to solve these problems? History says no they are not.

Without a decent alternative to the Democratic Party we are all screwed. Perhaps we have to start a new party. How about the name Federalists?