Friday, August 30, 2013

How to Start a World War

Syria seems like a cake walk after Iraq and Afghanistan.  But there are a few things different here. Iran and Russia are backing Syria.  Go ahead and fire a few missiles into Syria.  It’s a little like your neighbor beating his wife and you decide to empty your handgun into his home to get him to stop. It isn't going to end there, now is it?

Since there is a little bit of a time delay before the strike, Iran and Russia have the time to move a few armaments to Syria for its defense.  It’s a little like Spain before WWII.  Everyone got to test their new weapons. Iran feels threatened because of the US’s position on nuclear weapons as well as Israel’s threat of a first strike.

We’ve meddled in Iraq, Libya, Egypt, Afghanistan and all we have done is taken a stable government which  never even had a hope of being a Democracy, and destroyed the institutions that could keep order.  Afghanistan will be like Viet Nam.  200,000 immigrants will be moved to the US. Otherwise they will be executed when we leave.

If Obama launches a missile attack, I fully expect a reprisal attack on our vessels in the Mediterranean.  And I would expect that the launches would be from Syrian soil, but not necessarily by the Syrians.    The question you have to ask, do our naval ships carry gas masks?

The people in the Arab world are very poor.  They want a reason for why they live in poverty.  The answer is, the Great Satan is extracting from their labor the wealth that would have been theirs.  Any military  success by Syria against US vessels, could rally the Arabs and make shambles of  governments in the region.
 What we need to realize here, is that we are at a point to where we could start WWIII.  And without using any gas, 4 billion people could starve to death in a nuclear winter, because some US President had a red line that was not to be crossed.  Give me a break. War is about killing people.  If you're not any good at it, you lose.

Sunday, August 25, 2013

Restaurant Menu Prices 1938

I was searching through some picture albums of my parents from way back and ran into some restaurant menus  from the depression era of late 1930's.. The first 3 pictures are from the Manhattan  Restaurant


The Second menu (three pictures) is on the Union Pacific Railroad from 1937 somewhere in Wyoming.

This last menu is from the Hotel Windermere in Chicago 1937.

Double click on the images to see what the prices were back then.   Did you notice that the Manhattan offered a broiled (Whole) lobster for 65 cents?  In today's world, you'd be lucky to get half a lobster for $30.  Bear in mind, the people that read these menus in real time are probably dead by now.

The pay raise that everyone gets each year because of inflation is just an allusion. Look around, the new hires are starting out a few pennies less than what the seasoned workers are making.  The neat thing about inflation is that Congress doesn't have to raise the tax rates, you earn more, you pay more.  That's the real difference between the Democrats and Republicans; print as you go verses pay as you go.

The real odd thing is that the average person does not connect the dots. The relationship between government spending and inflation does not exist. Rumor has it, we've always had inflation-- I guess we're supposed to get used to it.  My wife bought a new battery and asked me to guess how much she paid for it, and I said $40.  Her answer; "That's the price you would have paid 20 years ago, the battery was $100."

Let's see, I'll have the broiled lobster with coffee and a slice of cake--that's about 85 cents total, plus 15 cents for a tip.  The trouble is, 76 years of inflation have raised the prices a tad.


Sunday, August 11, 2013

MY Way Or The Highway

Newspapers around the world report how Russia granted Snowden political asylum for a year snubbing President Obama.  That’s really not the case.  In order for Snowden to get to his destination in South America, he pretty much has to ride on an airline.  The airline will have  to make one stop for fuel in Europe on the long haul to his destination.  Obama probably directed FBI or CIA to detain and search aircraft leaving Moscow and capture Snowden.  If you know he’s going to be traveling in a few days, it’s no real effort to search about 5 or 6 aircraft a day.  The US in a foreign country  no less, stopped a flight bound to Cuba just to check to see if  Snowden was on board.  Obama got too demanding with Putin.  Snowden has to leave Russia so that the United States could capture him when the plane lands to refuel.  What a joke! All Putin did by granting him temporary asylum, was give Snowden a better chance at making it to his destination. The kid hasn’t violated any Russian laws, why should Russia be responsible for his return? It was the Chinese that dumped him on their doorstep.

Then we hear something I could not believe. Obama said; "Nobody is more offended than me by some of the anti-gay and lesbian legislation that you've been seeing in Russia," he added. "One of the things I'm really looking forward to is maybe some gay and lesbian athletes in bringing home the gold, or silver, or bronze, which I think would go a long way in rejecting the kind of attitudes we're seeing there." 

As far as governments go, Russia can do whatever they deem correct, gay people don’t reproduce and spreading HIV isn’t a good thing unless you have Obamacare. Why should the government support a way of life that produces no offspring to benefit the future of the state?  And at the same time their sexual actions endanger the regular population and deplete health care resources.  What is the US -- the land of the free or the land of the Gay?  Look for Obama’s new promotional souvenirs  for the Moscow Olympics, jars of Vaseline with a picture of your favorite gay American gold medal winner on the back—ought to be a real collector’s item.

Then there is Obamacare.  Whatever gave the President the idea that once he snuck his health care thru Congress, that from then on, it would be business as usual?  This guy might know how to play checkers, but this is a chess game.  Congress is now like a wasp nest that he stuck a stick in. Wait till the masses figure out they have money for health care or car insurance, but not both and they don’t get to choose which one they pay. 

To add wood to the fire, he stated the other day;  the idea that you would shut down the government unless you prevent 30 million people from getting healthcare is a bad idea." And that "Republicans have determined that they don't want to see these people get healthcare."

 It implies, we as a nation don’t have the real money to spend on it and raising the National Debt will solve the problem. It’s similar to the car insurance and health care choice for the poor, only with the government, they get to have both even though they can only afford one. 

 In the Middle East, the Arab Spring, the promise of Democracy promoted by the US is a miserable failure. It has turned stable governments into war zones. Anyone care to vacation in Libya or Egypt?  How do you give Democracy to people that have to steal just to survive?  Idealism doesn’t put food on the table, pimping your sister or killing your neighbor’s dog does. I remember trying to give Viet Nam Democracy, looks like our government didn't learn much from that lesson.

Then there is the idea of amnesty for 10 million illegal immigrants (30 million might be a more correct figure).  Do we really need 30 million more registered Democrats in the country?  When the country was founded, the voters had skin in the game, they were land owners.  I’d like to see the right to vote determined by the amount of taxes paid.  The more you pay in taxes, the more votes you get.  Let the people who pay the taxes determine how the taxes are spent.  Funny, that doesn’t seem to support our present day concepts of how Democracy should work, but it seems very logical just for its long term survival (Alexis Tocqueville's book written in 1835 "Democracy in America" comes to mind) 

The only thing I see with the Obama Presidency is a man whose actions declare “My way or the highway.”  You are either with him, or in his way.  If you listen to his rhetoric, he’s going to solve world hunger give us universal health care and give the world Democracy.  We all have dreams; reality is when it comes time to pay the bill.  Obama has triumphed over everything, except for those “Damn Republicans.”  And it looks like he’s about to get his comeuppance, it’s  time to pay the bills.

 Shades of paranoia, I’m getting ready to hit the publish button and I can visualize in my mind, a drone locking onto the meta-data in my cell phone—nah, that’s still a few years away—I hope.

Sunday, August 04, 2013

The Student Loan Bubble

Students are offered college tuition loans guaranteed by the Federal government. Some students have anywhere from 150k to 300K in loans.  If the student pays it off in 10 years, that’s about $1,820 to $3,640 a month for 10 years.  When they graduate, they will need an 80 to 100K beginning wage job. If they can’t find one, there will be 12 to 24k of interest accrual each year that payments aren’t made. This interest turns into principle when added to the loan, so a 150k amortized over 7 years at 8 percent with no payments made turns into $257,000.  And if we calculate the same for 300K, you get a new loan amount of $514,000.  If you are unable to find a job, just the monthly maintenance to keep the loan amount from increasing is $960 a month on the 150K loan—double that for the $300K loan.

Now picture how the economics work for an institution of higher learning.  They need students that can afford a 2 to 4 year degree.  They are not promising jobs, they are promising an education to get you a better job (this is the most important sentence, and nobody really comprehends it-- a college degree does not mean more pay, it implies it).  With a lot of two year schools, the education received wouldn’t buy a cup of coffee, but the dollars the student spent are real.  The school needs students, and a lot of ”would be students” don’t have the dollars to attend.  Here is where the school will offer services, free of charge, to help you finance your education with them.
Don’t be surprised to read about the divorced mother of two who signs up for the 2 year dental technician course for $12,000,  graduates only to find out she can’t get a job with her new training. She still has the 2 kids and now in addition, 12K in school debts.  If she’s flipping hamburgers, her hours will probably be cut because of Obamacare, and her wages will be garnished to pay off the student loan. FYI,  that trade school is still turning out dental technicians by the 100's ---financing is in place for your future degree.

Our youth has been told  that  a college education guarantees a better paying job.  Students with large student loans will have to look at the bottom line before they accept a job—it might not pay all the bills.  There is always the chance your girlfriend will have just as much debt as you do. 20 years ago, the consensus was  a person with a college degree would earn a half million more than the guy without one  (I sure hope that amount has increased somewhat).

The choice for a graduating senior in High School is obvious; flip hamburgers, or get that college loan and go to college. The real irony, is that you get the loan, and the education, and then you learn how to flip hamburgers for the rest of your life.  Not every college degree is in demand. Plus you might not want to work in Butte Montana or in Detroit Michigan.
The student debt bubble could be deflated if Congress would allow students to file for bankruptcy on the ridiculous amounts loaned to them.  It’s a noble gesture to offer everyone the money to pursue a college education. It’s insanity to think that most will have the opportunity let alone the desire to pay it back.   The underwriters of these loans are turning our kids into indentured servants. If you can’t afford something you do without---what if the government offered guaranteed loans on lottery ticket purchases?  I'd love to have sold the guy that thought up the student loan program a toll bridge or two.

We saw how free money caused a real estate bubble.  When that bubble collapsed, bankruptcy was a way out of a bad mistake.  Right now, the student loan bubble is fueling the economy ---1 trillion dollars’ worth of consumption so far and Congress is still pumping air into it. Can we count on these college grads to be consumers when they graduate?  Will they be too busy paying back their loans or fighting to keep their wages from being  garnished?  
Everyone at the age of 20 has dreams of success and wealth. The rest of the world will play on those dreams, they are a vulnerability. Two kids a wife and a house payment are a reality,  and there isn’t much room for a large student loan.  The more bills you have, the less you sleep at night. A college education could become your worst nightmare.  We can be very sincere when we say;  “The road to hell is paved with good intensions.”   Another 10 years of these super fantastic student loans, and one will  need a Master's Degree to get a job cleaning toilets or a PhD to flip hamburgers.

As a post script, you can always move to Australia and forget about the debt. Being broke and having a new start will work miracles on your state of mind and you'll sleep a lot better. Now might be the time to invest in surfing posters about Australia and New Zealand for the dorm room.  However, it wouldn't surprise me to see them distributed free of charge, with a visa application for the Down Under, printed on the back side. No "go figure" on this one, we saw it coming and did nothing.