Headscratcher (10)

Failure to pay timely attention to an automobile's fuel gauge often results in running out of gasoline. When that happens, a call to an emergency service will, after a modest wait for police or a towing service, result in the supply of a gallon of somewhat expensive gas.

The current eco-fad is to purchase overpriced electric powered vehicles. Simple plug-in hybrids do make a certain level of operational, if not financial, sense as does the Chevrolet Volt which is a battery powered plug-in vehicle with a 'range extender' gasoline motor.

The newly introduced Nissan Leaf, however, is a pure electric car with a range of about 100 miles, as claimed by the company, and only 73 miles as tested by the Environmental Protection Agency (EPA) . Reduce that - by a lot - when sitting in traffic jams on days when heat or air conditioning are required and the risk or running out of fuel becomes substantial.

Then what?

The answer is simple. Call a tow truck and, instead of purchasing an expensive gallon of gas, the vehicle will be hauled away to spend hours being recharged while the unfortunate eco-freak owner paces impatiently as he (women are likely too sensible to buy these impractical status symbols) contemplates the new damage to his bank account.

A headscratcher indeed!

Advice for New Dictators

Dear Dictator:

Congratulations!

Whether you acquired it as a result of a coup d'etat, a vaguely legitimate election (with no plans for any more), a rigged election or by the cancellation of any further elections, you have just acquired your very own country. The following suggestions should help to provide you with some guidance regarding your next steps:

1. Never forget that all dictatorships have a 'Best Used by Date'. It can sometimes be hard to determine that date but you do want to be long gone by the time it arrives.
2. Never, ever, believe your own propaganda.
3. When stealing money, don't overdo it. You only need a billion or two for a very comfortable retirement. If you have many children, wives and mistresses you may need four or five billion but stealing tens of billions is overdoing things. If you do, you will never work out how to enjoy it or even to hide it - and perhaps yourself - from those seeking vengeance after your retirement.
4. Give your children some of the money and encourage them to leave the country for a life of leisure and debauchery. Whatever you do, refrain from trying to establish a dynastic succession. Some dictators (and absolute monarchs) have been murdered by descendants who too much desired to take their place.
5. Hide the money well. This is getting harder - specially since Switzerland's bank secrecy laws are under attack. There are still some tax havens with good secrecy laws but you need to diversify. Don't put all of your ill-gotten gains in one place.
6. Keep some of your wealth as bullion (coins, small bars) in a reasonably secure warehouse. Use a company - registered in a country where 'Bearer Shares' are permitted - to buy the warehouse.
7. Give your retirement planner a decent share of the money that you have stolen and that he is hiding for you. Include him in your planning for retirement. If you do, there is a reasonable chance that he will only steal a modest part of your retirement fund.
8. If you catch your retirement planner stealing from you, execution - slowly and painfully - is appropriate pour encourager les autres.
9. Negotiate - well in advance - retirement homes in more than one country. Ideally these countries are run by fellow dictators but, in a pinch, an absolute monarch will suffice.

To sum up, don't steal too much or too obviously, keep your children away from the levers of power, hide the money well, and leave before you are deposed or, worse, executed.

Enjoy your new country and, after a while, your very comfortable retirement.

Sincerely

Your Friend

PS: if you feel that this advice is of value and were minded to wire a couple of million U.S. dollars to my bank account, I would be very grateful.

Burdens as a Result of Government Actions

The following aptly sums up the manner in which citizens permit governments to mismanage the affairs of their nations and inflict great pain upon their citizens:

"The marvel of all history is the patience with which men and women submit to burdens unnecessarily laid upon them by their governments.”

To prove that there is - once again - nothing new under the sun, the author was none other than George Washington.

Let us listen to, and act in accordance with, the words of Winston Churchill who frequently annotated reports and proposal with the words 'ACTION THIS DAY'.

We could make the world a slightly better place.

Presidential Cowardice

President Obama sent his budget proposal to the Congress on Monday. It was greeted by Republicans with the ancient cliche 'dead on arrival' and accompanied by shrieks of pain from Democrats who oppose some of the all too modest proposed cuts.

There is nothing in the budget about bringing under control the big five spending categories: Medicare, Medicaid, Social Security, Defense and Interest on the National Debt which, between them, account for approximately two thirds of total spending and nearly one hundred percent of all taxes collected. The reality of this piece of political theater is that the President, by admitting that he is waiting for the Republicans to make the first proposals for real - repeat real - and significant spending cuts, as well as reform of entitlements, demonstrated his weakness and woeful lack of political courage.

Since the 2012 Presidential campaign will soon begin, Republicans should keep in mind that, if they actually do want to win the White House - as opposed to merely making a statement, they need to attract centrist voters. They must, therefore, address the real issue of out of control spending whose growth seems not to be subject to the Constitutionally required appropriations process.

In addition, they must nominate a serious, thoughtful and competent person. Charismatic airheads who speak in slogans, such as Ron Paul, Michelle Bachmann and Sarah Palin as well as out of control quasi-intellectuals like Newt Gingrich, will almost certainly fail to dispatch Mr. Obama to the early, and well deserved, retirement so needed by our country.

During the 1996 election campaign, then President Clinton was unpopular enough that he might well have been defeated. Republicans, however, nominated Senator Bob Dole (R-KS) who, while a decent Senator, was not really Presidential caliber and he duly lost. An old friend of your correspondent, formerly a very senior staffer in the Reagan White House, said then: "you can't beat the President with a nobody because the President of the United States, no matter how unpopular, is somebody."

Your correspondent hopes that Republicans will keep their eyes on the real objective and the actions that will be needed to achieve it.

Acting LikeTeenage Boys

One of the features at the just concluded CPAC (Conservative Political Action Committee) meeting was an egg throwing booth featuring pictures of former Vice President Al Gore and climate scientist Michael Mann.

Behavior like this may be appropriate for teenage boys - and the MTV show 'Jackass' - but hardly what your correspondent would like to see from those who aspire to lead our nation.

Since many of the attendees decry waste, fraud, and abuse in government spending, why were they wasting perfectly good food? If they wanted to play juvenile games, could they not have thrown rotten fruit and vegetables instead.

Attitudes towards Government

Since 1776, Americans have generally had doubts about the value of government. Columnist George Will, writing in the Washington Post last year, summed up the average citizen's experience with government.

"The average American has regular contact with the federal government at three points - the IRS, the Post Office and the TSA. Start with that fact if you are formulating a unified field theory to explain the public's current political mood."

Enough said!

What If They Held an Election...

... and the bad guys won? Or, at least, were able to dictate coalition policies? To name only a few, all of these were elected in generally legitimate polls:

• Hamas (Gaza Strip)
• Hezbollah (Lebanon)
• Joerg Haider's Freedom Party (Austria)
• Adolph Hitler (yes, he was legitimately elected Chancellor)
• Too many third world strong men who, it turned out, believed in 'one man, one vote, ONE TIME'.

Will Egypt and the Muslim Brotherhood be next?

Job Creation

New and poorly trained supervisors tend to start the day like this:

Here's a pile of work and here's a pile of people, what shall I give the people to do to keep them busy?

They miss the point which is to get the work done - not to keep the people busy. That means that they should look at the work first and assign enough people, with suitable skills, to get quality work done on time and as cheaply as possible.

Inevitably, during good times, most companies accumulate excess employees. Some of these employees have really nothing much to do (other than to look busy and refrain from attracting attention) while many more work quite hard - sometimes very hard - at tasks that contribute little of economic value. When times are good, no one cares very much since there are plenty of profits to support share prices and senior management bonuses. When hard times arrive, however, management focuses on removing excess while getting more useful work from those who remain. All levels of management, at least for a while, remember that the objective is to get the work done rather than to keep the workers busy.

Politicians generally think like poorly trained supervisors. They see corporations with healthy profits, and significant cash balances, and grab the opportunity to castigate them for not creating new jobs and hiring new employees.

These politicians also miss the point. If there isn't any useful and profitable work to be done, why spend money on additional employees? Since corporations, regardless of the propaganda that they may put out, are solely driven by profit, we can be sure that, if they can see a way to make more profit by hiring additional employees, they will indeed take that course of action.

None of this is very complicated so it would only take some very slightly more sophisticated economic thinking from our politicians to reduce - at least a bit - the noxious cloud of political hot air now enshrouding Capitol Hill.

Paying for Health Care

One of the knottiest of economic problems is that of the free rider. That is, a person or organization that benefits from a service without actually contributing to the cost.

Take, for example, a township where revenues for the Fire Department are derived from subscriptions. The intent is that those who do not pay receive no service. Next, consider the owner of a row house who does not pay for fire protection while all of the other houses on the block are covered. When that house begins to burn, however, the Fire Department will still provide its services in order to protect the houses belonging to its paying customers.

That is the free rider problem in a nutshell.

While health care is not a constitutional right, Federal law requires that anyone, whether or not that person has insurance or the ability to pay, who presents at an Emergency Room must be treated. That is another example of the free rider problem and it is exacerbated by the fact that many of these persons could have been treated for much less money had they neither deferred, as is usual, seeking medical help nor sought it in the most expensive possible place.

Since these patients do not pay their bills, the costs are transferred to those who do in ways that are entirely lacking in transparency.

The Fire Department free rider problem has a relatively simple solution: most Fire Departments are funded by the taxpayer and all homeowners are required to pay property taxes. Solving the health care problem is harder and many of the options are unattractive:

1. should service be refused to those who have no insurance?
2. should there be a mandate to buy insurance as in the current much disputed health care bill?
3. should those who are insured, or who can afford to pay, continue to pick up the tab for those who can not or will not pay?
4. should health care be publicly funded?

The first option is morally repugnant, the second may be found to be unconstitutional, and the third describes the current highly unsatisfactory situation. Given that approximately fifty percent of current health care expenditures are paid directly by the government through Medicare, Medicaid, Veterans Administration and the military, principled objections to government paid medical care can no longer be sustained - at least not with a straight face.

Assuming that the individual mandate is found to be unconstitutional then, although no one really wants to address the issue, the question will be whether government funded medical care should be available to all - as in the Canada and the United Kingdom. A public option alternative, competing with the current much hated insurance companies, may make insurance more affordable (although Medicare has conspicuously failed to reduce costs) but, without an individual mandate, the free rider problem still exists.

Our nation has the most expensive health care system in the developed world. At the same time the fact that more than forty million residents have no medical insurance - and therefore only limited access to care while simultaneously inflicting massive costs on everyone else - is a disgrace. The so-called Affordable Care Act (less politely referred to as ObamaCare) is so far from being the solution that it may actually be a classic example of the old saying that the cure is often worse than the disease.

At some stage, our leaders - and the interest groups - will have to address the overall cost of medical care. Sooner - i.e. before it consumes the entire economy - would be better than later but, given the other issues facing us, nothing much is likely to happen until after the 2012 elections.

Your correspondent would be satisfied if a real debate, primarily addressing the issues of cost, were to take place in the next two years. If that were to happen, the prospects for real reform would be much enhanced.