Electric Cars

In 1994 the front cover of Time magazine heralded that "the time of the electric car had arrived." As we look at a more recent time we see another story unfold, that of  Think Auto, another government folly. Back in January of 2010, Think Auto made decided to move into a plant in Elkhart, Indiana and produce the  THINK City an all-electric, zero-emission car designed in Scandinavia for fleet applications and urban commuters.  The durable, highly maneuverable, low maintenance THINK City can travel at a top highway speed of 70 mph and has a range of 100 miles on a single charge of  its advanced Lithium-ion batteries manufactured in Indiana by Ener1, Inc. The car starts at $35,495 before a $1,000 destination charge. So was the plan.

The company planned to invest more than $43 million in building improvements and equipment in Elkhart.  The plant was slated to begin assembling vehicles in early 2011.  THINK's investments in Elkhart was to support manufacturing capacity for more than 20,000 vehicles a year.  The company had recently started delivering the latest generation of its THINK City model to customers in Europe where it has more than 1,500 cars on the road. The vehicle had a solid record and had accumulated more than 35 million road miles in customer experience since it was first safety certified in Europe in 1999.

"We've said we're out to make Indiana the electric vehicle state. It's beginning to look like the state capital will be Elkhart County," said Governor Mitch Daniels. The THINK Auto project was quickly backed by federal stimulus funding, state development grants, and tax credits. Other companies lined up to make electric cars and trucks, and their parts, too, as Elkhart County, a place long known for producing gas-guzzling recreational vehicles, set out to jump-start its flat-lining economy with electric vehicles.THINK began making plans to roll out retail distribution in select U.S. cities in the second half of 2011.

The retail distribution timeline was to coincide with the company's plans to expand the production line at its Elkhart facility, THINK soon employed more than 25 local workers, by the end of 2011 they planned to add 75 more people in Elkhart building electric cars and employ more than 415 by the end of 2013. President Obama visited the city twice promising stimulus funds to spark a new economic engine in electric vehicles. During his State of the State address in 2010, Indiana Gov. Mitch Daniels said, "Our goal is to be the capital of this potentially massive industry of tomorrow." Electric cars were supposed to kick-start Elkhart's economy.

Fast forward, two years later and those jobs never materialized, Elkhart's electric buzz has gone all but bust. Think Global of Norway, filed for bankruptcy last summer. Two other local electric start-up companies never got off the ground. Navistar is manufacturing short-range electric delivery trucks, but not yet at the level, the company had hoped. And the THINK plant delivered only about 200 electric cars, many of them to government fleets. An update from  July 2011 said a Russian investor purchased Think at auction but has not announced any plans for the ailing company. THINK North America announced it is still selling THINK City electric cars out of its Elkhart factory, but while cars are still visible through the window of the Elkhart plant there is no sign of any activity.

The last report I could find said,  from the outside, Elkhart's THINK factory looks deserted. There isn't a single car in the parking lot; the doors are all locked; the windows are dark. "The results were not anywhere what they thought they would be," says Elkhart Mayor Dick Moore. "We were looking at an investment of, I think, $4.5 million in real property, about $55 million in personal property, and 415 jobs. None of that has taken place. Even those interested in driving small and quiet electric vehicles have concerns about the battery life and range, as well as the cost. The THINK cars are rather expensive for such a tiny little thing — more than $40,000, before government tax credits and incentives." As for Indiana, the state has invested millions of state and federal dollars into creating an infrastructure for electric vehicles. Indianapolis has 100 short- and long-term public charging stations.

“It's going to continue to be an uphill battle for somebody to build a car from the ground up in a global industry where there are major automakers who have years of experience and deep supply chains to advantage them,” said Mitchell, President, and CEO of Energy Systems Network the organizer of Project Plug-IN, an initiative responsible for creating one of the most advanced ecosystems to support electric transportation in the country.  Project Plug-IN enlists a wide range of industry and government partners to solve technical and regulatory challenges related to preparing communities for electric vehicles. Mitchell said "To make this happen requires collaboration among vehicle and battery makers, utilities and government agencies at all levels and the willing participation of fleet operators, like the Department of Administration.  The response so far has been tremendous."

There has not been much good news for backers of electric vehicles lately. Last week, GM announced it will idle production of its 2010 car of the year, the Chevy Volt. And Bright Automotive announced it would shutter its operation at an Anderson, Ind. plant. The company had planned to develop a lightweight electric plug-in truck and hire up to 300 workers in Anderson. This news comes shortly after Enerdel, the Indianapolis company that makes batteries for electric vehicles, filed for bankruptcy. In the end, it can be said that all the wheel spinning and money wasted has not moved us forward. Like many of the green shoots that were springing up across America inspired by "Big Government," this has amounted to naught.



 A FOOTNOTE;               This Blog reflects my view on governments over-involvement in business, hype, and misinformation rather than my view towards the electric car in our future. It is my opinion that electric cars have a role in niche markets. However, the answer for a more sustainable future lays in hybrids, smaller natural gas-powered vehicles, and  high-density communities that would result in a less auto centered culture. Reading my book "Advancing Time" or reviewing my archive of past posts will clarify my position.

Public Servant or a New Elite?

C-20 military version Gulfstream-Pay $630 For $32,000 Trip

It is cool to be a public servant! This is a world where Defense Secretary Leon Panetta flys cheap and concerts in the White House play to the President and a few close friends, it seems the perks never end. It could be Americans just don't get it, that they have a blind spot as to what really is wrong with their country. Amid fallout over the secret service boys hiring hookers in Columbia and a lavish GSA conference that cost top officials at the agency their jobs, Panetta recently admitted to paying just $17,000 for his commuting costs for 27 trips back to his Calif., home on a military aircraft.

Before accepting the job as defense secretary, Panetta negotiated his right to commute home to California nearly every weekend using a military equivalent of a Gulfstream jet, as his job as Pentagon chief requires him to do. The trips cost the government as much as $860,000, but Panetta only pays about $630 per round trip for the flight that costs the Pentagon about $32,000. In November of last year, The Washington Times reported that Panetta had flown home 14 times, continuing the cross-country trips he made regularly as director of the CIA and indicated that he had no plans to curtail the trips.

At the time, the Defense Department refused to provide information about Panetta's reimbursements and the Freedom of Information Act requests The Washington Times submitted received no response. “The White House understood when Panetta took the job that he would return to Monterey to visit his family, as he did when he was director of the CIA,” a senior administration official said at the time. With the drawdowns of the wars in Iraq and Afghanistan as well as constant terrorism threats and crises, running the Pentagon is anything but a 9-to-5 office job, and the California weekends help him recharge, a government official said at the time, “He works virtually nonstop wherever he is, including on the weekends, and believes that he does some of this best thinking when he’s away from Washington,” the official said.

 The expenses involved with the commute drew another look after President Obama in November called for all Cabinet agencies to cut back on everything, from out-of-town conferences to cellphone use and officials gifts such as pencils and mugs. The president singled out travel as an area ripe for savings. “At a time when families have had to cut back, have had to make some tough decisions about getting rid of things that they don’t need in order to make the investments that they do, we thought that it was entirely appropriate for our governments and our agencies to try to root out waste, large and small, in a systematic way,” Mr. Obama said in announcing the directive.

The issue of Panetta flying on the cheap resurfaced earlier this week after GSA Administrator Martha Johnson resigned following reports that her agency had held a $823,000 conference for employees outside Las Vegas in 2010. Government rules require Panetta to use military jets for personal travel for security and in order to stay in touch with military commanders and senior-level administration officials. Panetta must reimburse the government for personal travel at the cost of an equivalent commercial coach ticket even though the actual cost of the travel is much higher, around $3,200 a flight hour. His ranch has been equipped with a secure telephone and a video-teleconference facility is just a short drive away, aides added that he is in constant touch through email and phone calls.

Although cross-country commuting is an expected part of the job for members of Congress, recent defense secretaries have spent most of their time in Washington or overseas. Robert Gates who retired this year maintained a remote lakeside home in Washington state, which he visited several times a year but not most weekends. Donald H. Rumsfeld, who held the job before Gates had three homes, one in New Mexico, one in Illinois and another on Maryland’s Eastern Shore, all were equipped with secure communication equipment and additional security measures, he also spent most of his weekends or breaks in or near Washington, D.C., according to knowledgeable GOP aides.

For security reasons Panetta and Homeland Security Secretary Janet Napolitano are "required to use government aircraft even for personal travel." Much like the government mandates small businesses face every day, it seems someone in Washington can always come up with a justification for the outlandish and the absurd, to those making the rules, the cost is not relevant. It also baffles me as to how any person could be so self-centered as to think they deserve to exercise this "perk" just because it is available to them. The waste of fuel and damage to the environment alone would give most normal people pause, and cause them to minimize long flights.

Moving on to the question of, public servant or a new elite?  It should be noted that the Obamas welcomed Paul McCartney to the White House last year, and recently Barack Obama told his guests in introductory remarks that hosting the concerts is a welcome perk of the presidency. "Some nights when you want to just go out and take a walk, clear your head...Secret Service won't let you, and that's frustrating," he said. “Then there are other nights when Mick Jagger and B.B. King come over to your house and play a concert. So I guess things even out a little bit.”

President Obama and first lady Michelle Obama have hosted a star-studded array of musicians to celebrate over the last several years. The Obamas’ musical push started on Day One when the Wynton Marsalis Quintet played for a private inaugural celebration party of 100 at the White House. A month later, the White House brought in Earth, Wind and Fire to entertain visiting governors. It was just a few days later, the Obamas hosted an East Room tribute to Stevie Wonder that featured Tony Bennett, Martina McBride and Wonder himself.

The takeaway is, of the many choices we make worse things could happen to you then becoming a "public servant" It is not uncommon to see our public servants, some as lowly as a mayor or agency head climbing out of  a limousine, being wined and dined, or on exotic visit or fact-finding mission, all paid for by the taxpayer. They often stay at the best hotels and are given private tours. Do not forget the expense accounts, solid health care coverage, and generous pensions. With perks like these, I suggest Mothers encourage their children to grow up giving consideration to a career in government or as a politician.  

Predictions of future events, Margin Squeeze

Welcome to my prediction center: Please remember most predictions are wrong! This prediction is particularly risky to put out there based on recent trends.

                     Prediction made on April  26,2012;    High dollar cell phone producers like Apple and the companies that provide service will be a group that suffers a huge margin and earnings collapse during the coming downturn. When government cuts back on its handouts and people must choose between a roof over their heads or an expanded data plan it will be close choice, but in the long run they will cut spending on their data plans. The cost of data plans will fall like a stone.

Postal Service Reform Delayed

The Senate today passed a bill aimed at kicking the can down the road as it approved legislation that would slow efforts to reform the money-losing U.S. Postal Service. With the agency facing insolvency in the near future the Senate proposed giving the Postal Service a cash infusion. With a vote of 62 to 37, the Senate approved the bill that would provide the Postal Service an $11 billion refund of pension-fund overpayments. The bill would allow the Postal Service to drop Saturday delivery, but only after two years if no other cost-saving measures can be found.

Congress is facing a deadline of May 15 to act before the Postal Service begins closing post offices and mail-distribution centers. The Postal Service wants to close about 3,700 post offices and more than 250 mail-processing facilities. U.S. Postmaster General Patrick Donohoe agreed to delay those closings if Congress acts before the deadline. The agency wants to begin closing low-revenue post offices this year in an effort to stem the financial bleeding.

The Postal Service lost $3 billion in the first quarter of fiscal 2012 alone, this followed a loss of more than $5 billion in 2011. President Barack Obama and  Donohoe have called for five-day delivery along with other changes to help the agency cut expenses. “The United States Postal Service is in trouble,” said Sen. Joe Lieberman, a Connecticut independent who sponsored the bill. “It’s not going to survive if the status quo prevails." But by delaying necessary action and supporting this pathetic bill Lieberman has become part of the problem.

Closing post offices and distribution centers has angered some lawmakers, particularly those from rural communities. The Senate bill deals with this by preventing rural post offices from being closed for at least one year, it also cuts in half the number of distribution centers targeted for closure. The House will soon take up its version which is expected to differ in some respects. It would create a commission empowered to close post offices and move more quickly to end Saturday delivery. As structured some of the $11 billion refunds in the Senate bill could be used for early-retirement incentives for about 100,000 Postal Service workers.

As far back as 2001, the Postal Service was talking about ending Saturday deliveries to save money and polls show most Americans support the move. How gutless can the Senate get? After much study and review, the strong proposals made by the U.S. Postmaster General are necessary and way overdue. For years the amount of mail that the Postal Service delivers has been on the decline, dropping Saturday delivery is a no-brainer. Delaying the inevitable changes to put the agency back on a firm financial footing will only cost the American taxpayer more money. My message to the Senate, "just do your job."


IN A RELATED FOOTNOTE:  The ecological benefit of not having the fleet of Postal Service vehicles hitting the streets on Saturdays would save millions of gallons of gasoline each week. This would also extend the life of the vehicles as well as cut imports of foreign oil and improve air quality, just saying.
                             Please read my April 12 post "Whats In A Footprint."

Predictions of future events, Europe in crisis

Welcome to my prediction center: Please remember most predictions are wrong!

                   Prediction made on April 15,2012    within a year at least one country will have pulled away from European Union and the Euro will be trading on par with the dollar. America can blame Europe for some of our economic problems, but in all reality our wounds are self inflicted and a weaker Euro will not help us.

Students Borrowing Against The Future

A student loan is designed to help students pay for university tuition, books, and living expenses. It seems that many students are borrowing against their future at an almost unimaginable pace, unfortunately the money is often used for things other then education. Too many young people and others taking student loans "living expenses" go on to include cars, trips, vacations and more. All this has a very dark side that will effect the lives of these borrowers going forward and has the potential to grow to crisis dimensions in the future.

In many ways society is encouraging young people to take on this debt and to hock their futures. This is akin to the, "I will gladly pay you Tuesday for a hamburger today" way of thinking. While it serves the propose of keeping large numbers of young Americans off the unemployment roles, it promotes a huge negative we can not ignore, much of this money is being poorly spent. I personally have witnessed several of these students rent an apartment, fail at school, and then be forced to move back in with parents when the money ran out. Sadly like the gifts from pawn brokers and pay day loan sharks, many of the borrowers will live to regret taking this easy money.

The burden of paying for these college loans is even beginning to encroach upon and  wreak havoc on the finances of an unexpected demographic: senior citizens. Reports show Americans 60 and older still owe about $36 billion in student loans, this information provides a rare window into the negitive dynamics of student debt. More than 10 percent of those loans are delinquent. As a result, consumer advocates say, it is not uncommon for Social Security checks to be garnished or for aggressive debt collectors to harass borrowers in their 80s over student loans that are decades old.

Student loans have received considerable media attention in recent months with growing concern about the crushing debt loads assumed by students and their parents. The Federal and State governments are deeply involved in the student loan market, either directly originating or indirectly guaranteeing them. Last year the Health Care and Education Reconciliation Act  ended private lending of federally subsidized loans, approved expansion of Pell Grants, and appropriated funds to invest in institutions that serve minority and low-income populations. Still, advocates for students clamor for more to be done to make more student loans available.

In October 2011, President Obama announced "executive actions" that capped monthly federal student loan repayment at 10 percent of discretionary income for college graduates lowering it from the previous 15 percent. While this cap comes as some relief to those who worry about how they will pay back their debt it also encourages more borrowing with the promise of more relief. These loans are typically shouldered by recent college graduates and other young workers that often face lower incomes and higher rates of unemployment as they enter the workforce.

From the second to the third quarter of 2011, the total outstanding student loan balance grew  from $852 billion to $870 billion. During that time period, other types of consumer debt declined or remained flat. Of the 241 million people in the United States who have a credit report with Equifax, our data provider, about 15.4 percent—or 37 million—hold outstanding student loan debt. But this debt is not evenly distributed across the general population. Among people under thirty years old, over 40 percent have outstanding student loan debt. Between the ages of thirty and thirty-nine, 25 percent have outstanding student loan debt. In contrast, only 7 percent of people who are at least forty years old are currently effected. This means that $580 billion of the total $870 billion in student loan debt is owed by people younger than forty.

Students may be struggling with debt more than we thought according to researchers, borrowers were late on $85 billion in student loans in the third quarter of 2011, which at face value is about 10 percent of the $870 billion in total outstanding student debt. While that rate is more or less in line with other forms of consumer debt like credit cards and mortgages, it is also “understated,” the team says, because not all student loans can be delinquent.

Unlike those other forms of consumer debt, students don’t have to pay back school loans  immediately. They get a break while they’re in school and in the six months after graduating. Almost half of student debt is in those approved grace periods, they add to the total balance but not the amounts past due. Once researchers exclude those loans to more accurately reflect the pool of borrowers who can actually be late, the delinquency rate more than doubled. In the end, 27 percent of the remaining borrowers were late on their payments, totaling about 21 percent of the aggregate loan balance.

The picture going forward is somewhat bleak for those that have taken student loans, with the borrowers about twice as likely to be behind on student debt as for credit cards, car loans, and mortgages. The report doesn’t compare the delinquency rate to previous periods, though it does confirm the total amount of student debt increased 2.1 percent between the second and third quarters of 2011 while other forms of consumer debt decreased. The average balance for student-loan holders is over $25,000. While this has driven the economy forward in recent years, this debt bomb is likely to weigh on future economic growth.



Footnote; As of the middle of 2013 total student debt has rapidly risen to around 1.1 trillion dollars. A post written shortly after I put this on my blog goes into the "politics and pandering" and how certain policies are used to get politicians reelected. The link is below,
          http://brucewilds.blogspot.com/2012/05/student-loans-politics-of-pandering.html

What’s in a footprint?

     For most of his time on earth, man has been a minor consumer of the earth’s stores of energy. With the discovery of fire man began to increase his demands and draw on the short-term energy stores that had been accumulated over scores of years or even centuries by woody plants.  In the last hundred years with the invention of the internal combustion engine and a huge increase in population man has begun to tap the planets long-term energy supplies of oil and natural gas at an alarming rate. We have shaped a world where our lifestyles revolve around and are dependent on oil and the consumption of energy from fossil fuels.

    To make a proper assessment of our individual energy footprint it is necessary to allow and factor in not only the gasoline burned on the trip to the store but the number of “BTU”s (British Thermal Units, a measurement of heat ) used to make the new metal pan you purchased. Add to this a share of the energy used to package the pan, get the item to the store, and operate the store till you bought the pan. Only when we begin to include in our footprint, part of the energy in all the different variables thrust upon us by society, and used on our behalf, can we get a proper and true picture of our energy footprint.

   People often forget small actions do add up. I have heard people say they can't turn down the heat in their home when they go on vacation because of the dog or they have a fish tank. I have seen an employee turn on all the lights and bring a large building up to full temperature when they stop by their closed office for two hours on a Sunday or even worse to put the thermostat on "hold" so the office will be warm when they arrive the next morning. A family that takes two cars on a trip for a little more room or so they don't have to be inconvenienced is another example of how people often feel they are entitled and deserve to dip into the vast stores of the world's unlimited bounty. This is all is completely on them, a little waste here, and poor planning there adds up rather fast and can cause the size of their footprint to explode.
                                                              
    Looking at our impact in this way may seem unfair to some people but creates a more realistic and somewhat uglier picture of our true energy use. Only when prorating our share of the energy used  to light the street in front of our home while we sleep and assuming responsibility for our share of the energy used to light the bridge not far from our home as well as the energy used to create junk mail, deliver it to your home each day then haul it off to a recycling plant or landfill are the last touches that must be placed on the portrait named “My True Impact” Under this premise, if we personalize the question and ask, what's in my energy footprint? I fear the answer is far more than what most of us would like to admit.


Footnote; Two other posts dealing with our attitudes about waste are listed below. The first delves into the fact that those running for public office appear almost afraid to utter the word "conserve" and the other about how the massive support system required by the automobile is massively overpowering.
                 http://brucewilds.blogspot.com/2012/01/candidates-shy-away-from-c-word.html 
                 http://brucewilds.blogspot.com/2015/02/automobiles-and-future-of-man.html

Jobs unfilled at a time of high unemployment

 We are told that a great number of jobs are going unfilled while many Americans claim they have been looking for employment and will do almost anything for work. So what gives? How do we reconcile these strange reports? This is my take on this phenomena, it could be called a "tale of two cultures." It could be that the crux of the employment problem, is cultural in nature and based on unrealistic expectations created over several decades by our growing government centered economy and its generous payouts to those inclined not to work.

As a employer I was surprised several months ago that I could not find qualified help during a small construction job that lasted two months.Yes, I could have hired a company to do various parts of the work, but I would of lost much of the control over the many decisions that had to be made as the project progressed and took form. Workers that had lost jobs paying far more often proved slow, sloppy, or allowed personal problems to keep them from showing up for work. I have several thoughts that formed during this experience.

I'm reminded of a story I heard years ago about a man who sat down in front of a empty fireplace and said "warm me and then I will put wood upon you", but life doe not work that way, and either does the job market. Many people forget it is not just the hourly wage we must look at,  but the hidden cost of hiring must be factored in, such as wasted time, risk, insurance, and more taxes. After a worker takes a job, and has proved their skills, reliability, and that they are indeed an asset and not a liability, only then are they be entitled to more rewards.

Big box stores, fast food franchises, and hotels often pay minimum wage, while other small businesses are asked to be more generous. The difference in wages is often because many small businesses need more from an employee. The fact is when people work in an environment where they must show more then minimum responsibility, and make even minor decisions, the mistakes and errors they make can be very expensive, making the cost of the worker far more then he or she is worth. Fact is many of those looking for work prove more trouble than they are worth when on the job.

Another strong negative is that in a small business the owner or manager has to deal with the employee directly, this ties up their valuable time. Large companies often have departments or discipline channels that serve in the role of  "babysitter." Most employees generally do not recognize the cost of their working with constant cell phone interruptions, repeatedly plugging up a toilet, stopping to buy cigarettes, or the habit of always rushing off to use the restroom while a truck full of paid workers wait to leave for a job. In a society where many people have a problem managing their own life it is unreasonable to expect them to be a productive worker.

In the end I suspect the employers will win out and lower wages will become the norm for the coming decade, the alternative is people will just continue not to work. Like many employers I have become skeptical, I have been told many times by job seekers of their outstanding skills to later be disappointed. It is easier to brag and talk a good game then actually produce results. Bottom line is that till this discrepancy is resolved do not be surprised if many businesses chooses to pass on more hiring. Yes many people will do anything for a job, but it seems, they won't do that! By that I mean put down their cell phones or pick up after themselves.


Footnote; A big reason people choose not to work is the option to live on the dole as outlined in the post below,
                         http://brucewilds.blogspot.com/2013/06/living-on-dole.html

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GSA Las Vegas Scandal, Spending Run Amuck

For those of us who rile to the spending and waste of big government, this target is too big to miss. Martha Johnson the chief of the General Services Administration resigned, two of her top deputies were fired, and four managers were placed on leave Monday amid reports of lavish spending at a conference off the Las Vegas Strip. The four-day conference in October 2010 featured a clown, a mind reader, and a $31,208 reception. In her resignation letter, she acknowledged a “significant misstep” at the agency that manages real estate for the federal government. “Taxpayer dollars were squandered,” she wrote.

The leadership collapse came hours before the GSA Inspector General released a scathing report on the $823,000 training conference, held for 300 West Coast employees at the opulent M Resort and Casino in Henderson, Nev., just south of Las Vegas. From $130,000 in travel expenses for six scouting trips to a $2,000 party in Peck’s loft suite, event planners violated federal limits on conference spending. The GSA cut corners on the purchasing rules they demand of other federal agencies. They hid costs and made secret deals with the hotel.  

At the start of her tenure in February 2010 Martha Johnson called ethics “a big issue for me,” Yet we find the GSA even used stimulus money to pay for part of the conference and to celebrate their use of stimulus money they hired clowns and a mind reader for entertainment. They must have felt that they were entitled to splurge because of the sacrifices they make as public servants. According to the report, one employee — just one! — argued that a team-building exercise devoted to charity should have not have been done during work time. The criticism was ignored, all this happened as the American economy was cratering and unemployment was soaring.                   

It is not surprising that this episode is an embarrassment for the Obama administration, it comes at a time when the role, size, and efficiency of government has become a major issue in the presidential campaign. How much government should spend, and its priorities will be at the heart of the election-year battles between Democrats and Republicans. The White House after being criticized for huge budget deficits and making a mild effort to lead a campaign against government waste, was alerted in March to the year-long investigation and has moved quickly to get in front of the scandal. Chief of Staff Jacob J. Lew briefed President Obama before last week’s trip to South Korea and said Obama “was outraged by the excessive spending, questionable dealings with contractors, and disregard for taxpayer dollars.”        

The taxpayers should also be outraged, outraged by the casualness with which the 300 GSA employees took their fellow citizens to the cleaners. GSA bosses knew and approved, with one saying the conference should be “over the top.” It certainly was. They spent months planning, with hardly a peep of dissent. The workers traveled, ate, slept, and had cocktail receptions where they paid $4 for each shrimp. They tipped 22 percent and gave themselves awards and mementos. Some took family members. It was essentially a week’s vacation that they called "work" at a Las Vegas resort.      

Their conference occurred despite President Obama’s ridiculing of financial institutions for wasting federal bailout money. “You can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayers’ dime,” he said in February 2009. This was the same month the GSA began soliciting bids for its trip to Vegas on the taxpayers’ dime. Apparently, the GSA didn’t take the President seriously, but why should they? Obama traveled to Vegas to campaign for Harry Reid in Oct.2010 and has appeared to have cut back little on spending since. 

The conference must have been a real challenge to plan, according to the report, five employees conducted a “scouting trip” to nine hotels as far back as March 2009 — 19 months before the gathering. Within days, 15 workers returned to scout out two of the hotels, including the Ritz-Carlton and the M Resort. After the M Resort was selected seven more employees went back for a “planning meeting.” A second “planning meeting” there drew 11 employees. A third drew 16. Later nine employees attended a “planning meeting” at a Denver hotel. Then it was back to Vegas in June, where 21 employees had another “planning meeting.”

On August, 31 GSA employees thought it was necessary to go to the M Resort for a “dry run” of the conference. All the planning alone cost American taxpayers $136,000. You can find the 23-page report available online, written in the dry language of the government and bureaucracy. All this causes me to wonder how much it cost the government to do its "year long investigation", collect all the information, and to produce this report, I suspect the sum would be as shocking as the amount originally spent on the conference. Now we can look forward to costly a Congressional hearing. It seems when it comes to government spending, it never ends.

Health Care The Issue Redefined

After all the maddening analogies that often seem irrelevant let us focus on the crux of the issue, it should be how to cut healthcare cost so we could get more and better coverage for the money spent. It is unfortunate that if this law is not overturned in a big way the real and important issues behind it will most likely never be addressed.  The issue is masked by noise, I heard one supporter of Obamacare say, "I guess we could just let people die in the streets but then the conservatives would probably complain about the cost of collecting the corpses." another said "I think it rather tragic that a five/four Supreme Court decision could overturn the wishes of  Congress."

Many people push this law forward based on Congress using power rooted in the commerce clause and a case dating back to 1942. The case found failing to sell wheat into the interstate commerce still impacted interstate commerce, thus a farmer was subject to certain agricultural rules concerning planting etc, over the years the broad use of this clause has helped to provide standards for interstate commerce. Justice Kennedy in his questions looked for a balance between the precedent of  the commerce clause and concerns about whether Congress had gone too far. Scalia, Thomas, Alioto and possibly Roberts - don't appear to be constrained by this precedent and want to return to the pre Wickard era, to many this is seen as an attack on seventy years of precedent. But is that necessarily wrong? If the law is struck down based upon a new constrained view of the commerce clause it may have the dramatic effect of  limiting Congress.

I can't think of any other area of the economy or society where having the federal government order every citizen to buy a good from a private provider seems like a reasonable solution to a problem. I think there's actually a slight window of opportunity in the question Justice Kennedy posed to solicitor general Virelli when he asked, "Can you identify any limits on the commerce clause?" At various points in the oral arguments yesterday, justices raised the concern that if the government can require people to buy health insurance, it could also require people to buy other goods on the private market; specifically mentioned were broccoli and cell phones. It's a slippery slope, the judges were saying. What principle could limit Congress's power to make people buy things?

One such limiting principle might be that a measure had to be "necessary" as part of legislation to achieve a major, legitimate public good. This should be sufficient to rule out idiotic analogies  such as requiring Americans to buy broccoli or cell phones. What major public goal that could be reasonably addressed by a program which would entail the government ordering people to buy broccoli? Increasing the public's intake of vitamin B so as to reduce public health-care costs and improve public health? Mandatory private broccoli purchases would be completely ineffective at achieving this goal; the government might order people to buy broccoli, but it can't force them to eat it. It would obviously be more effective and constitutional to subsidize broccoli so that those who do have some inclination to eat broccoli, rather than Big Mac's, would be more likely to do so. Ordering people to buy broccoli would be an arbitrary, irrational and ineffective means to accomplish any public health goal, and for that reason such a law could be ruled unconstitutional.

Take this to the next level and imagine that the government wanted to enhance public safety by ensuring that all victims or witnesses of crimes could immediately call 911. Obviously many people can't afford cell phones, so the government would have to provide subsidies for those who couldn't, while also means-testing to ensure the subsidies aren't handed out to people who would have bought cell phones anyway. This starts to seem possibly reasonable. But does universal cell-phone possession really enhance crime reporting? That seems doubtful; so many people already own cell phones that the number of witness reports seems unlikely to rise by much if some of the few people who don't yet own them acquire them. And, as with the broccoli example, requiring people to buy cell phones doesn't mean the federal government has the power to require people to carry them.

Requiring people to buy things besides health insurance on the private market does not seem to be a reasonable or necessary means to achieve any objective. Imagine, for example, that America decided to eliminate its standing army and go back to a model of pure territorial defense based on a "people's war" guerrilla strategy, with required militia service for all able-bodied citizens. This seems pretty unlikely, but having made that decision, would it be constitutional for the government to order everyone subject to militia service to buy an assault rifle on the private market, providing subsidies for those who can't afford one? This seems like it might be a reasonable means to achieve a legitimate public goal. It's much more likely that the government would simply buy everyone a rifle for reasons of standardization, and you'd have to allow exceptions for reasons of religion or conscience, just as we do with the draft. But in principle is ordering everyone to buy a rifle doesn't seem like the way to achieve the goal of national defense.

We all know that there is no escaping the grim reaper, and little to no way to collect against the dead if they have no assets to pay for burial, cremation, etc. Therefore mandating people buy burial insurance makes sense. Consider the fabled broccoli, gym, and junk food examples, if you are out of shape you increase your chances of getting a major disease and forcing costs on the system. Once Congress has the power to regulate in an area it is more or less unfettered what is to prevent them from mandating you eat broccoli, go to the gym and banning junk food? While the Constitution was designed to limit government power those supporting Obamacare are now desperately looking for ways to prove that we simply can not survive without this law... Because we all know that until today we've been struggling and dying on the streets for not having a mandated insurance. Great, what's next, will government also mandate me to buy '' food insurance" or "clothe insurance" etc.?  This is why the law may not pass the litmus test of being constitutional.

 Another interesting objection to Obamacare is that it is a boondoggle to increase the profits of private companies and their owners and that it should not have been adopted in preference to a single-payer system covering "basic healthcare." A single-payer system could achieve many of the goals of the healthcare bill by cutting cost through eliminating wasteful duplication, bureaucracies, and paperwork. The idea wouldn't eliminate insurance or pharmaceutical companies, they would continue to sell extensive types of "optional" coverage. A single payer program would appear constitutional. Many argue there are "better" solutions than Obamacare, but that is not the legal standard for what is constitutional. Deciding the better, or the workable, is the job of the legislature, but some suggest that this law is an irrational means of achieving it's objective.

Healthcare is ridiculously expensive because many people have convinced themselves of  three things: The answers for good health outcomes rest with pills and procedures rather than good diet and exercise. Death at late stages of life is some strange, recent development in human history which justifies and necessitates extreme, exorbitant payouts to delay it for every possible last second. Just because we can does not mean we should. And last but not least mixing all the myriad of "health care" transactions that result from the just mentioned concepts with health insurance as originally conceived to protect a person from unforeseeable, catastrophic events like an accident is a good idea. Surely there is a legitimate and rational place for government in ensuring access to basic levels of care, but we've lost our bearings about what "basic levels of care" should mean, and we know what happens to costs when free government money flows into a system, hello college tuition!

It is not for lack of spending, Americans spend more on healthcare then people in other developed countries with very poor results. Our system allows insurance companies not only stick their nose into every interaction you have with a health care provider, they get to take a large cut as well. It has become virtually impossible to find a modestly-priced traditional insurance plan that protects a person from unforeseeable catastrophic accidents while letting them own responsibility for the accumulation of their lifestyle choices over time, thus differentiating the healthy  70-something marathon runners from a fat slob suffering from self induced diabetes. Extending medicare to give the most "basic coverage" to everyone would require some rationing of service to contain cost, but this is already being done. It would allow us to discontinue Medicaid while meeting our goal of basic healthcare for all citizens. Other wise let us be honest and made it lawful to turn the uninsured and poor away from the emergency rooms of our nations hospitals untreated.

Point me to a conservative who resolutely opposes Obamacare, but thinks it is constitutional? There are probably still a few out there but I'm not hearing much from them today. Nor am I hearing from any liberals who support universal health insurance, but think the mandate is unconstitutional. Partisan identification is overwhelmingly the easiest means of determining where anyone will come down on any question with a political overtone, on  the street, in Congress, and to all appearances on the Supreme Court. Many supporters of more government have become fear mongers saying if Congress can not act by invoking a broad reading of the Commerce Clause, the slow national consensus that resulted in Medicare, Social Security, civil rights, protecting minorities, and women may dissolve. These fear mongers claim that the  notion that America is a nation - forged in the Civil War - and not a collection of states, may also be at risk.

While nothing prevents states from trying to create individual mandates like Massachusetts did, the federal government was supposed to be a government of limited and enumerated powers. I hope that the Supreme Court will overturn this power grab by the federal government, it is sad that our republic has strayed so far from our core principles as drafted in the constitution. What can the government force you to do or buy if the mandate is upheld, what are the limits, this is what terrifies many Americans, there is simply no federal action that can't then be justified by simply claiming it affects interstate commerce. Some people seem to have a hard time grasping, that the Constitution is not intended to be a guideline for government to do good, it's a guideline for the people to prevent the government from doing bad. Again let us return to the crux of the issue, how do can America cut healthcare cost and get more and better coverage for the money spent.

A Jobs Bill for Wall Street

 

The newest JOBS Act, an acronym for Jumpstart Our Business Startups Act recently sped through Congress with huge bipartisan support. The bill passed the Senate 73 to 26 last month following an even more lopsided 390-23 vote in the House of Representatives. Some say it received such large support in large measure to the IPO (Initial Public Offerings) Task Force which convinced members of Congress that 90% of job creation comes after companies go public. But many were against the bill, according to the North American Securities Administrators Association: State regulators claim the JOBS Act remains a “fundamentally flawed product of a rush to legislate,”

 This must not be confused with the expensive 447 billion dollar deficit ballooning JOBS BILL that Obama was calling for last September aimed at putting Americans back to work. That bill contained payroll tax cuts, investments in things like roads and schools, and less-publicized steps including everything from experiments in job training to a provision designed to prevent discrimination against the unemployed.

 Critics of the new legislation sight the dismantling of many investor protections Congress put in place a decade ago after accounting scandals at Enron and WorldCom. Small businesses will now find it easier to solicit and raise money, but scam artists will also  find it easier to dupe naive and less-sophisticated investors. It will be a bonanza for guys with fuzzy reputations that choose to step into the hedge fund business. The new JOBS Act opens the spigots up for creative upstarts and the established wanting to raise new capital. Under the new law hedge funds will be able to sponsor sporting events, begin advertising their funds in print, and promoting to the general public at large, this overturns a ban that dates back to the Securities Act of 1933.  

 Here's a look at the main points in the American Jobs Act, it is comprised of six bills that will make it easier for companies to go public and raise money. Supporters say fast-growing businesses will be able to use the new capital to hire more employees. The administration has urged  the legislation which arose from recommendations by the president’s Council on Jobs and Competitiveness. It increases private companies to have as many as 2,000 investors, instead of the current limit of 500, before going public or filing with the SEC. The bill even allows for online investments made through either a registered broker-dealer or a registered funding portal that is a third party not directly benefiting from the investments. The bill even has a "pathetic limit" on how much can be "pledged", all individual investor will be allowed to pledge at least $2,000, but contributions above that would be based on annual income or assets.

As we continue to recover from the worst economic downturn since the Great Depression this does not maintain oversight, transparency, and accountability over our financial markets. A Democratic House member of the New York delegation who opposed the bill, said the measure “won’t create jobs, but it will create fraud.” Barbara Roper, director of investor protection for the Consumer Federation of America, predicted wealthy Americans will receive mail and cold calls once the legislation becomes law. The legislation “paints a big target on wealthy investors who will get solicitations to invest in speculative start-up companies,” Roper said. She goes on to say “The ban on general advertising of private offering is gone. Most people will lose money because most of these companies will fail.”

The deputy director of the Council of Institutional Investors, said that after the dot. com bubble burst, Congress required public companies to hire external auditors to verify they have proper internal financial controls. This bill will roll back that requirement for a whole slew of companies and this applies to new companies with as much as $1 billion in revenue. Study after study has found that smaller public companies are more prone to financial reporting fraud. Consumer groups, AARP, the Council of Institutional Investors and the North American Securities Administrators Association are troubled by the planned rollback of consumer protections for people who invest in small businesses. Securities and Exchange Commission Chairwoman Mary Schapiro also wrote a letter to Congress expressing her concerns.

According to Bloomberg news, March 12, 2012, “The Jobs Act Won’t Create That Many Jobs.” Their opinion is the legislation should be named, “JOBS in Theory,” referencing overblown claims about new jobs in the JOBS Act. A lot of money may flow into hedge funds and while they do indirectly create jobs by investing in IPOs, stocks, derivatives, bonds and whatever they fancy will make money, are they job creators? When’s the last time you heard of job openings with a hedge fund? The theory behind this bill is that small companies provide the most robust job growth in America, which is a well-documented fact, but I see few of the small business owners I know that will benefit from this bill.

When all is said and done, the JOBS Act appears to be a misnomer, sadly this bill has more to do with allowing deal makers to raise money then helping small business create new jobs in the "real economy." How necessary is this new legislation, and why the big rush to finalize it when normally Congress can’t seem to agree on anything?  There are detractors who believe it is called the "JOBS Act" only to give political cover to those who voted for it, and to the president signing such a flawed bill. Looking closely it seems the bill was crafted on behalf of the highest ranks of capitalism and not to benefit small businesses. Maybe naming it the Wall Street Act would fit better. After many American investors have been scammed out of their money Washington politicians can then demand even larger and more government as they ask, how did this happen?


Footnote; This article has again become important because of several things taking place in Washington. This post dovetails with many of my recent writings. Other related articles may be found in my blog archive, thanks for reading, your comments are encouraged.