Monday, January 31, 2005

2020 - Demographics

While the present "globalization" phenomenon is driving economic change in Asia and elsewhere, demographic changes will also impact the geo-political scene for 2020 and beyond:

  • U.S. population growth will continue to be among minorities which may lead to
    • a lower percentage of the population with high school educations (see U.S. graduation rates by race)
    • a lower percentage of the population with bachelor or advanced degrees (follows from overall lower high school graduation rates)
    • a higher percentage of marginally employed or unemployed adults
    • greater fragmentation along "ethnic" lines

      Bottom Line: Population changes will likely increase social problems and economic strain without adding to U.S. competitiveness in the global markets

  • China will have the largest absolute population, but
    • a significant trend toward a much older average age
    • a slowing growth rate may occur with the one-child policy
    • a larger segment of very-well educated people
    • a very large segment of marginally-educated people
    • a growing overall demand for consumer goods and services
    • a growing overall demand for manufacturing and energy resources

      Bottom Line: Population changes will improve China economically and enable it to become an economic and military superpower, but internal disparities will be a challenge

  • India will have the second largest population
    • a growing population with no population control policy which may eventually lead to India being the most populated country
    • a significant Muslim minority population and possible unstable relations with neighboring Muslim nations
    • a larger segment of very-well educated people
    • a very large segment of marginally-educated people
    • a growing overall demand for consumer goods and services
    • a growing overall demand for manufacturing and energy resources

      Bottom Line: Population changes will improve India economically and enable it to become an economic and military superpower, but internal disparities will be a challenge and Muslims citizens and neighbors may lead to serious economic backsliding overall for India

  • Europe will have a stable or declining indigenous population but at growing Muslim immigrant population from Southwest Asia which may
    • increase ethnic and religous tensions and violence
    • increase the strain on the social support systems
    • shift focus from Europe-American commerce to Europe-Western Asia issues

      Bottom Line: Europe will have a changing population mix that may cause serious ethnic and religious confrontation that could disrupt its potential to rival the U.S. in the form of a United Europe

  • South America will be split between the prosperous south and east and the backward and corrupt west and north. Brazil and Argentina populations will continue to grow and they will become global suppliers of food products and other materials supplanting other major producers.
    • China will attempt to have close ties with Brazil and Argentina and, as a major customer, attempt to use its influence there as part of overall competition with the U.S.
    • U.S. will be a net importer of products from South America and lose more of its overall exporting markets to South America

      Bottom Line: Brazil and Argentina will grow and prosper while the remainder of South and Central America will have increasing populations and increasing problems

  • North and Central Asia will fall behind the rest of Asia and Europe. Russia will have a stable or declining population while Central Asia will have a growing, but poorly educated Muslim population that will cause political instability to its north and south.
    • Russia may be able to exploit its natural resources provided that its government can stabilize the economic system and address the issue of an older population
    • Central Asian countries have no apparent population, resource, policy, or skill advantages to be competitive any time during the next century
    • Central Asian countries will continue to seek independence and isolation and will be a non-factor or negative factor in overall Asia

      Bottom Line: Russia's population will probably stagnate or decline and it will slide backward in the world's economic competition. Central Asian countries will have increasing populations and be non-players economically, but the sources of conflict throughout Asia

  • Africa will have growing populations in some areas and declining populations in others if AIDS is not quickly addressed.
    • North Africa will align with the Middle East and Central Asia in an attempt to reinforce Muslim authority through Europe and Asia as overall Muslim population grows
    • Sub-Sahara Africa will continue to be isolated from the rest of the world by political unrest and depopulation from AIDS unless that disease can be controlled very soon

      Bottom Line: Africa will continue to be two distinct populations - North and South going different directions, but both likely to be the sources of political unrest

Sunday, January 30, 2005

Iraqi Elections - Voter turnout

If anyone questions the resolve of Iraqi voters to be heard, check out this graph of U.S. elections voter turnout (data from George Mason University - Dr. Michael McDonald).

If the initially estimated 72% of Iraqi voters who showed up were only as high as the highest U.S. percentage (around 60%), the election would have been labeled a failure by U.S. media. And no one threatens U.S. citizens who want to vote.

Well, I'm sure our local newspapers will find the grain of sand on the watermelon.

Saturday, January 29, 2005

2020 - Changing Geo-Politcal Landscape

The National Intelligence Council's paper looked at possible futures regarding poitical power.

"A combination of sustained high economic growth, expanding military capabilities, active promotion of high technologies, and large populations will be at the root of the expected rapid rise in economic and political power for both [China and India]."
As pointed out in yesterday's post, the U.S. is contributing to the economic rise of our own competition:
  • U.S.-based multinational corporations are focusing more manufacturing as well as reseach and development activities in China and India driving a significant portion of those countries' advances
  • U.S. focus on advanced education in hard sciences has declined in the past two decades
  • U.S. government has not seen any need for a "Manhattan-style project" for advances in the frontier sciences... leaving the gates wide open for other countries to move into leadership positions
The rise of economic power is concommitant with the rise of political and military power:
"China’s desire to gain “great power” status on the world stage will be reflected in its greater economic leverage over countries in the region and elsewhere as well as its steps to strengthen its military. East Asian states are adapting to the advent of a more powerful China by forging closer economic and political ties with Beijing, potentially accommodating themselves to its preferences, particularly on sensitive issues like Taiwan.
  • Japan, Taiwan, and various Southeast Asian nations, however, also may try to appeal to each other and the United States to counterbalance China’s growing influence. China will continue to strengthen its military through developing and acquiring modern weapons, including advanced fighter aircraft, sophisticated submarines, and increasing numbers of ballistic missiles. China will overtake Russia and others as the second largest defense spender after the United States over the next two decades and will be, by any measure, a first-rate military power."
It is not a certainty that India and China will become economic superpowers, but it is likely. And with that likelihood comes the likelihood that the U.S. will have to adapt to a different role in the world... still important, but not the driving force.

There are some flies in the ointment for the U.S., China, and India:

  • Increase in poor Hispanic population resulting in an overall less-educated population and greater ethnic fragmentation
  • Increase in the gap between the haves and have-nots... the poor will be less supported because the productive population will be a relatively smaller percentage of the total population
  • Tendency toward looking inward versus the rest of the world... some loss of military and political confidence/relative strength... more focus on exclusively American issues... much less effort to be the world's "policeman".
  • Dramatically aging population because of the "one child" policy
  • Potential political unrest as larger "middle class" emerges with higher level of overall education for the total population
  • Regional political unrest with neighboring Muslim countries
  • Significant gap between the haves and have-nots that could cause social upheaval
A big potential fly in the ointment for both India and China is the spread of AIDS which is growing rapidly in both countries. Unless an effective vaccine is found soon, there may be widespread social impact as the large poorer segments of those populations become infected. India now leads the world in HIV/AIDS cases with about 5,000,000 adults or nearly 1% of the adult population... less percentage-wise than other countries (particularly in Africa)... but most absolute number.

Friday, January 28, 2005

2020 - Globalization

I have written several posts around the issues of globalization... not a lot of it all that complimentary. It is a market force that has it's own momentum and is being fueled by multinational corporations who are likely to benefit... at least in the near term.

Within the National Intelligence Council's paper there is the statement of the obvious:

Yet the benefits of globalization won’t be global. Rising powers will see exploiting the opportunities afforded by the emerging global marketplace as the best way to assert their great power status on the world stage. In contrast, some now in the “First World” may see the closing gap with China, India, and others as evidence of a relative decline, even though the older powers are likely to remain global leaders out to 2020. The United States, too, will see its relative power position eroded, though it will remain in 2020 the most important single country across all the dimensions of power.
An interesting point is that:
The greatest benefits of globalization will accrue to countries and groups that can access and adopt new technologies. Indeed, a nation’s level of technological achievement generally will be defined in terms of its investment in integrating and applying the new, globally available technologies—whether the technologies are acquired through a country’s own basic research or from technology leaders. The growing two-way flow of high-tech brain power between the developing world and the West, the increasing size of the information computer-literate work force in some developing countries, and efforts by global corporations to diversify their high-tech operations will foster the spread of new technologies.
Globalization does not just mean transfer of manufacturing jobs to low cost labor nations. A more important long range aspect is far more intellectually based:
The expected next revolution in high technology involving the convergence of nano-, bio-, information and materials technology could further bolster China and India’s prospects. Both countries are investing in basic research in these fields and are well placed to be leaders in a number of key fields.
But the U.S. doesn't need to worry there... right?
The number of US engineering graduates peaked in 1985 and is presently down 20 percent from that level; the percentage of US undergraduates taking engineering is the second lowest of all developed countries. China graduates approximately three times as many engineering students as the United States. However, post-9/11 security concerns have made it harder to attract incoming foreign students and, in some cases, foreign nationals available to work for US firms. Non-US universities—for which a US visa is not required—are attempting to exploit the situation and bolster their strength.
Draw your own conclusions, but the issue of Education Failure about which I often write does seems to have some bearing on this topic.

Thursday, January 27, 2005

Iraq - Public reaction

On January 22, I wrote about how the Detroit Free Press had run headlines proclaiming that the U.S. was in danger of losing the war based on some statistics compiled by Knight-Ridder newspaper employees. The gist was that the "analysis" show a large percentage increase in casualties in the prior three months and that portended losing the war. What the so-called analysis failed to note was that the increases were concommitant with increased military action against the insurgents/terrorists and that the absolute base was very small to begin with so any increase could be made to look large statistically.

The Detroit Free Press published my remarks along with many others who had drawn the same conclusion. Today, they published additional letters "refuting" our position, to wit:

There are some who question bringing facts about the war out in the open, saying it hurts our soldiers and our country. I strongly disagree. The best thing we can do is to be honest about the situation. This approach will bring us to hard choices about Iraq that must be made based on reality.

Barbara Masters Farmington

What reality Ms. Masters? Perhaps you mean the reality that you don't support the actions there so any misrepresentation of the situation is acceptable?

It is ironic that so many readers were offended by a headline that suggested that we are losing the war in Iraq. In reality, we have already lost much more than a war. We have lost our way.

Bill Hickey Detroit

The Way of what Mr. Hickey? The Way of the U.N. that can't get out of its own way to address evil anywhere? The Way of ignoring the most pressing danger to the world since the Soviet Union?

Today's letters did not address the fact that the analysis was spurious... only that they believed we had no "moral" standing in being in Iraq.

I will begin to go through the 2020 analysis and one common theme appears throughout: the continued danger to the whole world represented by fundamentalist Islamists... as well as the difficult choices we will have to make... doesn't necessarily allow us going into the Way of Isolation.

I stand behind what I wrote on November 3... and there is nothing I have seen or read that convinces me differently.

Wednesday, January 26, 2005

2020 Foresight - Looking ahead

From National Intelligence Council study: "Mapping the Global Future" page 8. Link on the CIA website

Some interesting reading in the 123 page report.

We'll take a closer look over the next few days... but here are some points to ponder
  • In the same way that commentators refer to the 1900s as the “American Century,” the 21st century may be seen as the time when Asia, led by China and India,comes into its own.
  • By 2020, globalization could be equated in the popular mind with a rising Asia, replacing its current association with Americanization.
  • Growing connectivity will be accompanied by the proliferation of virtual communities of interest, complicating the ability of states to govern. The Internet in particular will spur the creation of even more global movements, which may emerge as a robust force in international affairs. [this is not a quote from Tom Clancy's Net Force... but it could be]
  • The absence of effective conflict resolution mechanisms in some regions, the rise of nationalism in some states, and the raw emotions and tensions on both sides of some issues—for example, the Taiwan Strait or India/Pakistan issues—could lead to miscalculation. Moreover, advances in modern weaponry—longer ranges, precision delivery, and more destructive conventional munitions—create circumstances encouraging the preemptiveuse of military force.

There are more points... but that's enough to get the thinking started.

Tuesday, January 25, 2005

Excessive Litigation - Lawsuits or extortion?

A quick Google search: lawsuits 2005

Okay, you get the idea... everyone is doing it. That's nothing new. It's not so much that people and corporations are suing each other as much as the impact on each of us... yes, each of us... probably more indirectly than directly.

The issue is not that legal action is improper. The alternative to legal action would be far worse... large corporations using their economic power to ruin individuals and smaller competitiors... and, perhaps, violence by individuals or small groups against corporations in retaliation.

The issue is when does legal action become extortion? We hear about the $100 million damages awards and presume that the tort system is amok. By and large, it is a sound process that is a win-lose proposition which is used after all other means of settlement are exhausted.

Perhaps the legal system needs one small change: remove the penalty aspect of lawsuits from the jury process and establish a standardized, accounting approach for calculating the penalties. Another aspect of reform might be to limit legal fees to a cost-plus formula rather than a percentage of the award. Once again, the cost accounting should be standardized and reviewable by independent accounting firms. This would limit "padding" of the bills.

Right now, the system is just too tempting in its mechanisms that convert the concept of "damages" to "enrichment" and "protection" to "intimidation." Perhaps there are models from other countries that could be adapted to the U.S. system... or not. But it might be worth a look.

Monday, January 24, 2005

Environmental Extremism - Northern tropical storm

AP Photo

The year's first Northern tropical storm, Allrightalready, struck from the Midwest to New England. Several Patriots' fans are shown braving the record-breaking Northern tropical storm, blamed on the global warming effects of their gas grills, as they struggle to get to their convertibles in order to drive to the local sports bar where many of their friends wait in air-conditioned comfort. Temperatures were in the 70s with the wind at 0-5 mph... or was that the other way around?

Sunday, January 23, 2005

Economics - Economies of scale

Econ 101 - the more you can buy at once, build at once and sell... the lower the unit cost.

Seems logical, so why doesn't it always work? Why so much red ink in manufacturing and government?

One fallacy is that there is often a disconnect between supply and demand.

  • Manufacturers produce X units and demand is X minus Y units. The cost of production is kept low by "economies of scale," but the cost is not covered by consumers or other payers. And the large-scale operation cannot quickly respond to changes in demand, products, or new technologies... they get locked into the past and cannot change the scale of production quickly.
  • Government produces X units of schools and teachers, but demand for those facilities is X minus Y units of schools and teachers (under-utilization), so the cost of those schools and teachers is not covered by revenue per student sources.
Another fallacy is that large-scale operations are more efficient than smaller-scale operations: fewer people supporting a larger proportion of others.
  • Bureaucracies have a way of increasing in size simply to support the bureaucracy, not the customers of that bureaucracy. After a point, the bureaucracy becomes increasingly less efficient in the eyes of the customers and from a cost standpoint.
  • Larger-scale operations can "afford" to have inefficient or ineffective people who "hide" in the system and are carried by the efforts of others; these are the "buckpassers" or those who say "see so-and-so about getting that done." It's interesting that many large companies have essentially given up trying to do their own work and hire outside "contracters" to actually get something done.
One of my sons who works in the "high tech" area of a large company as an outside contracter was told that he should spend much more time documenting what he was doing so other developers would understand what he had done. His reaction was basically:
  • The product operation should be obvious to the customer, but it will have documentation for them
  • A qualified developer should not need extensive documentation because what I am doing is obvious to a qualified developer... get some qualified developers.
His problem was that he is working in a large-scale bureaucracy for the first time and can't accept that one need not be qualified and stay qualified to continue to do the job.

Saturday, January 22, 2005

Bringing Liberty - Part Two

Well it didn't take long for the criticsim to really come out... the Detroit Free Press had banner headlines declaring:

U.S. in danger of losing the war

This was based on "analysis" by Knight-Ridder newspapers that there were increases in bombings, troop deaths and troop injuries. It was noted that actions in Falujah (and Mosel and other locations?) might have contributed to that increase.

I felt compelled to write to the Free Press:
When one takes a close look at the data, it is obvious that:
  • The absolute level of deaths and injuries is extremely small compared with any other war
  • The percentage-of-forces deaths and injuries is extremely small compared with any other war
  • The recent increases were due to specific military-initiated actions that were bound to take place
  • The so-called analysis was done by a newspaper, not anyone connected to military analysis or intelligence
It is as if one looked at weather patterns over the past three months and declared that:

"Michigan is on the verge of a new Ice Age! Analysis by residents of the Detroit area reveal that temperatures have declined steadily while snow fall has increased sharply. These trends show that Michigan is in danger of spiraling into a deadly Ice Age that will destroy the economy and force millions to evacuate."
Amazing how easy it is to do an "analysis". To be fair, the article quoted the Brookings Institution as one of the sources in it's analysis. However, a look at the Brookings site does not reveal anything remotely resembling the headline banner in the Detroit Free Press. It does have articles cautioning about an election with insufficient Sunni representation and saying that the U.S. military should announce a withdrawal timetable... much as we did in Europe and Korea... NOT!

Let's be honest, this Free Press article is not an "analysis," it is a political statement. It presumes that "the insurgency is getting larger" without an actual count of insurgents. More accurately, it could have stated that "the insurgents are becoming more active as elections grow near." That is verified by observation. There is no evidence that the number of insurgents is increasing or that more Iraqis side with them.

The Free Press has taken a giant "leap of faith" in this article.

And those Michigan residents are right... the Ice Age is upon us!!! Evacuate to Florida! Evacuate!

Friday, January 21, 2005

Education Failure - Say it thusly

I OFF-TEN AXE myself what effect the wrong PRO-NOUN-SEE-A-SHUN of words is upon both speaker and listener. Now, I'm not talking about obvious geographical PEE-QUE-LEE-AIR-IT-TEES... rather, I refer to words spoken as they are spelled or as passed along by those who never checked a dictionary.

Why bring this up? Most of us get along quite well despite the occasional FAAX-PAAS within our conversations. What's da big deal? English is riddled with invented words and slang, so how does a minor transgression in speaking a perfectly good word cause a problem?

In the worlds of education and business, people are judged in many ways: appearance, knowledge, confidence, skills, personality, and communication... did I mention communication? To the educated ear, the sound of a word poorly spoken is like the sound of fingernails on a chalkboard. It is the equivalent of wearing plaids with stripes and polka dots. It resonates poorly with the listener.

There are far more serious problems with the educational achievement of most people than a few words poorly spoken... except for those who have all of the other educational requisites for success. For those individuals who have the diplomas to testify to their educational accomplishments, the poorly spoken word is a testimonial to their lack of education. It sows the seeds of doubt in the minds of truly educated listeners.

For the curious:

The way winter should look!

Thursday, January 20, 2005

Bringing Liberty

What makes the news most often:

  • Car bombings
  • Prisoner abuse
  • "Insurgents" in ski masks carrying machine guns
  • Casualty counts
  • Political condemnations
  • Military costs
  • Usama (or Osama) Bin Laden tapes
What makes the news least often.

Damir Sagolj - Reuters

If the presence of U.S. troops only meant destruction for the places they were positioned, President Bush's words of bringing liberty would ring hollow. But the U.S. military is unlike those of other nations through history. While there is war, there is compassion and caring for the innocent. It may not make the news, but it reaches the hearts of those they touch.

All who live in tyranny and hopelessness can know: the United States will not ignore your oppression, or excuse your oppressors. When you stand for your liberty, we will stand with you.
George W. Bush

Let the cynicism begin.

Wednesday, January 19, 2005

Education Failure - Shoot the messenger?

Gov. Granholm - Schools Superintendent Watkins
Photos from State of Michigan Website

The Detroit Free Press reports:

Gov. Jennifer Granholm on Tuesday said state Superintendent of Schools Tom Watkins should resign, calling him an ineffective education leader.

In a Free Press interview, a miffed Granholm said Watkins reneged on an agreement last May to leave at the end of 2004. She said on Jan. 7 that she asked him again to resign, through her education adviser.

Instead, Watkins has dug in his heels, she said, hoping to muster support from the state Board of Education. The board has sole power to hire and fire the superintendent, who heads the Department of Education and is charged with carrying out policies set by the eight-member elected board.

"He needs to resign for the good of the state board, for the good of public education," Granholm said, in a reversal of her public comment last week that Watkins was a "valued member" of her cabinet.

"The simple reason is he is not providing effective leadership in one of the most critical departments in state government."

The board last week tabled action to extend his contract. Six months ago, the board gave Watkins a glowing evaluation.

The Detroit News editorial included the following:

Some of Watkins' ideas are better than others. But he's absolutely right in suggesting that the state's public education industry is whistling past the graveyard by refusing to open itself to radical reform in the face of dwindling resources.

Watkins ruffled feathers last month with a nine-page report, "Structural Issues Surrounding Michigan School Funding in the 21st Century."

Here are a few of his thoughts:

• Build common-sense solutions to education problems that taxpayers are willing to pay for.

• "We must ask ourselves what we are willing to do to redirect our finite resources and optimize support for our core mission of teaching and learning."

• "We need to right-size our public education system to optimize resources..."

• "A nonpartisan effort must result in development of a shared vision and common agenda that puts the needs of children and schools above all else."

• "A new approach will require everyone to let go of deeply entrenched constraints and the 'we've always done it this way' mentality."

• "Action is preferable to appointing committees and task forces and holding meetings" though input from concerned parties will be required.

That last item no doubt miffs aides to Granholm, who has been criticized for appointing study panels and holding stakeholder meetings in lieu of action on a variety of festering state problems, including budget deficits. Last week, the governor did little to dampen stories that her administration had asked Watkins to step aside.

What is effective leadership? Michigan has problems that do not appear to be changing:
  • Failing schools are not improving
  • Budgets are being cut
  • Districts like Detroit are out of control
  • There is little or no evidence that charter schools are doing a better job, academically, than nearby counterparts (let's not compare the best of the charter with the worst of the public)
Granholm has a point. The question is which way should the finger be pointing? Politics is the art of looking well dressed while you are naked.

Tuesday, January 18, 2005

Environmental Extremism - Predicting climate - TILT!

Weather forecasting has improved to the point that we can pretty well rely on today's forecast and have some confidence in the forecast for the next two or three days. After that, there usually are too many variables to come up with a really reliable prognostication.

I cringe every time I read that mankind is causing a "global warming" by adding carbon dioxide into the atmosphere. Well, there is that factor. But it is only one possible factor for change in earth's climate. And it is by no means certain that it will cause widespread problems... changes perhaps, but not necessarily problems.

Another pollutant, sulfur dioxide, is having a cooling effect. And lest we get too excited about our part... all it takes is one really large volcanic eruption to top all of our efforts at pumping this gas into the atmosphere.

Let's suppose that the CO2 level is increasing and we all follow the Kyoto protocols... what's the prediction? One view is that the cure is worse than the illness... the benefits will be slight and the cost enormous.

Another piece of information that is overlooked is that the climate we are used to as "normal" (and the 2nd part)... is subject to rapid variations. (Additional reading ) related to an eccentric earth... eccentric orbit, tilt and wobble... that induces climate change.

It is interesting to note that in the past 100,000 years, the ice caps have formed and melted 10 times without man's help. Nothing is ever as simple as it first seems.

Full article

We need to be careful about projecting short-term changes as long-term trends... as this chart shows:

For those of you who can't quite make out the details... this is a trend whose values increased rapidly from 1,500 to 5,000 in a matter of a couple of years versus slow increases prior to that. Projections of 8,000 to 10,000 were being made based on this "new trend". You can see the details here.

There's a bit of hubris in thinking that our micro influence is the cause of major climate changes. Wait... is that another ice age coming our way? Tilt!

Monday, January 17, 2005

Martin Luther King Day

Some interesting sites dedicated to Black Americans, but eye-opening for others:

There are many more, but the point is that when you read the articles on these sites, it is often easy to forget that you are at a "Black" site. Too often the focus of non-Blacks is on the lower socio-economic segment of Black America and they loose sight of the very large representation of Blacks whose interests are about the same as any other ethnic or racial group.

Then one realizes that, despite the statistical disparities, there is a large portion of Black America that has realized Rev. King's dream. That doesn't mean that other issues raised in this site are not valid... it means that they should be kept in a larger perspective.

Sunday, January 16, 2005

Education Failure - The Dream

Martin Luther King was just a man... noble side, fallible side. He, like other noteworthy people are more remembered for their vision and public persona than their personal lives. That's fair. We should ask our leaders to be leaders, not saints. Their vision and the risks they take should overshadow their personal shortcomings.

Rev. King is probably most remembered for the speech he delivered on August 29, 1963 in Washington, D.C.... known as his "I have a dream" speech. Unfortunately, that's about all people remember... those four words. Whites forget the history behind the words; blacks forget the challenge he also spoke...

But there is something that I must say to my people who stand on the warm threshold which leads into the palace of justice. In the process of gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must ever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again we must rise to the majestic heights of meeting physical force with soul force.

The marvelous new militancy which has engulfed the Negro community must not lead us to a distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. And they have come to realize that their freedom is inextricably bound to our freedom. We cannot walk alone.

It is ironic that his dream that the South would change has happened and that blacks are moving back from the North. Georgia, a specific target of Rev. King's speech, has become a target place for relocation.

The problems continue to exist in the North... maybe worse than before as manufacturing jobs are lost and schools are blamed for the failure of blacks to embrace the very education process that would allow them to live and compete economically while
conduct[ing] our struggle on the high plane of dignity and discipline
Forty-one years later, another prominent black is again speaking out about the problems of the black community... this time with a more inward perspective. Dr. Bill Cosby... yes, that's a correct title, not just a TV title... has been touring the North with his message:
The incarceration rate of our youth is accelerating with devastating consequences for our families and neighborhoods. Children are being killed by stray bullets in territorial gang and drug wars.

Many of us feel shocked and helpless. We don't need to feel passive.

Most of these ills stem from several factors, but an important one is the lack of education of too many of our young people. Studies show a correlation between inadequate schooling and a wide range of distressing outcomes, including early death, a propensity toward violence and substance abuse.

Our children are telling us something. Why are we not listening and paying attention to the messages?

Parent power! Proper education has to begin at home. We must demand that our youth have an understanding of spoken and written English, math and science. We must transform our communities with a renewed commitment to our children, and that means parents must show that they value education. We don't need another federal commission to study the problem.

What we need now is parents sitting down with children, overseeing homework, sending children off to school in the morning well fed, clothed, rested and ready to learn.

Easier said than done, Dr. Cosby. Especially when getting an education is seen as "actin' white" by too many young blacks. The biggest education failure is the failure to convince those who need education the most to accept their need.

Dr. Cosby's message is beginning to resonate among blacks... let's hope that it gains a following.


Thursday, January 13, 2005

Government - Chicken or Egg - Chapter 2

On December 21, I wrote about the problems facing Detroit and some of the painful "solutions".

Today, the Detroit Free Press and The Detroit News both ran front page stories about the financial crisis that has forced mayor Kwame Kilpatrick to announce the layoff of nearly 1,000 city employees... despite this being an election year for mayor. The Detroit News also ran a series of related articles:

Go Financial calamity worsened over years

Go Detroit's tax plan faces tough sell

Go Workers, residents fume over Detroit layoffs
As I stated in that previous post:
...Detroit has been in decline for 1/2 a century and any turnaround must either be based on a total change in government... or a turnaround will take at least 1/2 century given current government processes.
Quite honestly, Detroit does have a downtown in revival. But too many areas within the city's borders are simply too run down and unattractive to anyone foolish enough to consider moving to Detroit. The map of vacant properties linked to in the December 21 article shows a fact that cannot be ignored: the city is in a profound state of decay. If a human had osteoporosis to the extent that the city has vacant and abandoned property, every bone in his body would be fractured or about to be so. The city is incapable of healing itself.

Fact: the city's taxes are among the highest in state (including an income tax). Raising taxes will exacerbate the problem.

Fact: the city's residents are among the poorest educated in the state. They do not represent a dynamic resource for rebuilding... and even they are leaving.

Fact: the city's services are burdened with Labyrinthian processes while struggling under union rules that allow 5 to do the work of 1... a situation often dramatized by hidden camera reports on local television. Firing workers without changing the basic processes or work rules invites further deterioration.

Fact: the State of Michigan is already strapped for money. Taxpayers might consent to higher taxes for keeping the state government running under present programs... but taxpayers would most certainly rebel against a bailout of Detroit... especially without a complete restructuring of all aspects of Detroit's government.

I don't see any reason to change my assessment of December 21.

Wednesday, January 12, 2005

Excessive Spending - No comment needed

Read links below and try to figure it out:

  1. Record trade deficits
  2. U.S. budget deficits continue
  3. State budget deficits reach breaking point
  4. U.S. dollar continues to weaken; Treasury Secretary Snow affirms strong dollar policy
  5. Jobs growth is mixed news... very mixed
  6. Housing sales are forecasted to be good
  7. Social Security issues abound
Here in Michigan the forecast is warm and rain followed by cold and snow... soggy is a good description.

It's as dreary as it looks.

Monday, January 10, 2005

Risky Business

Tsunami pictures from space... done with that for awhile.

Today was spent peering into the future. I need to be sure that I make wise investment decisions for my family's sake. But nothing is ever really simple about the future except that eventually it will become a today.

How much are we willing to risk for the opportunity to attain (or obtain) more? How much downside can we accept for an upside? And what or who is to say that our assessment has any chance of being almost correct?

Risk takers don't seem to concern themselves much with downside analysis. The future never comes or is certain in their minds. Others are so concerned about the future that they can't make a decision. No decision is a decision. Inaction is a course.

Life has its risks. We don't have to be foolhardy to accept risk... but we should understand our options. Gamblers take risks; good gamblers know how to play the game and the odds.

It's also good to have a Plan B.

Sunday, January 09, 2005

Environmental Extremism - Odd call

Back on October 25, I wrote a piece called "Humor: What, me worry?" It was pretty much dark humor... how we ignore the big dangers of our existence.

Rogue asteroids, super volcanos, tsunamis, Iraq, Bush, Kerry.... What do these have in common?

  • They cause people to worry
  • They can impact our lives
I then wrote:
How is it that we can go about our everyday lives with all of these grave threats to our existence? Distance. Our minds do a risk assessment and we prioritize our concerns. So the super volcano that could wipe out much of mankind may be there in the background, but the chance of it happening in our lifetime is too distant... too remote... to cause us to give it much concern.
Well, a massive earthquake and tsunami have devestated a relatively small portion of the human population, but, by God, it is NEWS!

But human nature is such that those of us not directly impacted by this natural disaster will quickly relegate it to the background of our minds. Those who survived and lost family and homes will not forget so quickly, but eventually will get on with their lives. In fact, some of them seem to have ignored the disaster altogether... or taken advantage of it.

It's nice to know that humans are so resilient.
What nature doesn't do to us, will be done by our fellow man....

Friday, January 07, 2005

Ethnic Divisiveness - Another Round

The University of Michigan is a powerhouse institution. Two of my sons have Masters Degrees from UM, so I have a bias toward that university. Nevertheless, UM continues to be the focal point for the political hot potato of affirmative action.

The Detroit Free Press reports that there is now a petition for putting the issue to the Michigan voters in 2006. In this article, Mary Sue Coleman, UM President, is quoted:

""All our students benefit when we are able to build a diverse learning environment," she said. "The ballot initiative seeks to eliminate a moderate but effective tool the court allowed for recruiting a diverse group of students.""
I find the statement a little disingenuous. Why? Because "diversity" does not mean "diversity of thought." Rather, in this situation, it only means diversity of skin color. For an institution whose purpose is to educate, such shallowness of "diversity" is appalling. It is the same thought process that drives young blacks to yell "Quit tryin' to eat white," at their peers for eating chicken with a fork and knife.

It is an approach to "diversity" that doesn't examine, critically, whether a statement or position is functional or dysfunctional... only that it is "ethnically diverse." It is an approach to "diversity" that creates divisiveness.

Other thoughts on this subject:

Comment on Global Warming

Check out one reader's thoughts on Global Warming in the comments link on yesterday's post (Cold Comfort - 2).

Check out:

What is of interest is the abrupt changes in climate historically... without man burning fossil fuels.

Thursday, January 06, 2005

Environmental Extremism - Blame it on Kyoto

There are some Global Warming enthusiasts who are now claiming that the tsunami that originated in the Indian Ocean was linked to global warming which is linked directly to drivers of SUVs.

Cooler heads are taking a different look at the situation.

Actually, the main environmental problem with an exponential growth in human population is to avoid poisoning ourselves with our waste. I don't mean the waste that goes down the toilet... although the after-effects of some heavy rainstorms have left lakes fouled from sewage systems that were tasked beyond their capacities. I'm speaking of the waste created from everyday living and working.

Mountains of trash are growing around cities. While engineers have developed some neat ways to layer and hide the stuff, it's there. Perhaps it is harmless... a temporary eyesore that eventually becomes a ski hill. Although it is hard to believe that there isn't a lot of stuff oozing its way into the ground water.

We seem to have reached a level of environmental control that has allowed reasonably safe growth in the U.S. But I'm not so sure about countries like China or India that are suddenly expanding their manufacturing and consuming at a far greater rate than the U.S. The U.S. remains the prime target for environmentalists, but common sense tells me that the real danger lies with the 3-4 billion inhabitants of S.E. Asia that are moving from the 19th to the 21st century and skipping the infrastructure development and environmental controls developed in the 20th century... go directly from cattle to cars... pass Go several times... let all hell break loose.

Without adequate controls on personal and corporate garbage and process by-products, huge portions of the earth may be poisoned... while the Kyoto participants keep their focus on the CO2 levels in the U.S.

We may need some more tsunamis... just to clean things up. Well, okay, that's a bit harsh.

Just a thought.

Cold Comfort - 2

Some of us may be a bit skeptical about global warming... or even cheering it on a bit.

Global Warming - Michigan Style Posted by Hello

Wednesday, January 05, 2005

Relationships - Mother and Son

Mothers and sons... complex relationships. I'm 60 and still my mother's "baby". It doesn't matter that I supplement her income. Roles may change, but not relationships.

Watching my wife and youngest son (who is home from Michigan State for a few more days), I see the same dynamic in play. "Take these vitamins"... "eat your vegetables"... "drink orange juice, not soda".... But as I watch them happily cook dinner together... each making more than enough for the family meal... it is evident that my son is beginning to take on some of the adult roles. Of course, as he discusses going out with his friends during the middle of a snow storm, I realize that it is only a beginning.

Nevertheless, it is good to see a healthy relationship between them... among all of us, actually. We parents order less and discuss more; the children whine less and reason more. And there is a lot of mutual respect and love... that's the best part.

Tuesday, January 04, 2005

Excessive Spending - Easy go

Last year's federal budget is about $2.2 trillion (see page 26 of 311) with an $0.3 trillion deficit. My taxes are rounded out of that number... so are yours.

My oldest son sent me a link regarding Federal discretionary spending. It's so much that you can't see it on one screen. I can't vouch for the accuracy of the data, but it certainly is an interesting visual.

If any of you are wondering how our representatives in congress control this, join the club. I used to develop sales objectives at Ford Motor Company. What a pain it is to manage a few billion! You don't really manage trillions... you sort of baseline plus a few percent each year. I think a program gets killed if someone can generate enough bad publicity about it or someone realizes that all the people involved in it died 20-years ago.

So, as we get prepared for the next season... the tax season... just be grateful that you only have to deal in thousands. Well, okay, grateful may not be appropriate. I'd be grateful if I could deal in millions!

Monday, January 03, 2005

Getting Back to Normal?

First a response to the comment on yesterday's post (you can see the link to the comment at the end of the post):

I didn't mean to exclude the Federal Government from the examples. It just wasn't necessary to include it. The issue was not about government spending as much as the impact on the average person's earnings... now and in the future... which is impacting tax revenues and may lead to new forms of taxation such as Gov. Granholm's hare-brained idea to have a sales tax on services. That's $15 for the lawn mowing and 90 cents for the governor.

To your point... government, in general, believes that "cut backs" are moving from a 5% annual budget increase to a 4% increase. The thought process ends at the digit and never gets to the word "increase".
Grim news continues to pour in from Asia and that has tended to diminish the space and time appropriated to the nutballs in Iraq who continue to kill randomly in the hope that they will ... what? They have no agenda except that they hope for power. They have been described as nihilists. That seems appropriate. They are good at destruction... nothing else.

It will be interesting to see how the Islamist extremists will attempt to take advantage of the chaos to further their political goals. Don't think that will happen? Let's just say that humanitarian actions are not part of their repertoire.

Somehow, I think that the Bush administration will be severely criticised for whatever action it takes with regard to the aid provided to the tsunami-devestated areas. Too much spending, too little spending, too much military involvement, too little military involvement, helping Muslims areas, not helping them enough.... Wanna bet? I think I heard him say something to effect that whatever money is spent by the military to provide relief assistance should be added to the military budget. That sounds like a good starting point for criticism. After all, how can we call it aid if it doesn't come out of our budget?

Global warming has definitely hit the Midwest. The 6" of snow and zero-degrees temperature was replaced by two days in the 50s. Let's hear it for global warming in Michigan! You know, there were times... geologically speaking... when there was no ice covering large portions of the earth. Without the isthmus of Panama and a little more on each side, the climate of the northern hemisphere would be dramatically different... and that isthmus wasn't always there. The earth changes and life adapts... or dies out. It's more likely we'll die from nutcase Muslims or car accidents than global warming. In fact, with the ice storms coming this way, that is more than likely.

It's good to be crochety again in 2005!

Sunday, January 02, 2005

Excessive Spending - What is our economic engine?

On December 23, I wrote about the issues related to our current account deficit (negative trade balance). I questioned the basic assumption that cheaper imports were good for our economy.

Today, there were a few articles in The Detroit News and elsewhere that I found interesting and connected... even if obtusely:

Where am I going with this?

It seems that there is a macro trend developing in the U.S. which greatly reduces the pathways to wealth creation and wealth expansion. Those individuals and companies who do not enjoy leverage and prosperity may find that it is increasingly difficult to find pathways to wealth creation as domestic manufacturing and trades dwindle.

Rather than moving upward economically, the "average" citizen may find that they are on a treadmill of running faster to stay in the same place... finding that borrowing becomes increasingly necessary to meet basic needs and opportunities for personal advancement become fewer as massive corporate structures engulf smaller competitors... places offering opportunity for personal advancement... leading to more "contract" employment or direct "outsourcing" to foreign countries.

This macro trend could be called "economic squeezing"... and it portends a less dynamic, more elitist, economy.

If so, what will be our economic engine for the future... home equity loans?

Saturday, January 01, 2005

Happy New Year

The "new year" has begun at different times for different cultures, but as much of the world homogenizes through communication and business, January 1 marks the common celebration.

Why bother?

Why not?

We need our diversions from war and natural disasters. We need a moment or two to remind us that we share a common humanity. It doesn't have to be religious or serious. Something as innocuous as acknowledging the passage of time in our lives... that we have each spent another year of our life's currency... and that we are still here.

It could be a maudlin time if we so choose... and some do, but most of us find it nothing more than a celebration that lets us mentally reset the scorecard. Businesses do that as a matter of practice by setting new "objectives." So do governments with new "budgets." New scorecards; new scores. Individuals make their "resolutions." It's not that a lot changes, but it's that we allow ourselves a "fresh start." It's too hard to measure progress in increments of a whole lifetime, so we pick shorter timeframes... more manageable portions of our lives.

So, happy new year to you. 365 days to either continue as before or change. But a "fresh start"... a new scorecard... a system re-booting. With any luck, we'll be able to check our scorecards next New Year's Day.

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CO2 Cap and Trade

There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)