We Remember - Memorial Day, 2005

Picture by Harry Doerr

What I Say; What I Am

From USA Today:

Bomb kills at least 20 at Pakistan shrine

ISLAMABAD, Pakistan (AP) — An apparent suicide bomb detonated Friday as hundreds of Shiite Muslims recited verses from the Koran during a religious festival at a shrine near Pakistan's capital, killing at least 20 people and wounding dozens, witnesses said.

Pakistani Muslim devotees mourn Friday's deaths near Islamabad.

*****

Rallies abroad protest alleged desecration of Koran

ISLAMABAD, Pakistan (AP) — Thousands of Muslims marched Friday in Islamic countries from Asia to the Middle East, burning symbols of America to protest the alleged desecration of the Koran by military personnel at a U.S. prison in Guantanamo, Bay, Cuba.

The rallies in Pakistan, Egypt, Lebanon, Indonesia, Malaysia and elsewhere followed an admission Thursday by U.S. investigators that Islam's holy book was mishandled at Guantanamo. But American officials claimed it was often inadvertent and denied that any Korans were flushed down a toilet, as Newsweek magazine had reported in a now-retracted article.

Now if certain persons who called themselves "Christian" were to protest maltreatment of the Bible and then go to a church and blow up the congregation, everyone would say those persons were:

1. Not Christian
2. Sociopaths

Now about those "Muslims"....

Fair Trade Deficit

A couple of diverging articles appeared today:

US' Snow-need "significant" China forex move
Thu May 26, 2005 04:43 PM ET
WASHINGTON, May 26 (Reuters) - Treasury Secretary John Snow repeated on Thursday that China should take steps to make its yuan currency more flexible and said that any action must be dramatic enough to be meaningful.

And from Cafe Hayek, Dr. Don Boudreaux extols the virtue of a Dr. Walter Williams (also of George Mason University) article on the Trade Deficit where Dr. Williams states:

The fact that foreigners are willing to exchange massive amounts of goods in exchange for slips of paper in the forms of currency, stocks and bonds should be a source of pride. It means America, with its wealth, rule of law and the sanctity of contracts, inspires foreigners to hold large amounts of their wealth in U.S. obligations. Their willingness to do so means something else: Trade increases competition. Ultimately it's competition, many producers competing for his dollar, that truly protects the consumer. What protects producers, at the expense of consumers, are restrictions on competition. The quest to restrict competition is what lies at the heart of the trade deficit demagoguery. When's the last time you heard a consumer complaining about his buying more from a Chinese or Japanese producer than that producer buys from him?

Some thoughts on those thoughts:

1. While Dr. Bourdeaux has stated often that a trade deficit is not debt, he then thinks it is perfectly all right for the outflow of funds from the U.S. to create an opportunity for foreign investors to support the increase of the government's debt through borrowing.
• The outflow of funds is partially a result of manipulation of currencies that allow the Chinese to be more "competitive"
• The outflow of funds is partially a result of manipulation of home markets that keep out the U.S. from Japan allowing the Japanese to be more "competitive"
• The erosion of the U.S. industrial base converts high tax revenue jobs into low tax revenue jobs thus "encouraging" the U.S. government to "borrow" from our "competitors"
2. Consumers are also businessmen who own the businesses against which the Chinese and Japanese "compete". Consumers are also the skilled workers and tradesmen who produce goods against which the Chinese and Japanese "compete". Consumers are also the taxpayers who see a large portion of their remaining income taxes go to those "competitors" who are undermining their ability to make a living wage. I think I have met quite a few "consumers" who are "complaining about his buying more from a Chinese or Japanese producer than that producer buys from him."

What Secretary Snow is discussing is the manipulation by the Chinese that undermines the very concept and practice of "fair trade". What Secretary Snow is challenging is the continued policy of currency manipulation to undermine the U.S. producers in the global marketplace. But according to Drs. Boudreaux and Williams, what that means is:

Some politicians gripe about all the U.S. debt held by foreigners. Only a politician can have that kind of audacity.

No, not necessarily. But perhaps some economists really can't see the bigger picture.

Profession versus Practice

No, I'm not referring to doctors....

If anyone has read the news lately, it is clear that the so-called "religious fanatics" in the Middle East... those "Muslims" who proclaim "holy wars" against other Muslims, are guilty of the age-old practice of ignoring what they profess. Killing your brother is all right if it is done for religious conviction.

Mankind seems to have this innate (or inane) ability toward hypocrisy. Oh, I'm certain the hypocrites do not even realize they are such. They rationalize that they have the "truth"... the "word of God/Allah". They are the ones who interpret God's will correctly.

Don't misunderstand me. I'm not picking on Muslims. I'm picking on those who would "lead" us with their particular religious knowledge of what is "God's will". To the point, there are always gray areas. Is war evil? Well, it is destructive, but would anyone argue that fighting against Hitler was "evil"? Maybe a few.

One can make a case that actions meant to improve the quality of life and relationships among people are good and those meant to create division and hardship are bad. Case in point:

Koreans shake up stem cell creation

Is it the "Will of God" to oppose such research? Is that a valid question? When is the line crossed that separates the "good" actions from the "bad"? If I profess to love my neighbor as myself, do I practice that by withholding a potential cure for his serious disease or crippled body?

Excessive Spending - $3,600 Chevy... Chery

Cue the theme music from the "Twilight Zone".

You have found a car to meet your budget. Offered with zero percent financing, you are able to purchase this new vehicle with 36 monthly payments of $100. You sign the contract. You have entered the Chinese currency manipulation zone.

In the Detroit Free Press:

AUTOS IN CHINA: Chery gears up for the U.S.

Maker of the $3,600 QQ aims to load its cars with deluxe features, low prices

No one is saying that China's currency does not reflect its real value... okay, they are saying that. No one is saying that China is using slave labor to build those cars... but, gee, if their currency really reflects reality, then this must be slave labor:

China is able to produce cars at such prices because its labor costs are far below those of the rest of the automaking world. Its autoworkers make barely $2 a day, even as auto plants adopt modern technology.

That's $60 per month. Obviously, they can't afford clothes or homes or food with those wages. Wait, there is the official valuation used for world trade and then there is the real valuation which lets these workers have homes and clothes and conveniences.

In a totally unrelated article, Reuters reported that:

The U.S. stock market's upbeat reaction to the heated rhetoric between Washington and Beijing over China's currency has puzzled some strategists who say a revaluation of the yuan is ultimately negative for equities.

These analysts see that any upward valuation of the yuan would simply increase our Current Account (Trade) deficit because we would keep buying from China anyway.

Maybe. But if the yuan were realistically valued... if that $2 per day became even $40 per day... the cost of that Chery Chevy would definitely not be $3,600 on the world market. The cost of the steel and plastic and rubber and electronics would reflect the fact that the workers could actually afford decent homes and food and clothes and amenities.

And the U.S. manufacturers who are presently competing with $2 per day labor might actually have a real chance to compete for sales. Yes, there would be a period of adjustment. "Inflation" ... as measured by our government ... would have a period of growth. We might even have some layoffs as Wal-Mart finds it tough to compete with the corner hardware store. But, in the end, we might actually save our U.S. based industries.

In the U.S., if you have two sets of books when you run your business... one public and one private... you tend to be viewed as a criminal. Someone ought to mention that to China.

Getting Married Is The Easy Part

Last night, I went with my son to look for a place to have his wedding and reception. He and his fiance have started the arduous process of budgeting, planning, adjusting, re-adjusting, and re-re-adjusting the commencement ceremony.

The first shock to him was the amount of money that this ceremony could devour. He is a frugal person who was appalled to see that this place required a bar expense of $22 per person. First, he doesn't drink alcohol himself and, second, he thinks that anyone who consumes $22 of alcohol shouldn't drive home.

Well, I agree with the second point except that the charges at such functions are always inflated, so that's just a few drinks over the course of the entire evening for most folks. But he is right in that there is no real reason to spent $4-5,000 for booze. He leaves open the possibility of a wine and champagne bar, but isn't even too happy about that. His fiance has been told by friends that weddings without alcohol are always a bit boring. Maybe they need to get a life!

Well, as I said, the process is just starting... and that's the easy part of marriage. 30 or 50 or so years later you get a different perspective about the commencement ceremony.

Detroit will shoot itself in the foot again

"Trooper charged in slaying," reads the headline on The Detroit News article.

"Trooper pays price for Detroit's incompetence," read the headline on another article.

A Michigan State Police trooper shot a man who approached in the middle of the night with his hand behind his back... after the man disregarded the officer's command to show his hand and stop. The scene is captured on tape.

It turns out the man was not armed.

Flash back to Iraq. Soldier kills unarmed man in a building where shots had been fired toward the troops. It's dark and dangerous. The scene is captured on tape. The soldier is charged with shooting the wounded man who the soldier thought might detonate a bomb.

In both cases, men were sent into uncertain, dangerous situations and expected to make decisions instantly about their safety and the intentions of those facing them. If their decisions were faulty, they were then treated as criminals by those who could review the situation at their leisure... in safety.

Question: at what point will those young men simply stop responding to those calls to action in those uncertain situations? The City of Detroit has once again seen an official act rashly... no, stupidly. The City will suffer as a result... suffer more, that is.

Bittersweet

Classes at Cambridge University, graduation, marriage proposals, going into business, high-rise living in Chicago... so many things happening in our sons' lives.

I watch with a great deal of pleasure and a little bit of sadness as they stake out their independent paths. It's all my wife and I could have hoped for them... maybe more.... We were lucky; whatever it was we did with them and for them seems to be working. The house is emptying. Oh, the younger ones are still hanging around for a little longer while they build up their personal funds so that they can purchase homes and cars. But the change is clearly here.

It's strange how so much gain can feel like so much loss. More free time, less expenses, less responsibility... but the thought of a house without young people outweighs those positives. It was tough when the oldest left, but having the younger ones around softened that change. Now the second one is about to leave and the third will follow soon after. They'll be nearby, but it will be very different.

We'll get used to it, but I'm not sure how well we'll like it. That's life: the destination is not nearly as welcome as the journey.

Love and Proposal

Graduation turned out to be a bigger day than we expected.

Congratulations, Whitney and Kevin!

Spring and Graduation

A glorious day to celebrate.

My youngest son decided to skip graduation exercises because, technically, he is not quite finished with his college courses... and he doesn't get too excited about such events. But since he won't have another opportunity until December to participate in the ceremony... and he will not be the least interested... I'll celebrate the day for him.

My second son's girl friend is also graduating from the same college today. She decided to participate in the festivities and we will probably stop in to congratulate her.

Despite what the ceremony may or may not mean to these young people, it means much to their parents and families and to their communities. They are no longer the "future" for us; they are now part of the contributing "present". We celebrate their achievements, but we also celebrate our roles in their achievements, too.

The caps and gowns and ornate pieces of paper are nice touches, but the real reward is that they have been tested and found able... they are prepared for their lives and to contribute to the next generation's support. It is time to commence.

Da Duh Factor

Some items in the Detroit Free Press today:

• Gotta have it... "We have to look like and act like the dope dealers," said Police Chief Ella Bully-Cummings after the City Council rejected a proposal to lease "four luxury cars -- at $100,000 a year over two years. One of the rides is a 2005 Lincoln Navigator." That, after the blowup about the Mayor leasing one for his wife and charging to the city.
• An appropriate name... "Denise Fordia Coke was arraigned in 37th District Court in Warren on a charge of possession with intent to deliver cocaine...."
• Somehow slipped our mind... "New York's Freedom Tower, the tallest skyscraper planned for the site of the destroyed World Trade Center, will be redesigned to address security issues.... Police officials last month presented concerns, including that the tower's planned location, 25 feet from a six-lane highway, would leave it vulnerable to a truck bomb."

Not exactly humorous... but entertaining anyway.

Excessive Spending - Creating competition

I've written several times about what I believe to be the fallacy in thinking that goes roughly: "It doesn't matter if our manufacturing capability is lost (outsourced) or how much we import. Our future lies in our ability to be world leaders in the high-tech, new idea realms. Other nations will still need our leadership in cutting edge industries and that is our future."

Headline:

China's Lenovo has become world's No. 3 PC maker

Company completes $1.75-billion deal for IBM division

May 2, 2005

BEIJING -- Chinese computer maker Lenovo Group Ltd. has completed its $1.75-billion purchase of IBM Corp.'s personal computer division, creating the world's third-largest PC maker, the company said Sunday.

The deal -- one of the biggest foreign acquisitions ever by a Chinese company -- is expected to quadruple sales of Lenovo, already Asia's biggest computer maker, the company said earlier.

"Within weeks, we will be introducing new products as the new Lenovo," Stephen Ward, Lenovo's CEO, said in a company statement without providing specifics."

Let's watch over the next few years as China, which has been amassing billions of U.S. dollars, begins to purchase other advanced manufacturing capabilities and informtion. These are all tiny chips at the base of a massive monolith, but eventually the base can't support the rest. Let's hope that those 27 percent of parents who do think that a college education is a good idea (see yesterday's article) provide enough leadership for our nation's future.

Education Failure - All should get a college education

... even if they don't want one.

Two interesting articles in The Detroit News Commentary section:

• Attitude may make Mich. the new Mississippi
  

  "Michigan is doomed to be the new Mississippi. A backward state locked to a last-century industry, awash in ignorance and unprepared to seize the opportunities presented by new technologies and scientific advancements.

  That's the only fortune to tell for a state where just 27 percent of parents consider a good education essential for a successful life, and nearly half don't agree that everybody should go to college."
  

• Michigan must stress college for all students
  By Gov. Jennifer Granholm
  

  "If there is one factor critical to creating a stronger economy and more good-paying jobs in Michigan it is this: states with the most educated populations have the most robust economic growth and the lowest unemployment.

  Unfortunately, Michigan rings in at the wrong end of the spectrum on both counts. Only 22 percent of adults in Michigan hold a bachelor's degree. That's more than 10 points below the leading states. And we all agree that the state's unemployment rate is unacceptable.

  Our call to action is clear: We must make a college education a universal goal for every student in Michigan...."
  
  "This past week, along with Rep. Tupac Hunter of Detroit and Sen. Michael Switalski of Roseville, I introduced bills creating a new Merit Scholarship. The scholarship guarantees that any student who completes two years at any Michigan college or university will get at least $4,000 in scholarship aid. That's enough to pay for an associate's degree at most Michigan community colleges."
  

I may be missing something here, but passing a bill that says students who finish two years of college will get $4,000 aid may not have much impact on a population with a dysfunctional attitude toward education.

Yes, it may help motivated students... that is fine. But let's not fool ourselves into thinking that members of educationally dysfunctional subcultures... and there are several of those represented in Michigan... will suddenly change their outlook on life because they get a "resigning bonus" after two years of college... which they don't intend to start anyway.

Some earlier posts that may be relevant:

2020 Preparations - Step 1: Education

2020 Preparations - Step 1: Education (continued)

2020 Preparations - Step 1: Education (Continuing?)

Environmental Extremism - Energy Policy

It was interesting to hear the President of the United States agree with the energy strategy I detailed back in December.

Of course, I don't agree with everything he said. Some items such as growing corn to create ethanol to replace oil doesn't make much sense since it takes more energy resources to grow the corn than corn provides. But most of it was pretty good.

The cornerstone of the strategy must be expansion of nuclear power. That scares a lot of Americans. But the dangers of nuclear power are a carryover from old-style Soviet reactors... that were never in America. Three Mile Island is the only reacter in the U.S. that created a danger and that type of reactor is not what the President is talking about.

Go back and read some of my posts about energy including November 7. The president is right, too.

Faith, Belief, Truth: A new Pope

Everyone else has written about the new Pope, so I'll join in the fray.

Some general observations:

• He is old; his reign will likely be short
• He is German; he may live to be 100
• He is said to be conservative; he likes his faith to be faithful to its beliefs and truths
• He is seen as set in his ways; he likes the test of time instead of the opinions of the moment
• He is resolute in his public stances; he has some nasty nicknames
• He is new to the Office; give him a chance

Sometimes assuming a position of leadership changes people for the better or worse. Sometimes they don't change and people are disappointed. Sometimes they change and people are disappointed. You can please some of the people some of the time.

The popes of the 20th and early 21st centuries are significantly different from the popes of the 14th century. Why 14th century? That's about 700 years ago. Coincidentally, that's how much younger Islam is than Christianity. The popes back then were political beings as much as leaders of the Church. A lot of nasty stuff went on in the name of Christianity.

Today, the Church is fairly benign, unlike its Islamic counterpart. But, hey, a lot can change in 700 years. So, as we move toward the 28th century, we can expect a similar discussion among Muslims. Of course, they don't have a real counterpart to the Pope. But they kind of have "leaders" who interpret the Qur'an. Will it be the duty of Muslims to colonize distance planets and establish Islam among the "natives?" Or will the arguments center around whether genetically modified, irradiated, and molecularly-transformed pork is acceptable to eat?

Faith, belief, truth... heady stuff.

Traffic lights get an F in efficiency

This headline appeared in the online version of USA Today in Yahoo.

The nation's traffic lights are woefully inefficient and outdated, forcing frustrated commuters to sit in congestion, waste gasoline and pollute the air, a traffic engineering group said Wednesday.

Two-thirds of 378 traffic agencies in 49 states don't actively monitor traffic lights, or they simply respond to problems as they occur, the Washington-based Institute of Transportation Engineers reported.

Below is a copy of a letter I sent to Michigan officials.

September 9, 2003

Governor Jennifer M. Granholm P.O. Box 30013 Lansing, Michigan 48909	Sen. Gilda Z. Jacobs Post Office Box 30036 Lansing, MI 48909-7536
The Road Commission for Oakland County 31001 Lahser Road Beverly Hills, MI 48025	Wayne County Department of Public Services Administration Division 415 Clifford St., 8th Floor Detroit, MI 48226

Subject: Traffic Management

As an owner of two homes in Oakland County and a frequent traveler in Wayne County, it is apparent that there is an inconsistent effort to manage traffic flow on major surface roads. This has a significant economic impact within Southeast Michigan in time lost and fuel wasted.

As an example, Newburgh Road in Livonia between Five Mile Road and Eight Mile Road is posted at 40 mph. The signal progression is precisely the opposite of the posted speed so that traffic is halted at every light in that stretch. Other examples of signal progression that is idiosyncratic are M24 (Lapeer Road between Silver Bell Road and the Palace (sometimes, but not always, the world’s shortest green light southbound at Brown Road), and Telegraph Road between Maple Road and Long Lake Road.

There are many other high traffic locations that I could cite, but the point should be clear: lack of signal progression is wasteful and too frequent. Given the amount of taxes dedicated to roads, a simple improvement that would immediately benefit all would be attention to signal progression. It is not rocket science or even difficult mathematics. With computer control over signals, it should be nothing more than simple diligence. This is an opportunity to make a noticeable improvement in traffic at very little cost. And this improvement is totally independent of road construction costs.

By the way, the first time I brought this subject up was in the 1980s… and I haven’t seen a lot of improvement since.

Sincerely,

Bruce Hall

To be fair, some improvements have been made, but overall, very little progress is evident. Let's presume that poorly timed lights and resulting congestion increase fuel consumption by 25%. At $2.25 per gallon, that means that you are spending about 50 cents or so of each gallon on the failure of traffic engineers, who are paid with your taxes, to do their jobs properly.

Excessive Spending - Surprised by inflation?

Reuters reports this morning:

RPT-US consumer prices up more than expected in March

Wed Apr 20, 2005 08:42 AM ET
WASHINGTON, April 20 (Reuters) - Another surge in energy prices helped push U.S. underlying inflation up at the sharpest rate in 2-1/2 years during March, the Labor Department said on Wednesday in a report likely to reignite concerns that inflation is on the rise.

Reuters also reported:

Treasury debt prices dived on Wednesday after a surprisingly (emphasis mine) large rise in core U.S. inflation suddenly revived fears the Federal Reserve might have to be more aggressive in raising interest rates.

My question is: why would anyone be surprised that prices have gone up? Let's review the basics again.

• Import excessively versus export - value of dollar falls relative to other currencies
  
• Dollar value falls - inflation happens

Now some will argue that oil prices have risen independently of the 30% or so devaluation of the dollar in the last two years. Uh-uh. A big "duh" to those people. If we didn't have the "outsourced", hugely excessive, trade imbalance, we could then reasonably expect to be surprised by oil prices going up as dramatically and renewed inflation pressures. But because demand for oil has been high worldwide, oil prices reflect both the demand pressures and the weakness of the dollar.

Still think they are unrelated? Remember those cheap airfares to Europe? They are a fond memory... and that's all. And as soon as China floats its currency, the real impact of the dollar devaluation will hit home.

It's payback time. The economy is sluggish, manufacturing is dormant, cities are struggling... and inflation is getting higher. I suspect the next 5-10 years will be a pretty tough adjustment for many.

Time runs out on Detroit mayor

It's not that none of us didn't know this:

Time: Mayor is among 3 worst
(From The Detroit News) Time magazine named Detroit Mayor Kwame Kilpatrick one of the nation's three worst big-city mayors in this week's issue, adding to the problems facing him in this mayoral election year.

The 5 Best Big-City Mayors

	Chicago: Richard Daley
	Atlanta: Shirley Franklin
	Balitmore: Martin O'Malley
	Denver: John Hickenlooper
	New York: Michael Bloomberg

Excessive Spending - Devaluation Equals Inflation

It doesn't matter that there is a trade imbalance... except...

Bank of Canada says further US$ fall needed

Just think it through:

• Tangible goods in; dollars out
• Too many dollars out; not enough U.S. goods or assets wanted
• Value of dollar falls globally
  
• Cost of global goods go up (e.g., oil)
• Cost passed on to U.S. consumers (inflation)
• Federal reserve raises interests rates to "combat" inflation
  
• Economy falls

It just doesn't matter... right... except it's all related:

Downside risks to world economy have increased-Rato

DeNial is a river in DeTroit

Both the Detroit Free Press and The Detroit News had extensive coverage of Mayor Kwame Kilpatrick's proposed budget cuts. As the Free Press article stated:

The mayor said 754 city employees will lose their jobs, remaining city workers will be asked to take a 10-percent pay cut, and voters will be asked to approve a 2-percent tax on fast food.

And, for the first time in more than 20 years, firefighters will be cut. Kilpatrick said he will lay off 61, as well as trim 38 paramedics and dismiss the current police academy class.

The mayor's austerity plan is the latest blow to a city that already has endured closures and layoffs in the public and parochial school systems, church closings, the seemingly nonstop erosion of its tax base from fleeing businesses and residents and bad publicity from local and national media.

But Kilpatrick said the plan -- which faces stiff opposition from unions and, possibly, the City Council, which must approve it -- is the only hope to eliminate a projected $300-million deficit. He has proposed a $1.4-billion budget for the 2005-06 fiscal year, which begins July 1.

Not mentioned is that one of those jobs being cut will cover the cost of the Mayor's leasing of a big, bad Navigator SUV for his use (or a girlfriend perhaps?) that is being paid by the city.

Okay, he is finally trying to face reality (sort of), but it appears that a lot of the "movers and shakers" in DeTroit are also in DeNial.

For more on this: click here.