Wednesday, December 29, 2010

Fill her up!

I pulled up to my corner gas station and noticed that the price of gas had inched up ten cents more. Every day the price goes up by a few cents. It is now over three dollars a gallon. I thank God I no longer own the Toyota that only accepted premium gasoline. If I tried to cheat and mix it with lower grades, it sputtered and jerked unhappily until it stopped.

I noticed the few Prius owners giving me superior looks of "I am saving the planet, why are you driving something else?" I am picturing the huge battery in the trunk of a hybrid that is very toxic and expensive to dispose of, actually causing more damage to the environment than my conventional exhaust spewing engine. Who thinks that a Prius is a nice-looking, muscle car?

I asked the gas station owner why his prices are going up every day. He tells me that there is a tacit collusion between owners, he would get chewed if he did not charge the same price as the other owners. As far as why he thinks gas is going up, he shrugs his shoulders and goes about his morning routine.

I am thinking of OPEC and their overt collusive successful attempts of controlling oil prices and production. The 11-member Organization of Petroleum Exporting Countries has reduced production of oil times and times again in the interest of raising prices world-wide. In a sense, since they are producing 40% of the world's oil production, they have the power to control how we live and what we pay to fuel our economy.

OPEC is a cartel and economists in general view cartels as terrible forms of market organization as it is inefficient and flies in the face of consumer welfare. They control somewhat the price and certainly the flow of oil. History has shown that price controls on various commodities have caused painful shortages.

A war in 1973 between Israel and Arab nations caused OPEC to quadruple oil prices. Prices of raw materials shot through the roof while food prices increased as well in part due to poor harvests in various parts of the world. As energy became more expensive, businesses cut back, causing a reduction in productivity and thus a recession.

Things are never as simple as they seem because there are too many variables coming into play. If one adds enough variables, just about every economic theory proves to be wrong and so are the textbooks espousing them.

In 1933, President Franklin Roosevelt established that the U.S. would buy and sell gold at the constant rate of $35 per ounce. Officials at Bretton Woods conference in New Hampshire turned to the dollar as the basis for a new international economic order after World War II since the U.S. held the lion's share of the world's gold reserves.

When Richard Nixon ended in 1971 the dollar to gold convertibility, Pandora's box of ills was opened wide. The dollar had been fixed at $35 per gold ounce for a long time. Anybody knew how to convert foreign currencies on any given day into gold and into dollars. There was no fluctuation between currencies on a day by day basis. Money was always worth a certain amount of silver and gold and that never changed.

Nixon opened a huge can of worms, allowing politicians in Washington to print paper dollars out of thin air, without any backing by goods and services, thus causing inflation. And the out-of-control spending began.

Gold is a commodity in relative short supply as all the gold that was ever mined can fit into the cargo hold of a large petroleum tanker. We are not likely to find any huge reserves to be mined any time soon. Mining for gold is a very painstaking and expensive process as it takes the removal of tones of dirt and/or stone to harvest one ounce of gold. Gold prices go up and down, currently most up, in the stratosphere of $1,300 plus per ounce, but its worth as commodity money never changes. It is the value of the dollar with which gold is purchased that fluctuates wildly since the dollar is a currency deemed "worthy" by "fiat" by the American government. "Fiat" is a Latin term for "let it be." Otherwise the dollar is only worth the cotton/linen paper it is printed on and the labor and ink involved in printing it. The wild fluctuation in value has to do with the amount of currency in circulation and the faith and trust in American government and its investments.

The worth of a currency is determined by many factors such as inflation, demand for investment and goods in a specific country, interest rates in that country, just to name a few. The most interesting variable that makes a currency desirable or not desirable to have is the faith in the government of that country and the political stability of its government. We all know right now how much faith American people have in their own government, its policies, and its ability to run the country. If Americans don't trust their government, how worthy is the U.S. dollar? If public confidence sinks, the dollar devalues. This devaluation of the dollar by printing money without backing of goods and services is called inflation. And the Federal Reserve System, our central bank, is doing just that at the moment, in order to deal with the vast spending that the 111th Congress engaged in 2010. As a matter of fact, this Congress has spent more this year than all the previous 110 Congresses had.

Complicating the picture are petrodollars, or oil dollars. Petrodollars are U.S. dollars earned by a country from the sale of petroleum. The term was coined in 1973 by Ibrahim Oweiss, a professor at Georgetown University.

The Bretton Woods conference in New Hampshire established the dollar as the world's "reserve currency." This is a fly in the ointment because oil is bought all over the world using the U.S. dollar as an international currency, a global medium of exchange. OPEC keeps increasing the price of crude to guard themselves against future drops in the value of the U.S. dollar which is the international currency that oil trades in.

If the U.S. allows the free fall of the dollar by printing huge amounts to deal with its government out-of-control spending, OPEC sees its revenues plunge and has no other choice but to raise oil prices. Add to the problem the speculating on the Chicago Board of Trade of oil, currency, and gold commodities futures and you have a severe crisis.

Since gold is a reliable commodity, people are buying it in larger quantities, including oil rich Arabs who see their dollar holdings worth less, day by day, thanks to the American government's inept handling of the economy and out-of-control spending. Whether this is done on purpose to bankrupt our country, that is another issue.

After 1971, U.S. could buy crude oil for as little as $1 a barrel - now it is approaching $100 a barrel. Consumers could buy premium gas for as little as 28 cents a gallon in the early 70s. Gasoline is now approaching $4 a gallon in some states.

Are we a self-sufficient nation that could drill its way out of this problem instead of shipping our wealth and prosperity to oil rich nations who wish as harm? The seven year moratorium on drilling in the U.S. imposed recently by the Obama administration certainly dooms our ability to become self-sufficient in oil production. Many nations such as China, Russia, Cuba, Vietnam, Venezuela, Brazil, to name just a few, are furiously buying oil leases and drilling in the Gulf of Mexico, right in our own back yards, exploiting our reserves while we are forbidden by our own government to drill.

There are rich oil shales that could be exploited as well, but environmentalists lobby Congress constantly to forbid drilling and exploration in their zealous attempt to either protect the environment or some endangered species of rodent, amphibian, bird, or fish. In the process, the interest of protecting humans becomes irrelevant as humans are seen as more expendable. According to environmentalists, there are almost 7 billion of us, and we are straining the resources of the planet. White House czars advise that population must be culled drastically in order to reduce the permanent damage we cause to the environment by our mere existence.

As we watch the price of oil escalate yet again, our economy and standard of living will suffer immeasurably, since crude oil is the engine that drives the energy behind our productivity. Our way of life and survivability are inexorably threatened.

Thursday, December 23, 2010

Education or Common Sense?

When I was a little girl, having a baccalaureate degree meant something. Although literate, most people were not college educated. Graduating from a professional high school that actually taught a trade was highly respected. Attending and graduating from a two-year technical school was an achievement. Few people attended college in spite of the fact that it was free. There was no shortage of people wanting to go, just a shortage of colleges, professors, and resources.

The competition to attend a university was so fierce, there were at least 10 students viying for one seat. You really had to be the creme de la creme - perfect grades, perfect scores on high school exit exams, and stellar scores on college entrance exams.

Socialism promised equality and free education for the masses, but resources were limited and thus rationing had to be instituted through very tough entrance criteria - only a select few could attend. Often, those select few were children of the ruling elite and thus automatically admitted in spite of their mediocre scores.

People were proud and content to have an eighth, tenth, or twelfth grade education. Each represented a different ability level and professional track. I say twelfth grade because many students were unable to get their high school diploma as they could not pass the baccalaureate exams.

When mom was young, under the monarchy, education was not free and most college students were children whose parents could afford, managed to borrow, or saved to pay the tuition. Most families were large and could ill afford to send so many children to college. Perhaps one of out six siblings attended college, the rest chose professions or trades with less education.

Villagers had large families - their children cared for their younger siblings and raised and harvested the crops that provided the family's survival. There was no birth control and religious beliefs forbade abortion.

Children skipped school a lot to help on the farm; their education was not up to par and many dropped out of school completely by the seventh or eighth grade. Most of my mom and dad's siblings had to complete their education as adults in night school during the communist regime.

People tend to confuse education with intelligence by assuming that anybody who is college educated must be very intelligent and those who are school drop-outs must be unintelligent. That is certainly not true.

Common sense and intelligence are also misunderstood - one can be intelligent and have no common sense or conversely, have common sense but not be particularly bright. Stereotypes and human values are assigned to all people based on their educational level, perceived intelligence, and common sense or lack thereof.

The wisest sage in my grandpa's village was the shephard who walked around half-enabriated most of the time, with a happy smile and an infectiously positive life view that astonished everybody. He never completed fifth grade and had difficulty signging his name, it was painful to watch him scrawl his name for five minutes. He had a lot of common sense and innate intelligence.

I've met my share of educated people from prestigious universities who had no common sense, a warped and shallow world view, and superficial knowledge in general. Their only claim to wisdom was the diploma that stated the potential to learn.

Wednesday, December 15, 2010

Green Salad in December?

I am staring at my beautiful ceramic bowl filled with a luscious chicken Cobb salad. The lettuce is crisp and fresh green, the cheese aromatic, the balsamic vinegar is divine, small strips of organic chicken, diced fresh tomatoes, bits of eggs, and the piece de resistance, real bacon.

The room is cozy and the fireplace radiates warmth from the dancing flames. There are smiling, glowing faces all around me. I let the moment sink in as I ponder where all this abundance comes from. It certainly is not from the government or my garden, but the hard work of so many people driven by their self-interest of the "evil" capitalist system. Here I am, an ordinary citizen, having a wonderful green, fresh, and colorful salad in December.

Could I have had this delicious treat that we take for granted every day in my former country, communist Romania? Not by a long shot. The ruling elite would be able to eat anything they wanted but not the "unwashed masses." We were relegated to dried beans, bones stripped of meat, or canned vegetables - if we were lucky.

Government bureaucrats told us how much we could and should buy on the market via five year plans that failed miserably to provide enough food, nutrition, and goods for the needs of the population. Central planning did not take into account demand and size of the population, it was based solely on perceived need and centralized supply, randomly and haphazardly determined by people who had no idea what they were doing, beyond the ideological rhetoric of communism.

There was never an abundance of anything. The best food was shipped to export for hard currency and the rejects were brought to the market to be divided unfairly between the large substrata of the population. Luck, barter, rationing coupons, black market prices, patience waiting in interminable lines were some of the variables determining whether you ate or not that day.

The hard currency bought industrial equipment and expertise, to develop an industry that had no chance of flourishing because factories were never run on a competitive model, they always lost money, and were bailed out by the government.

I wonder how liberals would feel if they had to do without their organic food, fresh food, or food in general? Would they change their "save the earth" tune or "capitalism is evil" tune if they were starving? Do they realize that abundance does not just happen, it is not willed or ordered by the government bureaucrats, it is the coming together of many self-interests driven by the lure of profit? We are successful because we work hard, knowing that in the end, we get to keep part of our hard-earned labor. We don't have to wait for the government to bring us what we need because, frankly, they cannot do so.

I thank farmers for growing my lettuce, tomatoes, chicken, pigs, grapes, dairy cows, and olive trees. All gave me the opportunity to buy this luscious salad today. Less than 3% of the population feeds the rest of us. It is an unsung profession but highly respectable and important to our survival. They work very hard to provide the fruits of their labor to the market with the lure of profit in mind. It is not evil, it is justly theirs for getting up very early every day during the growing season and going to bed very late at night during harvest. They are unsung heroes who give sustenance and blood to our way of life, the highly successful capitalist model.

Sunday, November 28, 2010

Social Engineering

Government dictated land use under the guise of sustainable development, sustainable communities, and social engineering are seemingly innocuous euphemisms. The reality is much more sinister, it is communist control of land use, agriculture, and housing.

I see in my mind's eye the grey landscape of drab and dirty concrete apartment complexes, crowded on the periphery of towns, close to polluting refineries, black smoke spewing steel factories, chemical plants, and other noxious industrial platforms.

The occupants of the small, one bedroom, one dining room, one bathroom, and one tiny kitchen apartments, had been living in villages surrounding large cities. They had been forcefully moved so that the land they had previously occupied and owned could be confiscated, controlled, and farmed by the government for the "good of the people." It was learned soon enough that the "good of the people" did not really exist, it was just an euphemism to enslave everyone to the communist party and its "caring" for the downtrodden.

A few villages escaped this social engineering because they were either too remote for practical mass agriculture or too scattered across the hills and mountains. Such was the case of my paternal grandmother's village, perched high up in the Carpathian Mountains, a rocky but rich soil. Scattered patches of land allowed the locals to grow grapes and fruits, undisturbed by the confiscatory land grab of the communist party. Farmers were able to make wine, jams, preserves, sell fresh fruit, while keeping all income. Being so isolated from the beaten path and being connected to the world by one weekly bus, made it impossible and impractical for communist revenuers to come claim their lion's share for the "good of the people."

The neighborhoods that had been developed by the government "largess" on the outskirts of towns were very poor and a sorry excuse for city living. Some did not have paved roads, running water, plumbing, or electricity. The mayor did not care about their fate although it was his job. Over time, buildings decayed from lack of maintenance, updating, painting, roofing, earthquake damage, were eventually demolished or left abandoned just like a ghetto area in the U.S.

Row houses separated by wooden fences looked respectable on the outside but were not connected to any modern conveniences and lacked bathrooms. A wooden shack, the outhouse, loomed very smelly in the back.

The apartment blocks fared a little better because they had electricity, water, sewage, and garbage pickup when the government provided them. The problem was that the government could shut them off any time it wished, without prior notification. This included water, hot water, steam heat, electricity, and garbage pickup.

People had to maintain everything, clean, and provide security. Many blocks turned into ghetto areas, best to be avoided. Some became really dilapidated especially if occupied by gypsies who stripped them down and sold all interiors for spare parts, then abandoned them. What was the law going to do? There were not enough jails for all recidivists. Besides, gypsies could come and go as they pleased, they were feared by everyone.

Before the arrival of the communists to power, people had bucolic life styles, sufficient food, homes they called their own, a small plot of land which they farmed and produced enough food on for their families and extra for the city market. Communist social engineering changed that - most became poor, needy, hungry, cold, homeless, landless, and certainly lacking their human dignity as they became totally dependent on the government for all their needs. Nobody would own much of anything, everybody had to rent from the government.

If, in your American naivete, are ever persuaded to even think that social engineering is a concept worthy of discussion, consider this - it is a communist code word for mass poverty and government dependency in perpetuity. Don't take my word for it, study history and review the same failed experiments in Cuba, formerly Iron Curtain countries of Eastern Europe, North Korea, and China, to name a few.

You can even take a short trip to Cuba to see the blight and dilapidation of formerly beautiful homes. So many inhabited buildings in Havana are in such bad shape that even Roman ruins like the Coliseum, are better preserved. These buildings that would be condemned in this country, were "socially engineered" and fundamentally destroyed by Fidel Castro's communist regime. Cubans owned homes, hotels, and land before it was confiscated through clever rhetoric, finally by force, and distributed as rental property to the "proletariat." All fell in a sorry state of disrepair and remain that way to this day.

Saturday, November 27, 2010

Analogies between communism and U.S.A. today

What are the analogies between the progressives agenda today and communism? Why do we have czars in a republic? Czars are certainly elements of Russia, not the United States.
Why do we need total government control or the nanny state? Can we not make decisions for our own lives and families?
Why do we need to be told what to eat, how much to eat, and when and where to purchase our food? Why do we have to be controlled how much sugar or salt we eat? Why do we have to be taxed more if we smoke? If smoking is bad, why are most pension funds invested in tobacco companies?
Why do we need to connect our homes to the power grid? Should the government tell us how much electricity we consume and when? Should we give them control over our thermostat at times when we like to use our heat or cooling the most?
Why do we allow government to brainwash our children that spreading the wealth is good and fair? Why do we allow them to be indoctrinatedd that religion is bad, that sex before marriage is good? Do we need the government in our bedroom as well?

Happiness and Pessimism

How happy are we? Are human beings supposed to be happy all the time? Are physical pain, mental anguish, suffering, and regret part of everyday life? Is pessimism a more predominant part of who we are, or is it happiness? Can we be happy and positive all the time? Is it wrong to be a realist and a pessimist? Can a person be both without being shunned by society as a "toxic" individual? Such labels are hard to overcome once imposed on someone. We do it with children at an early age. Schools are notorious for doing so in kindergarten and even day care. If a child is a little more active thant he average one, he/she must be put on meds to control his/her hyperactivity. If a child is quiet, he must be autistic.

I remember my daughter's first grade experience at the age of 5. She was really tall for her age and very mature. Since school started in September and she was born in November, she was two months shy of the "legal age" for school. She was ready in every way but she was very shy and quiet and certainly overwhelmed by the presence of all her classmates. The impatient and unqualified teacher immediately labeled her mentally retarded and thus had to be put in a special education class. This label was placed on her after less than a day of interaction or lackthereof. My daughter was overwhelmed with everything and kept quiet the entire day. This would have earned her a lifetime of special ed classes. I took her out, enrolled her in a private school and she thrived in gifted education with a higher than average I.Q.

Overabundance

When I was a child, I had very few toys: a doll with a chipped face, a teal colored doll bed with a miniature comforter, and 9 piece wood puzzle blocks that formed pictures of various fairy tales if matched correctly. This forced me to be quite creative during child play and brought many neighborhood kids outdoors for improvised games of chase, hide and seek, sledding, ball playing, hop scotch, chess, and dominoes.

Poverty encouraged us to dream of faraway places, fantastical creatures, dragons, kingdoms, and mythical heroes. It did not cost us anything to dream. We were imaginative, creative, and free to wonder in the recesses of our minds that otherwise would be left untouched.

When we could find colored pencils and paper, I drew images that my mind created, unencumbered by outside influences. Clay was plentiful and I taught myself how to model it into figurines and primitive looking vessels. I was not going to win any art contest but I had so much fun. Playing with mud pies on my grandpa's farm helped shape the love of art. I never owned an art book - I admired pictures in art gallery windows and library books.

We did not have Barbies, Ken, Nintendo, PlayStation, computer games, or any electronic gadgets or games, yet we were more creative by necessity. Why did we not create such toys and games like the Americans? Because we were not allowed to be different, to express our uniqueness, we were encouraged to excel, but within the parameters of the group, of the collective.

Standing out was discouraged, bourgeois, and thus punished. A communist society by definition was a "shared," based on equality society, nobody was allowed to be better than anybody else, except for the ruling elite.

Schools made some concession to achievement by awarding book prizes at the end of the school year for good grades. It was the only glimmer of self-esteem allowed. Contrast this to the liberal educational doctrine today to give everybody a trophy, to make everyone a winner, to promote everyone, to social promotion, or risk hurting their feelings and self-esteem.

Should we fail to reward bad behavior, bad grades, and bad performance, the legal system is there to sue us at the drop of a hat. We are the most litigious society on earth and spend more on self-insurance to avoid unpleasant lawsuits. Teachers are afraid to come in direct contact with their students, counselors counsel with wide open doors, and principals use witnesses during conferences with parents.

The uniqueness that made this country great, is now discouraged and shameful, pushing children towards uniformity and communism. In communism everything is "communis," as the Latin term describes, "shared." Sharing may be a virtue in the Bible but under communism, it is a misnomer. Nobody really shares anything. There are poor people and the elites. If I demand my "share" of the pie, of the country's wealth, I am laughed at and sent to a gulag.

We were punished when we were bad, our parents were humiliated, we were humiliated, we were held back in school if our performance was not up to par, we got bad grades if we were not prepared every day, repeated the year if we had to, no social promotion there, nobody threatened to sue the school, bad behavior was not only not tolerated, but was harshly punished. We got up, dusted ourselves off, and tried harder next time. Discipline and failure were natural consequences to bad behavior and under performance.

American parents who are enablers of their children's poor performance in school and preposterous behavior in society, are responsible for overindulging their children with material possessions that are beyond the needs of a child and do not promote healthy developmental, moral, and ethical compass.

Educators catch the brunt of parental and societal displeasure for their children's poor performance. Mom and dad fail to take responsibility for the first six years of a child life that shape who they are and how they will behave and perform in society.

Parents abdicate their roles completely and expect teachers, who are often ill-prepared to teach the subject matter to which they are assigned, to also become surrogate parents who will magically change all the neglect and sometimes verbal and physical abuse children suffered in their first six years of life.

Society's flawed solution to "fixing" this problem is to waste more money on education and demand more accountability and longer work hours from teachers, when the fix would be quite simple - raise responsible and involved parents who stop spoiling their children materially while spending more time with them and supervising their homework. There is only one other country in the world that spends more money on education than we do, Luxembourg, a rich country the size of a postage stamp. And we have precious little to show for our expenditures on education and our lavish, overabundant parental material spending on our children.