On shoring

The practice of off shoring manufacturing jobs had its beginnings in the late 70’s and 80’s but accelerated with the NAFTA free trade agreement of 1992. For those old enough to remember the presidential debates, where candidate Ross Perot said about NAFTA, the giant sucking sound you hear is the sound of jobs moving to Mexico. Next came Chinas entrance into the WTO in 2001 and this resulted in the transfer of millions of jobs and hundreds of thousands of companies moving part of their operations out of the country. The devastation to American industry can be seen in the rust belt states of middle America. This has resulted in large corporate profits and an income and wealth gap. In the United States, the top 10% of households hold roughly 69% of the total wealth, while the bottom 50% hold only about 3%. This basically transferred both income and wealth from those people who worked for wages to those who worked for salaries. It was the middle- and lower-income groups that got hurt the most. This whole process was called globalization and Trump is trying to reverse this by bringing jobs back home. By March, foreign companies committed to $3 trillion in new investment in the US. One incentive that government can use to bring home jobs is tariffs. For many years tariffs have worked against the US but this is changing but not without disruptions. Those who are adversely affected will try to old onto the old ways and the fight is now on between the globalist and the proponents of on shoring.

Germany

With tariffs in the news, it is time to compare Europe with the US or more specifically Europe’s big manufacturing country, Germany, with America. For many years the US has run trade deficits while Germany has had trade surpluses. Germany’s national debt is 62% of GDP while the debt in the US is 122%. Germany spends 1.5% of GDP on defense while the US spends 3.7%. Germany spends .87% of its GDP on interest on the debt while the US spends 3.0%. Germany is in a much better economic position for three reasons. First, they rely on the US for their national defense. Second, they have high tariffs on all goods from the US. Third, they have a trade surplus meaning a small national debt. All three of these advantages are only possible because of US foreign policy. Germany wants the EU to consider using its most powerful tool to retaliate against Trumps trade war. Germany’s leaders still hold out hope that a free-trade agreement could follow Trump’s tariff “mania.” The ball is now in their court. Germany is representative of Europe and for almost all of the countries of the world.

Fat waste

There were protest around the country this weekend, as people came out to object to the way Trump was cutting government. They said it was the responsibility of congress to cut. While this is true, the congress is not only responsible for the budget but also for over sight. In other words, the job of congress does not end when it allocates money to some agency, it includes a follow up to see how the money is spent. Congress has failed to follow up and government spending, which was 15% of the GDP in 1950 is now 37% and has resulted in a $36 trillion dollar debt. One of the top priorities of each congress person is to get reelected and this makes it difficult for them to control the spending. If a congressman goes before his constituents a says he wants to cut the fat from government, everyone agrees but not their fat. If he tries that he will be primaried at the next election by someone who promises not to cut the fat but will add more fat. Trump is trying a new approach by bringing in an outsider, Musk, who is not concerned about being reelected and willing to cut the fat. Mistakes are made because it must be done before the next election. There is another hurdle because it is Trump. In the 90’s Clinton cut the federal work force by 400,000 and there was no protest. It is the same old story. People all understand that there is waste in government and they want it to stop but not if it means cutting their benefits. -- When the people find that they can vote themselves money, that will herald the end of the republic. -- Ben Franklin.

Trade

It’s time to take a closer look at tariffs. First off, the best situation is to have free and fair trade which under the best conditions means no tariffs. If that is so then why do so many countries have tariffs and why is the US entering the tariff scene. The answer is all about the word fair. China wooed American companies by using low prices. Over the past 50 years American companies discovered that they could produce products in China at such low prices that they could even absorb the higher shipping cost and make more money than producing goods in America. How China was able to do this is something that was rarely considered by US companies. To start with their labor cost were cheaper, sometimes even using slave labor but over time that difference narrowed. China did not have the environmental restrictions nor the worker protections that the US has. China used government subsidies to lower production cost and China manipulated their currency to promote cheap exports. All of these things resulted in unfair trade practices. China had a simple plan that worked quite well. They would use the above mention advantages to produce products below manufacturing cost and flood the world markets with these cheap goods. In time they would run competitors out of business. This hurt US manufacturing. One example is the steel industry. Before 1970 the US made more steel than any country in the world. This year the US will make 80 million tons of steel and China will make one billion tons. This means that the steel used in the US to produce US cars is made from Chinese steel. This same thing happened in many products and the US lost much of its industry. This is about to change as the end of globalization is bringing industry back to America. Tariffs are being used to accelerate this process. The establishment in the US has profited handsomely from this global trade at the expense of the US worker and they are fighting to maintain the status quo.

Fair trade

Karl Marx said that capitalism would fail because the proletariat (poor) doing all the work, would rise up against the bourgeoisie (rich) and move to a socialist type government, where the people owned the businesses. Then along came Henry Ford and did something that Marx had never thought possible. Henry was paying $5 per day in 1914 when you could buy a new Ford for $260. Marx, in is wildest dreams, never thought that the workers would be able to buy the products they made. This opened the door to what came to be called a consumer-oriented economy and it stayed that way for 80 years, while the country built up the biggest middle class in history. Then starting in the late 60’s things changed. Manufacturing jobs were sent overseas and corporations and financial institutions took control of the economy. During these past 50 years the democratic party, long considered to be the working man’s party, became the party of the rich white educated and the working people now look to Trump for help. He is reversing the trend of the past 50 years and is bringing good jobs back home. He is telling the other countries that the US will no longer be the world’s policeman and that they must have fair (reciprocal) trade agreements.

Revolution

In years past most companies sold stock to get money for growth but in recent years companies have turned to private equity firms like Blackstone and Carlyle. The advantage is that private equity firms are not subject to government oversight. Thus, they can offer a higher return with lower risk and that in itself should be a warning. A public company can be quickly evaluated by its stock price but with private equity the public must rely on managements value. As the number of private equity firms end up in bankruptcy the public trust is waning and the growth in this area is declining. This decline is part of the Trump revolution. The economy is moving away from the trend toward finance back to the old ways of manufacturing. The influence of the big banks will also lessen as smaller banks begin to make business loans. Big corporations will rely less on mergers and start to build new facilities which means more emphasis on manufacturing. For people who were adults in the 50’s and 60’s this will be a return to the old days but for most people this will be a new experience.

Trade

A good example of the unfairness in tariffs can be seen with the difference between the US and Germany when it comes to auto imports. The US charges a 2.5% tax on German auto imports and Germany charges a 10% import tax plus a 19% value added tax. In the United States, the Cadillac Lyriq is available from $58,590 but customers in Germany, where the EV has just been launched, will have to pay almost $30,000 more for one. The new Trump proposal increases the US tariff to 25% but it still leaves the US in and unfair situation. Other European countries also have tariffs plus value added taxes. Almost all of the US trade partners are charging higher tariffs than the US and Trump is attempting to minimize the difference while still giving other countries the advantage. These other countries are not happy as they see Trump’s fair-trade policy as unfair to them. This is an attempt to reduce the one trillion-dollar US trade deficit. The plan is to encourage other countries to lower their tariffs which in turn will allow the US to lower tariffs and in the long run have lower tariffs for all countries.

War

During the three-year Ukraine War more than one million have been killed or injured but the battle rages on. The war has resulted in widespread destruction, displacement and a humanitarian crisis, with millions facing food insecurity, lack of basic necessities and trauma, while also causing significant damage to infrastructure and disrupting education and healthcare. Meanwhile those in the West are safe in their homes and the military industrial complex racks up the profits as they restock their weapons of war. The West has contributed $287 billion to the war effort. Grain exports are down resulting in food shortages in Africa. Natural gas is cut off from Europe resulting in a 400% increase in utility cost and a two-year recession in Germany. Recent polls show Americans favor continued support for Ukraine even if it prolongs the war. It appears that they agree with Biden’s, as long as it takes, plan.

Change

As the Trump revolution gets underway, it is time for a review of how we got here. It began at the end of WW 2 with the formation of the United Nations followed closely by NATO. The 50-year cold war signaled a change in the world order with the US being at the top of the heap. As the battle between communism and capitalism took hold, technology led the way to automation and increased productivity. The next step was the movement of industrial jobs to lower wage markets like China. As manufacturing moved out the service economy filled the gap and this opened the door to the modern American financial business. This brought low inflation and low prices for imported consumer goods but it was a death blow to good paying manufacturing jobs in the US and Europe. While the wealthy people and large corporation saw their fortunes rise the working people saw their wages stagnate. Companies began moving over seas and taking the jobs with them. Our country has suffered from rising income inequality and chronically slow growth in the living standards of low- and moderate-income Americans. This disappointing living-standards growth—which was in fact caused by rising income inequality—preceded the Great Recession and continues to this day. The policies of Biden, American First and Trump make America Great, have attempted to reverse this trend and those who have profited from the global economy are fighting against these changes.

Hyundai

When Hyundai started its new plant in Georgia in 2022 to build electric cars, many people wondered about such a decision. The future of EV’s was in question at the time and even more so today. At the grand opening this week, the talk was slightly different with no mention of EV’s but talk about hybrids. Will this change again and move toward gasoline cars? If the US introduces tariffs on imported cars, Hyundai will be encouraged to produce gas power cars here in the states. The demand for Hyundai will be high, at least at the start, as other companies try to build new production plants here in the US. This plant is designed to produce 500,000 cars per year and the demand will be there if imports slow down because of tariffs.

France

This week, after a nine-week trial, Marie Le Pen and 24 others from her campaign were convicted of misusing $3 million dollars of European Parliament funds to pay for party staff between 2004 and 2016. All have denied the charges. It was established that these people were working for the party but had no specific task. Until this week Le Pen, the leader of the far-right party, The National Front, was the likely winner in France’s next presidential election set for 2027. She was banned from holding public office for the next five years.

Cars

Those who profited from globalization are concerned as Trump leads the world away from the old established ways and into the make America great world. The news is predicting a downturn in the world economy as one of the first changes takes place this week. Trump is introducing reciprocal tariffs. This means that if any country charges tariffs on US goods the US will charge an equal tariff on that country’s goods. This shows how dependent the established order is on current tariff practices of discriminating against the US. The US is merely promoting the concept of free and fair trade. The world likes the free part but not the fair part. For many decades Europe has had a 10% tariff on US auto imports while the US has a 2.5% tariff on auto imports from Europe. Trump is about to change that and here is the response from Europe. “I deeply regret the US decision to impose tariffs on European automotive exports,” von der Leyen said in a statement released late Wednesday evening. “Tariffs are taxes — bad for businesses [and] worse for consumers equally in the US and the European Union.” A much better approach would be for Europe to reduce their tariff to match those of the US at 2.5%. When both sides are charging the same, they can take the next step and remove the tariffs. In 2024 8 million cars were imported to the US mostly from Europe and Asia. In contrast 300,000 US cars were exported to Europe. Less than 1% of cars sold in Japan are US imports. This is just cars but almost all other products are similarly treated. That is why the world is upset.

Biden tariffs

In his first term, Trump's tariffs were an about-face from decades of free trade policy. Economists warned that American consumers would pay the price, U.S. companies complained they would lose money to foreign competitors, and Democrats piled on Trump for a shift they criticized as haphazard. Biden came in and not only kept the tariffs on China but added to them increasing the rate on EV’s to 100%, 50% on solar cells and 25% on EV batteries, critical mineral, steel, aluminum, face masks and ship to shore cranes. The press was quiet. Now Trump is once again increasing Tariffs and the press is speaking out. This back and forth gives the impression that tariffs are more about politics than economics.

Tariffs on EV's

The Chinese have a history of using cheap labor sometimes slave labor along with minimal regulation for safety and the environment and government subsidies to produce low-cost items. They then flood the world markets with lower priced merchandise and run competitors out of business. Over a 40-year period they were able to turn the great manufacturing middle American into the rust belt. Before Trump became president in his first term, he promoted the idea of tariffs. While in office he placed a 25% tariff on Chinese cars and later Biden increased it to 100% and the result has meant no Chinese cars in the US. Europe was slow to react and they are now in a panic. EU imports of Chinese EV’s jumped from $1.6 billion in 2020 to $11.5 billion in 2023. The Chinese car sells for $21,500 and the EU equivalent sells for $45,000. On October 4, 2024 EU member states approved tariffs on Chinese electric vehicles (EVs). The move follows a historic rise in imports from China, which spurred an in-depth investigation by the European Commission that found widespread state-support for China’s EV industry. The EU imposed tariffs on China-made EVs at the end of October after an anti-subsidy investigation, including 17.0% for BYD, 18.8% for Geely and 35.3% for SAIC, on top of the EU's standard car import duty of 10%. Jan 24, 2025 These tariffs saved the US auto industry and the UAW understands that. The result is that the US consumer will pay a higher price for EV’s but there is now much in the news about this.

Opinions

The news is filled with articles about how polarized the country is and this is only because people refuse to consider other opinions. Shortly after 9-11, I joined a Muslim chat room so I could better understand their view points. One thing I quickly discovered is that they expected me to defend the US in all areas. I quickly pointed out to them that while I felt the US was the best country ever, I understood that many mistakes had been made and I had no intention of trying to justify those mistakes. This is the way people should look at the political party they support. You do not have to defend every thing your party does. Each party has members who are far away from center and often times they have ideas that are difficult to swallow so don’t. Evaluate the party positions and go along with those that seem reasonable and discard the others. When the far-out groups in your party make, what you consider outlandish statements, feel free to disagree. It will give you more credibility on the issues that are important to you.

Growth

Everyone agrees that the national debt presents a serious problem to the long-term health of the economy. There are four ways to reduce the debt or at least keep it from rising faster than inflation. The first two are obvious. Increase taxes or decrease spending. Neither of these are effective. Experience has shown that when government revenues increase the money is not used to pay down debt but to initiate new programs to gather new votes. Congress is unable to reduce spending for fear of losing votes so that leaves two ways. The best way is to grow the economy by increasing productivity. This provides new revenue without increasing inflation. The other way is to increase government spending at a slightly lower rate than inflation. Both of these ways are long term solutions taking as many years to bring the debt to zero as it took to get the debt we have today, which means about 75 years. Right now, the government is trying to grow the economy by bringing jobs back home. Whether this will work remains to be seen.

Autos

It is difficult to get objective news about the upcoming 25% tariff on imported autos and auto parts. While manufactures say they will not attempt to build more cars in the US to escape the tax, the unions are for the tax. "U.S. Automakers are committed to President Trump’s vision of increasing automotive production and jobs in the U.S. and will continue to work with the Administration on durable policies that help Americans." Last year the US imported half of all cars sold. There will be pressure on US companies to produce more here in the states, if they can reduce the cost by 25%. A car that sells for $50,000 built here will have a price tag of $62,500. It will take time to build new manufacturing facilities but existing plants can quickly increase production. While some U.S. auto plants do operate with three shifts for 24-hour production, according to Dallas News, not all plants run three shifts, and it depends on factors like production demand and the specific type of vehicle being manufactured.

DOGE

Congress is responsible for the purse strings but their job doesn’t end there. They are also responsible for oversight which means they must follow up. It is not enough to just pass a bill giving money to an agency, they must assure the voters that the money is spent as intended in an efficient way. This puts them in an awkward position. One of the top priorities of any elected official is getting reelected. A congressman prefers to hand off the oversight to the bureaucracy and not be faced with investigating waste and fraud. If they were to uncover waste, they might have to cut some program and this would offend some voters and risk getting reelected. In order to avoid this, they just allow the agency to spend as they wish and this has led to the excesses that are now being exposed. This is why the debt keeps rising as congress is afraid to cut. In 1950 government spending was 15% of GDP and today it is 37%. The congressmen will not change as they are winning with 95% of incumbents being reelected. This time Trump is using a different approach asking Elon Musk to step in and find the waste and fraud. This is not the proper way to do this, as it should be done by congress but past experience has shown they cannot do the job. If DOGE is shut down, everything will go back to the old ways which means increasing debt and just kick the can down the road.

US dollar

Before 1940 Saudi Arabia was a desert populated by tribes of Bedouins who struggled to survive in the harsh, dry country of sand storms and camels. An American company discovered oil in 1940 and over the next 30 years US engineers developed the vast oil fields and beginning in the 1970’s the Saudi Government began to assume ownership. By 1980 Aramco (Arabian American Oil Company) was transferred in total to the Saudi’s Part of the deal was that the Saudis knew that they did not have the military to protect their fields from a takeover by some foreign country, so they agreed to accept protection from the Americans. As a part of the deal the Saudis agreed to only sell oil in US dollars and thus was created the petrodollar which is still the rule today. This is one of the main reasons why the US dollar is still regarded as the world’s currency. This is just one more way that the US helped the world during the 20th century along with defeating fascism, Nazism and communism not to mention the many medical advances produced by US research and advances in space technology as we now await AI.

Schools

The country is in the middle of a crisis in public schools. Gallup polls show that confidence in public schools is at all-time low of 26%. This requires some drastic changes and can start by concentrating on teachers and the 3 R’s. First step is to go back to the basics where children learned how to read and write. 50% of high school grads are reading at an eighth-grade level. To do this every class should have the same approach. Students will read for twenty minutes and then spend the rest of the class writing down what they read. They follow this procedure in all classes including science, social studies, civics, personal finance, health and business. Teachers are put at the forefront and all non-teaching staff is reduced to a minimum. Teachers pay increases are financed by eliminating most other staff. Class sizes are lowered. Classes like chemistry and algebra 2 are elective like physics and calculus and these classes are for people who plan to go to college. The rest of the students are trained to go to work right out of high school. There will be many jobs in factories as the country doubles its industrial base. People will learn on the job to run production lines using automatic panel boards augmented by AI. Other activities not involved with the 3 R’s will be extracurricular and not available during regular school hours. This includes things like sports, art, music and group clubs.

Judges

The constitution is famous for its balance of power between branches. Congress controls the money; the president controls the federal employees and the Supreme Court pulls the reins of power on the other two. Recently judges, not Supreme Court Justices have been attempting to control the president. There are 890 federal judges and if each can curtail the actions of the president, then the president will be severely limited in his ability to run the country. Judges, being human, are shopped around to get one to lean one way or the other. If a judge is found to have a prejudice against a sitting president, he can be used to interfere with any decision the president makes. Then the case goes to the Supreme Court and that slows everything down. This judge can interfere on every decision and the president will be unable to carry out the duties of his office. In a short time, the country will be brought to a standstill as cases make their way to the Supreme Court. The judge can be impeached by the congress but that may take a long time and if the right party is in control, they may not get the votes to impeach. The most recent incident is US District Judge James Boasberg blocking further deportations by Trump under the Alien Enemies Act. The emergency appeal, which asks the justices to overturn an order from US District Judge James Boasberg blocking further deportations under the act, further thrusts the Supreme Court into Trump’s whirlwind.

Government

Since 1950 the Europeans have developed more social benefits than the US. European governments spend a significantly larger share of their budgets on social protection programs (including disability and old-age pensions, welfare, unemployment insurance, housing assistance and income support) compared to the US. In economics this is called guns and butter and they spend a lot of money on butter but not much on guns. The reason is they have depended on the US for protection. This was particularly true during the 50-year cold war but has continued since the fall of the Soviet Union in 1990. The average European citizen spends $700 on defense and the average American spends $2,800 or four times as much. Europe spends 1.6% of its GDP on defense while the US spends 3.7%. While doing this they have placed high tariffs on US imports as the US continued with low or zero tariffs on imports from Europe. The US has shouldered the bulk of the cost of world groups like the UN, the WTO and the WHO and has 120 bases around the world where 170,000 US troops are stationed. Trump has let the world know that this is about to change, that the US will no longer be the worlds policeman. This change is necessary because the US has accumulated $36 trillion in debt and can no longer afford these commitments. Most Europeans and many in America want the US to continue the old way but that’s because they have a vested interest in maintaining the status quo. These are the same people who do not want cuts to US government programs.

Nuclear

In the 1960s, the Atomic Energy Commission (AEC) anticipated that more than 1,000 nuclear reactors would be operating in the United States by 2000, reflecting a significant expansion of nuclear power plans. Today there are 94. These plants were stopped by well-meaning people, by the fossil fuel industry and later by the wind and solar industry. The same thing happened in Germany and today they are restarting their old coal plants. Trump is pushing companies to build their own electric generating plants as they build new facilities. Some of these will be nuclear.

Trade

In 2024 Japanese automakers manufactured 3.2 million cars in the US and imported another 1.4 million. A Toyota RAV4 is equivalent to a Chevy Equinox and both cost about $30,000. If Toyota is hit with a 25% tax then the RAV4 will cost $37,500 and this will force Toyota to build more cars in the US if they want to be price competitive. This imbalance is part of the $68 billion trade deficit the US has with Japan. This is typical of the US trade with all countries and it has been this way for decades. Historically Japan and most European countries run a trade surplus because of their tariff policies but that is about to change. The US with a $36 trillion dollar debt can no longer operate without reciprocal tariffs.

Houthis

The Houthis in Yemen are a terrorist group that have shut down the sea traffic through the Suez Canal and this has had profound effects on trade with China. Europe gets 21% of its imports from China while the US gets 16%. The alternate trip around the southern tip of Africa takes 7-10 days longer and cost $200,000 per ship. In 2023, a record 26,434 vessels passed through the Suez Canal, marking a new high in maritime traffic. This translates to an average of around 72 ships per day. The US is once again called upon to stop the Houthis and allow all ships access to the Canal which will in turn lower cost to the Europeans.

Tariffs

One important reason why the US has a trillion-dollar trade deficit is the auto industry In 2023 the US imported 1.5 million cars from Japan and exported 16,000 cars to Japan. In 2023 the US imported 692,000 cars from Europe and exported 116,000 cars to Europe. Much of this has to do with import taxes on US cars by both Europe and Japan. This has been going on for many decades. The US believes in free and fair trade but has been subjected to free and unfair trade. This will end next week as the US will start imposing import taxes. These taxes will not be on foreign cars made in the US. The goal is to have more cars that are sold in the US be produced in the US. A preferred response is to have Germany and Japan lower their import taxes to match the US. Once they are matched all import taxes can be dropped.

Common sense

The democratic party is realigning as is normally the case after an election loss. The progressives are believers in identity politics and pull the party to the left. Identity politics generally refers to people evaluating issues through the lens of their association with a specific group. This in turn means that approaches to issues, politicians and political parties revolve around how those things affect the relevant group or groups. This can include the conviction that one's group is being oppressed or discriminated against either by larger groups or by society as a whole. Identity politics can also create backlashes among those who disagree with what it means for the rest of society. The more center group believes that joining forces and not separating by groups will bring the party together. While defending small groups is admirable it is not conducive to winning elections. Even compassion towards large groups without proper controls can be destructive, case in point, the border. While helping people who were only trying to escape danger, new dangers arose. Many thousands of women and girls were molested, many thousands of young people died from fentanyl poisoning, many thousands of children disappeared into the arms of traffickers, many thousands of convicted criminals were released into society, and the cartels made billions. Less than one half of one percent of the population identify as transwomen but allowing them into women’s sports threatens the progress that women have made in sports. Most people are uncomfortable with transwomen in women’s locker and bathrooms. Most people are uncomfortable with drag queens dancing in schools. Most people do not want schools to keep secrets from parents. Then there are even less important issues things like which pronoun to use, paper straws and plastic bags. It is these minor cultural issues that have allowed the republicans to the claim that they are the party of common sense.

College or not

When George graduated from high school, he went to work at a national office supply company. He worked there for 12 years and learned the business while he saved his money. When he was thirty years old, he moved to a small town and using his savings started a local office supply store. He was quite successful and twenty years later at age fifty, having never married, he set up his retirement plan. He would hire a young person and train them in all aspects of his business, including accounting, marketing, public relations, customer service and getting to know his supply chain people. His plan was to teach them the business from the ground up over the next ten years and then retire and build a home on some beach front property he owned in Belize. Over the years he had taken writing courses at the local university and he planned to buy a boat and spend his later years fishing and writing short stories. So now he was looking for his replacement. He had narrowed it down to two people. Mary, had just graduated after 6 years with a Masters in Sociology. She was an only child and her parents were professional people, both worked as professors at the U. Mary spent her college years enjoying the social life and had many friends. During summers the family vacationed often times to foreign countries. Mary was a good student getting mostly A’s. Jane was a different story. She graduated from high school six years ago and went to work at Walmart stocking shelves on the night shift. She was ambitious and a quick learner and soon understood all of the departments in the store and the manager was grooming her for an assistant manager’s job at another Walmart. Jane had her own apartment and was saving her money to buy a house. George was earning $300,000 per year before taxes and wanted to retire in ten years at age 60. His plan was to sell the business to his trainee on a contract for deed basis, meaning the buyer needed no money down and would pay George half of the profits for the next ten years and then one forth of the profits for the rest of his life at which time his protege would own the business outright. George decided to go with?

Muslim

Christians throughout parts of Africa and the Middle East are being attacked by Muslims but there is little in the news about these incidences. One of the reasons given for not reporting is fear. In 2006 Pope Benedict delivered a lecture at the University of Regensburg in which he hinted that Islam is flawed by fanaticism. This caused an uproar of violence by various Muslim groups around the world. There are many instances where criticizing Islam has resulted in a violent response and thus people tend not to express their views if they are anti Islam. One well known case involved a cartoon showing Muhammad and that resulted in an attack by Muslims where 12 people were murdered and 11 injured. Some thirty years ago, author Salman Rushdie, wrote an uncomplimentary book about Islam and he has lived under threat of death ever since. This type of behavior is a threat to free speech. In today’s vernacular such things are called cancel culture.

Worker wages

Many people are slowly coming around to understanding, that The Green New Deal was more about social change than climate change. It was a different approach to income redistribution or sometimes called tax and spend. Working people prefer to have a job that pays a living wage instead of a low wage job with public assistance. This is why bringing manufacturing back home will help the working people. Working people are paid wages vs salaries and they get overtime so no tax on overtime helps them. No tax on TIPS helps them. It is a way of bringing up the bottom instead of bringing down the top. Doubling the industrial base means more factory jobs which helps the workers. This week Trump signed an executive order to increase mineral production in the US which means better paying jobs for working people. "The United States possesses vast mineral resources that can create jobs, fuel prosperity, and significantly reduce our reliance on foreign nations," the order reads. "The United States was once the world’s largest producer of lucrative minerals, but overbearing Federal regulation has eroded our Nation’s mineral production." This combined with new leadership in the EPA will allow the US to become self sufficient in the production of the minerals needed for modern factories and also protects the national defense. These new facilities will require large amounts of electrical power and the Trump administration is stepping up nuclear. Nuclear energy is set for a “renaissance” under U.S. President Donald Trump, according to Tema ETFs’ Yuri Khodjamirian. The chief investment officer noted that the Trump administration is “very, very interested” in backing new nuclear energy technology.

Income gap

The age of globalization caused the wealth and income gap to widen. From 1947 to 1979 the average real hourly wage grew 2.2 percent per year and workers saw their standard of living increase but all that change since then. From 1979 to 2018 productivity grew 70% while wages for production workers grew at 12%. The workers did not benefit from increased productivity but management did. From 1978 to 2023 CEO compensation increased 1,085% while workers increased only 24%. Since 1980 corporate profits have steadily increased, reaching record levels in recent years. Since World War II, CEO compensation has seen a dramatic increase, especially since 1978, with a significant gap emerging between CEO pay and the compensation of typical workers. Trump’s rise to popularity started when he recognized the disparities caused by globalization and campaigned against it and in the process, he won over the working people. This caused considerable consternation among the elites and they are fighting back. This is happening in the US and around the world as the workers are coming to understand that it is time for change.

Sweden

Sweden’s GDP jumped up in the early 2000’s but has remained steady since at about $56,000 per capita. There was a time when Sweden was looked upon by American liberals as an inspirational example of the welfare state but that has changed. At the end of the 2008 mortgage crisis Sweden began allowing immigrants from around the world and today foreign-born account for 20% of the population. These new arrivals have not integrated into society but have formed enclaves. Present day Sweden carries the dubious distinction of having the highest rate of gangland killings in Europe. Sweden has transitioned from being a model of inspiration to becoming a warning example. Sweden, a country of 10 million now has 2 million immigrants who are mostly from the Middle East. After staying out of WW 2, Sweden had evolved into a high performing export-oriented economy, based on stable parliamentary democracy and social consensus. The country had top notch health care and education. It enjoyed social and gender equality, had low crime rates and little ethnic conflict. It is no surprise that there was little ethnic conflict as Sweden, like other Scandinavian countries, was one group. They had similar backgrounds, similar religion and culture. They even looked alike but that has now changed with these new arrivals. .

Defense spending

European countries are gearing up to increase their defense spending. Since the end of WW 2 they have depended on the US for their protection but Trump has encouraged them to start paying their own way. Here is what Germany is doing. Since the middle of the Cold War era, Germany’s military expenditure as a percentage of GDP has dropped dramatically. Peaking at 4.9% in 1963, it fell to an all-time low in 2005 of just 1.1%. Germany has just passed a major reform to its constitutional debt brake, unlocking billions of euros in funding. One model shared with CNN suggested that over a 10-year period, with Germany spending 3.5% of GDP, it could amount to €600 billion ($652 billion). Other countries in the EU are following similar paths. These changes will allow the US to spend less on defense and help lower the overall budget unless the savings is used to introduce new benefits to win votes which has been the norm in the past.

EU USA

Presidents since Ronald Reagan have encouraged Europe to build up their own defense so they would not have to depend so much on the US but nothing changed until Trump demanded that NATO countries, spend at least 2% of their GDP on defense. He followed this up with threats to reduce US military expenditures and now the European Union countries are gearing up to increase their defense spending. New plans from the European Union to increase defense spending could potentially mobilize as much as 800 billion euros ($841 billion), European Commission President Ursula von der Leyen said Tuesday. This is comparable to what the US spends and will allow the US to spend less which will help with the deficit. While doing this the US is also demanding that the EU countries reduce the unfairness of the $235 billion dollar trade deficit. The US is also asking the EU to pick up more of the cost of world organizations like the UN. Europe is not happy with this especially since their economies are suffering from the loss of cheap energy caused by the Ukraine War. It is to the advantage of both Europe and the US to maintain good relations but it must not be one sided. One area to start, is with Trumps plan that tariffs be fair. If the tariffs are the same then they can be eliminated altogether.

Eugenics

In the late 19th century, a practice called Eugenics was popular. It was the forced sterilization of certain people based on race and other xenophobic attitudes. The result was that many Black Americans were sterilized. This practice is still legal in 30 states but is limited to disabled people and no longer associated with race. Since the passage of Roe v Wade in 1973 there have been 63 million legal abortions. To be pro choice on abortion is the more common position but some people are just pro-abortion. These are individuals or groups that understand that children born in poverty are likely to live in poverty and out of compassion encourage poor women to abort. This indirectly returns to the old ways of eugenics because many more Blacks are poor. The result is that while Black women represent 7% of the population, they have 40% of the abortions. This is the modern-day equivalent of Eugenics.

EU savings account

When people talk about investing in an individual stock, I say they are no longer investing, they are speculating. The stock market has averaged 10% over the past 100 years while the inflation rate has been 3% meaning you can earn a net seven percent. If you invest $1,000 per year at 7% for 40 years you will have $200,000. Many people will not be satisfied with a 7% net return so they will take the additional risk to get a higher return and this brings us to the new plan proposed in Europe to finance their military buildup. They want to use private savings but they will not just take your money as that is too unpopular, so they have come up with a scheme. They are developing a new government savings account where you can invest in defense of your country. They will reduce the regulations to make this account more competitive and they will pay a higher rate of return. As more and more people looking for better returns buy into this investment (speculative) account the union will have funds for military spending.

StarLink

One of the major Internet problems was the lack of service to rural areas. Here is an article from Sept 2024. In 2021, the Biden Administration passed the Infrastructure Investment and Jobs Act, which included a provision to give $42.5 billion to the Broadband Equity, Access, and Deployment (BEAD) program to provide under-served and rural areas with internet access. To date, it has connected nobody The government refused to help Elon Musk’s company StarLink as reported in June 2024 President Biden’s slow rollout of a $42.5 billion rural internet program has increased criticism of the administration’s decision to yank federal funding from Elon Musk’s Starlink broadband service, which proponents say could provide faster, cheaper internet access to areas with little or no connectivity. From March of 2025 SpaceX’s Starlink satellite broadband offering touts an edge in service reliability over its cable counterparts, despite most of its customers residing in rural areas. Starlink now has 5 million users worldwide with 1.4 million in the US and is expected to grow to 8 million US users by the end of 2025

National debt

I have spoken of this before but it is worth repeating. Trump is the closest thing we can have to a third-party president in a two-party system. He first recreated the old republican party by sending the old established members out to pasture and then bringing in the working people. He is now in the process of forcing the democrats to reevaluate what they stand for. Both parties are trying to adjust to a new America and a new world. The old crowd cannot understand what is happening and they are desperately trying to hang on to the old ways but there is no going back. Trump only has four years and will not finish the job so the question will be, did he go far enough to get over the hump. By the midterms the victory at the border will be forgotten and the turmoil surrounding the effort to cut the fat will be in high gear on the nightly news and the democrats will probably retake the house. This will mean the end of cuts and a renewed emphasis on the angst toward Trump. In the meanwhile, other factors could change the voting. If the war ends and reshoring brings in enough jobs, people may be satisfied with the progress and keep the republicans in charge of the house, even though prices may not have come down much. That would allow the fat cutting to continue for at least two more years. By that time if wages have kept up with inflation, then the republicans may get a second chance at the White House, in which case some serious changes in government may be on the horizon. The program of bucking 75 years of increasing government debt will not be easy and things will likely fall back in to the old ways of doing business, using government money to buy votes. It will go down in history as a gallant try and await the next time some party has the will to try again. The last time it was tried was the Graham Rudman Act of 1985 so it may be another 40 years. The current debt to GDP ratio in the US is 132%. If this continues the ratio in 40 years will be 860% meaning the GDP will be $62 trillion and the debt will be $520 trillion. This is because in the past ten years the GDP has risen 2% per year while the debt has risen 7% per year.

Electric power

As the US economy gets prepared to double in the next ten years, one of the greatest needs will be electric power and this is especially true for AI. Large social media companies are prepared to pay for their own power rather than rely on the government and private power companies. They understand that their demand will be so great that it could cut power to citizens who would not stand for it. The one area that the government can help is by reducing regulations. Many of the current regulation surround nuclear power were designed around safety and the new small reactors no longer present a safety hazard. Many regulations were also designed to work against nuclear and were led by environmentalist and the wind and solar industries along with the fossil fuel companies. These new small reactors will not only power the new industrial revolution but will in time produce inexpensive hydrogen for transportation and desalting plants to grow food in the desert areas.

Debt

Many people are concerned about the national debt, which has doubled in the last ten years and now stands at $36 trillion. There are three ways to lower the debt or at least keep it from rising. First is to raise taxes, the second is to lower spending and the third is to grow the economy. History has shown that raising taxes will not work, because when congress gets more money, it doesn’t apply that to the debt but starts new programs to get votes to get reelected. Lowering spending can’t work because congress will not cut programs, which would risk getting reelected so that leaves only the third, growing the economy. The first step is to bring back the manufacturing jobs, which were out sourced over the past 50 years. This means doubling the industrial base. The new facilities will use the latest technology supplemented by AI to increase productivity, which means lower cost per item produced. Reshoring means shorter supply chains and lower transportation cost. Maximizing fossil fuel production along with nuclear means lower energy cost. All of these efficiencies will be offset by higher wages paid to American workers. The goal is to have wages increase slightly faster than inflation, as was the case in the 1950’s and 60’s where inflation was 2% and wages increased at 4%. Many of these new positions will require people right out of high school and they will be trained on the job and many will be union jobs which include benefits. People will be able to afford to purchase the items they make which means they will be both producers and consumers. The country will move away from banking and finance to manufacturing and this will redistribute wages from the super-rich to the working people.

Social security

There are currently two bills before congress designed to lower the taxes on seniors. The first is called The Bonus Tax Relief for Seniors Act. First off only 40% of seniors pay tax under current law. Here is an example of how this law will affect taxes. John and Mary Smith have $2,500 per month in pension and collect $3,500 per month in social security benefits. Thus, their annual income is $30,000 in pension and $42,000 in SS. They take one half of their SS which is $21,000 and add that to their pension which is $30,000 for a total of $51,000. From that they subtract $32,000 which leaves $19,000 and half of that or $9,500 is the part of their SS which is taxed. They add that to their $30,000 pension for a total of $39,500. From this they subtract their standard deduction which for two people over age 65 is $34,000 for tax year 2025 leaving $5,500 taxable income. The Bonus Relief Act will increase the extra deduction for seniors from $2,000 to $5,000 meaning the deduction for this example will be $40,000 instead of $34,000 meaning they would pay no taxes as $39,500 minus $40,000 is zero. The second bill is called the Tax Relief for Seniors Unleashed Act doubles the exclusion from $32,000 to $64,000. For John and Mary Smith this means They take their SS benefit of $42,000 cut it in half to $21,000 then add their pension money of $30,000 for a total of $51,000 and subtract the $64,000 which means none of their SS is taxable so this leaves only their pension income of $30,000. From that they subtract the standard deduction of $34,000 leaving zero taxable income as $30,000 minus $34,000 is zero. Using a higher pension income of $50,000 the taxable income on the first bill would be $19,500 and under the second bill the tax income would be $19,000. With no change the taxable income would be $30,000 so this helps more as income rises.

EV's

Between the November 5th election and December 17 Musk made $75 billion on Tesla stock and since then he has lost $80 billion. Ho hum, win some and lose some. It is difficult to understand why an EV company even survives since the chances of EV’s taking over the car market are slim to none. They are too expensive, can’t go far enough on a charge, especially in a MN winter, there are not enough charging stations and even if there were there is not enough power to power the charging stations. To top it off the mining, processing and disposal of the materials needed to manufacture EV’s is poisoning the ground water along with using slave labor in China and Africa. In today’s news there are stories of elected officials who formally bought EV’s to save the planet from extinction who are selling their EV’s and buying gas powered cars. Does this mean that they think the threat of climate change is over?

EU

Some years ago, the US started discussions about using 401K money to finance government but this was considered a nonstarter. Total US retirement assets reached $42.4 trillion by the end of 2024. This is more than enough to pay off the $36 trillion national debt but most Americans are not willing to use their personal savings as collateral for government spending. Enter the European Union. As the US tells the EU to start taking on more responsibility for their own defense, they do not want to raise taxes to finance and they are considering using private savings. What was once considered to be a ridiculous idea is now in the conversation. EU president Ursula von der Leyen sent a letter explaining her plan which she calls ReArm Europe. This is why today I have written a letter to Leaders ahead of Thursday's European Council. This is why we are here together today. And I have outlined in this letter to the leaders the ReArm Europe Plan. This set of proposals focuses on how to use all of the financial levers at our disposal – in order to help Member States to quickly and significantly increase expenditures in defence capabilities. Urgently now but also over a longer time over this decade. There are five parts to this. The first part of this ReArm Europe plan is to unleash the use of public funding in defence at national level Italy’s Finance Minister Giancarlo Giorgetti has proposed a groundbreaking plan to mobilize up to €200 billion of private defense investment

Ukraine War

The American people are slowly coming around to the fact that the Ukraine War will not result in one side winning but rather a long-term affair that will destroy Ukraine. Most people are now looking for a peaceful settlement. This will put an end to the death and destruction of the past three years but one country that would benefit greatly is Germany. The German government over the past 20 years has made a series of unforced errs caused by bad policy and they are now paying the penalty. Adding to their mistakes is the loss of Russian oil and gas. German industry, once the power house of Europe, is now in decline as is their economy in general which has been in a recession for the past two years. Germany's most immediate problem is that its economic growth has stalled. The European Commission forecasts GDP growth of just 0.7 percent in 2025, marking the slowest pace among EU nations. Since 2017, the German economy has grown by a mere 1.6 percent, far below the EU average of 9.5 percent. Feb 19, 2025

Spending

In 2024 the European Union with a population of 450 million spent $350 billion on defense and the US with a population of 330 million spent $850 billion on defense. This means the cost per person for national defense in Europe is $777 and the cost for each American is $2,570. If Europe took care of their own defense and the US spent like Europe this would leave America with $591 billion to spend on social programs perhaps national healthcare.

Tesla

There is evidence that the push to replace fossil fuels with wind and solar was more about social programs that climate change. Something similar is now happening with electric cars. Tesla cars that were the darling of environmentalist a couple of years ago are now being vandalized by some of the same people. This once again raises the question, are the environmentalist champions

WEF

Globalization is a word that is bandied about without a clear understanding. To put a face on this word, take a close look at Davos where the World Economic Forum meets each year The World Economic Forum (WEF), often colloquially referred to as "Davos," draws a diverse group of global leaders, including heads of state, business leaders, prominent thinkers, academics, heads of NGOs, innovators, the media, and civil society leaders. . These are the world leaders who have been running things since the end of WW 2 and their days are numbered. According to their website the WEF is for “Public-Private Cooperation”. This sounds like the military industrial complex. They want to use climate change to move money from Western countries to less developed countries and control who gets what. They often promote military conflict to cement their control. Trump is interfering in their plans as they want to maintain the status quo where the middle-income groups lose ground as the upper income groups become more dominant. These are the elite who feel they know what is best. .

In crowd

During the early post war years, up until the late 60’s, companies expanded by building new facilities but that change when they discovered it was more efficient to just buy a smaller competitor and have a readymade work force. Then they discovered it was even more efficient to just send production overseas and the politicians went along with the idea and the working people suffered. This resulted in a large income gap where the top 10% saw their assets grow at the expense of the middle-income group. Big business and big government grew while the middle-income group suffered. Now that is changing and those in power are not happy. Government is shrinking and those affected are protesting and the press is happy to expose every injustice, while ignoring the waste, saying that congress should be dealing with waste but they are unable to do so. Congressmen are first and foremost concerned about getting reelected and cutting benefits to any constituent will jeopardize that goal. In their minds its like asking them to cut their own job much like term limits. The in crowd, wants to continue the old ways where money went to the wealthy and they in turn provided campaign funds to help in reelecting the ins. The result is that 95% of incumbents win reelection and the status quo is maintained. The establishment doesn’t want to change this and the bureaucracy is part of this group. They have formed a coalition of bureaucrats, big business, the press, Hollywood, social media and Silicon Valley. The losers are the middle-income workers who watched 90,000 factories disappear along with millions of good paying jobs. Since 1997, the U.S. has lost over 91,000 manufacturing plants and nearly 5 million manufacturing jobs, with globalization, outsourcing, and changing trade policies being major contributing factors

Globalist

Globalization is a word that is bandied about without a clear understanding. To put a face on this word, take a close look at Davos where the World Economic Forum meets each year The World Economic Forum (WEF), often colloquially referred to as "Davos," draws a diverse group of global leaders, including heads of state, business leaders, prominent thinkers, academics, heads of NGOs, innovators, the media, and civil society leaders. . These are the world leaders who have been running things since the end of WW 2 and their days are numbered. According to their website the WEF is for “Public-Private Cooperation”. This sounds like the military industrial complex. They want to use climate change to move money from Western countries to less developed countries and control who gets what. They often promote military conflict to cement their control. Trump is interfering in their plans as they want to maintain the status quo where the middle-income groups lose ground as the upper income groups become more dominant. These are the elite who feel they know what is best. .

Europe

Recent history has shown that many countries that are run by strong, dictatorial leaders tend to fall apart if the leader is removed. Countries in the Middle East that for centuries have differed in culture remain calm under the dictator but resort to infighting when the leader is deposed. Strange as it may seem something similar is happening to Europe. Ever since the end of WW 2 the United States has been the protector of Europe by way of NATO but now that protection is in jeopardy. The Trump approach is to demand that Europe take on responsibility for their own defense and allow the US to develop a new world economy. The danger is that the various European countries may be unable to bind together much like the tribes in the Middle East and resort to fighting with each other. Some say that the 75 years of peace in Europe was only possible because US maintained the common defense of the continent.

Oppressors

There is a risk involved in following the idea of oppressors and oppressed. A good example is the situation in Gaza. Good hearted people in the US saw the Israelis as the oppressors and the Palestinians as the oppressed. The Israelis stole their land and kept them prisoners in Gaza. The good people were the good guys. They were compassionate and concerned. Then Oct 7 came and the oppressed attacked the oppressors. Now what. This action must either be justified or the whole idea of oppressor and oppressed must be reevaluated. This is not an easy transition as witnessed by the problem at the US southern border. At the beginning it was compassion and concern that allowed suffering people to enter the country but in time the problems with taking care of these people got too costly. The schools and medical facilities were over crowded, fentanyl deaths were rising, women and girls were being attacked, children ended up missing, criminals were released within the country and the cartels were making billions. Now the compassionate people are faced with the possibility that their approach caused more problems than it solved. Can they reevaluate their position or do they double down?

Government

The success of conservative pod casts is an extension of the success they have in talk radio. The problem comes from the length of time involved. On a TV interview there is not enough time to delve deeply into the issue and thus no difficulty in explaining away any discrepancies or contradictions. The democrats deep down feel that the average man needs government to take care of him, to protect him from unscrupulous people and there is some truth to this, since in today’s world, the buyer is often far less knowledgeable about the product than is the seller. Most consumers without realizing this, benefit from government oversight but that is where it ends. The democrats cannot afford to have the consumer think that they cannot take care of themselves and this is the rub. It is difficult, if not impossible, to talk for an hour or more without revealing this underlying belief, that people need government to care for them. When people suspect this, they feel like they are being talked down to or they are being patronized. This then leads to the idea that democrats are the educated elite who know what is best. Most of these democrats are sincere in their desire to lift up the poor to have lives of dignity and inclusion but they also feel that their opinions are more valuable than some clerk at the checkout. They also believe that they should have a higher standard of living than the person who delivers packages to their home. These two drives conflict since you can’t be an egalitarian social climber.

Tariffs

The question is, will tariffs effect products made in the US and the answer can be seen in the manufacturing and sales of light trucks. In 1964 a 25% tariff was put on imported light trucks. Last year 12 million light trucks were sold in the US and only 7,000 were imported from outside of North America. Does this mean the US consumers are paying higher prices? You bet. Toyota Corolla in Japan cost from $15,180 to $22,869 while the Corolla in the US cost from $22,132 to $32,699. As more products are brought home the prices will rise. The country spent 50 years sending production overseas to give US consumers low prices but that is ending. Millions of workers were forced out of their good paying manufacturing jobs, so they could buy low-cost TV’s and refrigerators while the corporations made huge profits. Then net financial result was the rich got richer and the poor got poorer. This is changing and the rich don’t like it.

Earmarks

It is a practice of congressmen to carve out special projects for their districts called earmarks. It may be the building of a new military base or a new VA hospital. In any case, the congressmen will normally make this public in order to garner future votes. Recent revelations have highlighted some expenditures that have been kept secret. Take the example of “forty-two million for social and behavior change in Uganda”. This money was set aside at the behest of someone in congress. Because it was kept out of the public eye and because it seems to have no direct benefit to any congressional district, it looks suspicious. It opens the door to various conspiracy theories. Will any of this money end up in the pockets of a congressman or any of his associates. This is only one of many such unusual “earmarks”. Is it a common practice in congress? Does this help to answer the question, as to how so many in government end up with large estates. Government employees are supposed to appear above reproach but this puts them in a bad light. Will all congressmen now be tainted because of the acts of a few or this something that many, even most, participate in. In any event the optics are bad.

Peace prize

A few weeks into his first term President Obama made what has been called an apology tour. Here is what he said in Europe. "In recent years we've allowed our Alliance to drift. I know that there have been honest disagreements over policy, but we also know that there's something more that has crept into our relationship. In America, there's a failure to appreciate Europe's leading role in the world. Instead of celebrating your dynamic union and seeking to partner with you to meet common challenges, there have been times where America has shown arrogance and been dismissive, even derisive. A few months later in Oct 2009 only ten months in office and nine months after his “apology tour” Obama was awarded the Nobel Peace Prize. Five years later the retiring secretary of the committee Geir Lindestad said: Awarding the Nobel Peace Prize to US President Barack Obama in 2009 failed to achieve what the committee hoped it would, its ex-secretary has said. Last week Vice President Vance went to Europe and told them they were losing their free speech rights and they needed to start paying for their own defense and he was roundly criticized. He won’t be receiving any prize.

Private schools

Many people who object to Charter Schools do so because they do not want government money going to Catholic schools. Recent news reports have revealed that Columbia University in New York is a private school that receives federal money. Federal funding accounted for about $1.3 billion of the university's $6.6 billion in operating revenue in the 2024 fiscal year, according to a Columbia financial report In addition, Columbia University is a private school with $13 billion dollar endowment and charges $69,000 per year tuition. Also, all eight Ivy league schools are private, have large endowments, charge high tuitions and get government funding. The Ivy League schools are Brown, Columbia, Cornell, Dartmouth, Harvard, Princeton, the University of Pennsylvania, and Yale.

Income gap

Trump is in the process of changing the world in profound ways. The global world which has dominated since the end of WW 2 is undergoing adjustments. It started in the US when Trump upended the republican party and followed that up by turning the democrats up side down. The next move was to alert Europe to the fact that the US will no longer accept unfair trade deals and no longer be the worlds policeman. Trump wants to end wars and reopen free and fair trade with all countries. The establishment, headed by the military industrial complex, is trying to hang on the old ways of doing business and they are gaining partners in the press to help them. Trump is using a combination of military and economic power to force countries to look at new ways of doing things. In the past 25 years the growth in income has tilted to upper-income households. At the same time, the U.S. middle class, which once comprised the clear majority of Americans, is shrinking. Income growth has been most rapid for the top 5% of families and this group has the most to lose. These are families whose income is over $500,000 which is definitely not middle income.

Cuts

Trump has told cabinet heads that they are in charge and Musk will only make suggestions but will this work. In private business, managers are always trying to cut cost but in government agencies, managers are always trying to increase their power and influence and thus government just grows. According to available data, in 1950, the US government spending as a percentage of GDP was around 15.3%, with a gradual increase over the decades, currently hovering around 36.7% as of 2022 based on IMF figures. In private business managers brag about reducing cost but in government agencies it is common for groups to make sure they spend all of their allocation, so they can get at least that much in next years budget. In private companies there is a limited amount of cash but in government they can print all they need. If all government agencies were held to increasing their budgets to one-half percent less than the inflation rate, the size of government would decrease gradually much like it has risen gradually. Government cannot do this on a voluntary basis but must be forced by the citizens. Will the citizens be willing to cut some benefits? Probably not and the press will point out every cut.

Deficit

The US has been providing security for Europe since NATO was founded in 1949. In addition, the US pays the most of any country for various organizations including the UN, WTO and WHO. In emergencies the US is always up front in providing aid to countries around the world. The US has an annual trade imbalance of almost one trillion dollars per year. That’s more than the GDP of 175 of the world’s 195 countries. The US is the leader in research in most areas, including medical where new products have saved millions of lives. Just one recent example is the Emergency Plan for AIDS Relief called PEPFAR which save more than 25 million lives and prevented millions more of HIV infections. The US is the leader in new technology and this is also shared with others. All of this is carried on as if the US has a budget surplus and the country is just sharing its excess with the rest of the world but in fact the US has a $36 trillion dollar deficit, which is slowly dragging the country down. If the US wants to continue its practice of helping others it must get its house in order or the golden goose will die.

Pareto Principal

One of the best ways to motivate workers, is to increase their responsibilities and increase their salaries accordingly. This can be accomplished by a phenomenon known as the 80/20 rule, or the Pareto Principle which suggest that roughly 20% of the workforce is responsible for accomplishing 80% of the work. This is how Elon Musk was able to reduce the workforce at Twitter. Here is an example. Three employees work in a small group and they each earn $80,000 per year. The boss calls two of them into his office and says he has fired the third. From now on the remaining two will be responsible for all of the work. The third was earning $80,000 and half of his salary or $40,000 will be savings to the company but the remaining $40,000 will be divided between the other two employees. In other words, they will take on more responsibility but they will each see their pay rise from $80,000 to $100,000. A good supervisor will know who the productive workers are and his supervisor will do the same on up the line. This works in both private and public business. There is money to be saved in government programs like social security where there are 60,000 employees by using the Pareto Principle. Elon Musk reduced Twitter's workforce by about 80%, cutting the number of employees from roughly 7,500 to around 1,500. This was accomplished through layoffs and voluntary resignations. A general rule in business is if you want to get something done, give it to a busy person.

Endless war

Turmp has put Europe in a quandary. They don’t have a central army but small armies in a dozen countries and no one country is in charge. The don’t have the military equipment nor the money to defend Ukraine against Russia so they hold meetings in the hopes of convincing America they are organizing to fight for Ukraine. They are not willing to sacrifice their social programs to build up defense, so their easy out, is to get the US back on track to aid Ukraine but Trump is not having it. Trump’s position is that he wants the war to end and will allow US private industry to invest in Ukraine, which means civilian Americans on the ground in Ukraine, which means that Russia will not attack for fear of starting a war with the US. Europe wants to continue the war but they want the US to lead the way with money and equipment. In other words, they are the globalists and they want to keep on with the old way of doing things. They want the US to give them protection and favorable trade deals. They haven’t figured out that those days are gone. Many oppose Trump’s plan but they have yet to come up with another plan. So far, their answer is to just continue the endless war.

K12

How have schools changed since 1950. In 1950 there were one million teachers in K-12 and the student/teacher ratio was 27. In addition, there were 200,000 non teacher employees. In 2022 there were 3.1 million teachers in K-12 and the student/teacher ratio was 15. Added to that were 4 million non-teacher employees. The population had doubled but the number of teachers tripled. The major difference is the number of non-teachers increased from 200,000 to four million. During this time the test scores declined and the racial gap increased. The US spends 6% of GDP on education which is in the top three in the world. In the 1950s, student test scores, particularly in math and science, were generally considered to be relatively high compared to later decades, with some data suggesting a peak in achievement around the mid-1950s. In spite of a lot of new technology designed to

Innovation

The US has the highest GDP per capita at $81,695. Europe is second at $60,350 US workers are considered highly productive due to a combination of factors including significant investment in technology and research and development (R&D), a culture of innovation and risk-taking, access to advanced capital equipment, a skilled workforce, and a business environment that encourages competition and adaptability, allowing them to produce more output per hour worked compared to many other countries. With the reshoring of manufacturing and the advances in new equipment along with AI the advantage that the US has will become greater. In 2023 the US spent $783 billion on R&D compared with $410 billion in Europe. Most new technology was invented in America -- from personal computers, lasers, mobile phones, video games, photocopiers, and even the internet.

Education

Senator Berney Sanders was on TV complaining that the rich people, like Elon Musk do not worry about public education because they send their children to private schools. In the 2021-2022 school years, about 9% of students were in private schools. This amounts to 4.7 million students. One part of this that is rarely mentioned is the number of teachers children who are in private schools. Public school teachers send their own children to private schools at a rate more than twice the national average–22 percent of public educators' children are in private schools compared to the national average of 10 percent. The department of education has once again come under attack. The department founded 45 years ago was an attempt to improve education and in particular to close the gap between White and Asian student’s vs Black and Hispanic. It has failed and there is a need to try a new approach. This is almost an act of desperation since most people realize that the problem starts in the home. Moving things back to the states will look like the government is taking action but it is not likely to have much of an effect on the test score gap. To talk about the home problems makes many people uncomfortable but until that happens there will be little progress made toward solving the problem. Most of the problems in schools are about discipline and discipline is learned in the home growing up. All too often, especially in minority homes there is no father.

Waste

Over the years congress has moved away from their oversight duties and allowed the bureaucrats to check on themselves. As if this weren’t bad enough the bureaucrats have joined forces with other parts of the economy. They have united with the universities, social media, Hollywood, Silicon Valley, the national press and much of the democratic party to help hide the distribution of government money. Now this cabal is faced with the uncomfortable scrutiny of DOGE. Slowly, day by day, new revelations of the misuse of government funds are being uncovered but so far most of the press is not revealing the waste. Fox News will daily expose some new bazar program but the rest of the media is only covering the loss of some benefit to some group. If DOGE is able to unravel the mess and the public is made aware, then the whole system will be in jeopardy. The key here is, will the public even know about this. The one thing DOGE has in its favor is Trump’s messages on Truth Social along with the bully pulpit.

Subsidies

Sunnova is the latest solar panel company to get into financial trouble. After receiving $3 billion from government, they are facing bankruptcy. Recall Solyndra that received $500 million and folded and First Solar who got $2 billion from the Investment Reduction Act and their stock rose to $300 last June and today it closed at $130. These companies cannot compete with Chinese solar panel companies but they keep getting subsidies. Investigations show that a lot of money was given back in the form of campaign contributions but much of the money is unaccounted for.

Cuts

The US has been protecting Europe since the founding of NATO in 1949. When the Soviet Union collapsed in 1990 this was no longer necessary and Trump let them know it was time for them to provide for their own defense. The result was something that should have happened 30 years ago, Europe has” New plans from the European Union to increase defense spending could potentially mobilize as much as 800 billion euros ($841 billion), European Commission President Ursula von der Leyen said Tuesday.“Europe is ready to massively boost its defense spending,” she said in a statement. This is only in the planning stage but it is a recognition that it is time for Europe to take some action to be less dependent on the US. The Trump policy is that the world can get along without the US be responsible for the world order. It means bringing home military personnel, closing basis, cutting back payments to NATO, the UN and other organizations like the WTO and the WHO. This reduction will include domestic spending as each congressmen’s pet project will be cut. The press which is part of the establishment will point out everyone who suffers from any cut and put pressure on maintaining the old way of doing business. Since congress has proven unable to cut it will be left up to the voters.

Natural gas

Natural gas is the cleanest fossil fuels and the reason the US has reduced its CO2 emission to 1960 levels even though the population has increased from 180 million to 330 million. The US has enough natural gas to ship around the world to replace in many cases the burning of coal. This helps in the fight against climate change. Since 2020, US natural gas exports have increased significantly, especially in the form of liquefied natural gas (LNG). The US has become the world's largest LNG exporter, surpassing Australia and Qatar. Yes, the United States is building several liquefied natural gas (LNG) export facilities, including Plaquemines, Corpus Christi Stage III, Golden Pass, Rio Grande, and Port Arthur In January 2024, President Biden temporarily halted new approvals for liquefied natural gas (LNG) exports. The pause was put in place to study the impact of LNG exports on the climate, economy, and national security. U.S. President Donald Trump has ended the moratorium on new liquefied natural gas export permits imposed by his predecessor Joe Biden in January 2024.

Wages price

Why tariffs? Consumers benefit from low prices from imported goods. If the US wants to make products at home, then the cost of labor will drive up the cost of goods. Improvements in productivity (new equipment and AI) in new US production facilities, along with lower transportation cost from shorter supply chains and lower energy cost (new small nuclear reactors) can offset some of the increased labor cost. New technology from AI can also reduce cost as well as lower energy cost. One way to force the issue is by using tariffs. If some foreign country controls the supply of TV sets and they cut off supply it is an inconvenience but if they control pharmaceuticals or computer chips it can be dangerous. Are the American people willing to pay a higher price to pay workers a higher wage? Recent experience says yes. In 2000 a McDonalds employee earned $6.25 per hour and a Big Mac cost $4.23. In 2022 the wages rose to $12.50 and the Big Mac cost $5.93. Labor costs represents about 30% of overall cost so this is a proportional increase. As reshoring grows, prices will rise and this will cause wage/price inflation. Depending on how long it takes for productivity to catch up, prices will continue to rise. This could be an issue in the upcoming midterms but there are no solutions except for time. The outsiders running for office will not need a solution just the problem.

Panama

Another example of Trump using financial and military solutions to political problems has emerged with the Panama Canal. First Trump threatens to retake the canal with force if necessary. This is followed up by an agreement between the US investor BlackRock to purchase the ports at both ends of the canal from a Chinese based company for $23 billion. The canal is once again under control of America without having to use any US government money or military

College

The cost for a four-year degree at the University of Minnesota is $125,000 and the average grad ends up with $20,000 in student loan debt. If that same person worked four years at McDonalds at $17 per hour, they would earn $134,000. The difference between the two people is paying out $145,000 or taking in $134,000 or $279,000 to start. The average humanities grad starts out at $50,000. The humanities include the academic study of philosophy, religion, history, language arts (literature, writing, oratory, rhetoric, poetry, etc.), the performing arts (theater, music, dance, etc.), and the visual arts (painting, sculpture, photography, filmmaking, etc.). Assuming the difference in salary of $17,000 ($50,000 - $34,000) holds, it will take the graduate 16 year to recoup. There are many other factors to be considered but this is one of them. For example: Fewer than half of students graduate from four-year colleges within four years. The six-year graduation rate is often used to measure how long it takes students to complete their degrees. In that case it would take 24 years to recoup the college cost.

A new world

During the cold war the world was bipolar in that the two major powers were the Soviet Union and the US. When the Soviets fell the world became unipolar with the US standing alone much as it was when WW 2 ended. After the end of the USSR in 1990 the Americans once again stood alone at the top but then came the end of globalization and today, we face a multipower world with the US, Russia, Europe and China all contending for power. It would be to the US advantage to help Europe get along with Russia and open free and fair trade with both. A strong Western alliance will offset the growing threat from China and help preserve peace through strength. This will return Russian gas and oil to Europe and save their economy while releasing the grain from Russia and Ukraine to help feed the people in sub-Sahara Africa. All of the mineral wealth of Russia and Ukraine can once again flow free while Europe starts the rebuilding of Ukraine. The US will then be free to work with Saudi Arabia and using the Abraham Accords, help to rebuild Gaza, using the money from the rich Arab oil countries, along with construction companies from Israel and labor from Palestine. A new Golden Age can be a possibility.

Defense

Trump has told Europe to start paying for more of their own defense since the US is no longer going to keep them safe. The result in just a few weeks was: EU chief proposes plan to ‘urgently’ increase defense spending by mobilizing around $840 billion This is a significant increase since: EU members spent 326 billion euros on defense in 2024 - about 1.9% of GDP, according to the EU's European Defense Agency. Keep in mind that the US spends 3.5% of its GDP on defense. Part of Trump’s plan is to cut defense spending and this will help.

Labor

The great American manufacturing economy that built the country up from the end of WW2 to the 1980’s was replaced by a combination of sending jobs overseas and growing the financial businesses. Over the past 40 years the money makers have been running the economy at the expense of the working people. Capital has become king and labor second to producing more capital. New phrases like mergers and acquisitions, leverage buy outs, hedge funds and too big to fail banks have taken control of the country but all that is about to change. The Trump revolution means that labor will once again assume its proper place as an equal to capital. As products are made and sold in America the wages paid to workers will be higher than those in foreign market and thus prices will rise along with inflation. Countering this will be the higher productivity from new and improved manufacturing processes and AI. Added to that will be the savings of shortened supply chains meaning lower transportation cost and lower energy cost by maximizing all energy sources including nuclear. The American worker will once again have a shot at the American dream.

Fat

People often say that changing the ship of state, is like turning around and air craft carrier and for the most part they are right. This is normally acceptable because people are usually uncomfortable with change. We like our old slippers. This is why Trump has caused so much turmoil. Not only is he moving faster than normal, he has a different approach, one that is not the way government usually operates. Every president since Kennedy has promised to cut the fat out of government and everyone applauds until it is their fat. The congress is responsible for spending, so they set about looking for fat. They form committees, hold meetings, research and write letters but in the end the debt keeps rising. Despite the gallant efforts of congress, the debt in 1960 was $300 billion and today it stands at $36 trillion which is a rise of 7.6% per year while inflation was half that at 3.6%. If congress had just held the increase to the inflation rate the debt would be a very reasonable $3 trillion. The people in power, want to handle the fat removal in the same way it has always been done, so that nothing will change. Trump will come under severe criticism from each group as their fat is trimmed and the press will broadcast every situation where cuts are made and the pressure will mount to go back to the old ways. Stations like Fox will air the savings and the rest of the media will cover those who lose their fat. Those who risk losing the most fat

Spending

The differences between the democrats and republicans can be seen by comparing the Trump presidency vs Biden’s. Biden passed the $2.2 trillion dollar Inflation Reduction Act which means government will spend all of this money on various projects mostly involving going green with $900 billion designated for things like solar panels and windmills. Biden past the $280 billion dollar CHIPS Act providing government funds for investments in computer technology. In the past 5 weeks Trump has secured $2 trillion in private money investments in things like high tech. When the government prints money to spend on these projects it causes inflation but when the private sector invests it provides growth. The big social media companies like Microsoft, Google, Amazon and Meta are investing billions in nuclear power to run their data centers. This is more private spending.

Capital

As the world slowly comes around to realizing that wind and solar are not the answer to climate change, nuclear looks better and better. One of the reasons rarely discussed is the upfront cost or what is called capital cost. As the baby boomers moved from the group with the highest earnings to retirement the available capital for investment declined rapidly. These people who ten years ago were investing for retirement are now putting their money into safe havens where it is no longer available for capital investment. This shortage of investment funds hurts the wind and solar industry because the major cost is upfront since the fuel is free. With nuclear the cost is spread over the lifetime of the project because most of the cost is fuel.

China

As observers watch the slow decline of the Chinese economy the questions arise, will Xi Jinping resort to military violence as happened in Tiananmen Square in 1989 and the answer is probably not. The general thinking is that as long as the dictator controls the military, he will remain in power but that may not be the case. In China’s case it could be much like what happened in South Korea in 1987. The people went on massive strikes and the economy came to a halt. Foreign investors pulled their money out and the IMF and World Bank froze assets. If this happens and Xi chooses to put down the people with force the military will see that when all collapses they will no longer be paid and they will revolt as happened in South Korea. After the collapse elections were held and democracy took hold and the economy boomed to where South Korea became a thriving country. The South Korean GDP went from $170 billion in 1987 to $1.7 trillion today, a tenfold increase in two generations. This is one option for China.

Negotiating

Trump diplomacy works from the standpoint of a businessman instead of a politician. Trump suggest a peace deal to end the Ukraine War and it blow up in the Oval Office. Zenlensky went home and met with European leaders who promptly met in London to take control of the negotiations. The US is now on the sidelines as once again Trump turns the problem over to the people most effected. If they decide they need US help then Trump will offer the same plan. He will meet with Putin and get an agreement of land for peace and no NATO membership. The peace keeping will be a large contingency of US workers in Ukraine mining rare earths. If the Europeans are not in agreement, they can handle things on their own. In either case once again the US will not be involved in a foreign war with money or troops.

Palestine

When Trump suggested that Gaza be turned into a Mediterranean Resort the general thinking was that he did not understand how that part of the world operated. Once again those who are critical of Trump did not appreciate his ability to make a deal. This week Arab countries including Egypt, Jordan, Saudi Arabia, Qutar, the UAE and others are meeting to determine the fate of Palestine meaning Gaza and Hamas. They propose to put the Palestinian Authority in control and are willing to put up $53 billion to rebuild Gaza. The plan is in three steps. First to build temporary housing, second reconstruction and rehabilitation and third establishment of a new governing body. The group will meet again in Saudi Arabia to formulate plans to visit world capitals, including Washington DC, to gather support for their plan. This group accepted Trump’s challenge to come up with a better plan than his. If they are successful the next step is a Palestinian State as part of a two-state solution. This type of diplomacy is contrary to past US methods. The US always wanted to maintain control but Trump has turned the problem over to the Arabs. This means no US money, troops or equipment.

Europe

In contrast with Trumps rhetoric, he placed more sanctions on Russia than any president. During Trumps first term oil imports from Russia declined. Trump increased US oil production from 9 million barrels per day to 13 million and the price of oil dropped from $95 to $70. This hurt the Russia economy. During the Ukraine War the US sent billions to Ukraine in the form of free cash and military equipment while maintaining sanctions. The Europeans sent billions much in the form of loans that must be repaid. Europe purchase of natural gas and oil from Russia was more than the money sent to Ukraine to fight the war. The EU is spending more money on Russian fossil fuels than on financial aid to Ukraine, a report marking the third anniversary of the invasion has found. They are putting money into Putin’s pocket faster than they are taking money out of his pocket. Such is the way the war is going and while it will continue to go as Biden said, for as long as necessary. The bottom line is that they are financing Putin’s war machine with the purchases of oil and gas while they finance the Ukrainians with money and equipment. They are paying both sides to continue the war. It is much like saying we can’t let Putin win because he will take over Eastern Europe and we can’t let him lose because he will use nukes. Some strong leader must stand up and point out the absurdities of it all.

Jobs

The question is are American jobs coming back home and the answer is Yes, manufacturing jobs are coming back to the United States, a trend known as reshoring. More than 60% of US and European manufacturing companies plan to reshore some of their supply chains by 2025. Industries leading the effort are Electronics, Appliances, Computers, Chemicals, Medical equipment and Transportation. Trump being a businessman and not a politician promised to do this in 2016. Here is a speech that politician not businessman Obama gave in 2016. In June 2016, President Obama, in a town hall in Elkhart, IN, asserted that American manufacturing was merely a thing of the past. When asked by and audience member why blue-collar jobs continues to disappear, the 44th President admitted that good-paying jobs in America were moving overseas under his watch. Mr. Obama asserted that “some of those jobs of the past are just not going to come back”. “When somebody says, that he’s going to bring all those jobs back, well, how exactly are you going to do that? What are you going to do” Mr. Obama asked? There’s no answer to it…What magic wand to you have?” This, in a nut shell, is why the democrats lost the working people.

Healthcare

Canada’s relationship with the US is similar to the Europeans in that they both rely on the US military for their national defense and they both use the money they safe on defense to provide for national healthcare. In 2024-2025, Canada's military spending is projected to be 1.37% of its GDP. In 2023, the United States spent 3.4% of its GDP on its military In 2024, the U.S. trade deficit with Canada was $63.3 billion Because of this Canada wants to maintain the status quo while the US is looking for change. If the US reduced their defense spending from the present 3.4% to the 1.37% that Canada spends it would save the US government $500 billion dollars per year.

Ukraine

As the fervor over the Trump/Zenlensky spat subsides and reality checks back in, where does the world stand. Trump has clearly laid out the US positions saying that there will be no US military protection but the US will set up manufacturing in Ukraine, near the Donbas region and this will deter any Russian invasion for fear of killing American workers. Zenlensky’s position is to gather the forces of Europe and stand up against Putin. Trump is fine with that which puts the ball in Europe’s court and removes the US from the war. This means Europe will have to divert some of its social spending to defense spending, which is highly unpopular with people who have grown up with lots of benefits, because the US was paying for their defense. Just as some were saying that the democrats need a Joe Rogan, the Europeans need a Trump. From the European standpoint, as the dust settles, the plan that Trump proposes is looking better all the time. Trump will go to Putin and say that the West will not allow Ukraine to join NATO and he can keep Crimean which he took in 2014 and he can have the Russian speaking areas of Ukraine, mostly in the Donbas region in return for ending the war. This allows Putin to save face and go home with the victory of keeping NATO away from the borders of Russia. This will save Ukraine from many more years of destruction and loss of life and allow Europe to spend the money that would have gone to the war effort on rebuilding Ukraine.

Migrants

One of the major issues of the last election was the problem of illegal immigration. This leads to two questions. First how did this happen and second what can be done about it. There is an old adage that says the road to hell is paved with good intentions. Many people saw the immigrants as people who were trying to escape situations where their lives were in jeopardy and they only wanted the freedom and opportunity that they believed America had to offer. Compasionate Americans wanted to help and it became a classic case of the unexpected results of good intentions. It resulted in many thousands of young girls and women being molested as they travelled across the 2,000 miles of Mexican out back semi wilderness. Even after they arrived, they suffered abuse because of their vulnerable immigration status. The cartels made billions of dollars helping these unfortunate victims to illegally enter the US. Over 600,000 criminals entered the US and 75,000 young Americans died each year from fentanyl poisoning. An estimated 300,000 children have gone missing and many are in danger from traffickers. Thousands on illegals are put up in hotels while American citizens sleep on the streets. So, the second question is what can be done about it. The first step is to secure the border and let the world know that illegals are no longer welcome. Second the criminals should be rounded up and deported or put in prison. Third the missing children should be located and placed in safe and secure situations. Fourth those remaining should be given work permits so they can get off of public assistance and start paying into social security, Medicare in income tax. These work permits should be designed to lead to green cards and in time a path to citizenship. Meanwhile the problem of schools must be addressed. Migrant children should spend most of the school day in English second language classes. These can be taught by adults who are proficient in English. It will be four hours per day learning to speak, read and write English. Other school subjects are less important and available only as electives. During the last two years of high school students can learn about civics and basic finances.

Nuclear power

In the 1960’s early environmentalist began protesting against the use of nuclear energy. This was somewhat counter intuitive since their main concern was the carbon dioxide produced by burning fossil fuels and nuclear was carbon free. There had been no accidents and waste materials were stored on site. Groups like Green Peace convinced the people that nuclear accidents could happen and mining for uranium was harmful to the ground water. Not a single new reactor began construction between 1978 and 2013 and only one since then. More than 100 orders for new reactors, many already under construction were cancelled in the 70’s and 80’s bankrupting some companies. Not everyone agreed with Green Pease and early opposition emerged as a diverse alliance of ranchers, miners, loggers, hunters, off road vehicle drivers, oil workers and farmers. As CO2 emissions rose many felt that moving away from nuclear was a mistake and are reconsidering. The way the environmentalist won the battle was to add so many regulations under the guise of safety that the time to build and the increased cost killed the industry. The quickest and easiest way to revitalize the industry is to remove unneeded regulations. There is still opposition coming from environmental groups who are unaware of the new reactors that are safe and produce very little waste. Other opposition comes from the fossil fuel industry and the New Green Deal.