OPEC

Lower energy costs have a cascading effect on the economy. The farmer uses diesel to plow, to plant, to cultivate and then send the wheat to the grain elevator. Next it is sent to the flour mill which then forwards to the bakery and finally to the retail outlet. People use gasoline, truckers and rails and ships use diesel and citizens heat and cool their homes while industry uses power to build and operate plants. Electric power from nuclear plants is $32 per megawatt hour and natural gas is $50. The point is that lower cost oil and lower cost electricity means lower cost for goods. Trump is now facing a dilemma. Putin wants to keep the war going which leaves Trump with the only option and that is to sanction Russian oil. This will hurt Putin but it will raise the price of oil since Russia exports 4.5 million barrels per day. Trump could be helped if OPEC would pick up the slack. He has some influence over OPEC since they rely on the US for protection. The question remains, if oil went to $100 would OPEC want to produce more to lower the price.

Harvard

Last year 54,000 students applied to Harvard but only 7,100 were admitted. Of the 27,000 total students both graduate and post graduate about 10,000 are foreign students. Harvard is widely regarded as one of the most prestigious universities in the world. The question then becomes why are foreign students given preference over American students. One answer is that half of the American students get financial aid from Harvard but foreign students pay about $90,000 per year. The total cost of attendance for an international student, including tuition, fees, housing, food, and other expenses, is estimated to be between $90,426 and $95,426.

More on debt

The average inflation rate since 1950 has been 3.8%. The national debt in 1950 was $250 billion. Today the national debt is $37 trillion. This is an average increase of 6.8% and therein lies the problem. If the government would agree to increase spending at one half percent below the inflation rate the debt would come down each year. The current budget is $6.75 trillion and it that is allowed to increase at the long-term inflation rate of 3.8% the budget in 75 years would be $110 trillion. If spending increases are held to 3.3%, which is one half below the inflation rate, the budget would be $77 trillion and the difference between the two would wipe out the $37 trillion dollar debt. It took 75 years to accumulate this debt and it can be eliminated in 75 years. Even if the government just kept the spending at the current inflation rate the debt would no longer increase. Congress has been unable to do this and thus the debt keeps rising and they just keep kicking the can down road hoping that if and when it breaks the bank they will be retired. In the eyes of most politicians attacking the debt problem is a fool’s errand. It would most likely result in a primary challenge.

Energy density

Energy density is a term used to describe how much energy in one pound of any substance and this varies. Product BTU’s per pound Wood 7,000 Coal 12,000 Oil, gasoline and natural gas 20,000 Enriched uranium 1.25 billion Thorium 270 billion The higher density products produce far less waste. For example, burning 12,000 pounds of coal would produce 2,000 pounds of waste not counting CO2 while thorium would be less than one pound. The coal waste would contain sulfur and nitrogen oxides (which cause acid rain), heavy metals like lead, arsenic and mercury along with 20,000 pounds of carbon dioxide.

Debt

The national debt increased by $11 trillion over the past 5 years to a total of $36 trillion and thus is once again in the news and once again the same solutions are put forward. The democrats want to raise taxes and the republicans want to cut spending. These are standard answers to questions that have been around for 50 years. Everyone knows that if the government collects more taxes the money will not be directed toward the deficit but will be used to create new programs to get votes. The public also knows that to cut spending means tackling social security and Medicare and no politician is going down that road. So where does that leave things? The only answer is to limit the increase in spending to one half percent less than the inflation rate and in 75 years the debt will be down to zero.

DEI

After the George Floyd incident in MPLS many universities began offering degrees in DEI. Yes, it is possible to get a degree focused on Diversity, Equity, and Inclusion (DEI). Many colleges and universities now offer bachelor's and master's degrees, as well as graduate certificates, specifically in DEI or related fields like diversity studies. Master's programs in Diversity, Equity, and Inclusion Leadership at institutions like Tufts University and the University of Maryland, Baltimore. This resulted in 10,000 DEI jobs at various businesses and universities and they are now being eliminated.

Experts

Some say it is wise to be suspicious of experts and there is evidence to support this suspicion. In 1800 Thomas Malthus developed a theory that population growth would outstrip the food supply and lead to starvation. He was unaware of the upcoming industrial revolution and food supplies outpaced population growth. In 1968 Paul Ehrlich wrote a book saying that the population would grow faster than the food supply and people would starve. Both of these experts were widely believed and laws were changed based on their theories. Today the world is facing a population decline that threatens the vary existence of countries like China and Japan. In today’s world these experts are not only subjected to the risk of predicting the future but they must contend with political ideas being fostered off as science. Case in point. The promotion of wind and solar as a way to promote social change. Politics has a tendency to distort science. The holding up and in some cases the dismantling of nuclear power, by groups claiming to be science based, has been one of the main causes of global warming. These groups are still active today. Germany has in the past 30 years closed all of its 17 nuke power plants and today they are restarting coal plants.

Tariff's

According to the constitution congress has the authority to impose tariffs but many times this authority was granted to the president. There are three reasons called the three R’s. They are revenue, restriction (protect US industry, and reciprocity (bargaining chip to cut deals). Presidents throughout history have used tariffs, most recently in 2009 President Obama imposed a 35% tariff on tires imported from China. In 2002 George Bush imposed tariffs of 30% on most steel imports. Trump imposed tariffs on China in his first term and Biden kept them and added new ones on EV’s. Trump is using tariff’s for all three reasons. Yesterday a three-judge panel at the US Court of Trade ruled that Trump overstepped his authority with his tariffs. This then limits the bargaining chip reason for tariffs. Now the US Supreme Court will have to decide.

Will change come

The establishment is trying to hold on to the global economic system but just who are these people. First off are the bureaucrats who run the government agencies. Next are the large corporations who with their campaign contributions and their paid lobbyist control the elected officials. Then there is the military industrial complex where wars mean profits. The elected officials are deeply embedded in a system that allows 95% of incumbents to be reelected. The schools, both K-12 and colleges keep getting more money and hiring more people. Groups of all types and sizes line up at the trough of government largess. The only groups interested in trying out a new approach are the middle-income people who watched their jobs move overseas. Their only power rests in their vote and they are beginning to realize that. Will they be willing to put up with some short-term pain for long term gain is yet to be determined.

Education gap

One problem that the country has faced since WW 2 is the education gap and it is not getting any better. The experts in the field of education have tried many different methods but all have failed. One of the things to consider is that when experts come in, they tend to move away from basics to more complex solutions. Some say that the movement away from basics has made the problem worse. It is time to go back to the three R’s. In high school, algebra 2 and chemistry should electives like calculus and physics. These courses should be for students who are going on to college. The rest of the courses should follow a simple pattern. Each day students are given a short reading assignment and then asked to write a short summery about what they read. They do this in every class every day for four years and at the end of that time they graduate with the ability to read and write at grade level. This will be an improvement over the 70% who can read at grade level today. In addition, all high schools should eliminate 50% of staff employees and part of that saving should be used to increase teacher salaries. In 1950 there were 52 staff for every 1,000 students and today there are 140 staff for every 1,000 students.

End the war

Where does the world stand regarding the Ukraine War? The four participants have different ideas. Ukraine President Zelensky says he will not give up any territory. The European Union, within reason, sides with Zelensky. This is a total impasse and will remain so until some changes are made. The Russian position is that Ukraine must agree not to join NATO, must give up the Donbas regions, not have foreign troops in the country and end the sanctions. This is close to Trump’s view but not so the senate and the American people. The most likely scenario to end the fighting is for Trump to convince the senate and the American people to deal directly with Putin. As each year passes more people in the US and Ukraine are looking for an end and as the years go by Ukraine is being destroyed. American people supported Ukraine keeping all of its territory by 66% in 2022 but that is now at 44%. For now, the US position is as Biden said, for as long as it takes.

Eugenics

Margaret Sanger, a prominent figure in the early birth control movement and founder of Planned Parenthood, had a complex relationship with the eugenics movement. Eugenics is not a fringe movement. Starting in the late 1800’s, leaders and intellectuals worldwide perpetuated eugenic beliefs and policies based on common racist and xenophobic attitudes. Many of these beliefs and policies still exist in the US but in ways that are not so obvious. Since 1973 there have been 63 million abortions, that we know of, performed in the US. Black women compose 7% of the population but they have 40% of the abortions. This is not called eugenics but the result is close to the same thing.

Gambling

The phrase unintended consequences of good intentions are often used to illustrate surprise results of some program but there are times when the negative results can be predicted. Case in point. Brazil legalized gambling in 2017. Brazil is a country where the wealth gap is far worse than in the USA. So, what happened. Large companies sprung up and started pushing Internet gambling. They next hired well known movie star types to promote the gambling. They paid these super stars, people in the US like Kim Kardsahian, huge salaries and then offered them a part of the earnings as a bonus. Poor people by the millions were influenced by these stars and started spending their minimal resources on gambling. Gambling is growing at 12% per year while the GDP is growing at 3%.

Border

Border crossings have been reduced to 7,000 per month instead of 7,000 per day. Drug seizers are down 50% and human trafficking is down which means fewer unaccompanied minors and fewer young women and girls be molested. This has made a serious dent in the money going to the cartels which helps the new Mexican president to get control of the country. The Mexican government is cooperating with the US allowing CIA drones to fly over Northern Mexico to spot fentanyl labs. The US is putting pressure on China to stop the flow of fentanyl precursor chemicals from coming to the US. Mexico was on the path to becoming a drug country as the cartels have infiltrated government institutions, law enforcement, and even businesses. In the last ten years murders in Mexico have gone from 25,000 per year to 35,000. The US with 2.5 times more people had 25,000 murders in 2024.

Unity

Under Trump’s Make America Great Again and Biden’s America First both parties want to unite the country and move forward and the time is now. There is general agreement on key issues. Bring home manufacturing jobs. Bring home other products necessary for national defense, things like pharmaceuticals and rare earths. Codify immigration laws. Deport convicted criminal migrants. Zero tariffs on all trading partners. Finding the 500,000 missing children. Ending the Ukraine War. Promoting a two-state solution in the Middle East. Develop nuclear power. Make it a priority to reduce the wealth and education gaps. Reduce government waste. These are issues that can unite the nation when country becomes more important than party.

AOC

The leading nominee for the democrats is AO Cortez. Her platform is Medicare for All, housing as a right, no more wars, rebuild unions and bring back jobs, guaranteed federal jobs, invest in rehab not jails, citizenship for migrants and ending ICE, support for Peuto Rico, the new green deal, strengthen public education, equal rights for women, support gay rights and dignity for the aged. There are some things in her platform that are popular and she could be running on but she spends her time talking about Trump and his oligarchs. In 2016 people didn’t vote for Hillary but against Trump, and the same thing in 2020 and 2024. Voters need something to vote for.

Capital

Trump was one of the early republicans to realize that the loss of manufacturing jobs hurt the country. His first attempt to reverse this process is to use tariffs but that is only a stop gap measure not a cure. Starting in the 1980’s the US, using its technological advantage, led to companies making huge profits which in itself is OK but what they did with the profits hurt the working people. Instead of investing in new factories they started using financial gimmicks to increase profits. New terms appeared out of nowhere, terms like venture capital, mergers and acquisitions and dividend by backs. The government cooperated by changing banking rules and reducing regulations on financial institutions. As profits rose manufacturing was replaced with financial activities and new ways to make profits by just moving money around. Even things like home mortgages were monetized. Changing tariffs is a simple task compared to changing the financial culture. This will involve changing rules to encourage manufacturing. Rules that will allow companies to make more profits by building things instead of using capital to make more capital.

Socialism

Polls show that only 4% of baby boomers believe socialism is a good form of government while 19% of their children, the millennials, believe in socialism. During the runup to the 2016 election young people were excited by Bernie Sanders and his socialistic views. This was happening while Venezuela, a country with more oil than the US, was going broke. People were fleeing the country to avoid starvation. The siren call of socialism has always been strong but in practice it never works. Marx said the rich would keep the poor down to promote their own good. In today’s world there are more billionaires in the United States than all of Africa and Asia but the poor in the US have a better life than the people in those other two continents. The poor in West live better lives than the kings of the Middle Ages. The wealth gap in the US is far too wide and getting wider each year and posses a serious long-term problem but socialism is not the solution. A greater threat today, is the number of intellectuals, who believe they have the answers and if they just had the authority to implement their solutions, the country would be better served. The common mistake they make is that they fail to consider the results of their actions and thus the phrase, the unintended consequences of good intentions. Examples indicating this are legion.

Plane gift

The airplane gift to the US from Qatar was a big news item but after further investigation it just kind of went away. Qatar had two of these new but 12-year-old 747’s and they tried to sell them but there were no buyers. They then gave one to Turkey and offered the second to the US. Trump accepted the gift and the news went wild. Will Qatar expect something in return. What they want is to maintain good relations with the US. The plane is no good. It is a gas guzzler and would take millions to make it safe for the president. In 1996 Qatar invested one billion of its own money to build a Qatar US airbase. Since then, they have invested billions more in the base. Did they want something for this gift? Yes, they wanted the protection of the US to keep them safe from Iran or any other country who might want their oil. Saudi Arabia is looking for similar protection and willing to consider joining the Abraham Accords to get this protection.

Trade

European countries have a value added tax (VAT) that varies from 17% to 27%. This means that imports from the US will pay a VAT in addition to the import tax (tariff). The US charges only 2.5% tariff and has no VAT. The result is that most foreign cars sold in the US are made in the US. The result is that in 2024 five million foreign cars sold in America were made in America. In contrast only 750,000 were made outside of America and sold in America in 2024. Note that in 2024 only 169,000 American made cars were sold in Europe. Americans who travel in Europe often remark that there are no American cars. The same situation happens with many other products including electronics, appliances, clothing and pharmaceuticals. As America transitions to made in America there will be shortages but in the long term it will mean good American jobs. This will also mean higher prices but higher wages. This was the situation in the 1950’s when wages increased 6% and inflation was held to 2%. Each year workers had a little more disposable income.

Unions

I have long been a proponent of private pensions but not public pensions. The benefits of public pensions are paid for by the taxpayer and the elected officials bargain with union officials for benefits. Over time the unions help to elect the public officials and the negotiations become incestual. The Chicago teacher’s union is a good example. The average retirement benefit is $76,000 and the average pay is $71,000. Chicago teachers do not contribute to social security nor collect social security but they still retire at higher pay. The teachers contribute 2% of their salary to their retirement plan. The result is that the plan is currently billions of dollars short of providing the promised benefits. This shortage will be made up by raising taxes, diverting revenue from other programs or re amortizing the debt. Public pensions still remain as defined benefit plans while almost all private companies have switched to 401K plans. The latter cannot be underfunded. As the reshoring of America continues, the hope is that many of the new jobs will be union and negotiations will be between the employer and employee and the government will not be involved.

Change

The post WW 2 years have seen globalization become the economic system of the world. This resulted in significant increases in the wealth of the top 1% of earners, with studies showing real income increases of 60%. Rich individuals and companies have benefitted from the expansion of global markets, leading to increased investment opportunities and profits. Globalization lowered production costs, especially in industries where labor is a significant expense, leading to increased profits. This led to job losses in domestic manufacturing, particularly for lower-skilled workers. It caused exploitation of labor in poor countries without environmental standards and protection for workers. The benefits have not been evenly distributed, with the richest individuals and countries gaining at the expense of lower paid workers. Those who were not part of the global elite have seen their wages stagnate. The US is trying to upend this economic system and this is causing a back lash from all the groups who have benefitted. These include the military industrial complex, followed by the large international corporations and the very rich. The American citizens are beginning to understand the injustice and the working people want a change. They want their good jobs back. They want the money the US is spending acting like the world’s policemen to be spent on growing the US economy. They are beginning to see the unfair trade agreements the US has with the rest of the world. They want to move away from groups like the UN, WTO and WHO by paying only the US share. They want to put America first.

Grants

Research grants to universities have proven to be a good investment over the years but once again congress has not followed up with its oversight responsibility. The congress will allocate a certain amount but once the university gets the funds, it is easy to reallocate. Speaking crudely, the schools can skim off the top and use some of the money for other purposes. How much of this is going on is unknown except to the individual schools. Cutting off funds will force a review of what is happening to the money. In answer to the question, is any money misused AI says, Yes, there are instances where research funds sent to universities are misused. While universities are highly incentivized to ensure proper spending, fraud and misuse can still occur, leading to reputational and financial damage. Misuse can manifest in various forms, including fraudulent expense reports, tainted research results, and spending funds on unauthorized expenses. Human nature, being what it is, means there must be checks and balances.

Biden

Special counsel Robert Hur was assigned to review President Bidens handling of classified documents, something considered by many as a minor problem. When he released his report on February 2024 Hur concluded that no criminal charges were warranted, partly because he believed it would be difficult to convince a jury to convict Biden, whom he described as "a sympathetic, well-meaning, elderly man with a poor memory". This raised the question of whether a person who was not capable of standing trial could be president. To answer this the White House said that Hur was a republican operative and the report was right wing propaganda. Later when the report was released most felt that Hur was kind in his remarks. In hindsight, many suggested that Biden should have dropped out of the race at that time, which would have given the party time to have a nominating process. Others say that Harris would still have been the candidate because the party would have been unable to by pass a VP who was a Black female. They were captives of identity politics.

New regs on nuclear

The scientific community has been saying for some time now that the climate change problem can best be solved by nuclear power. Those opposed often sighted safety and waste disposal as reasons to avoid nuclear but that has changed. The new molten salt reactors automatically shut down when power is lost and they produce far less waste and can use up existing stored waste. The final factor against nuclear was the cost but that too has been reduced. The small reactors are produced assembly line style and shipped to the use point. The biggest cost factor was regulation and Trump has taken steps to reduce that. President Trump signed a series of executive orders aimed at boosting nuclear power and restructuring the independent Nuclear Regulatory Commission during an Oval Office event on Friday. The order calls for approvals of new nuclear reactor designs to be completed in no more than 18 months. Currently it takes 10 years to get approval. The only thing standing in the way of nuclear is the idea that wind and solar can replace fossil fuels and that has been debunked.

AI overview

The Trump tax cut in 2017 lowered the corporation rate from 35% to 21%. At that time the average corporate tax rates around the world were 25% so this made America more competitive. The result was that corporate tax revenue increase from $297 billion to $530 while overall revenues increased from $3.3 trillion to $5.1 trillion. This is a 7% increase while inflation during this time was 3.5%. When I google I get something called AI overview I asked, does government spending increase tax revenues and here is the answer Yes, government spending can increase tax revenues I asked, does private spending increase tax revenues and here is the answer Yes, private spending leads to increased tax revenues I asked, does lowering tax rates increase tax revenues and here is the answer No, cutting taxes reduces government tax revenues.

Asylum

Most illegal migrants do not qualify for asylum. An estimated 11 million people in the US lack legal immigration status. About 1.2 million have received final orders of removal meaning they have been found not to qualify for asylum. Before going after these people, the government has decided to deport migrants that have criminal records. Once those estimated 500,000 are deported the congress could pass legislation giving work permits to those who remain. The problem is that some require that the criminals go through the asylum process before removal. In 2019 asylum applicants waited an average of 1,030 days for court date. Then after the court determines they are not eligible for asylum they will get in line behind the 1.2 million already waiting for removal.

Deportations

President Obama deported 3 million illegal migrants and many of those were turned around at the border. This was before they had the legal right to determine their asylum status. Here is a story from the ACLU in 2018. The Border Patrol Was Monstrous Under Obama. Imagine How Bad It Is Under Trump. On a December morning, Border Patrol agents confronted a 15-year-old high school student named Jahveel Ocampo at a rest stop and threatened her with rape and she was forced to sign deportation papers and was deported. If you assumed this abuse happened during the Trump administration, think again. Jahveel was threatened in 2009 by President Obama’s Border Patrol, and her treatment was not an isolated incident. Her case is part of a pattern of physical, sexual, and emotional abuse by Customs and Border Protection officials against child immigrants that existed long before President Trump emboldened the agency by unleashing its officers to enforce his draconian immigration policies. We have received more than 30,000 pages of internal government documents detailing this abuse between 2009 and 2014 throughout the southern border region This finger pointed just illustrates how badly immigration reform was needed.

Medicaid

There are 10 million people who are able to work between ages 19 and 64 who are not working and receiving healthcare under Medicaid. The new law proposed would require these people to work 80 hours per month to retain their healthcare. A similar Act was passed by the house in 2023 but it did not pass the senate.

Medicare for all

The push for national healthcare, sometimes called Medicare for all, is getting more attention. The upside is an estimated savings of $45 billion per year from reduced administrative costs, better price negotiation power and increased access to preventive care. The downside is the availability of care. There is currently a shortage of medical care professionals and this will get worse as the population ages in particular the baby boomers. The Association of American Medical Colleges (AAMC) projects a shortage of 124,000 physicians by 2034 and a current shortage of 300,000 nurses. In additions there are shortages in health workers is special units like eldercare facilities. If healthcare is free for all then preventive testing will help but over use can cause delays in service. The US population is projected to grow by 6% by 2036 but the over age 65 group will grow by 34%. The net result is the people will trade lower cost for longer waiting periods.

Healthcare

With news around cuts in Medicaid it is time to review just what Obamacare did as compared to original Medicaid. Medicaid was originally for dependent children and their parents, the disabled and the elderly. Obamacare expanded to include single adults without children. Obamacare is free for low-income people and that includes about 5 million individuals. This includes individuals with an income of under $15,000 per year. Higher incomes will get some cost sharing with incomes up to $39,000. For example, the popular silver plan without cost sharing might have an annual deductible of $3,000 but with cost sharing could be as low as $700. This means that most people are paying about $3,000 out of pocket each year and many choose not to enroll. Since there are no preexisting conditions many prefer to wait until they need medical help. There is some risk here because enrollment starts on the first day of the month after applying. There are 7 million able bodied men between the ages of 25 and 54 who are not seeking work. These men would be prime examples of people not signing up until they need help. Obamacare also allows children under the age of 26 to remain on their parents’ health plan. A shift to national healthcare would simplify the system as there would be no monthly cost and no annual deductible. The cost would be paid by the federal government from income tax collections. Since the rich pay most of the income tax they would pay most of the cost of healthcare. The top ten percent of wage earners pay 75% of taxes so they would pay 75% of the healthcare cost. This is one way to reduce the wealth and income gap. It would end the private healthcare system in the US and all consumers would be subject to the rules laid down by the government. This is somewhat the situation today with Medicare.

Biden

There is something odd about the prostate cancer diagnosis on former President Biden. First off, an annual PSA test is recommended for all men over age 50. The president has his own personal physician and gets an annual physical at Walter Reed Hospital, one of the best in the country. Prostate cancer like all cancers doesn’t come on overnight but gets worse over time thus terms like stage 1,2,3 or 4. For prostate cancer these stages can take up to eight years. While not mandated by law, presidents in the United States generally undergo an annual physical at Walter Reed National Military Medical Center If this was not done could this be a case of medical malpractice against the president’s doctor. If this had been discovered at stage 1, could the metastasizing have been stopped. Was it discovered and was he receiving treatment without anyone knowing?

European Union

At the start of the 21st Century the global experts predicted this would mean the rise of Europe and decline of America. Europe had the right model to lead. They had a high quality of life, long life expectancy, low poverty rates, high social net protection, lots of leisure time and well-trained work force. So, what happened. Through a series of government decisions, led by people within the bureaucracy, unforced errs were made. A combination of climate activist and pro war leaders moved the continent toward economic collapse. Instead of a united Europe they have 25 separate countries all looking out for themselves. There is no national leader and various self-interested groups are involved in threatening unity. Adding to their woes is Trump’s demand for fair trade rules and for these countries to stop relying on the US for their protection. The result of all the great benefits the people enjoyed was low productivity. Some even go so far as to say they became lazy. For example, the US has 330 million people and a GDP of $27.7 trillion which is $84,000 per capita. The European Union with a population of 449 million has GDP of $29.2 trillion or $64,500 per capita. Some say the US people work too many hours and the European people work too few.

News

I have only been aware of podcast over the past year but they are a welcomed addition to the news. One of the protections of our constitution is the free press and public approval of the press has been declining since the days of Walter Cronkite in the 1960’s. The original purpose of the press was to present the facts and reserve opinion in the editorial section. Over the years the reporters slowly started to infuse opinion into their reporting and today the news is as much opinion as it is fact. Much of the misinformation starts at the beginning when decisions are made as to what will be reported. A false narrative can be put forth by omission. Pod cast to do not eliminate this but with more sources the public has a better chance of reaching the facts.

Cigarettes

One of the big concerns in the US today is the wealth and income gap. It is often suggested that this problem be tackled by raising taxes on the rich but one area is never discussed and that is what are called sin taxes, like cigarettes and alcohol. Cigarettes cost about $10 per pack and $4 of that is taxes. For example, as of 2023, the federal excise tax on cigarettes is $1.01 per pack, with many states adding their own taxes that can range from $1 to over $4 per pack. Aug 21, 2022 In the US people with low incomes smoke at higher rate. In the US, cigarette smoking prevalence is higher among individuals with lower incomes compared to those with higher incomes. Specifically, in 2019, smoking prevalence was 21.4% among people with annual household income less than $35,000, 15.7% for those with $35,000-$74,999, 11.4% for those with $75,000-$99,999, and 7.1% for those with $100,000 or more. A family with an income of $35,000 per year will spend $3,600 on cigarettes. That is more than 10% and, in most cases, this is less than this family will save for retirement. The average production cost of a pack of cigarettes is 30 cents. Part of cost for production cigarettes was a fine leveled against cigarette companies and they covered the cost by raising prices. Cigarette companies agreed to pay substantial sums to states as part of the Master Settlement Agreement (MSA). This agreement, reached in 1998, obligated the tobacco industry to pay states an estimated $206 billion over 25 years.

The new ways

A newbie in politics comes in with the goal of making things better but soon realizes it will take time so he must be reelected and this then becomes the number one thing. This means, in most cases, following the tried-and-true ways of conforming to get on committees and gain respect. In a short time, they become part of the establishment. Trump came in as an outsider and started fighting with the in crowd and was summarily dismissed as a comedic clown. As he gained some success, he continued his anti-establishment ways but soon gained popularity. He was fighting an up-hill battle but overcame all opposition and to the dismay of the political leaders was elected. In his second term he doubled down on his radical approach and is constantly proposing new ways to solve problems. In the Middle East he got four Arab countries to normalize relationships with Israel and is working on getting Saudi Arabia to join. He proposes a Palestinian Riviera which is laughed at and leads to the rich oil countries to consider investing in Gaza. He suggests moving a million Palestinians to Libya and is scoffed at. He thinks outside the box because he is concentrating on problem solving not getting reelected. He has a standard way of operating where he uses both economic and military power to forge new thinking. He remade the republican party and is in the process of ending globalization. He negotiates in public because experience as taught him that any secrets will be leaked. His back and forth, up and down way of deal making has the press in a tizzy. The public knows what is going on as soon as the press. He is called reckless and unpredictable and sometimes crazy as friends and enemies try to figure out what is going to happen next. He is willing to take the risk of going down the path less traveled and that kind of person is always persecuted. He is changing the world at a record pace and will need a midterm win to have a chance to succeed. The odds are against him but it is possible to reshape the globe.

Newsom

As California Governor Gavin Newsom gears up for a presidential run in 2028, he is pivoting toward the center but leaving behind a state with a number of problems. There is a $12 billion dollar deficit, the highest state income tax at 13.6%, the highest gasoline tax, the highest sales tax and the highest electricity cost. Except for the income tax these taxes are all regressive and hurt the poor far more than the rich. 250,000 upper middle-income people leave the state each year. The school system is in the bottom ten states and poverty rate is 21%. They shut down their nuclear power and spent $30 billion on a high-speed rail and not one mile of track has been laid. They shut down the lumber industry and the refineries which were good middle-income jobs. The people in power who set up this system live in safe gated communities far from the homeless living on the streets. If Newsom is the nominee will any of this information be made available by the press. His latest change of direction is a promise to do something about the homeless problem. During his term they spent $24 billion tackling this problem and things got worse.

California grid

California is phasing out diesel locomotives by 2035. The newest electric replacement for diesel uses a 460,000-pound battery and travels 60 miles between charges and takes ten hours to recharge. California is already suffering black outs and brown outs so this will put additional stress on the grid.

Raising taxes

Here is a quote from CNN: Trump floats raising taxes on the rich to pay for his sweeping tax and spending cuts This is an opportunity for the democrats to join in and talk this idea up but most remain silent.

Drug prices

For years the democrats have pushed for Medicare to have the authority to negotiate with Big Pharma on drug prices. For decades, Democrats have advocated for empowering Medicare to negotiate drug prices, arguing it would be a significant step towards making prescription drugs more affordable for Americans. As part of Biden’s Inflation Reduction Act, Medicare was allowed to negotiate prices on a few drugs. The Inflation Reduction Act, signed by President Biden, authorized Medicare to negotiate prices for certain high-cost drugs. Trumps plan is to modify what Biden did. Trump has also proposed a "most favored nation" approach, where the US would pay the lowest price paid by other developed countries for prescription drugs. This proposal could potentially lower drug prices but differs from direct Medicare negotiation. This is an opportunity for the democrats to jump on board and get drug prices down but they seem ambivalent and thus far have remained quiet.

Tariff changes

The plan to bring back manufacturing to the US can only be done over a few years and therefore it is important that China not collapse. The Chinese economy is in bad shape for a number of reasons but the US cannot replace all that it imports from China, without having time to build up its own industrial base. Here is a quote from The Hill: Trump on China trade switch-up: They would have broken apart. The US does not want to decouple from China but slowly bring manufacturing back home. This is not just a new version of nationalism but a matter of national defense when it comes to certain imports like rare earths. It is also a health concern in regards to pharmaceuticals some critical like antibiotics. This is the view of Trump supporters. The anti-Trump people feel that Trump caved on Chinese tariffs when he saw the market drop. Trump reduced the tariffs from 145% to 30% and shipments to the US from China increased immediately. They also said that Trump did this so the market would go down and his friends could buy low and the sell high when he changed the tariff percentage. The market dropped to 38,000 and rebounded to 42,000. As usual things are in the eye of the beholder.

Embargo

Iran could have had a nuclear bomb many years ago but prefers to use the threat as a negotiating tool. The experts say that a facility using 3,000 early-generation centrifuges, starting with natural uranium, could enrich enough material for one nuclear weapon in about four months. Iran has about 7,000 operational IR-1 centrifuges (the first-generation model) and thousands more stored. They are using that threat to get a deal with Trump. The only way a deal is possible is for Iran to agree to get rid of its centrifuges and have open inspections. This is based on the Reagan idea of trust but verify. Iran has promised this in the past but then they refuse inspections. An oil embargo would bring Iran to its heels and may be necessary to get an agreement.

Legal immigrants

During the Biden years an estimated 10 million illegals crossed the border not counting the got-a-ways which are at least a million. Of these, approximately 300,000 were unaccompanied minors that the government has lost track of and step one is to find them and make sure they are safe. The 435,000 convicted criminals should be rounded up and kept in jail while their cases are adjudicated and those who are convicted should be sent back. Then there are 1.3 million who have been denied asylum and they should be giving an opportunity to get work permits. After a five-year period, they can receive green cards and another five years be eligible for citizenship. The only requirements should be the ability to read and speak English and not have a criminal record. In addition, the US should welcome another million legal immigrants each year based on merit. These would be people who have skills that are needed by the work force.

Europe gas

As the world entered the new century the fear was that the supply of oil was running out. Then in the early 2000’s a new technology called fracking came on line and the supply of oil increased. Along with fracking for oil came a large amount of natural gas. This brought the price of natural gas down to record lows. Much gas was burned off in the oil fields and this led to the building of liquid natural gas export terminals. The first was constructed in 2016. Since then, 7 more have been constructed with two more on the drawing board. In the past nine years the exports of LNG have increased from .5Billion cubic feet per day to 12Bcf/d a 24-fold increase. These exports came just at the time that Europe cut its ties with Russia for natural gas. Today Europe gets 45% of its natural gas from the US.

Good jobs

As manufacturing jobs come back to America, some think it will be like the 50’s when workers were tied to machines but this time it will be different. The new factory jobs will require the operator to control the machine not just do repetitive task. An example of a step in that direction is an auto assembly plant. Workers fit components together using hand tools and robotic welders. They operate presses to shape metal sheet and control spray painting equipment. They ensure quality using digital readouts and manual inspections. One million auto workers produce 10 million cars. It is a tribute to the industry that one person can make ten cars per year. The new plants will use the next generation of technology where workers will be more skilled and higher paid. The construction of these new facilities will require trades people and many Gen Xers are getting trained to fill these jobs. The country is undergoing a major shift in how young people will be trained and what kind of work they will perform. The shift is the return of manufacturing jobs to America.

New policies

During the last half of the 20th century the US was seen as the champion of civil rights around the world. This led the US to believe that it was their responsibility to police the world and get rid of dictators and bring democracy to the people. Experience has shown that this approach did not work as evidenced by Afghanistan and Iraq. Going into foreign countries an attempting to make them more like America did not work and requires a change in policy. Trump is attempting to replace the military threat with economic persuasion. Mutually beneficial trade agreements can bring peace and prosperity but there will be some left behind. In the Middle East, for example, the small minority live in comfort while the majority are imported workers who have very few rights and benefits. It will be up to these countries to improve the lives of these workers and not the responsibility of the US. This will be controversial and open to disagreement.

Middle East

On Trumps visit to the Middle East, he laid out a new vision for US foreign policy. The US will no longer be going around the world, dictating how different societies should rule their countries using the military as threat, the so called neo con version of diplomacy. He pointed out that the past has led to wars and not peace and that under his administration the emphasis will be on economics. He sees the rich oil companies who are trying to diversify, investing in the US and in return the US helping them to develop AI in their countries. The oil rich countries will purchase US military equipment and protection from the US while the US sends technology for development in the Middle East. They can have the vast electric power to operate data centers and conduct research on new AI. They will move forward with small modular reactors to allow for more foreign sales of oil and natural gas. As the economic relationship between the US and the Middle East grows stronger, this opens the door to expand the Abraham Accords and in time for a relationship with Israel. At that time, the two-state solution for Palestine will become viable. Then all the countries in the area will be aligned against Iran who will be pressured to discard the nuclear bomb and look for economic ties with the rest of the world.

SS tax

Turmp originally propose not taxing social security but that would help rich more than poor and take away from the social security fund. His new plan is to increase the standard deduction for seniors by $4000 and that is more help for low- and middle-income people. Here is an example John is over 65 and has a social security benefit of $24,000 and a $18,000 pension. His tax under current law is $550. With no tax on social security his tax would be $300 and the proposed new plan of increasing the std deduction by $4,000 his tax would be $150. According to Richard Johnson, a senior fellow at the Urban Institute, for the 2024 tax year, people with income between $11,601 and $47,150 would see their annual taxes reduced by approximately $480, assuming the proposed increase was in effect. For John his tax would be reduced by $400 ($550 - $150) In most state, including MN, when the federal tax is reduced it lowers the state tax due.

EITC

Many public assistance benefits are reduced when people go to work. In order to minimize the loss, the government in 1975 instituted the EITC (earned income tax credit). Workers with incomes at certain levels could receive this benefit which this year is up to $7,800 for a working person with three children. When first introduced there was no requirement for social security numbers on dependents but that changed in 1986. That year 7 million children vanished meaning they only existed to collect EITC. Even with this change the IRS estimates that 33% of EITC claims are paid in error. For example, in fiscal year 2023, the IRS estimated that nearly 33% of total EITC payments were improper, totaling $21.9 billion. Using AI may help to reduce these mistakes but congress must follow up on its oversight responsibility. This same case can be made for many programs.

South Africa

In the news today white farmers in South Africa are leaving the country because of land reforms which include restitution and redistribution. Land was unfairly given to white settlers during the colonial times and the government is trying to make up for this past discrimination. White farmers are leaving. This is a repeat of what happened in Zimbabwe and lessons could be learned from past mistakes. Zimbabwe is an African country colonized by the British. In the 1930’s 50% of the farm land was given to 50,000 white farmers who developed high producing farms. These farms supplied the one million inhabitants with food. In 1980 the country gained independence and in 2000, under the leadership of Robert Mugabe, the country instituted land reform meaning they moved out the white farmers and replaced them with local Blacks. The result was a 64% decline in production and starvation for the people. Zimbabwe has experienced a severe economic decline since 2000. During 2003, the largest poverty rate was recorded in urban areas, with a massive 65% increased since 1995 and a 45% increase in rural areas. With poverty rates being at the highest it as ever been, in 2008, life expectancy within the nation reached an all-time low of 37 years old, as opposed to age 61 at independence in 1990 In retrospect, it would have been wiser to move the white farmers out over an extended period of time, allowing the new owners to learn how to farm. The white farmers could have been given an incentive to teach the new comers while being properly compensated for their land.

Iran

One of the more difficult problems facing Trump is the situation in Iran. He is currently on the negotiations path but Iran has proven to be an unreliable negotiator. This means the use of force and many feel this means bombing their nuclear facilities. Iran has huge supplies of oil and natural gas and a small population so they have no need for nuclear power, which means they are going to use enriched uranium for bombs. Once they get a couple bombs, they will use rockets from North Korea to deliver the bombs and Israel is a small country and using a first strike they could knock out the country. This is what they have said it their goal. Should the world wait or take action. To prevent a first strike it is necessary to take out the places where bombs are produced and stored. This can be done since Iran has no air defense. If that is the path chosen then step two would be to take out the military, which would allow the people to revolt and toss out the leadership. The question then becomes should the US allowed Israel to attack Iran using US made bunker busters, or should the US take on the task or would a joint operation be best. This is what Trump is facing and regardless of whether he acts or not he will be castigated by the press. They will wait until things are over and then pontificate on what he should have done. Trump knows this and also knows that the buck stops on his desk.

China's new reactor

This past summer, China started up the first fully operational small nuclear reactor using thorium fuel in molten salt. In the fall they added fuel to the reactor without shutting down. Uranium reactors must be shut down to refuel and this is time consuming and means loss of power. Thorium is three times more abundant than Uranium and is found on every continent. Thorium comes full strength and needs no enrichment like uranium. Thorium produces far less waste products and can use up existing stored waste. Thorium is fail safe meaning it cannot over heat as the reaction shuts down with loss of power. Thorium reactors do not use water and thus operate at normal pressure. These reactors run at much higher temperature (1,300 F) which is more thermodynamically efficient. In time the rest of the world will catch up with China.

Redistribution

The relationship between the new green deal and social change is slowly coming to the attention of the general public, even though they explained early on that this was their objective. Here is the original statement. The Green New Deal is a broad framework for a government agenda aimed at addressing climate change, economic inequality, and racial injustice. It encompasses various proposals, including transitioning to 100% renewable energy, investing in infrastructure, and implementing social programs. The underlying purpose was the redistribution of wealth using social programs with government deciding who gets what. The same things are true on the global stage. Certain wealthy and powerful people gather in Davos each year, to promote moving money from developed nations like the US to underdeveloped nations like Bangladesh. They decide who gets what and in the process, they take piece of the action. This is all done under the guise of saving the world from climate change.

Laws regarding sex

In 2022 a dispute arose between Disney and the state of Florida over the Florida Parental Rights in Education Act. The law is most notable for prohibiting public schools from having "classroom discussion" or giving "classroom instruction"[a] about sexual orientation or gender identity from kindergarten through 3rd grade Disney announced that it will build a Disney Park in Abu Dhabi. This illustrates that economics can overcome sexual differences since: Homosexuality is illegal in Abu Dhabi and the UAE. This means same-sex sexual activity, and potentially even public displays of affection, could lead to penalties. Penalties vary depending on the specific offense and the emirate's laws. They can include imprisonment, fines, deportation, and under Sharia law, theoretically even the death penalty, though this is rarely if ever carried out for consensual same-sex relations. Many people in the US are not familiar with the laws regarding sex in some countries. This was clearly indicated by the sign in a recent protest that said, Gays for Palestine.

Newsom

Just as Kamal Harris changed her mind on issues like Medicare for all, decriminalizing illegal border crossings, mandatory gun buy backs and reparations, Gavin Newsom is now following in her footsteps. Newsom recently started a pod cast where he interviews various conservative influencers, he came out against trans males in women’s sports and is now planning on removing homeless people from the streets. It is acceptable to change your mind when the situation changes but done too often gives the impression that you lack core values.

Follow the money

The homeless problem, particularly in California, was always blamed on the lack of affordable housing but other see things differently. Many feel that the homeless are mostly people with drug problems or mental illness and that giving them a home would not solve things. California spent $24 billion on the homeless over the past five years and the problem remains and the money disappeared. The homeless represent what is called in political parlance a cash cow. It is not uncommon for problems to be treated in ways that allow for the transfer of funds from one group to another while the government decides who gets what and this often ends up in reelecting incumbents. This happens on a national scale when congress allocates funds to agencies and doesn’t follow up on how the money is spent. Some funds are returned in the form of campaign contributions while other cases show elected officials getting wealthy. Billions have been handed out to various solar panel companies which have gone broke and the money just vanished. The congress seems unwilling or unable to follow the money.

NY v FL

NY State has a $254 billion dollar budget and 20 million people. Florida has $116 billion dollar budget with 23 million people. NY state is $180 billion in debt and Fl is $15 billion. The NY State constitution requires the state to have balanced budget yet the state is $180 billion in debt. How is this possible. New York can be in debt despite requiring a balanced budget due to a combination of factors, including the use of "backdoor borrowing" by public authorities, deferring obligations, and reliance on one-time budget maneuvers to achieve balance. These maneuvers allow the state to appear balanced in one year while shifting obligations to future years, ultimately contributing to the overall debt burden The result is that the people are taxed much higher in New York and more than 100,000 move out of the state each year. Conversely 350,000 people move to Florida each year. If you just divide the budget by the number of people living in the state you see that each resident of NY pays $12,700 in tax while each person in Florida pays $7,800. The budget is so high in NY because they provide benefits to garner votes and they cannot change that for fear of losing power. Thus, they are on a downward spiral as people leave and those who remain will see their taxes increase. As Ben Franklin said, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury

China trade

Trump has made progress in getting China to lower tariffs but that is only part of the trade problem. Besides tariffs, China employs various non-tariff barriers to trade, including quotas, licensing requirements, complex regulations, and administrative hurdles. These measures can restrict imports, raise prices, and impact competition. This means there is much work left to be done before China is a fair trade partner.

Estate tax

The greatest transfer of wealth in the history of the world is underway and two thirds finished. The baby boomers are in the process of transferring $120 trillion dollars to their heirs the Millennials and Gen X. The baby boomers are those born between 1946 and 1964 and the Millennials were born between 1981 and 1996 and Gen Xer’s were born 1965 to 1980. Since there are 135 million Millennials and Xer’s that comes to $888,000 each. This figure gives a false impression of the real facts which are that 60% of Americans will inherit less than $5,000. This further increases the wealth gap and brings forth calls for an inheritance tax. Currently the first $14 million is exempt from federal estate tax. Last year the government collected $20 billion in estate tax. The exemption will drop to $7 million if the 2017 tax cuts are not renewed. Those pushing to renew could do so and allow the estate tax exemption to drop to $7 million. This would help to pay for the no tax on TIPS.

Government pensions

The government is considering lowering the pension benefit for federal employees. Almost all private companies did away with pension plans and replaced them with savings plans like 401K’s. The government could remove the pension plan and increase the savings plan and allow these employees to retire at the same income they earned while working and save the government money. The average federal government employee earns $105,000 as opposed to the average US employee who earns $67,000. Government employees have three sources of income. The first is their pension, which if this employee started working for the government at age 25, would have 37 years of service at age 62. His pension would be 37 times .011 times $105,000 or $42,735 per year. In addition, he would receive $21,600 ($1,800 per month) from social security for a total of $64,335. In addition, the employees have a thrift savings plan where the government matches the first three percent at 100% and then the next two percent at 50%. Assuming the employee took advantage of this it would at 5% grow into $426,000 which at 5% would yield $21,000 per year and he can retain the principal. His total retirement income will be $85,300. His last year working he would net $78,000. This is typical of most employees who have a pension plan. They retire at age 62 with more net income than when they were working. In this case $7,000 more. In most cases people need less money at retirement not more. The children are grown and for many the house is paid and they have no more deductions for social security and pension. There are currently 20 million government employees and 11 million private company employees who have pension plans and this number is decreasing each year.

Fair and unfair

One of the main reasons why there is confusion about tariffs is the distinction between fair and unfair. Most are for free and fair tariffs but not for unfair tariffs. In the 90’s when President Clinton signed NAFTA most working people were opposed. They realized this would send manufacturing jobs to Mexico what Rose Perot referred to as a giant sucking sound. The same happened in the 1999 Seattle WTO protests. These were violent protest mostly by liberal groups like labor unions understanding that manufacturing jobs would be going to China. Green activists, blue-collar workers, and consumer advocates formed an eclectic alliance furious at the impact of the WTO’s enforcement of free trade on the environment and workers’ rights. The unfair trade agreements have resulted in a $1.2 trillion dollar deficit and Trump is trying to change to reciprocal tariffs and bring these jobs back home. Key unions like the Teamsters and auto workers are backing Trump but many liberals are opposed. This is one of the reasons that workers are moving toward the republican party.

German energy

Germany, though a series of unforced errors, is watching its economy crumble as recession extends past two years. The government decided to close their 25 nuclear power plants and cut off natural gas from Russia and industry and households paid the price as cost of electricity rose by 280%. One example is Volkswagon that is closing three of its ten assembly plants and VW has never closed a plant before. VW plans to regroup and build up in the US. The plan is to expand production in Tennessee and South Carolina and build new facilities to build Porsche and Audi models. Much of German chemical producers' capital spending is apparently being shifted to the U.S. Over the past three years, the companies spent €6.5 billion on building new plants there or expanding existing facilities. Germany has reactivated its closed coal plants to reduce energy cost. They were going to lead the way to clean energy but they got ahead of themselves. As countries move away from fossil fuels they cannot rely on wind and solar without nuclear. The US can learn from Germany’s experience.

Obama or Biden

As former President Biden makes his tour many people compare him to Obama and find that the voters much prefer Biden. In 2012 Obama got 66 million votes and in 2020 Biden got 81 million votes.

Going broke

In the private economy, voters express their preferences by purchasing products but in government they express their desires by voting. Voting has a few problems in that most people are upset with government but 95% of representatives are reelected. Polls show trust in government has declined from 77% in the 1960’s to 20% today. Why people keep reelecting the same officials is a mystery. The common answer is we like our representative but not others. In the private world when profits go down it means loss of jobs but in government when goals are not met it means more money is needed. In business one way to increase profits is to lower cost but in government there is no measurement of profit so no incentive to lower cost. It is well known that government agencies will spend all the money assigned to them even if it means unnecessary spending. The Washington Post published an article concerning the large amount of office furniture stored in warehouses. At the end of each fiscal year many departments buy new furniture to use up their budget. In many public areas, like schools, the need is always for more money. Businesses go broke everyday but governments small and large never go broke. Local governments raise taxes to cover loses and the fed just prints money.

Turbines

The recent power failure in Spain illustrates one of the problems with wind and solar. Spain and Portugal get about 80% of their power from wind and solar. In most countries the power comes from fossil fuels which means rotating turbines. When there is a glitch in the power system the turbines can speed up or slow down to compensate but with wind and solar there are no turbines. If they had been using small nuclear reactors for power this would not happen since these units use turbines.

SMR's now

The move away from globalization is being challenged by the establishment and this can best be seen in the way the world is approaching climate change. The two competing ideas of wind and solar verses fossil fuels are both pro globalists. Fossil fuels contaminate the air with heavy metals like mercury, lead and arsenic along with nitrates and sulfates that create acid rain. In addition, they add CO2 to increase temperatures. Wind and solar contaminate the ground water with the same chemicals plus other poisons but without CO2. The answer is small nuclear reactors (SMR’s) which contaminate neither. These new reactors are fail safe, produce far less by products and can use up existing waste. Used in combination with the new gas turbine they produce low-cost electric power. In addition, synthetic gasoline, diesel and jet fuel can be made without the damaging chemicals. The CO2 is extracted from the air and returned to the air and these products are made with the same size molecules meaning more efficient burn. Synthetic fuels much like today’s synthetic oil are more efficient and can replace transportation needs of cars, trains and planes. Many private companies are financing their own SMR’s. The government can review and remove many regulations that were set in place for safety reasons which are no longer needed for the new reactors and this will speed up construction and lower cost. The hang up is the establishment which profits from the current system and provides financial benefits to certain groups. SMR’s use electric power to change water into hydrogen and oxygen by electrolysis and the hydrogen can be combined with CO2 to create transportation fuels using the Fischer-Tropsch process. The CO2 is neutral since it is extracted from the air and returned to the air. The hydrogen can also be used directly as a fuel. The SMR’s run continuously for years and the fuel supply is almost unlimited using both uranium and thorium. Neither the reactor or the turbine use any water and can be manufactured on an assembly line basis and shipped to the use point meaning no long distance power lines. As more power is needed additional units are added.

Universities

The current controversy surround Ivy league schools, has brought attention to the fact that somewhere along the way, these schools moved from teaching students how to think to teaching them what to think. The foundation of this new thinking is based on the premise that the world today is divided into two groups, the oppressors and the oppressed. While there are many examples of this dichotomy the most talked about is the oppression by white skinned people over those with brown skin. This movement began in the late 1960’s at the university level and over the past 60 years has moved into primary and high schools. It was an attempt to right past wrongs and thus started with good intentions but in time, like many things, moved further and today many people feel it has gone too far. Thus, the current controversy.

Carried interest

Trump is proposing eliminating the tax loop hole called carried interest. This will affect private equity investors in venture capital and hedge funds. A group of wealthy private investors get their money together and form a hedge fund. They use this money to buy businesses with the goal of increasing efficiency and thus profits. They take a 2% fee for doing this but in addition they get a share of the new profits over certain amount. Their share over the threshold amount is 20% and currently if they hold those profits for three years before selling their share, the profit is taxed at capital gains rates. To remove this loop hole means these profits will be taxed as ordinary income rates which for most rich people means paying twice as much tax on the profit.

Trump tariffs

China is often accused of intellectual property theft but how they do it is rarely explained. A good example is Westinghouse nuclear power plants. They started research and development in the 1950's and after many years and many dollars they came up with the process and how to build the plant. In 1995 the World Trade Organization started and a panel of judges was set up to determined trade rules. In 2001 China joined the WTO and began to circumvent the rules. Westinghouse went to China to build nuclear power plants but China demanded they have access to all private information. This was a pattern that China followed with all companies that wanted to do business in China. Westinghouse built 4 reactors and that was the end. Today China has 56 reactors all build by the Chinese government using Westinghouse technology. They were able to get away with this because they tied up any disputes in the WTO and dragged approvals out for years. During Trump’s first term he blocked the appointment of judges to the WTO to keep China from stealing intellectual property. He followed this up by placing tariffs on Chinese goods. Biden continued these and added to the tariffs and in Trumps second term he further increased the tariffs. This example of Westinghouse was repeated by China on every company that wanted to do business in China and continues to this day. China uses stolen technology and government subsidies to flood the market with cheap products and run the competition out of business. In the late 1990’s the US was the world leader in solar panel production. China, once again, used stolen technology and government subsidies to take over the market. Today China produces 80% of the solar panel market and US companies continually go broke trying to compete. Trump is tying to put a stop to this dumping of products by using tariffs.

Harvard

The government funding of universities, such as Harvard, has come under scrutiny and exposed some interesting information. Most of the government money is designated toward projects for the government such as research grants for medicine and military. So far so good. In practice the universities skim money off the top for other uses that the university selects. It is like Planned Parenthood saying they don’t use government money for abortions just for other healthcare. Money is fungible and like most other situations, congress does not follow up with oversight to see how the funds are being spent. This is the same with many different government agencies and groups within agencies. The misuse of funds has recently been exposed by DOGE. It is possible that the country is just too large for congress to keep tabs on.

Migrants back or not

For many years most Americans (polls show 80%) agree that the immigration system is broken but politicians knew that if they brought up the issue, they would be accused of being uncompassionate or worse being racist so they remained quiet. Obama changed the way they count deportations by including turn arounds at the border. This increased his numbers to the point where he could offset the claim of racism by suggesting the children who were born here should be citizens (DACA). People were still upset with the migrants and Trump came along and capitalized on the issue and got elected. The press who didn’t like Trump considering him racist went after his border stance but the people held firm. On day one when Biden took office, he reversed Trump’s border policies and migrants poured in by the thousands. Defenders said these people were just the poor trying to have a better life but these poor were around long before Biden made the changes. As the number of migrants passed the 200,000 per month mark nothing was said in the press except for Fox news who had a reporter on the border with a drone showing nightly pictures of migrants streaming across. Then in August of 2022 one man stepped up to the plate and everything change. Governor Abbott of Texas started sending migrants to northern cities and the press had to cover the situation. This then led to Trumps elections and the fight has now switched to whether the migrants should be sent back or not.

PFAS

Back in the 1970’s companies were burying harmful substances. These plant managers were mostly chemical engineers and were fully aware that in 30 or 40 years these steel containers would rust away and these dangerous substances would get into the ground water. As expected, the government created the Super Fund to clean up these thousands of places at a cost of billions. More recently 3M paid 10 billion in fines to clean up the Polyfluorolkyl Substances commonly called PFAS which they had buried and it contaminated the ground water. Chemical waste has been found in high concentrations around multiple 3M facilities in the US, including its 1,750-acre factory in Minnesota, where the state claims there is a 100-square-mile underground plume of leaked PFAS. These chemicals are used in the manufacture of solar panels and each year 5 million used panels are buried in the US and this number is expected to rise. Solar panels may very well save the planet. But the way they’re being produced and disposed of right now is seriously hurting the environment. Thousands of tons of PFAS waste are put in landfills each year — and the sector has no idea how to deal with it. While the mining and processing of materials needed for solar panels is currently done mostly in China the disposal of these panels is done in the USA. Once again, the problem is just buried for future generations to handle.

Solar panels

A good example of the difference between China and US production is the solar panel business. First off, most solar panels are made in China. In 2022, about 1.9% of the solar panels installed in the U.S. were made in the U.S. The vast majority, roughly 88%, were imported, primarily from Asia, with China accounting for nearly 78% of all panels globally. China not only makes the solar panels but they use coal energy to mine the rare earths while they contaminate the ground water, use cheap labor sometimes child labor while forcing people to move out of their homes. They have no worker protections and the government subsidizes the industry. In the early part of 2024, over 100 US solar companies went bankrupt. This number is significantly higher than previous years, and some sources even estimate that at least 100 more companies could fail. Major solar companies that have closed or filed for bankruptcy include SunPower, Pink Energy, and Lumio. Mining rare earths in the US would be opposed by environmental groups. The one US mine in Navada was shut down in 2002 and reopened in 2017. Even today the ore is sent to China for processing because of environmental concerns. The US prefers to send the processing out of the country to protect the environment. Old solar panels are sent to landfills. Solar panels contain several potentially hazardous materials, primarily due to the metals used in their construction. These include lead, cadmium, silver, and arsenic. Additionally, some solar panels may contain hexafluoroethane and polyvinyl fluoride, which are also considered toxic, as well as copper indium selenide and copper indium gallium (di)selenide.

Change or not

Ten years ago, when Trump came on the scene, he was considered a joke and was not taken seriously by the national press. In time his dual claims of draining the swamp and make America great again caught the attention of the voters, especially the low- and middle-income people. The first group to be caught up in the Trump revolution was the old standby republican party. The old leaders like George Will, Bill Crystal, Mitt Romney and Mitch McConnel were moved aside to make room for new younger faces like Rubio, Kristi Noem and Tim Scott. The next to fall were the old-time democrats like Pelosi, Biden and Schumer and the new faces are now gaining prominence. While the change in the republican party has been smooth because of Trumps leadership the democrats are in disarray as they try to find a new leader. While the republicans have goals like securing the border, bringing jobs back home, deporting criminals, reducing waste and fraud and ending the Ukraine War, the democrats concentrate on Trump saying he will end democracy and calling him a dictator. The next group to be challenged is a combination of the press, Hollywood, big business and academia. These people see the end of globalization as a threat to their power. The net result is that the low- and middle-income people have moved away from the democratic party which is now controlled by rich, White, college educated, mostly coastal people. All of this has caused a major overhaul in the politics of the country and the battle lines are set. If Trump wins it will mean an earth quake shift toward working people and if he loses it means going back to the old ways. The chances of a Trump win are slim because it is hard to beat City Hall.

Future

Available capital in our society comes mainly from people between the ages of 50 and 65 and the baby boomers have been the largest contributors of capital for the past 15 years but they are retiring and shifting their investments from stocks to fixed accounts. This removes a lot of money from investment and thus raises the cost of capital. This is coming at a time when the country is experiencing a manufacturing revolution which will lead to the doubling of the industrial base in just few short years. To the rescue will be private industry. US companies are sitting on $7 trillion in cash just waiting for the right time to expand and build new facilities. Apple recently announced that it plans to invest $500 billion in the US. Add to this the other US companies and the estimate $5 trillion of foreign investments coming in and the capital needs will be met. Economic expansion will follow and wages will rise as productivity rises. This will be accelerated by the innovations that always follow expansion.

AI vs labor

During the past 50 years while manufacturing was offshored the primary motivating factor was labor cost but thanks to technology and AI that is no longer the case. The move toward reshoring is prompted by the fact that the efficient operation in new factories is not determined by labor cost. When computers first came on scene the driving force was programmers but in this new world the need is for tradesmen. AI will be the new programmers. New factories will be much larger and contain much more technology. First it takes large numbers of skilled craftsmen just to build the facility. Then it takes others to build the machines that will build the machines to install in the factory. While engineers will lay out the plans, it will be workers who put the plans into effect. People will receive on the job training on how to operate the machines (robots) that build the finished product and it will be people learning on the job how to build the robots that build the robots. All of those jobs that left the country during the past 50 years will be coming back to build the future. Some jobs will be eliminated, some will be created and all jobs will be changed but as has happened throughout history since the start of the industrial revolution, more jobs will be created than lost. The biggest need will be for electric power and small nuclear reactors are ready to satisfy this need.

Nuclear power France

In 1953 President Eisenhower recognized the potential for nuclear energy and proposed Atoms for Peace. By the mid 1960’s the US was well on its way to building nuclear power plants. The same thing was happening in France but soon opposition to nuclear power took front stage and this slowed development in the US but not in France. The French government took control and the opposition was stymied. The result is that today the US produces 18.9% of its power from nuclear and France get 70%. The result is that the US emits 14.57 metric tons of CO2 per person while Francs is at 4.63 tons. This is the result of groups like Green Peace who even to this day are opposed to nuclear power. Today’s nuclear power plants are more efficient, safer and produce far less waste yet there is still far more regulations than France.

Children

One of the most concerning things about the border crossings during the Biden years was the number of unaccompanied minors. The AP reported that the Trump administration is conducting a massive, multi-agency review of 450,000 migrant children who crossed the US-Mexico border without their parents during President Joe Biden’s term. There is no way to determine how many children came in or where they are.

Iran oil

One of the big discussions currently going on in the Trump cabinet involves Iran. One side is pushing sanctions and threatening military options and the other side is pushing diplomacy and negotiations. A good compromise would be to stop all oil shipments from Iran and send the ships back. Iran cannot survive without revenue from oil and gas exports.

Trade

The GDP is negatively effect by the trade deficit. GDP is consumption, investment, government spending and export/import balance. The GDP is $27.7 trillion and the trade deficit is $1.2 trillion meaning without the trade deficit the GDP would be $28.9 trillion.

NATO

There are 32 countries in NATO and the US contributes $3.6 billion which is 16% of NATO’s budget but that is only part of the story. NATO’s military personnel strength is 3.4 million and the US contributes 1.3 million or 41%. Some countries like Germany send troops but they are not allowed in combat. NATO countries spend less than 2% of their GDP on defense while the US spends 3.7%. Since the founding of NATO in 1949 the US has been the major supporter. Trump is asking that NATO step up its support especially since the Ukraine War started. These countries have been using their defense money savings to provide social services to their people and it will be difficult, if not impossible, for them to reduce these benefits, so it means higher taxes. NATO countries are required to come to the rescue if any country is attacked. When the US was attacked on 9/11 other countries joined the US. The US spent $2.3 trillion plus $530 billion in interest for a total of $2.8 trillion. The other countries added $130 billion or 4% of the total. The US suffered 7,085 deaths while the other countries lost 1,449. The US sent 100,000 troops while the other countries sent 30,000.

Wages

As the reshoring gets underway, the big question is how will the US overcome the wage difference between here and different countries. A good example to look at is the garment business in Bangladesh where the minimum monthly wage is $113 or 63 cents an hour. The first step is to understand the inefficiency. The average number of employees in a US textile mill is 13, while in Bangladesh each mill employs 800. The new mills being built in the US get more product per employee. If the US employee makes $50 per hour including benefits the labor cost is $650 per hour while in Bangladesh the cost is $504 (63 cents times 800) per hour. The US is seeing a resurgence in textile manufacturing, including the construction of new facilities. The newer mills are more efficient due to technology and AI. In addition, the transportation cost from Asia is eliminated and that has increased by 300% in recent months. Having mills in the US allows the companies to change styles more quickly which means more sales. The point is that the oft talked about wage discrepancies regarding cheap foreign labor may not be as great as first appears. This means that if tariffs are removed from all sides the US may be able to compete. .

Private investment

Both Biden and Trump agreed that bringing home jobs to America (reshoring) was good for the USA. Biden with his America Frist plan and Trump with MAGA have pushed for reshoring. Trump started things in his first term by placing tariffs on China and Biden added new tariffs. Next Biden passed the CHIP Act and the Infrastructure and Jobs Act which promoted American jobs. Trump has followed up with tariffs designed to make products made in America more competitive. So far foreign and domestic companies have pledged more than $5 trillion dollars to invest in US manufacturing. Biden spent $2 trillion of government money which adds to the deficit and causes inflation while spending private money will do neither. Private companies are even setting up their own power systems to ease the stress on the grid. This is the capitalist system at work. Government should make things easier for private companies by using regulations and tax policies in ways that promote efficiency.

Protest

This is a headline from NPR May Day protestors will rally nationwide against the war on working people. Anti-Trump protesters have expressed a range of concerns regarding the administration's recent actions, including the elimination of thousands of federal jobs, immigration raids, and billionaire Elon Musk's involvement in downsizing the U.S. government. This article emphasizes the federal government not the private sector. It is the private sector (manufacturing jobs) that has been devastated by globalization over the past 50 years. This is what Trump is trying to reverse but it is not being well received by the establishment groups, who want to maintain the status quo. Trump is trying to bring back the millions of jobs that were offshored by big businesses trying to increase profits at the expense of the working people. Government employees have not felt the sting of these lost manufacturing jobs and would like to keep things has they have been. The country is undergoing a metamorphosis as these industrial jobs are coming home. This is pro labor and unions welcome this change of direction. American workers will once more be making products here in this country for American consumers. This will mean high paying jobs much like was the case in the 1950’s where wages increased by 4% while inflation rose by only two percent. Reshoring will revitalize the unions. Increased worker benefits will raise prices but new factories using the latest technology along with AI will lower cost. The protestors are using the cover of government layoffs to hide the real agenda which is deporting illegal migrants.