Cincinnatus BLOG *** Political Commentary – Social Commentary

Private Sector Jobs – The Missing Ingredient in Obamanomics

 

Six months of railing against business rather than finding ways to encourage entrepreneurs to expand and hire has left the Obama administration with egg on its face. “Pass my $800 billion Stimulus Plan and unemployment will not exceed 8%” was the Obama administration mantra. Well we passed it, and unemployment will soon exceed 10%. President Obama said his Stimulus Plan would save or create 3.5 million jobs in the next two years. This cornucopia of 1960′s “Great Society” style social programs misbranded, as a Stimulus Plan has not produced jobs and worse still is unlikely to produce any permanent private sector jobs. Maybe a few hundred thousand temporary infrastructure jobs will be created over the next year or two but that is the best we can hope for from the ill conceived plan.

The reality… For the unemployment rate to fall, we must not only increase the number of jobs, but that increase must exceed the expected increase in the size of the labor force. In other words, merely increasing the number of Americans working will not necessarily decrease the unemployment rate. Today there are 154 million Americans in the labor force and just to maintain the status quo, 2.0 million new jobs must be created annually (a 1.3% increase).  Just to stand still, we need 167,000 new jobs every single month. More than 85% of the permanent jobs must come from the private sector.

As if to add insult to injury President Obama has chosen to support the “Waxman-Markey global warming bill” over creating new jobs. A study by Charles River Associates concluded that if Obama signs off on the Congressional proposal to reduce CO2 emissions, it would have a serious impact on the availability and cost of energy. “By 2025, just 16 years from now, the cost of natural gas would rise 56%, electricity 44% and motor fuel 19%. Annual household purchasing power would annually decline by an average of $1,827. And America will lose 3.2 million jobs.” Obama can choose to placate his base and hope that the creation of “Green Jobs” will at least partially offset this loss or he can choose to use his influence to eliminate the more draconian aspects of the legislation and offend the left.

I am sure that President Obama is aware that Energy use is the direct correlate of a vibrant economy – in the United States for example; we consume 24% of the world’s oil and are responsible for approximately 28% of global GDP. We cannot just reduce our energy consumption, we have to replace it with new cleaner sources or the economy will suffer. It should also be clear that when the economy is weak it is the poor and the less educated that bear the brunt of the burden. For example, the current 9.4% unemployment rate is not equally distributed: the unemployment rate for college graduates is 4.8%, for those who have not graduated high school 15.5%, African American men 16.8% and for African American men and women under 20 it is a whopping 39.4%. As the old song says you always hurt the one you love -especially if you cater to your elite base.

We often appear to ignore the intrinsic reality that all life is carbon based and that at the moment all accessible large-scale sources of energy save nuclear and hydroelectric, are correspondingly carbon based.  As a World Street Journal Editorial on August 5, 2008 pointed out, “The U.S. has a great deal invested in fossil fuels not because of a political conspiracy or because anyone worships carbon but because other sources of energy are, right now, inferior”.

Obama will have to make amends for his thoughtless bombastic rhetoric – Greedy Wall Street bankers! Hedge fund moneylenders! Speculators! Shameful profiteers! – If he hopes to gain the support of American business and create the jobs that America needs to reduce the unemployment rate.

Here are a few of my suggestions for correcting the economic blunders of the past six-months:

1.     Entrepreneurial Incentives – In the short run we should help finance innovative ideas in all areas, including green technology, telecommunications, biotechnology, nanotechnology and all other embryonic inventions that will improve our lives. Since so much capital is sitting on the sidelines in Treasury Bills, let’s suspend future capital gains tax on any investment that is made in new technology for the next year. We have absolutely nothing to lose. If capital stays on the sidelines we will create no jobs and collect no additional taxes. If, however, the money is invested, we could create hundreds of thousands and possibly millions of permanent jobs and collect income taxes from every employee rather than paying them unemployment benefits.

Yes, we can create jobs without spending the taxpayer’s money and simultaneously help all those budding entrepreneurs currently starving for capital. Critics will say, “Another tax cut for the rich”. The potential loss of capital gains taxes 20 or 30 years hence when these entrepreneurs sell their companies is insignificant when discounted to current dollars, literally pennies on the dollar.

2.     Accelerated Depreciation – If we allow businesses to fully depreciate their capital expenditures in the first year of a jobs plan, it will go a long way to stimulate our manufacturing base and maintain and possibly increase employment in 2009 and 2010. Although not necessarily equal, there is an offset between the loss of revenue from business and the increase in revenue from greater employment.

3.     Issue 1 million “green cards“  – Over the next 12 months, issue green cards to well-educated immigrants who have the resources and will to commit to starting small businesses, which are the greatest engine of job creation in the U.S. Priority should be given to those who want to create export companies. We will create millions of jobs, reduce our surplus housing inventory by 1 million units, sell a large number of cars and reduce our balance of trade at no expense to the U.S. taxpayer. Such a plan would also increase our most important natural resource, intellectual capital.

4.     For those who may worry that I’m unrepentant tax cutter at a time when deficits are exploding, I say -”Cutting Marginal Tax Rates Won’t Work” – Such cuts should not be included because they would probably not be as helpful as they have been in the past. When President Ragan did it, marginal rates where high, 70% and there was a clear benefit to reducing them. Using a physics analogy a 70% marginal tax rate created massive economic potential energy, which was converted to economic kinetic energy by dropping the rate to 28%. Today, marginal rates are not high enough to store potential energy, and cutting them will generate little kinetic effect. But we can revisit this when the current tax cuts expire at the end of 2010 and all the new Obama taxes are implemented. Rates will then be high enough that cutting them may make a difference.

5.     Government at all levels has an important role to play in creating high paying jobs for the future, Education – Over the long term we must improve our performance because we are falling behind other sophisticated OECD countries, particularly in mathematics and science, and that does not augur well for the future. We are the nation of ideas and innovation, we will never be able to go backward and compete for unskilled jobs in a global economy. Our children are our future – but only if we educate them.

I’m sure there are many other innovative ways of creating jobs. I invite you to share your thoughts.

Rising Health Care Costs – A Sign Of Progress!

 

In the United States we spend more per capita on health care than any other country in the world. We spent $7,421 per capita as compared to about $3,500 countries with universal national health care systems such as France and Germany. In fact, according to the latest data, we spent $2.2 trillion in 2007 on health care, or 16.2% of our Gross Domestic Product (GDP). Even more worrisome is that expenditures continue to rise at an alarming rate of 6% annually.

There is however, another side of the American health care story, one that is rarely discussed but one that has added dramatically to health care costs. In the past 25 years we have turned deadly diseases such as AIDS and many cancers into chronic illnesses. Death is cheap and prevents health care cost from spiraling upward. Twenty-five years ago a diagnosis of AIDS meant death within 6 to 12 months. Today, we have every expectation that a newly diagnosed AIDS patient will live more than twenty-five years. The same is true for many cancers. It is expensive to keep these chronically ill patients alive and functioning normally but most would agree it is worth the extra cost.

As we develop new and admittedly costly procedures and therapies to transform these and other deadly diseases to manageable chronic illnesses, health care costs will continue to rise. But what is the alternative – Don’t invest billions in research and development and stand up and shout, “Stop The World I Want To Get Off – It’s too expensive”? For those who view the world only through an accountants “green shades” – May I remind them that by saving these lives and allowing our fellow citizens to function normally, they will become productive tax paying contributors to society.

There is also the mistaken belief that preventative care by primary care physicians will save the system hundreds of billions of dollars – If the prevention strategies we employ are just platitudes – Eat better, lose weight, exercise more, stop smoking – then they will cost very little and they will save money by keeping people healthy. But we don’t need a healthcare system for that – A public service advertising campaign will probably be more effective. If prevention requires medical intervention however, it will cost a lot of money. Medical prevention is a great thing but it requires extensive and often costly screening to find risk factors such as hypertension, elevated cholesterol genetic predisposition to certain cancers etc.

In an essay in a recent edition of the Wall Street Journal Dr. Abraham Verghese explained – “Discovering high cholesterol in a person who is feeling well, is really just discovering a risk factor and not a disease; it predicts that you have a greater chance of having a heart attack than someone with a normal cholesterol. Now you can reduce the probability of a heart attack by swallowing a statin, and it will make good sense for you personally….. But if you are treating a population, keep in mind that you may have to treat several hundred people to prevent one heart attack. Using a statin costs about $150,000 for every year of life it saves in men, and even more in women since their risk of heart attack is lower.”

The more that preventative medicine is applied to increasingly large populations for an expanding list of preventable diseases, the greater the current cost to the system. Saving money on a heart attack that does not occur 20 years from now will not pay for the necessary prevention that will allow Americans to live longer and healthier lives. We have to pay for it today.

In addition, adding more patients to the system will require that we increase the numbers of health care professionals. This is both desirable and expensive. If we make the reasonable assumption that American physicians currently work a full day; who is going to treat this new influx of patients. While it may overstate the case to say that these patients are not receiving any healthcare, it is instructive to calculate how many physicians would be needed to treat 46 million additional patients. In the U.S. we have approximately 3.0 physicians per 1,000 people thus, if we extrapolate we would need an additional 138,000 physicians to treat this population.

We are already behind the curve; there were 15,242 medical school seniors in 2008 to fill approximately 22,000 residencies. Not surprisingly, roughly 4,650 were filled with foreign graduates, some of whom were Americans who had studied abroad. The balance was filled with graduates of osteopathic schools. The medical-colleges association has called for a 30% increase in enrollment by 2015 as compared with 2002 primarily by expanding existing schools and opening new campuses. This goal may be unachievable. Thus, in the future, larger numbers of foreign medical school graduates will be needed to meet our needs since, expansion of medical education is unlikely keep pace with the increased need for physicians.  For example, the medical-college association estimates that if physician supply and use patterns stay the same, the United States will experience a shortage of 124,000 full-time physicians by 2025. Universal healthcare will further increase the need for physicians.

A recent study published in the New England Journal of Medicine estimated that 23% of medical school graduates begin their professional life with $200,000 or more of debt from pre-med and medical school loans. In addition, a substantial number have over $100,000 in debt by the time they graduate. At what point is it uneconomical to become a U.S. physician knowing that government is dedicated to reducing its expenses by limiting the income a physician can earn?

Medical students in Europe and elsewhere, where national health programs are virtually universal do not pay to attend medical school, the government who in a very real sense limits the ability of these future doctors to earn a living, has made a implicit bargain with the students; education is free but the government reserves the right to determine your level of compensation throughout your professional career. At the moment, the American medical student is asked to go into hock for $200,000 or more while their ability to control their level of compensation once they graduate may be determined by government bureaucrats.  Americans are likely to perceive such a system as inherently unfair, and may insist that government pay for medical education, like the rest of the Western world.  Has Congress calculated the potential cost? Will they increase the quota for foreign trained physicians to enter the U.S. to help alleviate the shortage?

There are however, actions that can be taken to reduce unnecessary cost. Elimination of the cost of defensive medicine is a crucial step in a “real” healthcare reform effort. Defensive medicine occurs when doctors order tests, procedures, or visits, or avoid high-risk patients or procedures, primarily to reduce their exposure to malpractice liability. The cost to Americans is difficult to calculate because it is divided between inappropriate behavior and the more insidious and costly subversion of the whole health care system. 

Several studies give us at least a sense of the magnitude of the easily identifiable problem of inappropriate behavior. Conservative estimates put its cost at more than $100 billion annually. According to one study of more than 900 physicians by the Massachusetts Medical Society and UConn Health Center researcher Robert Aseltine Jr., about 83 percent of physicians reported practicing defensive medicine, with an average of between 18 percent and 28 percent of tests, procedures, referrals, and consultations and 13 percent of hospitalizations ordered for defensive reasons.

It is instructive to look at a common example of the more insidious systemic problems that our overzealous malpractice system creates. Since the 1960s, hysterectomy has been one of the most frequently performed inpatient surgical procedures in the United States, with an estimated 33% of women undergoing a hysterectomy by 60 years of age. The medical/legal “rationale” for this excessive number of hysterectomies is that it prevents cancer and prolongs the life of women.

There is a relatively easy way to calculate how many of these procedures are medically unnecessary. In Western Europe, for example, only about 10%-12% of women under 60 have undergone a hysterectomy. Yet European women do not have a higher incidence of reproductive cancer and they actually have a longer life expectancy than American women. Conclusion, two-thirds of all hysterectomies performed in the United States are unnecessary.

For lack of a better phase I will call this ubiquitous problem the “Legal Hysterectomy” procedure. What gynecologist in the U.S. will cease performing questionable hysterectomies, knowing that in the unlikely event the patient develops a reproductive cancer or just excessive menstrual bleeding a lawsuit is a virtually certainty? Therein lies the problem. Every medical specialty has its own “Legal Hysterectomy” procedures and combined they not only waste unconscionable sums of healthcare dollars but subvert the medical system itself.

America needs special health courts aimed not at stopping lawsuits but at delivering fair, predicable and reliable decisions. A special court would provide expedited proceedings with knowledgeable staff that would work to settle claims quickly. Trials would be conducted before a judge who is advised by a neutral expert, with written rulings on standards of care.

When all is said and done the key to health care reform is spending more money on real care and less on wasteful side shows.

The 4th Of July – A Quintessential American Holiday

 

Embodied in our founding documents is the promise of unparalleled “Opportunity For All”. This is what makes America unique. In no other country can children of poor immigrants rise to the pinnacle of wealth and power. Talent, education and hard work are building blocks of the American success story, not birthright or ethnicity.

Have we done enough to preserve our special heritage – Have we been good custodians of our patrimony? As the son of bootblack I know firsthand the opportunities that can arise when you mix education and hard work. The American system has certainly worked well for this boy from the Bronx as well as for a half African-American lawyer who recently became President of the United States and countless tens of millions of others who have risen from poverty.

In our good intentioned attempt to right injustice we seem more often to fail than succeed and I fear that in subtle ways we erode the very foundation of the American experience. Freedom to stand and fall on our own has been the hallmark of American culture. It is what foreigners admire about us and what we admire in ourselves.

We are ethically obligated to provide a safety net for the less fortunate but must do so in a way that preserves unlimited opportunity for all. Despite all our efforts to right societal wrongs we still have a bifurcated class structure in the United States but it is not rich vs. poor but rather educated vs. uneducated. For example, the current 9.5% unemployment rate is not equally distributed: the unemployment rate for college graduates is 4.7%, for those who have not graduated high school 15.5%, African American men 16.4% and for African American men and women under 20 it is a whopping 37.9%. The high unemployment rate among African Americans is correlated with the disproportionately low levels of educational achievement.

We must find a way to ensure that every American has access to the education that will ensure prosperity the 21st century global economy. We can’t go backward to the “good old days” of unskilled factory jobs for the masses; we must educate our entire population to take advantage of the opportunities of the future. All other social programs are doomed to failure if we don’t educate our children.

The United States is the single greatest investor in education in the world. For the latest year in which we have comparative data, 2004, expenditures per student for the United States were $9,368 at the combined elementary and secondary level, which was 42 percent higher than the average of $6,604 for the member countries of the Organization for Economic Cooperation and Development (OECD). At the postsecondary level, U.S. expenditures per student were $22,476, which was nearly twice as high as the OECD average of $11,418.

Despite this expenditure, the 2006 Program for International Assessment, which measured the applied learning and problem-solving skills of 15-year-olds in 30 industrialized countries, found the U.S. ranked 25th out of 30 in math and 24th in Science. Maybe it is time to deal with root causes rather than continue to delude ourselves into to believing that by just spending a little more money we will fix a failed system. I don’t mean to imply that all school districts have all the resources they need; only that in the aggregate we already spend the money and do not reap the appropriate value for our education dollar.

First, we have to admit we have systemic disease in our education system and two aspirin won’t cure it. Second, you can only improve your average by bringing up the lower 50% not by dragging the top 50% down to the least common denominator. Our children are bright and our goal must be to must maximize their talents and stoke their ambitions. Seems simple, but it runs counter to most of our education policies.

Our inner city public school systems are a disaster.  The simplistic conclusion reached by policymakers is that if we simply spend more money the gap between whites, African-Americans, Latinos and lower income students will simply disappear.

A recent report found that only about half (53%) of all young people in the nation’s 50 largest cities are graduating from high school on time. Cities in Crisis 2009: Closing the Graduation Gap, prepared for America’s Promise Alliance by the Editorial Projects in Education Research Center, shows that despite some progress made by several of these cities between 1995-2005, the average graduation rate of the 50 largest cities is well below the national average of 71 percent, and there remains an 18 percentage point urban- suburban gap.

Let’s address head-on the greatest challenge facing our education system: incorporating the African-American community into it. The data clearly shows that all policies to date have been a colossal failure. If I were asked whom to put in charge of solving the problem my answer would be Bill Cosby. Doctor Cosby has a firm grasp of the sociological problems within the community, the need to involve the whole family, to make doctors and lawyers as cool as athletes and rock stars and not to disadvantage our children with an illiterate and incomprehensible dialect that separates African-Americans from the rest of American society. We also need to redistribute some of our education dollars into the inner cities, but money alone will do little unless we take on the bigger issues and get the dedication of parents, teachers and the community.

On this 4th of July lets dedicate ourselves to one objective, educating all of our children so that we can truly say America is the land of unlimited “Opportunity For All”.

New Climate Bill – Guaranteed To Increase CO2 Production

 

From Disneyland on the Potomac another ill conceived environmental bill, the  “American Clean Energy and Security Act” which will virtually guarantee that global carbon dioxide (CO2) levels increase at faster rate. In the process we will also eliminate over 3 million American jobs.

President Obama has chosen to placate his left wing base by promoting the “Waxman-Markey global warming bill” over his stated goal of creating new jobs. A study by Charles River Associates concluded that if Obama signs off on this Congressional proposal to reduce CO2 emissions, it would have a serious impact on the availability and cost of energy. “By 2025, just 16 years from now, the cost of natural gas would rise 56%, electricity 44% and motor fuel 19%. Annual household purchasing power would annually decline by an average of $1,827. And America will lose 3.2 million jobs.” Obama can only hope and pray that the creation of “Green Jobs” will at least partially offset this loss.

Rather than focus on available technological solutions, Obama says let’s burden hard working American consumers with another ill-conceived regressive tax! Who will ultimately pay for this brilliant plan? Consumers of course! This burden, however, will not be shared equally. The already economically hard-hit middle of the country, which is dependent on coal-fired plants for electricity, will be disproportionately taxed. The White House talks the talk when it comes to helping the economically challenged States of the “Rust-Belt,” but they sure don’t walk the walk.

The goal of the “American Clean Energy and Security Act” is to reduce overall U.S. greenhouse gas emissions by 17% from 2005 levels by the year 2020, and 83% by mid-century. In typical Congressional and Obama one-dimensional thinking they seem to have forgotten that it is global carbon dioxide production that we concerned about. American manufacturing which is already uncompetitive in the global market is about to become even less competitive.

Hooray we can reduce U.S. CO2 production by a miserly 17% by 2020. But by increasing the cost of manufacturing in the U.S. we will almost certainly demolish what is left of our manufacturing base and wind up outsourcing it to the least environmentally friendly country in the world, China. China has does not restrict CO2 for fear of making its manufacturing base uncompetitive.

China is by far the largest producer of carbon dioxide (CO2) in the world. A conservative estimate is that for every molecule of CO2 we save in the United States, China, our surrogate manufacturer will incrementally produce 3 CO2 molecules. In net effect by making manufacturing to costly in the U.S. we may technically reduce our CO2 production by 17% but we will have our proxy China incrementally increase their CO2 production threefold – resulting in an real increase in the U.S. related carbon dioxide production of 34%.

America’s biggest oil companies will probably cope with the new U.S. carbon legislation by closing fuel plants, cutting capital spending and increasing imports. Experts predict – “It will lead to the opportunity for foreign sources to bring in transportation fuels at a lower cost, which will have an adverse impact to our industry, potential shutdown of refineries and investment and, ultimately, employment”. Contrary to President Barack Obama’s goal of reducing dependence on overseas energy suppliers, the bill would give U.S. refiners an incentive to import more fuel.  With one bold sweep of Obama’s pen he can make us more dependent on foreign energy and cause a further deterioration in our balance of trade.

When the only tool you have is a hammer, the whole world looks like a nail. In other words, there is no problem that a bureaucrat can’t solve, if only we would let them pass another regressive tax. That may well be the sum total of the creative thinking that has gone into the Obama  “American Clean Energy and Security Act”. The Obama Administration proposes that companies buy a permit for each ton of carbon emitted, at an estimated cost, to start of approximately $13 to $20 per ton. The permits could then be bought and sold. The theory behind this convoluted scheme is that it will somehow miraculously increase energy efficiency and renewable energy development.

We could solve this problem in any number of ways that would not unduly burden the consumer. Let me give you a few examples.  In the United States we emit over 24 metric tons of carbon dioxide per person; in France they emit a little over 6 metric tons per person. So, let’s do it the French way and cut our emissions by nearly 75%. The centerpiece of France’s green strategy is of course clean nuclear power. France generates more than 75% of its electricity from nuclear reactors. All the power you want 24/7 and no carbon dioxide. The excess energy produced in off-peak times can be used to charge electric vehicles at night or generate hydrogen from water as a means to power the future hydrogen economy.

Even the “green” Germans seem to have finally come to the conclusion that wind may be fine as a supportive source of clean energy, but it is limited by both scale and its inherent intermittent nature. This year’s German election will probably result in a reversal of its long standing anti-nuclear policy, as it has become increasingly clear that only dependable nuclear power can generate carbon dioxide free, base load electricity on a nationwide scale. In Europe, the population seems to have finally realized that for 30 years the Germans have talked green but only the French have acted green.

The technology to replace carbon dioxide-belching cars and planes with high-speed inter-city mass transportation has existed for more than three decades. Continuing on our French green theme, there is, of course, the TGV (Train a Grande Vitesse) high-speed train. Following the inaugural TGV service between Paris and Lyon, in 1981, the TGV network, centered in Paris, has expanded to connect cities across France and adjacent countries. TGVs link with Switzerland, and through the French Thalys network with Belgium, Germany and the Netherlands. The Eurostar network links France and Belgium with the United Kingdom.

The key to producing less carbon dioxide emissions from fossil fuels is to use the fuel with the lowest carbon to hydrogen ratio. Coal is the least desirable because there are roughly 2 carbons for each hydrogen; oil is cleaner because it has the inverse ratio of approximately one carbon for 2 hydrogen molecules; and best of all is methane (CH4), with 4 hydrogen molecules for each carbon molecule. Natural gas is primarily methane. Thus, the reduction in carbon dioxide emissions when natural gas is substituted for gasoline in an automobile is about 25-30%.

Natural gas may not be the perfect solution to our need for a clean transportation fuel but it is certainly a good one and one that can be deployed in tens of millions of standard size vehicles in a relatively short period of time. The perfect solution will take at least a decade or two to be developed for standard size cars and trucks.

Voltaire had it right: Le mieux est l’ennemi du bien or “the perfect is the enemy of the good”. While there are only about 130,000 Natural Gas Vehicles (NGV) in the U.S, there are nearly 4.5 million of these alternative fuel vehicles worldwide, mainly in Argentina, Brazil, Pakistan, Italy, Germany and India. In Italy alone there are more than 400,000 NGV’s, demonstrating that this is not a pie-in-the-sky idea, but one that is easily and quickly implemented.

This essay is too short to detail all of the viable technological solutions that could be applied to reducing carbon dioxide emissions that would be far superior to an unimaginative regressive tax such as the “American Clean Energy and Security Act”. So let me enumerate a few additional thoughts: geothermal energy can play an expanded role, hydroelectric plants should be built not dismantled, coal gasification should be expanded, and tidal power, which unlike wind is not intermittent should be developed, as well as the creation of an energy efficient smart grid.

Unfortunately, politician of both parties appear to have limited ability to think creatively and tend to rely on regressive tax schemes to solve all of mankind’s ills.

Healthcare Reform – Myths And Miracles

 

The U.S. must join the rest of the Western world and ensure that every American has access to modern healthcare. We will however accomplish nothing worthwhile if we provide universal healthcare insurance and don’t have a real plan to deliver healthcare to the 46 million Americans who are now uninsured. Liberals, conservatives and moderates in Congress have developed innumerable insurance schemes, electronic medical record systems, a cliché or two about living healthy lives, tax mechanisms to pay the bill but have no plan to actually deliver healthcare the day after they congratulate themselves on reforming the “healthcare system”. Maybe they can borrow George Bush’s “Mission Accomplished” sign.

Those of us who have worked with dozens of differing universal healthcare systems throughout the world come to the problem with a very different perspective. Universal insurance is the easy part, it only costs money, and depending on the political flavor of the month, we will make our choice on how to pay for it.

Let’s examine some of the myths and deal with the reality.

Myth I – Preventative care by primary care physician will save the system hundreds of billions of dollars - If the prevention strategies we employ are just platitudes – Eat better, lose weight, exercise more, stop smoking – then they will cost very little and they will save money by keeping people healthy. But we don’t need a healthcare system for that – A public service advertising campaign will probably be more effective. If prevention requires medical intervention however, it will cost a lot of money. Medical prevention is a great thing but it requires extensive and often costly screening to find risk factors such as hypertension, elevated cholesterol genetic predisposition to certain cancers etc.

In an essay in a recent edition of the Wall Street Journal Dr. Abraham Verghese explained – “Discovering high cholesterol in a person who is feeling well, is really just discovering a risk factor and not a disease; it predicts that you have a greater chance of having a heart attack than someone with a normal cholesterol. Now you can reduce the probability of a heart attack by swallowing a statin, and it will make good sense for you personally….. But if you are treating a population, keep in mind that you may have to treat several hundred people to prevent one heart attack. Using a statin costs about $150,000 for every year of life it saves in men, and even more in women since their risk of heart attack is lower.”

The more that preventative medicine is applied to increasingly large populations for an expanding list of preventable diseases, the greater the current cost to the system. Saving money on a heart attack that does not occur 20 years from now will not pay for the necessary prevention that will allow Americans to live longer and healthier lives. We have to pay for it today.

Myth II - If we can convince more young physicians to enter primary care we will be able to efficiently treat the increased patient load – If we make the reasonable assumption that American physicians currently work a full day; who is going to treat this new influx of patients. While it may overstate the case to say that these patients are not receiving any healthcare, it is instructive to calculate how many physicians would be needed to treat 46 million additional patients. In the U.S. we have approximately 3.0 physicians per 1,000 people thus, if we extrapolate we would need an additional 138,000 physicians to treat this population.

We are already behind the curve; there were 15,242 medical school seniors in 2008 to fill approximately 22,000 residencies. Not surprisingly, roughly 4,650 were filled with foreign graduates, some of whom were Americans who had studied abroad. The balance was filled with graduates of osteopathic schools. The medical-colleges association has called for a 30% increase in enrollment by 2015 as compared with 2002 primarily by expanding existing schools and opening new campuses. This goal may be unachievable. Thus, in the future, larger numbers of foreign medical school graduates will be needed to meet our needs since, expansion of medical education is unlikely keep pace with the increased need for physicians.  For example, the medical-college association estimates that if physician supply and use patterns stay the same, the United States will experience a shortage of 124,000 full-time physicians by 2025. Universal healthcare will further increase the need for physicians.

A recent study published in the New England Journal of Medicine estimated that 23% of medical school graduates begin their professional life with $200,000 or more of debt from pre-med and medical school loans. In addition, a substantial number have over $100,000 in debt by the time they graduate. At what point is it uneconomical to become a U.S. physician knowing that government is dedicated to reducing its expenses by limiting the income a physician can earn?

Medical students in Europe and elsewhere, where national health programs are virtually universal do not pay to attend medical school, the government who in a very real sense limits the ability of these future doctors to earn a living, has made a implicit bargain with the students; education is free but the government reserves the right to determine your level of compensation throughout your professional career. At the moment, the American medical student is asked to go into hock for $200,000 or more while their ability to control their level of compensation once they graduate may be determined by government bureaucrats.  Americans are likely to perceive such a system as inherently unfair, and may insist that government pay for medical education, like the rest of the Western world.  Has Congress calculated the potential cost? Will they increase the quota for foreign trained physicians to enter the U.S. to help alleviate the shortage?

Myth III – Expensive misuse of emergency rooms for primary care will decrease when all patients have insurance – This logic is perverse. Since we have a shortage of physicians patients with insurance cards will be showing up at emergency rooms in even greater numbers. They have nowhere else to go. If we don’t first solve the physician shortage problem emergency rooms all over the country will be overwhelmed.

Myth IV – Government purchasing power will reduce the cost of prescription drugs and thereby significantly reduce health costs- We spent $2.2 trillion in 2007 on healthcare, or 16.2% of our Gross Domestic Product (GDP). Even more worrisome is that expenditures continue to rise at an alarming rate of 6% annually. Prescription drugs account for approximately 10% of that total. Prescription drugs have always accounted for only 10% of the total going back as far as the Eisenhower administration. A simple calculation will show that even if you cut prescription drug cost by 25% tomorrow the cost of health care would still grow at 3.5% the first year and return to its 6% trend line by the following year. Prescriptions drugs are to small a fraction of the total cost to make a significant difference.

In fact, if used properly prescriptions drugs should reduce the cost of more expensive care. Moreover the use of prescription drugs per se will not decrease it will increase to a per capita level that is commensurate with other Western countries that have universal healthcare systems. Forget the propaganda that we are a drug-oriented culture, the reality is that our per capita consumption is far below Western Europe. We may decrease the cost per unit with government pressure but our overall prescription bill will increase and it will have virtually no impact on overall healthcare costs.

Myth V – Electronic medical records (EMR) will save billions – EMR will make the practice of medicine more efficient and safer but it is unlikely to reduce costs significantly. Doctors, nurses, therapists, particularly in hospitals will be spending more and more time focused on the computer, communicating with each other, ordering and getting test results etc. People are what cost money in any business and they will be spending increasing amounts of time feeding the computerized monster.

Myth VI - We can have a cost effective healthcare system without tort reform – Elimination of the cost of defensive medicine is a crucial step in a “real” healthcare reform effort. Defensive medicine occurs when doctors order tests, procedures, or visits, or avoid high-risk patients or procedures, primarily to reduce their exposure to malpractice liability. The cost to Americans is difficult to calculate because it is divided between inappropriate behavior and the more insidious and costly subversion of the whole health care system. 

Several studies give us at least a sense of the magnitude of the easily identifiable problem of inappropriate behavior. Conservative estimates put its cost at more than $100 billion annually. According to one study of more than 900 physicians by the Massachusetts Medical Society and UConn Health Center researcher Robert Aseltine Jr., about 83 percent of physicians reported practicing defensive medicine, with an average of between 18 percent and 28 percent of tests, procedures, referrals, and consultations and 13 percent of hospitalizations ordered for defensive reasons.

It is instructive to look at a common example of the more insidious systemic problems that our overzealous malpractice system creates. Since the 1960s, hysterectomy has been one of the most frequently performed inpatient surgical procedures in the United States, with an estimated 33% of women undergoing a hysterectomy by 60 years of age. The medical/legal “rationale” for this excessive number of hysterectomies is that it prevents cancer and prolongs the life of women.

There is a relatively easy way to calculate how many of these procedures are medically unnecessary. In Western Europe, for example, only about 10%-12% of women under 60 have undergone a hysterectomy. Yet European women do not have a higher incidence of reproductive cancer and they actually have a longer life expectancy than American women. Conclusion, two-thirds of all hysterectomies performed in the United States are unnecessary.

For lack of a better phase I will call this ubiquitous problem the “Legal Hysterectomy” procedure. What gynecologist in the U.S. will cease performing questionable hysterectomies, knowing that in the unlikely event the patient develops a reproductive cancer or just excessive menstrual bleeding a lawsuit is a virtually certainty? Therein lies the problem. Every medical specialty has its own “Legal Hysterectomy” procedures and combined they not only waste unconscionable sums of healthcare dollars but subvert the medical system itself.

America needs special health courts aimed not at stopping lawsuits but at delivering fair, predicable and reliable decisions. A special court would provide expedited proceedings with knowledgeable staff that would work to settle claims quickly. Trials would be conducted before a judge who is advised by a neutral expert, with written rulings on standards of care.

Myth VII – Government will ensure that the most cost effective treatments are utilized – When Congress is involved can special interests be far behind. For example, Massachusetts which recently initiated a State based healthcare reform system has found it essential to cover hair transplants. If for one moment you believe that the cosmetic dermatologists engorged with their collagen shots and herbal therapists with a nutritional cure-alls etc. are not lining the halls of Congress as well as lining the pockets of Congressmen then you have been out of the country too long.

The current debate is less about healthcare reform and more about insurance reform, perhaps if we reverse our priorities we could focus on the big issue – Providing every Americans with not only affordable healthcare but first-rate healthcare as well.

SchizOnomics – Job Creation In The Time Of Obama

 

The first lesson every President learns is that in trying to please all his constituents he pleases no one, including himself.

President Obama sold the $800 billion Stimulus Plan to the American people as a strategy to create untold infrastructure jobs. If fact, President Obama said the stimulus plan would save or create 3.5 million jobs in the next two years and that he hoped to limit the unemployment rate to a peak of 8% this summer. In typical political bait and switch fashion his democratic Congress allocated 8% of the stimulus money to infrastructure projects. Instead of infrasturture jobs Congress gave us cornucopia of social programs that have been on their wish list for decades, leaving the President with egg on his face.

The unemployment rate has already reached 9.4% and will undoubtedly exceed 10% by the summer. The administration has been forced to drop its job creation rhetoric altogether and has been reduced to having Joe Biden make unsubstantiated claims that the stimulus package has saved 200,000 jobs in its first 100 days. Joe says this with a straight face knowing full well that there is no possible way to calculate jobs saved. Even if you could devise a method, the number is so small compared to the 154 million strong American labor force that it would amount to no more than a rounding error.

President Obama may have pleased innumerable factions in his left wing base by signing the stimulus plan with all it grandiose social programs but he will be left to stand alone and explain month after month through most of 2010 why we have double digit unemployment after Congress spent $800 billion on “his” stimulus plan. In private I am sure he regrets not having insisted that the heavily democratic Congress spend more than a paltry 8% on infrastructure projects. As an astute politician he also knows that his ability to blame all ills on his predecessor is coming to an end. The question he is undoubtedly asking himself is how long do you have to be President before have to take responsibility for being President?

President Obama will soon have to choose between signing the “Waxman-Markey global warming bill” and creating new jobs. A study by Charles River Associates concluded that if Obama signs off on the Congressional proposal to reduce CO2 emissions, it will have a serious impact on the availability and cost of energy. “By 2025, just 16 years from now, the cost of natural gas would rise 56%, electricity 44% and motor fuel 19%. Annual household purchasing power would annually decline by an average of $1,827. And America will lose 3.2 million jobs.” Obama can choose to placate his base and hope that the creation of “Green Jobs” will at least partially offset this loss or he can choose to use his influence to eliminate the more draconian aspects of the legislation and offend the left.

I am sure that President Obama is aware that Energy use is the direct correlate of a vibrant economy – in the United States for example; we consume 24% of the world’s oil and are responsible for approximately 28% of global GDP. We cannot just reduce our energy consumption, we have to replace it with new cleaner sources or the economy will suffer. It should also be clear that when the economy is weak it is the poor and the less educated that bear the brunt of the burden. For example, the current 9.4% unemployment rate is not equally distributed: the unemployment rate for college graduates is 4.8%, for those who have not graduated high school 15.5%, African American men 16.8% and for African American men and women under 20 it is a whopping 39.4%. As the old song says you always hurt the one you love -especially if you cater to your elite base.

We often appear to ignore the intrinsic reality that all life is carbon based and that at the moment all accessible large-scale sources of energy save nuclear and hydroelectric, are correspondingly carbon based.  As a World Street Journal Editorial on August 5, 2008 pointed out, “The U.S. has a great deal invested in fossil fuels not because of a political conspiracy or because anyone worships carbon but because other sources of energy are, right now, inferior”.

In time-honored political tradition Obama has taken advantage of the economic crisis and selected an unpopular target: Greedy Wall Street bankers! Hedge fund moneylenders! Speculators! Shameful profiteers! It is so ever so tempting to fall back on classic stereotyping. Appealing to innate prejudice is like taking candy from a baby for an articulate politician who wants his way. Ultimately, Obama has to placate these “devils” because they are the ones that create 85% of America’s jobs. If they have no confidence in the future and believe that the current administration is anti-business they will be very slow to expand and create new jobs. 

The reality… For the unemployment rate to fall, we must not only increase the number of jobs, but that increase must exceed the expected increase in the size of the labor force. In other words, merely increasing the number of Americans working will not necessarily decrease the unemployment rate. Today there are 154 million Americans in the labor force and just to maintain the status quo, 2.0 million new jobs must be created annually (a 1.3% increase).  Just to stand still, we need 167,000 new jobs every single month.

Obama will have to make amends for his bombastic rhetoric if he hopes to gain the support of American business and create the jobs that America needs to reduce the unemployment rate.

U.S. Immigration Policy – Confused and Unintelligible

 

From the beginning of our republic, immigration has played a critical role in the vibrant United States economy.  Diversity and innovation are the very hallmark of our nation. That is not to say that immigration has not sparked controversy in every generation. Today, no one would critique mainstream German and Irish immigrants, but only a century ago they were looked upon as “Papist” invaders. Similarly today’s immigrants will be tomorrows all-Americans.

There are 12 million or so undocumented immigrants already living in the U.S. In addition it is estimated that 400,000 people enter the country illegally each year — a direct consequence of the fact that our current policy is to make available only 5,000 visas annually for low-skilled workers.

We need a plan to legalize this group while at the same time creating a system that allows the U.S. government to control the flow of new low-skilled workers. The following elements should be included in any immigration reform plan:

1.     It’s time for the xenophobes to get over it – The vast majority of the 12 million undocumented immigrants are here to stay. Their children are American, they have roots in the United States and frankly they are here because we needed their labor. First and foremost a path toward citizenship must be created for all but the criminal element within the undocumented community.

2.     Politics be damned, forget the punitive punishment of fines etc. – Let’s give all the immigrants that can demonstrate that they have been in the U.S. for at least six months and have no criminal record, identification that legally recognizes their status as immigrants. This is both the first step on the path to citizenship and also provides a way for the U.S. government to gain some semblance of control over who is actually in the country.

3.     The path to citizenship should be the same for all legal immigrants, creating a special system is punitive and unwarranted. Our Italian, Irish, German, Polish, Jewish etc. ancestors where treated equally (sometimes badly) and the system worked well. It isn’t broken let’s not fix it.

4.     Future immigration must be subject to real legal control. Given that a limited number of unskilled jobs that will be created in a 21st century global economy, we probably cannot absorb 400,000 unskilled laborers per year.  But we can accommodate 200,000+ legal unskilled immigrants per annum, once the recession has passed.

5.     Since millions of disserving individuals from all over the world would like to immigrate to the United States a lottery system will have to be established which gives priority to those who have relatives in the United States. This is merely recognition of our traditional pattern of immigration where once an immigrant is established he or she tries to bring the rest of their extended family to the U.S.

6.     Open boarders with neighboring countries is not an option – We remain a sovereign country. The most difficult aspect will be how do we select quotas by country? Mexico for example, cannot fill the majority of the slots. The United States cannot become the release valve for the pressure building up in such a poorly managed economy. There would be no end to that game and ultimately Mexico would become a ward of the U.S. The best option is do to all that we can to help Mexico fix its internal problems.

7.     Little “Ellis Islands” should be established on the southern boarder to process legal immigration while the rest of the boarder must be controlled either with fences, electronics and/or air and land patrols. Unlike the descendents of the current 12 million undocumented immigrants who will never be able to trace the entry of their ancestors, lets make sure that the next wave of immigrants retains this wonderful connection to American history. All immigrants should have “Ellis Island”.

8.     If during economic boom times we need more labor by all means we should have a guest worker program.

Simultaneously, we have a need for highly educated scientific researchers but again there are not enough H-1B visas to meet legitimate corporate demand.

Worse still we make it difficult for American educated foreign scientists to stay in the United States. Should an American educated foreign scientist leave the country to attend a brother’s wedding or visit a dying parent or simply take a vacation — they could well be informed that they cannot come back until the U.S. government had done a security screening – which could take years. This is troubling because foreign students and researchers, especially from India and China, comprise more than half of the scientific researchers in the U.S. They earn 40% of the Ph.D.s in science and engineering, and 65% of the computer science doctorates.

The Obama administration seems to have adopted a policy in its stimulus plan that would be prejudicial to American educated foreigners despite the fact that may have graduated at the top of the class from one of America’s great Universities. The mantra is lets hire Americans even if American educated foreigners are more qualified. The only thing the administrations policy disserves is the xenophobia award.

On a broader economic note, we should embrace diversity and formally recognize the contribution foreigners make to the U.S. economy. Let’s start by issuing 1 million “green cards“  – Over the next 12 months, issue green cards to well-educated immigrants who have the resources and will to commit to starting small businesses, which are the greatest engine of job creation in the U.S. Priority should be given to those who want to create export companies. We will create millions of new jobs, reduce our surplus housing inventory by 1 million units, stimulate the auto industry and reduce our balance of trade at no expense to the U.S. taxpayer. Such a plan would also increase our most important resource, intellectual capital, which is the basic premise upon which our immigration policy should be based.

Compassion and self-interest should be the cornerstones of American immigration policy.

Environmentalism – A Neo-Malthusian World View

 

The morphing of environmentalism to Malthusian disaster theory leaves me with an uneasy feeling. Environmentalists seem more concerned with halting human economic progress than protecting the environment. Elite environmentalists, like their forefather, Malthus, appear to use nature merely as an excuse to discipline less enlightened members of society. 

Malthus believed we would be unable to feed ourselves as our numbers expanded. He postulated that short-term gains in living standards would inevitably be undermined as population growth outstripped food production. Malthusian population theory was eventually dismissed for its pessimism and failure to take into account technological advances in agriculture and food production.

Malthusian population disaster theory however covers more than just the limits of food production, it encompasses all of earth’s natural resources – “The power of population is indefinitely greater than the power in the earth to produce subsistence for man”  – Thomas Robert Malthus.

Today Neo-Malthusian environmentalists echo the same popular Malthusian themes – In a recent article in Scientific American Robert Engelman summed up their fears – “In an era of changing climate and sinking economies, Malthusian limits to growth are back-and squeezing us painfully. There will be less water for every cattle herder. The United Nations projects there will be more than four billion people living in nations defined as water-scarce or water-stressed by 2050, up from half a billion in 1995. Less land for every farmer – At a bit less than six tenths of an acre, global per capita cropland today is little more than half of what it was in 1961, and more than 900 million people are hungry. Less capacity in the atmosphere to accept the heat trapping gases that could fry the planet for centuries to come. Scarcer and higher-priced energy and food. And if the world’s economy does not bounce back to its glory days, less credit and fewer jobs.”

Recent years have seen a ratcheting up of the Malthusian rhetoric by so-called “environmentalists”. In a recent editorial in the Wall Street Journal by the horticulturist, George Ball, entitled Naturalism Has Been Hijacked – Man is not a cancer on the planet – the author pointed out “that a segment of the Green movement presents a fresh challenge to mankind’s place within nature. Humans, the thinking goes, are one species among the many, a life form coexisting with others, our rights commensurate with those of snail darters, mosquitoes and coral reefs. Conversely, mankind is portrayed as a cancer on the planet.

“Self-described “evo-lutionaries” and animal-rights activists feel justified in spiking trees, burning down housing developments, vandalizing laboratories and threatening the lives of researchers and their families. One activist author posits that the planet can support only one billion people — a number surely including the writer, his friends and extended family. Another activist advocates saving the world through euthanasia, abortion, suicide and sodomy. However, the truly repugnant part of this story is that these are both tenured professors in wealthy universities….. A Yale professor even maintains that owning pets is a kind of species colonialism.”

Indeed the world population is likely to grow from 6.8 billion today to 9.1 billion by 2050 and the challenges ahead are daunting but Malthusian pessimism and the irrational positioning of animals and even plants at the same level as sentient humans is both disingenuous and dangerous.

In the writings of Malthus one can find justification for being protectionist, anti-immigration and limiting the fecundity of the “lower classes”. Today Neo-Malthusian environmentalists are protectionists who support immigration restrictions. Their reasoning goes, if you let poor Mexicans into the United States they will earn money, learn to drive, and participate in other middle class activities. This will dramatically increase their carbon footprint and contribute to the earth’s destruction. The environmentalist logic is presumably that if the poor remain poor the world will be a better place for the privileged few.

Environmentalists are rabid supporters of abortion, which on the face of it seems benign. But their support is not for the same reason that I am Pro-Choice – I believe that women have the natural, and unalienable right to control their own fecundity. The environmentalists see abortion in the traditional Malthusian way, as a means of controlling reproduction of the “lower classes”.

The most pernicious legacy of Malthus is his suggestion that human reproduction can benefit from the techniques of animal husbandry anticipating the idea, which, in 1883, Francis Galton called Eugenics:

“It does not… by any means seem impossible that by an attention to breed, a certain degree of improvement, similar to that among animals, might take place among men. Whether intellect could be communicated may be a matter of doubt; but size, strength, beauty, complexion, and perhaps longevity are in a degree transmissible… As the human race, however, could not be improved in this way without condemning all the bad specimens to celibacy, it is not probable that an attention to breed should ever become general.”

Frances Galton first formulated Eugenics by drawing on the recent work of his half-cousin Charles Darwin and the philosophy of Thomas Malthus. From its inception prominent people such as Margaret Sanger, Woodrow Wilson, Teddy Roosevelt and Winston Churchill supported Eugenics. Its most infamous proponent and practitioner was however Adolf Hitler who praised and incorporated Eugenic ideas in Mein Kampf, and emulated Eugenic legislation for the sterilization of “defectives”. Racism is the malignant legacy of pessimistic Malthusian theory.

For those who have an interest in the subject let me suggest you read the following book – The Legacy of Malthus: The Social Costs of the New Scientific Racism by Allan Chase.

Neo-Malthusian environmentalists would like the world to view them as benign “Tree Huggers” who’s only motivation is saving the planet from impending disaster. History warns us that this is an assumption that should be questioned. We ignore their irrational rants at our own peril.

I too would like to see less carbon dioxide in the air, potable water for the arid areas of the world, clean energy, but I have more ambition than the pessimistic environmentalists – I also want to create a high standard of living for every human being on the planet. Can we do it? Yes we can!

Our focus should be on finding technological solutions to our problems. We should abandon convoluted, bureaucratic, regressive tax schemes such as “Cap and Trade” and focus on direct investment in new technology. It was technological advances that relegated the original Malthusians to the dustbin of history and it is new technology that will save us from the excesses of the Neo-Malthusian environmentalists.

Before you drink the Cool-Aid of Neo-Malthusian environmentalism, I suggest you give some serious thought to – The Real Legacy of Malthus.

The Clean Car Of The Future

 

Some thoughts for Obama Motors to consider!

Only 20% of the energy contained in gasoline is converted to mechanical energy by a traditional internal combustion engine. Refinements in the internal combustion engine, improved aerodynamics, more efficient drivetrains and low resistance tires could make a greater contribution to increased milage and reduced carbon dioxide (CO2) production than advanced technology such as plug-in cars.

Among the adjustments that could help improve fuel economy are turbocharging with smaller, more efficient engines that produce the same level of power; advanced heat management and cooling systems, which reuse the heat produced by the engine for energy; weight reduction, including extensive use of high-strength steel; better aerodynamics; more efficient air conditioners, transmissions and lighting devices and increased electrification leading to full hybridization with electric motor and regenerative breaking-all of which currently exist.

These improvements are likely to make a far greater contribution to global CO2 reduction than electric vehicles because they may be applicable to virtually all of the projected 2 billion motorized vehicles. For example, Ford has begun production of what it’s calling the EcoBoost engine: a new gasoline motor that employs turbocharging, direct fuel injection, variable timing in the valves that control fuel and exhaust flow to make a smaller, lighter six-cylinder engine perform like an eight-cylinder engine.

It is important that we take a realistic view of the contribution that newer electric vehicles are likely to make to global CO2 reduction. The soon to be introduced “100 mile per gallon” plug-in Prius will allow the vehicle to operate solely on its electric motor for ranges of up to 40 miles on a single charge. The gasoline engine then takes over when the car must travel further. This is the reverse of the original 50-mile per gallon traditional Prius that relied primarily on its gasoline engine. The plug-in Prius differs from the Obama Motors, Volt, in two important ways, the Lithium ion battery is smaller and less is demanded of it and the gasoline engine powers the car when needed. Unlike the Volt the Prius gasoline engine is not just a supplemental engine to generate electricity for the battery.

One little fly in the electric vehicle ointment – Coal-fired plants produce approximately 50% of the electricity in the United States and 82% of power generated carbon dioxide emissions.  The situation is even worse in China, which will become the word leader in motorized vehicles over the next few decades. If electric vehicles are charged exclusively by coal-fired electricity they produce more greenhouse gases than a traditional gasoline-powered combustion engine car. Improvements in the internal combustion engine will only further increase this gap.

That is only one of the problems faced by electric vehicles as executives of Toyota have pointed out: After the batteries are depleted on a plug-in hybrid, they become a heavy “boat anchor” until the car can be recharged. The executives also expressed reservations about achieving the level of battery durability that could be guaranteed with a long-term warranty. Even the claim that the plug-in Prius can achieve 100-mpg has been called into question. The extra weight resulting from larger battery packs, means that brakes, springs and subframes also have to be bigger and tougher, adding more pounds. “We can achieve 50 to 55 miles per gallon, but after that, there are diminishing returns”, one executive observed.

Unlike the classic Toyota Prius where the electric motor is essentially a back-up engine to the main gasoline engine, the plug-in Prius which can operate solely on its electric motor for ranges of up to 40 miles on a single charge before turning to the full capable gasoline engine. The Volt, is designed to go 40 miles solely on electric power. After the Volt’s battery is exhausted, a small gasoline engine on board recharges the battery. Because 80 percent of U.S. motorists travel less than 40 miles on an average day, they should rarely have to start up their gas engines. The battery is charged at an ordinary household outlet, hence, plug-in. Voila, “zero emissions” from the Volt – That is if you ignore the source or electricity.

The rationale most often heard for the impractical $40,000 Volt is that it would be a learning experience that can be used for future commercially viable plug-in electric vehicles. Since the taxpayers will fork-over $50 billion to the former GM, one wonders how much additional money taxpayers will be willing to donate for the opportunity to learn how to make an uneconomical “green car” that may not reduce CO2 emissions. Some day a car company will have the battery technology to make an economically viable all electric plug-in but not today and certainly not a government run company such as Obama Motors. But, it is instructive to contemplate what a $40,000 purchase from Obama Motors will get you as opposed to a less expensive proven plug-in Prius.

And God forbid that plug-in vehicles should actually become successful; one can only imagine how quickly their “green” environmental proponents will turn on them. Just the thought of having to dispose of 10, 20, 100 or 200 million huge lithium ion battery packs will drive the Al Gore’s of the world loopy. Even 200 million is only a 10% penetration of the 2 billion 2020 motorized vehicle market.

One additional thought – Why use gasoline? The reduction in carbon dioxide emissions when natural gas is substituted for gasoline in an automobile is about 25-30%. Natural Gas only has five things going for it – it’s Clean, Cheap Plentiful, American and the technology already exists. While there are only about 130,000 Natural Gas Vehicles (NGV) in the U.S there are nearly 4.5 million of these alternative fuel vehicles worldwide, mainly in Argentina, Brazil, Pakistan, Italy, Germany and India. This is not a pie-in-the-sky idea, but one that is easily implemented.


The future – Look for Obama Motors to make the politically correct cars and Ford and Toyota to make the clean cars consumers will actually buy.

Western vs. Islamic Philosophy – Venus and Mars

 

Christians must to find a way to justify war because their founder was a pacifist. Muslins have to defend peace because their founder was a warrior.

Although I am not a pessimist, who sees the conflict of cultures as inevitable, we ignore this distinction at our own peril. The Obama doctrine of political correctness would have us believe that all religions are inherently peaceful. By turning a blind eye to the fundamental philosophical differences between East and West we only delude ourselves into believing that humanity will not give into to its baser instincts. History has shown this point of view to be naive and dangerous. American foreign policy must never be built on the shifting sands of wishful thinking but rather on the solid bedrock of history and philosophy.

Since the Enlightenment of the 18th century the West has relied on reason as the primary source of legitimacy for moral authority. The intellectual and philosophical developments of the Enlightenment, as reflected in the U.S. Constitution, guarantee more freedom for common people based on self-governance, natural rights, natural law, with an emphasis on liberty, individual rights, and a recognition of non-sectarian deism. It is with this in mind that we view the underlying Christian philosophy of a just war.

Although virtually all Christian sects have from time to time ignored the teaching of their founder and initiated unjust wars, the philosophical barriers needed to justify their actions handicap them. In the early fifth century the Algerian-Christian philosopher Augustine, Bishop of Hippo, developed the Christian rationale for a just war, that is, war that is acceptable under certain conditions. Firstly, war must occur for a good and just purpose rather than for self-gain or as an exercise of power. Secondly, only properly instituted authority such as the state must wage a just war. Thirdly, love must be a central motive even in the midst of violence. This third prerequisite has also been interpreted to mean adversaries will take all action necessary to ensure that non-combatants are spared.

In a more modern version for example, The Catechism of the Catholic Church, published in 1992, lists four strict conditions for “legitimate defense by military force”:

§  The damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;

§  All other means of putting an end to it must have been shown to be impractical or ineffective;

§  There must be serious prospects of success;

§  The use of arms must not produce evils and disorders graver than the evil to be eliminated. The power of modern means of destruction weighs very heavily in evaluating this condition.

On the other hand the Muslim world has traditionally taken a more theocratic view of warfare. In fact, American-Muslim relations were born in antipathy. In early 1786, Thomas Jefferson, then minister to France, and John Adams, then minister to Britain, met in London with the resident Tripolitan ambassador, Abdrahaman, to try and negotiate a peace treaty to protect American shipping from the “Barbary Pirate” regimes of Algiers, Tripoli, Tunis and Morocco. In the process, the future American presidents asked the ambassador why his nation was hostile to the new American republic even though America had done nothing to provoke or offend his country.  The ambassador answered as Thomas Jefferson reported in a letter to Foreign Secretary John Jay and Congress on March 28, 1786:

“That it was founded on the Laws of their prophet, that it was written in their Koran, that all nations who should not have acknowledged their authority were sinners, that it was their right and duty to make war upon them wherever they could be found, and to make slaves of all they could take as Prisoners, and that every Musselman who should be slain in battle was sure to go to Paradise.” 

Disregarding for a moment the sanitized version of history, Islam is unique among religions in that it was founded by a ruthless illiterate warrior, Mohammad, who used assassination to advance his cause, was responsible for massacres, evicted or enslaved non-believers, engaged in forcible conversion and led by his own account a hedonistic life.

Mohammad left behind a supremacist legacy in which non-believers should only be tolerated if they pay a tax in acknowledgement of Muslin superiority and remain in a state of subservience. While secular Muslims try to distance themselves from this heritage they are reminded on a daily basis by their more devout co-religionists that Jihad is their sacred obligation. Can moderate Muslins completely ignore the more belligerent rants of the Koran?

Moderate Muslims counter the extreme view with a rationale that is similar to the Christian justification for war. “Islam accepts the theory of just war. The just war is a war whose purpose and objectives are just. The war has to be when peaceful negotiations and all efforts of dialogue and negotiations fail. The war is to be waged only in self-defense against aggression and oppression. The Qur’an says, “Fight in the cause of Allah those who fight you, but do not do aggression, for Allah loves not the aggressors. …So if any one makes aggression against you, you may likewise aggress against him, and be conscious of Allah. Surely Allah loves those who are conscious of Him.” (2:190-194)

“The war is allowed in Islam under the righteous leadership that understands God’s rules concerning inflicting harm upon or taking the life of another person. Those who do not know these rules have no right to proclaim a Jihad. It is the rule of war in Islam that non-combatants and civilians should not be harmed. The civilian targets such a homes, markets; places of worship, animal forms or agricultural lands should not be attacked. This condition alone is so stringent that one may wonder how the modern warfare can be permissible in Islam.”

Since the liberating ideas embodied in the Enlightenment have not crossed the Mediterranean Sea or penetrated the deserts of Arabia reason does not temper the hold of religion on the actions of the many Muslim States or factions. The Muslim peoples natural desire to live in peace and prosperity is frustrated by a lack of an overriding philosophy.

In the 21st century there is an ongoing intramural war between secular Muslims who appear to have no natural champion, no John Locke, no Voltaire, no Rousseau, to temper the aggressive tendencies of Islam of the religious fanatics who justify their every action with the innumerable warlike verses of the Koran.

Can the secular Muslims win out? Only when they find the voice to openly admit and condemn the failings of theocracy and like the philosophers of the Enlightenment distance themselves from the moral authority of religion. It all begins with the recognition of individual liberty and freedom of expression without which belligerent theocracy will continue to hold sway. It will be a difficult path for the Muslim establishment to recognize the equality of believers and non-believers, men and women, gay and heterosexual but one that is essential to integrate the Muslim community into the modern world.

In a very real sense the ball is their court.