Wednesday, March 31, 2004

John Kerry Anti-Foreigner Bigot? 

A number of politicians in both parties are exploiting exagerated worries people have about outsourcing. Outsourcing is only a minor factor in the jobs problem - the bursting of the tech bubble, and rapid growth in US productivity are the main factors. But the jobs are starting to come. I lost my job - probably at least indirectly due to outsourcing, but I have not lost a day of work. From my home in Houston, Texas I was summoned to Chicago, Illinois to work on an urgent Java project. Unlike last year, I get emails from recruiters everyday. (When every I look at my in box I blame the Bush tax cuts).

As to oursourcing - I don't see a political solution. Why are people in India or China less deserving of jobs? Shouldn't we all compete based on what we can produce per dollar of pay? Our country has achieved great wealth not because God decided to give us the best jobs, but because we competed well in the world economy. I have confidence the smart, capable people of our country can continue to do so.

Throughout history, in every country, when there are economic problems, many people want to blame others for their porblems (Jews, blacks, bosses, foreigners, etc.). Rather than look at the real problems and solutions which are, dare I say "nuanced", they holler out simplistic bigoted slogans. The left and the far right that are shouting about "outsourcing" claim the moral high ground, but this is plain old fashion bigotry.


Saturday, March 20, 2004

Affordable Healthcare for Every American 

That is the theme of John Kerry’s healthcare platform, and who can argue with such a desirable goal? President Bush proposes to attack the problem by introducing market forces; Kerry proposes government subsidies. I believe we are deluding ourselves if we think we can get ever increasing medical technology and treat a rapidly aging population while reducing what we spend on medical care. Listening to the campaign rhetoric, you would think our only problem is a few evil insurance and pharmaceutical firm CEO’s huddled in a room plotting how to take all our money. They are easy to blame but they are not the cause.

Currently taxpayers subsidize the healthcare of the poor (Medicare) and the elderly (Medicaid). We are a compassionate society and thus it is appropriate that those that are able help those who are less able. But Kerry’s program proposes subsidizing almost everyone. Medicare and Medicaid are transfer programs – transferring wealth from one group to another. Subsidies from everyone to everyone just means paying money to the government that it then gives back. This may hide the cost of healthcare, but it does not reduce it. A recent Washington Post article (requires registration) talks about how cheap the Canadian government healthcare system is. It says that employers pay about $552 per month per employee in the U.S. and only $50 in Canada. If you read to the end of the article however, you learn that Canadian income taxes are much higher and they have a 15% sales tax to pay for their medical care and the article does not mention the financial problems the system is currently experiencing.

Kerry’s program creates only the illusion of savings by routing the money through the government. In fact costs will go up because of the inefficiency of government and the increased use services. Hiding the cost of medical care is a bad thing. Consumers tend to make better decisions when they know the cost of what they are buying.

President Bush in contrast proposes ideas that increase transparency in the cost of medical care. The recently passed Medicare Pharmaceutical bill contains a provision for Health Savings Accounts. Anyone with a high deductible medical insurance policy can open an account and deposit tax-deductible dollars from which he or she can pay their deductible medical expenses. What they don’t spend they keep for future medical expenses or retirement. I hope these catch on because it means the consumer makes the decisions on the more routine medical expenses, but they are still covered if they get cancer or some other expensive situation.

Some links:

Kerry’s Platform

Bush’s Platform

An excellent article: The State of Healthcare


Friday, March 19, 2004

Kerry Endorsement by Foreign Leaders 

I guess Kerry was telling the truth, because these leaders are starting to go public. So far I count North Korea's dictator, Kim Jong-il, newly elected Spanish Prime Minister Jose Luis Rodriguez Zapatero, who has announced his surrender to terrorism, and former Malysian Prime Minister Mahathir Mohamad, who attributes the world's problems to Jews.

My question to John Kerry - what did you promise the guys to get their endorsement?

Wednesday, March 17, 2004

President Kerry 

As a mental exercise I try to picture what a John Kerry Presidency would look like. I do not like the guy, I think he is arrogant, but that is not important. In the course of history, some far more despicable people have been great leaders. I disliked Bill Clinton, but, objectively thinking, his presidency was not all bad. We got welfare reform, NAFTA, a balanced budget, and a few tax cuts. It could be argued that the Republican Congress had something to do with these things, but so what – they happened on his watch. Now, with the hindsight of the 9/11 attacks, we realize that what he lacked was the leadership to do the right things against the terrorists. Looking back at his speeches, he knew the threat, but did not take the bold new initiatives necessary. He chose the road of political caution over doing what needed to be done. This did not make him a bad president; it only makes him an ordinary president.

Figuring out what John Kerry would do is difficult because he has taken so many different positions on most of the important issues. One methodology would be to identify his core beliefs and treat deviations from those as temporary political expediency. Of course I believe Kerry loves his country and wants to do well by it, but beyond that I find it very hard to identify any core beliefs. Some will say that the passion of his early extreme left wing activity shows that he is a passionate about left wing dogma. I remember hearing him speak at anti-war protests back in the 1970’s and believe now as I did then, John Kerry has always just been ambitious.

But that alone would not make him a bad president. If we lived in peaceful times he would probably do a decent job of administering the machinery of government and not make a big impact good or bad. But these are times of great danger. We had 9/11 and now 3/11 in Spain. Kerry may have the wisdom, but, like Clinton who was also a pretty smart guy, he does not have the decisiveness to commit us in time of war. I believe that our country and the civilized world are in grave danger from Islamic extremists. The terrorist attack they have launched has moved up the technology tree to where thousands at a time can be slaughtered. In my view this calls for strong decisive action. John Kerry, instead, proposes hiring more policemen and firemen. Yes, his website has some language about taking military action, but when it really counted, he voted against funding our forces in Iraq and Afghanistan. His switches on Iraq, Afghanistan, and the war on terrorism show him to be at best indecisive, at worst just wrong. Not someone we need in charge.


Thursday, March 11, 2004

Benedict Arnold CEO’s 

President Bush announced he is going to appoint Anthony F. Raimondo to be the new assistant secretary of commerce for manufacturing and services. (see Wahington Post story –registration required). Now some in the administration are ready to back down because he has committed the crime of opening a factory in China. Mr. Raimondo is chairman and chief executive of Behlen Manufacturing Co., a Nebraska company that makes metal buildings and grain silos. Some administration officials are intimidated by John Kerry’s speeches about “Benedict Arnold CEO’s”.

Is Mr. Raimondo a criminal for opening a factory in China? Would we be better off in American companies were banned from investing in factories in other countries? What would be the repercussions of such a ban? Well the grain silo business in China is one I happen to know something about. I sold some to China back in the 1970’s. It was a very competitive and has only become more competitive since then. Selling silos into the China market now requires the lower steel prices and lower labor rates available in China and frieght costs from the US are prohibitive. What should Mr. Raimondo’s company do faced with this situation? Bid American made silos and loose the business, or build in China and keep the business for an American company. In fact Mr. Raimondo would be doing a disservice to his stockholders if he did not pursue manufacturing in China.

But I would go further. Are the bosses of Wal-Mart criminals for sourcing cheap products from China and thus putting American workers out of work? Or would they be criminals forcing me to pay $50 for a shirt made by an American worker instead of a $5 shirt made by a Chinese worker? (I read that John Kerry pays $200 for his shirts – I guess he does not shop at Wal-Mart). Of course both questions are ridiculous. Businessmen should make their decisions on what makes economic sense. Barriers to trade can help one group temporarily, and usually at the expense of another group. But they are never good for the long-term health of the economy.

In the old Soviet Union, workers never had to worry about foreign competition taking their jobs away, but they had to wait in line to buy a loaf bread and they could never find a pair of shoes that fit. Our economy has produced previously unimaginable wealth for the common man, but it is chaotic. Companies and industries come and go, people loose jobs and have to learn new skills. This is the price we pay for an economy free to move constantly to higher efficiency, and thereby greater wealth. If another country’s workers can do something more efficiently than our workers, let them do it. We are the richest country because we innovate, so lets keep doing that. Yes, we need to help displaced workers with unemployment benefits and retraining, but lets not destroy this good thing we have going.


An editorial in todays Washington Post talks about Kerry flip-flops says the following:

But Bush reversals differ from Kerry waffles. Mr. Bush seems to his detractors to change course with worrisomely little thought -- and to feel just as sure of himself in his new position as he was in his old. Earlier, he was jauntily certain that the United States should conduct a humble foreign policy; now he is jauntily certain that it should pursue a grand campaign against evil. Because the administration rarely admits that its positions have changed, even when the change is obvious, and because no introspection or process of deliberation is evident, the depth of commitment may be suspect.

The ridiculousness of talking about President Bush’s changed position on nation building without mentioning a little incident known as 9/11.


Wednesday, March 10, 2004


I should be right in there with John Kerry’s concern about outsourcing. I was recently laid off by an IT firm that has recently become very active in outsourcing IT work to India. But I have not lost a single day of work. When I got my notice, I activated my network of contacts and even now, a couple of months later, I get at least an e-mail a day about new projects and opportunities. I will say that the work I have found is more difficult than what I was doing before – I have had to hit the books and learn some new things. Also I am contractor now meaning , I have to fork out $1000 a month for my family’s health insurance (ouch) and I will have to find my next project in few months.

But I am optimistic. The Democrats say the economy is in the toilet, the Republicans say it is booming. My gut says it has been slowly getting better for a while, but only recently to where businesses are looking for more workers. I noticed a significant up tick in venture capital investments soon after the dividend/capital gains tax cuts (for the evil rich) went in. As these companies grow we can expect more employment for technically skilled, creative people. I plan to be ready.

I believe outsourcing must be a concern for anyone working in my industry. You have to move up the technology ladder if you want to work. But that is why our country is rich, because we stay at the leadership of technology and enterprise. If we stop doing that, we won’t be rich. Some economist called it “creative destruction” – old industries/career paths are destroyed and out of the mess new ones are built. Countries that discourage this process get poorer, those that encourage it, thrive.

Recently John Kerry, Jonathan Edwards, and others jumped all over Bush's economic advisor, Gregory Mankiw, for stating that out sourcing is a good thing. Specifically he said, "More things are tradable than were tradable in the past, and that's a good thing. That doesn't mean there's not dislocations; trade always means there's dislocations. And we need to help workers find jobs and make sure to create jobs here." Actually Mankiw is absolutely right. Kerry and Edwards are quick to criticize, but what would they do about this as president, ban doing business with other countries? The last president with that policy was Herbert Hoover and that got us the Great Depression.


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