Archive for March, 2008

A few months ago a slim, tall, pleasant looking, highly educated black man strode to the forefront of this nation’s Presidential election cycle. For a time there it certainly looked as if this nation was not only ready, but also willing to elect a man of color to the Presidency of the United States. When compared to the latter part of the twentieth century and the racial strife marring that period, the twenty first century looked like a dawn of a new era in this nation. To further magnify the achievements of the twenty first century, only 8 years of age, is the legitimate candidacy of a woman for the Presidency. This nation has come along way in acceptance of people “for who they are” and not “what they are”. It appeared that we had finally seen through a black man for his talents and message and actually did not see him as black, just as a presidential candidate with a soaring message of hope for all. Barack Obama was on an express train to the White House.

Obama’s message of bi-partisan involvement, coming together as a unified nation, care for those less fortunate, and those who have hit set backs of life presented him as a multi-cultural leader for all the people. Suddenly, he stopped his train to explain some unusual behaviors of his pastor and his involvement with his pastor. While stopped, a different Obama began to emerge. We have begun to see a man as highly educated, as highly articulate, and as smart as Bill Clinton start to parse his words, just as Bill Clinton has done for oh so many years. We have heard a number of variations explaining away his association with a very questionable church leader. This alone is troubling, but what is even more troubling is we now must begin to question his soaring message.

Bill Clinton was a well packaged candidate while on the campaign trail. His explanations were smooth and believable. His delivery depended on using just the right phrase or word. His moniker of “Slick Willy”, while a moniker of disdain, was also a moniker of grudging respect for his talents to mask the truth. So too are we seeing a Barack Obama begin to use equivocation to explain his questionable judgment. If you listen carefully to each of his explanations, you will hear a message very different from the one that has captured so many hearts and minds. This man – not seen as a black man – supported by people from all walks – women, men, young, old, black, white and many of the other origins of people in this country was accepted as a legitimate Presidential candidate. Listen carefully, and you will hear him now begin to educate us on how we have to treat race, how we get past our prejudices, and heal the racial divide. This same man, who is preaching to us about dealing with race and who had already been accepted by millions who easily put race aside and only saw a man, not a black man, running for President. This man is now lecturing the typical white person how they think and should think.

For all his education and for all his rhetoric are we to believe that he did not notice that in the twenty first century we had gotten past the black / white thing in the most important way that this nation can. We were earnestly considering him for the most important leadership position of the free world without regard to his color. We were simultaneously considering a woman for the same position. How much has this nation grown? Yet his explanations smack of a man who is not what he claims to be. They smack of a man who might actually believe the message of his pastor. Now we move on and we still consider a woman and only now we consider a black man for President – not a man, but a black man because his explanations revealed him to be just that, a black man running for President – not simply as a man of the human race. Time will now tell, as the vetting continues on all candidates, who he really is. Is this another well packaged candidate? Do we need to call him “Slick Barack”? No wonder Bill Clinton was out in front of this story about Barack Obama. He was able to see himself in Barack Obama’s shoes well before anyone else could catch on.

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What if Hillary Clinton, feeling that the Democratic Party has been taken over by the far left, decides to form a new political party in her run for President? I took a look at that scenario and was surprised to see my findings. The approach used to come up with the findings is far from scientific and could not get anymore low budget, but there is some reasonable rationale to the approach.

I started out with the simple premise that three major candidates and one minor candidate will be on the ballot in November – Obama, Clinton, McCain, Nader. With Obama and Nader sharing the far left, Clinton and McCain sharing the moderates, and the conservatives voting for McCain, since they have no horse in the race, the vote would be heavily split and winning a state’s electoral vote will not require a majority.

The next premise was that strong red states will continue to go with the Republicans and John McCain. The blue states were a different matter. In those states I looked at either the primary results or the polls where primaries have not as yet been held. When looking at the blue states, only a few battle ground states appeared and they will be discussed later.

538 electoral votes are at play and the Electoral College is not based on proportional votes and there are no super electors. 270 votes are needed to win the Presidency. The analysis of the primary results, polls, and voting history provided the following:

McCain wins Alabama, Alaska, Arizona, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Oklahoma, Tennessee, Texas, Utah, Virginia, and Wyoming for a total of 191 electoral votes.

Obama wins Colorado, Connecticut, Delaware, D.C., Hawaii, Illinois, Maine, Maryland, Minnesota, Nevada, New Hampshire, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Washington, West Virginia, and Wisconsin for a total of 131 electoral votes.

Clinton wins Arkansas, California, Iowa, Massachusetts, New Jersey, New Mexico, New York, Ohio, and Pennsylvania for 172 electoral votes.

Two states are very hard to figure do to the split votes and they are Florida and Michigan. After the Democratic Party primary debacle it is anyone’s guess as to how these states will go especially with four candidates on the ballot. Even so they represent 44 electoral votes, less than what any of the candidates will need to clinch. Despite some disagreement with how a state might fall, there seems to be no mix to give anyone candidate 270 electoral votes. Now what? It goes to the House of Representatives. The difference here is that the House votes by state and each state has but one vote – more infighting.

The following is an excerpt from the National Archives and records Administration web site: If no candidate receives a majority of electoral votes, the House of Representatives elects the President from the 3 Presidential candidates who received the most electoral votes. Each State delegation has one vote. The Senate would elect the Vice President from the 2 Vice Presidential candidates with the most electoral votes. Each Senator would cast one vote for Vice President. If the House of Representatives fails to elect a President by Inauguration Day, the Vice-President Elect serves as acting President until the deadlock is resolved in the House. http://www.archives.gov/federal-register/electoral-college/faq.html#270

If the respective state delegations follow the way their state fell, with no candidate getting a majority, then McCain might garner 22 votes including Florida; Clinton 9 votes; and Obama 19 votes including Michigan. I believe that the decisions, within each state delegation, are not readily apparent and anything could happen. Even though Senator Clinton would have the fewest states, she could win as a long shot.

As ludicrous as this all seems, the Clintons may realize that forming a third party and continuing on, if Senator Clinton does not receive the Democratic Party’s nomination, as a candidate for President may just work.

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America needs to regain the fundamentals of a strong economy for a number of important reasons. National socio-economic health, political and diplomatic influence in the world for trade, defense, and standard of living all depend on a fundamentally strong economy. The fundamentals of a strong economy, from a non-economist’s view – mine, start with comparative advantage in world trade. This is something which our country and our leadership and labor unions have taken for granted over the last 20 years, letting this precious commodity dwindle away. We also have mistaken productivity and its usefulness toward comparative advantage with an effective trade economy. Remember, while productivity helps our trade advantage, it does little to help our trade related employment number or the quality of the trade related jobs. Simply put, the definition of comparative trade advantage is “what do we have to offer in the deal that makes us come out ahead of the other guy?”

We hear about free trade agreements and that trade is good – and it is! Entering into the world trade arena without a trade advantage or at least a trade equilibrium is just down right dumb and we have run headlong into this arena stark naked. We need to rediscover our comparative trade advantage or discover a new one, if we are to successfully compete in world trade.

Look around, the world has oil and we need it, the world has cheap goods and we need them to keep inflation down, the world has the capability to produce both quality goods and cheap goods that it could not produce 50 years ago, the world has cheap labor – shall I go on? What do we offer? Well we still have some bright minds, even though they may be heavily populated with foreigners, we still can grow food with the best of them, we still offer innovation, but we have no monopoly any longer on innovation. Our dollar is losing value which helps us produce relatively cheaper goods for the world market and thus lower the trade deficit.

A devalued dollar is a two edged sword as also it brings us a higher cost of living and a lower standard of living relative to the world. What do we plan to do about this obvious problem? Well Senators Obama and Clinton want to tax us more – mostly business and the rich – you know, tax the engines of investment and growth! Senator McCain wants to keep personal income taxes low and cut spending, but this will not bring us back to a fundamentally strong economy even though it is good start. It is how, when, and who we tax that is the problem. We are an economy that taxes income accumulation. We should be taxing the disposable money spent on “stuff” and not the money earned and used for growth re-investment.

Businesses pay a 35% Federal corporate tax rate and varying state corporate tax rates, bringing the total corporate income tax on profit to between 40% and 50% for the most part. Remember the corporations only collect the tax and anyone who buys their goods pays the taxes. If a corporation works on a 15% profit margin, and they make a set of golf clubs which they wholesale for $500, $65 is taxable profit of which the retailer pays $30 of the income taxes due on the item. When the item is resold at retail at $800, assuming a 15% profit margin, $105 is the taxable profit and $47 is the income tax due on the item paid by the end user, the consumer, you. Actually you pay a total of $77 of the corporation’s and reseller’s income taxes.

Granted, this example is clunky and probably filled with holes, but it does serve to demonstrate that when we tax corporations for manufacturing or reselling all we do is raise the price of the item. This works fine when all the competition is paying the same taxes. If does not work fine when world trade is involved, because our goods and services are then less competitive with the goods and services of other nations. We already start out with a disadvantage, in that we pay our workers more than the workers in far off lands receive, but this can be adjusted with productivity.

Unless we seriously look at our tax structure and make changes sooner rather than later – maybe move to a consumption tax or a fair tax and get away from inhibiting investment, growth, and production with income taxes, we can expect to have a lower dollar value, a lower standard of living, etc. Income taxes on domestic corporations foster a comparative trade disadvantage for us. Our government must find ways to domestically foster healthy manufacturing and servicing sectors so we can compete with the rest of the world without giving up good paying jobs. If the tax burden shifts from corporations to individuals, their will be no real change in who pays the taxes, except we will compete in the world trade markets effectively, create good jobs, and restore a fundamental of a good economy.

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