Three strikes and we're out

Strike one. We in the United States are no longer competitive. Other countries like China and India now have talent equal to or exceeding that of the U.S. Their salaries are lower so they not only can design new things, they can manufacture them and ship them around the world cheaper than we can. Countries like South Korea produce better cars, and have overcome giants like Microsoft and Apple to produce superior electronics. Brazil has a superior energy policy than the US. Yet on a personal level we spend and live as if we are still at the top of the heap. Jobs have moved overseas and other than a few token changes our job pool will continue to shrink.

Quite a few years ago the US was declared to be a service economy, meaning we were moving out of manufacturing. But manufacturing, and selling offshore is the only way to grow an economy. It is necessary to bring money in from other countries to grow. Service economies simply move money around, there is no growth. If you're not growing, your shrinking and that is what is happening here.

This isn't all bad, it is a natural flow of things. It's just that in order to correct the situation the salaries of other countries have to increase, and the salaries in the US have to decrease sufficiently for there to be some level of balance. As long as the trade defect is negative our standard of living must shrink. But we hold on as if things can go on forever.

We must stress education so we generate the talent and then experience to once again become competitive, all during a period of a downturn in the standard of living in the US. There is no way around this mess. We have to live through it and it is going to take decades to swing the pendulum. Unfortunately that pendulum is still swinging away from us.

The economic crash of 2007-08 could have been a wake up sign. Instead we hold onto high salaries that companies can no longer afford to pay. Unions push companies for higher salaries, inefficient work force structures, and benefits that are dooming industry. When the government should have spent stimulus money on things that would have helped turn industry around it was spent on maintenance of the status quo. Stimulus money went to prop up the social system, to pay the unemployed which held them in limbo hoping for good paying jobs. 

Strike Two. Liberals are wrong and they are in control of the country. We've just appointed President Obama to four more years so things are going to get worse. Conditions are such today that there is no hope. Nobody can correct this down turn but a liberal approach is the surest way to cause a breakdown. It's not that it will happen. It has already happened.

There is no denying that some people need help. There are needy people in this world and it is simply a fact that some of them will have to be taken care of. But the window is open far too wide and it is sinking the country. Way too many people are taking advantage of a widespread system of entitlements. As the job pool shrinks due to Strike One conditions, there simply isn't the money required to support the millions on food stamps, disability, welfare, and unemployment, not to mention Social Security, Medicare, and the new Obamacare. As the federal government takes in money, spends some of it to support the bureaucracies to dole out money a smaller and smaller portion reaches those who need it. As the government grows it robs the economy of working dollars to advance the country.

Trillions of dollars have been added to the federal debt during this down turn. It was not spent wisely so there will not be the dollars flowing into the government to repay it, nor to sustain the expenditures already in place; forget the new demands that will be generated by Obamacare.

Corporate tax rates are rapidly steeling jobs from the US. Companies are either moving jobs overseas to avoid the high taxes, or they are not growing within the US to generate new jobs. Obamacare is adding to corporate burdens further stifling the economy.

Strike three. There is a sufficient mass of people who have bought into the lie that taxing corporations and the rich is right, mostly because they are dependent on the government to support them. This mass of ill informed people will continue to vote into law policies that benefit them with no regard to the fact that those laws are destroying the country.

We're out. I see no way to avoid a massive adjustment of the standard of living in the united states due to these three strikes. A few paths to the future come to mind.

The best outcome would be the cost of living would decrease through a depression. Some of that is already happening. Home prices are quite depressed which is lowering the cost of housing. Unfortunately home values have not dropped sufficiently and they have already shown signs of turning up. This unfortunately is temporary. As the job market won't really improve, taxes will be higher, inflation could possibly rear it's ugly head, home prices will once again have to fall. The federal government, who invented tax deductions for home mortgage interest, may remove the mortgage interest deduction which will further lower home values.

Salaries could drop and in many cases they have. As the federal government continues to extend unemployment benefits though it removes incentives for people to take lower paying jobs like picking crops. As people can't find any work they are already willing to take anything they can which is helping reduce the average salary which is necessary for the US to become competitive again.

But unions continue to push for higher salaries and benefits which delays the needed salary reduction. Unions once were necessary to protect workers from companies but they have now become an illness holding companies to salary and benefit packages that are destroying jobs.

If the cost of living, standard of living, tax rates, government spending, can all drop at a manageable rate to create a "soft landing" there is hope we can recover and strengthen in a couple of decades. I don't expect this to happen due to the strength of the liberal party and the mass of people who will continue to vote benefits for themselves.

The next worse outcome is the US trips the scales with continued federal spending, tax increases, and regulation, so that our debt rating falls to the level that no other country will continue to loan us money. At that point we simply will not be able to fund the programs that are holding up the mass of dependent citizens. There will be a rapid crash at that point that will dwarf the great depression. This is, in my opinion, the most likely outcome for our country. At the present rate I expect this to happen within the 10 to 15 year range from today, meaning somewhere in the 2023 to 2028 time frame.

We are living on borrowed time. The only signs of hope are things are going so poorly now that some wise conservative politician would come along that is able to convince the citizens that we must change this liberal slide into oblivion and turn the country around. Even then it will be an uphill battle.

The absolute best outcome at this point, given our unmanageable federal debt, is to cut federal spending, lower the standard of living, cost of living, salary base, stabilize jobs, and fight our way back to the top through education, innovation, and manufacturing. This effort would resemble the huge shifts in the work force that occurred during WWII. We must all learn to spend less than we make during a long period of making less. The biggest culprit that is dragging down the country is the federal government.

Windows 8

Ever since I saw the early information about the Lenovo Yoga convertible laptop/tablet coupled with information about Windows 8 I have been excited. This is what I've been waiting for.

In the range of computing devices there was a gap. From the desktop computer, to the fine portable laptops, the little inexpensive netbooks, the tablets, and the smartphone a couple of things stood out to me.

First, the tablets certainly have been popular and for good reason. With them you can do quite a bit including quickly viewing the weather, sports, news, Facebook, forums, shop various brick-and-mortar stores or on-line stores, read and send eamil, and more. But the tablets lack two things.

First they don't come with a physical keyboard. I'm a touch typist so I'm really frustrated by my one finger typing on my iPod Touch. I want a physical keyboard. Oh sure you can buy a Bluetooth keyboard and pair it with most of the tablets, but it would be true that most of the time you wouldn't have the keyboard handy. Also even if it was handy you'd have to set up the tablet somewhere to view it while you used both hands on the keyboard.

Second tablets are primarily media devices. You can't accomplish much with them even if you attach a keyboard. They don't run the most popular software in the world with is Microsoft Office with it's widely used MS Word, powerful MS Excel, and presentation software MS PowerPoint. Further you can't run any of the millions of Windows software packages such as Adobe Photoshop, or industrial software such as C++ programming languages, or machine controllers.

So a tablet has widespread but limited use. I wanted both. I did not purchase a tablet and it is unlikely I ever will. But a convertible laptop, one that has an attached keyboard but can convert into a tablet, well that is right down my alley.

I can see how Microsoft came to develop Windows 8. I would have done something quite similar. Microsoft had no presence in the tablet world but that may not have been the biggest problem. The tablet world was causing PC sales to slip. Something had to be done.

Microsoft couldn't abandon their PC customers, and there is a lot to be said for touch screen tablets. Hey, how about a software and hardware system that could do both? Right. Now how to do it.

First keep all the functionality of Windows 7, really Microsoft's best Windows system ever, perhaps the only really good one. Second add touch screen. Would touch screen be useful on a desktop, perhaps not but if it could be used with a keyboard and mouse who cares. Second strive to have one OS, or the appearance of one OS, that runs on desktops, laptops, tablets, and smartphones. Third come up with something new that would attract people away from iOS and Android; a new cool touch screen interface will do it. Fourth sell Windows 8 really cheap, at least until it catches on. If it is sold cheap enough it will help get it kick-started. Then see if you can get the world's PC and tablet manufacturers to have a flood of new hardware available on day one of the Windows 8 introduction. Oh and test the heck out of it so it will come out of the shoot with minimal bugs; after all the new interface is going to be a big step and confusing, we don't need bugs too. That should do it.

So I was ready on October 26, 2012 at 12:01am to download Windows 8 and put it on my desktop. I just wanted to show my support, and to try it out. I also want to keep up with the latest thing. My plan was to dual boot it so I could still have Windows 7, and switch over to play with and learn Windows 8. When ready I'd upgrade my Windows 7. But this didn't happen.

I partitioned a drive on my 750GB hard drive to load Windows 8. Immediately I ran into a problem. If I was going to load Windows 8 on the new partition I would need to have Windows 7, or Vista, or XP there to start with. But all I have is restore disks that won't load on any partition. My other choice would be to buy the full version of Windows 8 to install on that partition. A full version is 3 to 4 times the cost of the upgrade version. I do have a full version of XP I could load but it doesn't have any of the drivers for my desktop. So I'm stuck. Either I do the upgrade or not. Apparently there is no way to download Windows 8 to a DVD and load it later.

Frankly I have no need to load Windows 8 on my desktop. I don't have a touch screen and I think it would be largely a waste to buy a touch screen for a desktop. Also I really like Windows 7 and I think the features of Windows 8 aren't all that useful for me. I still have the iPod Touch so I have access to thousands of apps and have loaded all I want already.

What I really would want is one of the new convertible laptop/tablets running Windows 8. I can't justify that expense. The iPod Touch and the desktop suit me just fine.

I wonder how many other people will go through the same set of thoughts and realizations as I have. It makes me wonder how quickly Windows 8 will be adopted.

I see the Apple iPad Mini came out and sold out in a few hours. But I haven't seen any suggestion that Windows 8 or Windows 8 devices are selling like hotcakes.

My left foot

2012 a year of challenges for me.

Today I am faced with sad news. My left foot, on which I had tendon surgery on Aug 16, 2012, seems to have popped again so I may have to have repeat the surgery. I'm discouraged. It isn't about the pain of recovery, because there was none or at least very little. The problem is being ordered to bed for six+ weeks after the surgery.

On October 27, 2011 I climbed a ladder in the back yard to trim some branches overhanging our patio cover. This is a ladder I've used for years but on this day one leg must have been on uneven ground or a tree root. The small lowest portion of the cheap aluminum ladder bent. The ladder began to tip and there was nothing I could do. Nothing was within reach, I was free falling. My feet were about 5' off the ground at the time. The ladder went to my right along with the electric lopper in my hand, and I went left.

I know I landed hard on my left butt cheek but I must have also landed on or at least twisted my left foot. The effects of the fall on my butt cheek were quickly apparent. I was on Coumadin blood thinner at the time and a blood clot began to form in my left buttock. I felt light headed because not enough blood was getting to my brain. My son drove me to emergency where I spent a day in a lot of pain as my sciatic nerve slowly was chocked off by the blood clot. Four days later I exited the hospital, they had done nothing except observation. The only thing they did was give me vitamin K to counteract the Coumadin. Later a nerve conduction test (you don't want to have one of those) proved that 33" of my sciatic nerve was not conducting. Over the next year (so far) my sciatic nerve is slowly coming back to life, each little bit that springs to life comes with a sharp pain somewhere on my left foot. The second effect of that fall from the ladder took much longer to exhibit itself.

About 8 months after the ladder fall my son and I were jet skiing on Lake Shasta. We decided to jump off some rocks about 10' into the water. When I landed, even with my thick soled sandals on, I felt pain in my left foot. A few weeks later I stepped off a one foot high stage when a tendon in my left foot, with the most pain I'd ever felt in my life, parted.  Hence the first surgery.

I spent six weeks in a cast with orders not to put weight on my left foot and to keep the foot elevated. This was very restricting. Six weeks later the doctor removed the cast but I had to wear a restrictive boot, and still keep it elevated. Then I started physical therapy. Yesterday while in physical therapy I think the tendon parted again. The physical therapist noticed a bubble behind my left ankle. Then this morning I felt it and thought it must be the tendon.

I went to Dr Song, the podiatrist, who took an x-ray, checked it, then arranged an MRI for next week. We'll know more then. I'm just pretty bummed about having to go through all of that again.

United States Economic Situation

We hear a lot these days about how to get the U.S. back on track, add jobs, and pay down the federal debt. The liberals are pounding away at the idea of taking from the rich and giving to the poor. Obama and the Democrats firmly believe in spending more money and expanding the government. Republicans want to cap spending, shrink the size of the government, and reduce taxes. None of this exposes the reality. In fact I hear nothing to support what I see is happening. That suggests I'm wrong but I don't think so. The problem is that the real solution to our problem isn't a popular topic for either liberals or conservatives.

Here is the problem. We've lost our unique position in the world but are behaving like we haven't. Let me explain. Coming out of WWII the work ethic in this country was very high. People's expectations for their standard of living was not high, salaries were not too high but people were simply glad the war was over and they could start afresh. New companies were formed, factories switched from war production to consumer products, jobs were plentiful, all was good. America was alone in the world in terms of manufacturing, standard-of-living, and emerging wealth. Europe was no competition because they were busy rebuilding after the war. Japan was an emerging economic power but it would be a decade or two before they were noticed. Countries that we see as emerging power centers today, namely China and India, were stuck in the past or hindered by bad governments. The U.S. was alone and doing quite well.

The next couple of decades saw the emergence of technology. America was building televisions, radios, typewriters, cassette tape players, and all other forms of consumer products. Consumer purchasing drives the U.S. economy. The U.S. was supplying products to the rest of the world. We were also buying things from other countries. In 1960 we had a positive trade balance. That means more money was flowing into this country than was leaving. This is the best possible situation. Today we see more than $41 Billion Dollars in a single month. What happened.

Somewhere around the 1990s China and India began to put a lot of emphasis on education. Years later this began to pay off when those countries, who could produce products much cheaper than the U.S. due to very low salaries, began to develop their own products. The trade imbalance was being stimulated by high salaries in the U.S. and low salaries in China and India. We simply could not compete. We should have reacted then but we didn't.

In your own home if your income drops you normally make adjustments to compensate. You cut back somewhere such as removing the extra cost for premium channels on TV, reduce your cell phone plan, shop for groceries more carefully, drive less to cut back on gas costs, and you keep your car longer. That is if you are paying attention.

Some people react differently if their income drops. They just keep on living as they did hoping that a new job will come by or their investments will grow as the stock market behaves well. They take chances and may get bit later if things don't pan out.

Of course a negative trade defect isn't as obvious as someone in your house losing a job, but the effect is the same. It just takes longer to notice. Nobody in the government wants to bring this up because the only solution is for the U.S. to balance out with the rest of the developed, or developing world. That means salaries have to decrease, property values have to decrease, the stock market won't do as well for a number of years, we will have to work more for less, our standard-of-living will have to drop. The gap between the U.S. and China or India in terms of salary is large. Yet their level of education compared to ours has improved dramatically in the past decade. In short we are competing with other countries who are as capable as we are and they are happy to work long hours for what we would reject as income. We're in trouble.

Today there is a growing list of things being blamed for the state of our economy. Many believe that Wall Street, Big Banks, Democrats, or Hedge Funds are responsible for the current situation. I say these are simply organizations that were just trying to squeeze out as much as they could before things fell apart. I can't imagine they didn't know what was coming.

The truth is we are all to blame, some more than others. Not all could have seen what was going on but if you paid attention the data and signs were there. A country must have a positive trade balance. Don't let any mumbo-jumbo try to convince you of anything else. Years ago many said we were converting from a manufacturing economy to a service economy. Balderdash. We must product products, products that our consumers want and the consumers of other countries want too. The only way we can do that is to produce products at a competitive price here in the United States. We can do that by paying lower salaries, or by being much more efficient which means using less workers to do the same thing. However if we can be efficient then so can the other countries.

In 2007 the house behind ours was put on the market for almost $1 Million dollars. That was a sign for us. The problem was that was well over the build price at that time. In other words one could buy a piece of property and build that same house for way less than the asking price. Home prices were out of whack.We saw the writing on the wall and sold our house a few months later. We cut our spending and moved into a manufactured home in a mobile home park. We waited until the housing market crashed and bought a house. The new house was offered at a price well below the build cost. In other words if we went out and bought a piece of land and had an identical house built it would cost us more. That is good economics.

What happened to keep out salaries so high and allowed house prices to increase to such an outrageous level? I can think of two things. Both of these things are the result of not paying attention and making adjustments over the past two or three decades. We lived on borrowed money. We spent as if there was no end to the money we could earn. We were living on borrowed time hoping things would continue as they had. The second thing that stands out is the behavior of unions. The main function of unions of the long past was to protect people from unscrupulous employers who provided poor working conditions for low salaries. Those conditions exist in only a few situations these days. Unions today are working for employees of large companies where conditions, salaries, and benefits are quite good. Their only way to earn their keep is to keep pushing for even higher salaries and benefits. Instead of the manufacturers being allowed to compensate for overseas efficient companies building competitive products the unions forced the U.S. companies to increase salaries and benefits. The result is the crash we are going through now.

As far as I can see most people are hoping to get back on the same track the U.S. was on in the 1980s and 1990s. It's not going to happen. Home prices have dropped but most other costs have not. Salaries have come down because people are out of work and willing to take less to go back to work. But food, gas, and other things we use have not dropped. Sad to say we till have more to fall.

What is the way out? Find ways to manufacture new products the world wants and pay lower salaries. Home prices and rent costs will have to drop further. All salaries will have to drop which will bring down food prices and other necessities. Any attempt to keep things as they were is only going to delay the inevitable and we will be facing another crash or two in the near future.