Sunday, December 30, 2018

The Best of BeeLine-2018

Here is a Top 10 List for the Best of BeeLine for 2018. The first 5 are the most popular posts I wrote during the year based on the number of views. The second 5 are a few of my personal favorites out of the 139 blog posts I wrote during the year.

If you missed reading these "Best of Beeline" posts the first time around, here's another opportunity to get to "the shortest route to what you need to know" to start 2019 off right.

BeeLine readership continues to expand. Total readership grew by over 50% during the year and 800 now have email subscriptions. All of that growth is organic. I don't actively promote or advertise this blog. New readers almost always come from one of you passing it along to someone else.

If you enjoy BeeLine, please pass a recommendation on to your friends and family. I enjoy writing it but it is a lot easier to sit down, research and write when I know more are reading my blog.

If you want to make sure you don't miss a post, consider putting yourself on the BeeLine email list. You will receive an email the first thing in the morning when I post a new piece. You can sign up in the upper right hand corner on this page. You will receive a follow-up email (from FeedBurner) that you will need to confirm to begin delivery.

Thank you to all my loyal BeeLine readers and a Happy New Year to each one of you!

Best of BeeLine-2018

Food or Fraud- February 18, 2018

The incredible abuses in the food stamp program.

Where Does It Go From Here?- August 21, 2018

What do the indictments (and guilty pleas) of Paul Manafort and Michael Cohen mean to the future of the Trump Presidency?

The Science of Success- February 8, 2018

How West Point shows us how the science of success works.

Leverage and the Long Game- March 4, 2018

Understanding Trump's strategy on foreign trade.

It is Miraculous- April 2, 2018

We are told every day how awful and unpopular Trump is. However, why are his approval numbers higher than Obama at the same time in his Presidency? It is miraculous.

The Genius and the Dunderhead- January 11, 2018

The media called Steve Jobs a genius. They tell us Donald Trump is a dunderhead and unfit for office. The remarkable similarities between the two men.

Bitcoin- Boom, Bubble, Bust?- January 14, 2018

Buyer beware when buying Bitcoin. Written when Bitcoin was $14,000. It is now below $3,800.

Our Brains Lead Us Astray- March 27, 2018

How easily our brains are ruled by emotion and the extent it so often leads us astray.

How Did You Meet?-  October 4, 2018

Tracking how couples meet with a personal story of how Mrs. BeeLine and I met.

The Melting Pot- October 15, 2018

There are 3.3 million immigrants in New York City who were not born in the United States. There are nearly 500,000 from the Dominican Republic alone.

Wednesday, December 26, 2018

2018 In Pictures

Over 7.5 trillion photos were taken last year. It is estimated that 8.8 trillion images will be taken in 2018.

Only 5% of those were taken with digital cameras. The rest were taken with smartphones, tablets or apps (Instagram, Snapchat) on these devices.

The average iPhone user takes 2,100 pictures a year on their phone. Android users snap 1,332.

The most common images are of ourselves and our loved ones. In fact, it is estimated that the average Millennial will take 25,000 selfies in their lifetimes.

Only 10% of all images are deleted by most people. On the other hand, professional photographers delete 80%-90% of what they take.

Here are a few of the images on my iPhone over the last year that I took during my travels.

Sorry, no selfies, just the incredible beauty and majesty of God's creation and what mankind has done with it.

Footprints in the Sand
Miramar Beach, Florida

9th Tee, Woodlands Course, Shaker Run Golf Club
Lebanon, Ohio

State Capitol
Boise, Idaho

Point Fermin Lighthouse
San Pedro, CA

Creek Street
Ketchikan, Alaska

Glacier Bay National Park

Kodiak, Alaska

Yokohama, Japan at night

Sunset on the Yellow Sea


The Great Wall of China

Shanghai at night

Miami University
Oxford, Ohio

Asbury First United Methodist Church
Chattanooga, Tennessee

How do I find time to write when there is so much to see and do? It is not easy.  However, I plan to continue writing due to the many kind words I receive from you. Thanks for reading BeeLine. I sincerely appreciate it.

All the best to you and yours in 2019.

Thursday, December 20, 2018

The "Crazy" Constitution

Expect to see more crazy stuff like this from the so-called "Justice Democrats" or "Democratic Socialists".

Or stuff like this where the person is arguing the U.S. Constitution is outdated based on two premises that are completely false.

I guess Regina Fake does not know that there is absolutely nothing in the U.S. Constitution that says women can't vote. In fact, a number of states permitted women to vote before the 19th Amendment was ratified. In addition, Regina does not seem to understand that the 3/5 provision applied only to slaves in slave states---not to blacks generally. In a number of northern states blacks had been voting since before the Constitution was even written.

The provision was put into the Constitution to penalize the slave states and diminish their representation and influence in Congress with the intent of eventually eliminating slavery. Slaves were not 3/5 of a person. The states with slaves were not allowed to claim they had the full representative power of those people.

It is too easily forgotten that the United States of America is the oldest continuous government system that exists in the world today. Think about that. Think about all the other large countries in the world today. UK. France. Germany. Russia. China. Japan. They have all undergone fundamental changes in their governmental structure since our founding. The stability of the United States is unmatched compared to any other in existence.

That continuity and stability also is a significant reason why the United States economy has also been the envy of the world for decades upon decades.

It is quite remarkable that something that dates back to the 1700's has served us, and continues to serve us, so well.

As to the unequal representation based on population of each state, this was fully understood by the Founders. The population of the states were skewed considerably when the Constitution was written. The three most populous states--Virginia, Massachusetts and Pennsylvania--made up almost half of the population of the new nation.

In fact, here is a document from the papers of the U.S. Archives that shows the population of the various states while the U.S. Constitution was being debated and written by the Founders.

Note that Virginia had over 1/6 of the nation's population at that time. By comparison, California has 1/8 of the population today.

Credit: National Archives from the papers of David Brearley

Many of the most influential Founders were also from Virginia---Washington, Jefferson, Madison as well as George Mason, Edmund Randolph and George Wythe. Yet, Virginia still ended up with only two senators like every other state.

The Founders knew full well what they were doing. There were very clear population differences in the states at the time the Constitution was written and ratified. That is why the House of Representatives was established that allocated representation on the basis of population.

However, the nation being formed was called the United STATES of America for a reason. A fundamental principle from our founding was that smaller states would not have their interests and voices diminished by larger states with larger populations.

The real reason that the liberals attack the Constitution and try to diminish it is that it stands in their way to transform the country into their progressive vision.

The Founders provided a manner to amend the Constitution. It just requires the consent of 2/3 of the House and Senate and 3/4 of the states to agree. Notably for the liberals who despise Trump today, it does not require the President to concur. Alternatively, it can be amended by a convention called by 2/3 of the states thereby bypassing Congress altogether followed by ratification by 3/4 of the states.

It is hard to amend the Constitution. It was meant to be hard. After all, it is the highest law. Or it is supposed to be. In recent years, liberals have turned to using the Supreme Court to replace the Constitution.

That is why the Supreme Court is everything to Liberals. Most everything they care about in the last 50 years did not come from legislation or constitutional amendment but by the opinions of five Supreme Court justices. Look no further than abortion and gay marriage as prime examples. Or the affirmation of the constitutionality of Obamacare which is now under further threat by another judicial ruling by a federal judge in Texas.

Every new appointment to the Supreme Courts puts their agenda at risk. They know that they do not have the support of the necessary majorities of American voters to support and extend their progressive agenda. They do not want to follow the Constitution to get there.

Our Founders wanted a clear consensus before we made radical changes to the rules that governed us. They didn't want the "highest law" being changed based on passing fancies and the short-terms whims of the people. They also did not want slim majorities trampling on minority rights. Or the views in several states to overwhelm differing views in smaller states. They wanted true consensus on any amendments. The Democrats simply don't want to wait and do the heavy lifting necessary to do that.

Is the Constitution crazy and unfit for modern times?


Crazy only describes those that want to undermine and undo the foundational document that underlies the greatest government system ever known to man in the history of the world.

Tuesday, December 18, 2018

The D.C. Double Standard

If there is anything that the Donald Trump Presidency has brought clearly into focus it is the D.C. Double Standard.

I think we all understood a double standard was in place when it came to press coverage. Democrats just get much better coverage than Republicans. That is understood. However, I don't think most knew how deep the double standard was within the government bureaucracy. I guess that is why it has now become known as "the deep state."

It should comes as no surprise if you look at the election results for 2016. Most people who work in and around the District of Columbia are Democrats. They certainly did not want an outsider like Donald J. Trump to be President of the United States.

To show you how deeply the deep state does not like Donald Trump take a look at the vote totals in the District of Columbia for 2016. Trump only got 4.1% of the votes.

Trump only garnered 12,723 votes in D.C compared to 282,830 for Hillary Clinton. Third party candidates (Gary Johnson, Jill Stein) and write-ins actually got more votes collectively than did Trump in D.C!

You see similar patterns, although not quite as pronounced, in the counties in Maryland and Virginia that are contiguous to D.C. Trump only got 19% of the votes in those counties.

To be clear, it is just not a deep state in D.C.  It is clearly a Democrat deep state.

You see the double standard clearly every day in the news.

Make no mistake, Donald Trump is no saint. However, it is hard to find any saints in Washington, D.C. In that respect, Trump fits right in. The only difference is that the deep state is determined to drive Trump from office while they protect and defend their own at all costs.

We are now hearing calls for Trump's impeachment due to a payment that was made to a woman who Trump allegedly had sex with ten years before he even ran for President. This relates to the guilty plea of his attorney, Michael Cohen, to an FEC violation among other crimes unrelated to Trump.

However, when Bill Clinton had sex with a young intern in the Oval Office, and then lied about it under oath, we were told it was nothing. "It was just sex". It had nothing at all to do with the performance of his duties as President. Double standard?

We are also seeing that the payments that were made to the woman are being recast as illegal campaign contributions even though the money came from Trump's personal funds and there are indications that similar payments were made in the past in similar situations before he ever ran for political office.

However, when Barack Obama was running for President there are reports that campaign operatives of Obama offered $150,000 to Reverend Jeremiah Wright to stay silent during Obama's campaign. Wright said so himself. We have no idea whether the payment was ever made because no one in the deep state ever investigated the claim. Double standard?

If this payment was made it is a major violation. Trump payments came from his own funds. The Special Counsel is arguing it is a "constructive contribution" to the campaign that was never reported. However, in the Obama case, the funds would have come from others. There would simply be no question that it was an illegal contribution.

Let's also not forget that Congress paid out $17 million to settle various sexual harassment and discrimination settlements over the last 20 years with taxpayer funds. However, there has never been a hint from anyone that this should have been considered a disguised campaign contribution to these members of Congress who benefited. Double standard?

Democrats and deep staters are also out there claiming that Trump is enriching himself in office.

Of course, this is directly contradicted by Forbes magazine last year which estimated that Trump's net worth decreased $600 million in his first year in office due to the personal funds he expended in financing his campaign and fallout to his businesses due to his "unpopularity".

Let's not forget that both the Clintons and Obamas had very little net worth when they arrived at The White House. The Clintons are now worth over $75 million. The Obamas made over $20 million in income alone between when he became a US Senator in 2005 and left the Presidency in 2017. That was before they really started cashing in after Obama left office.

In other words, the Clintons and Obamas got rich because of elected office and Trump has gotten poorer by being elected to political office. However, the claim is that Trump is enriching himself as President? Double standard?

If you want to see a classic case of enriching yourself, and taking advantage of the political system, all you have to do is look at the Clinton Foundation.

I don't think I have ever seen a more obvious and blatant case of "pay to play" in politics.

For years we have heard about the amazing works of charity that the Clinton Foundation is doing around the world.

Million and millions of dollars flowed into the coffers of the Clinton Foundation. We were told it was due to donors being so taken with such wonderful works of charity.

Donations to the Clinton Foundation averaged $250 million annually from the time that Hillary Clinton ran for President in 2008, through her tenure as Secretary of State, and then through her 2016 Presidential run.

In the year after she lost to Donald Trump donations dropped to $26.5 million---a decrease of almost 90% in one year.

What happened to all the people who wanted to support the good work of the Clinton Foundation?

Where did all of those donors go all of a sudden?

What about all that great work that the Clinton Foundation was doing?

Credit: Investors Business Daily

When there is no influence to peddle, the money dries up very, very quickly in politics.

Why is all of this not being investigated more deeply by the deep state?

Could it be be this is standard operating procedure for everyone in the deep state? Double standard?

I still don't see anything thus far that Trump has done that I did not know or presume about him when I cast my ballot two years ago.

The Democrat and Deep State game right now is simply to try to raise doubts and create distrust of Trump with his base of voters. You can see how far they are willing to go in order to do that based on how deep the double standard is on display here.

Congress can do nothing about Trump if he maintains his popularity with the voters.

We have been down this road before. Bill Clinton also had a Special Counsel investigating him. Bill Clinton also liked the ladies. That was known before his election. He perjured himself while in office attempting to cover up his affair with Monica Lewinsky.

The Republicans, who had a majority in the House, impeached Clinton for "high crimes and misdemeanors". Democrats shrugged their shoulders and said "it was just about sex". They said that it was understandable he would lie under oath when it was about sex.

The American people agreed. The economy was good and nobody wanted to rock the boat.

It is not much different today.

The people who voted Trump into office knew that they were not electing a Boy Scout. If they wanted that, Mitt Romney would be in the second term of his Presidency.

If this is all that there is, this will not go very far. If anything, Trump's actions fall far short of Clintons. All of this happened before Trump was even elected. The alleged affairs with the women were ten years ago. Clinton was actually doing IT in the Oval Office with an intern.

The Democrats and the Deep State in D.C. have been going full bore on Trump for nearly two years. Are we going to see this for another two years? A Democrat House suggests that we will.

At this point, all I see in is a huge DOUBLE STANDARD in play.

In fact, a double standard does not even begin to explain what is going on in D.C. right now.

Anyone interested in equal justice under the law should take note.

In DC and its environs I would expect that to be about one person out of ten.

Friday, December 14, 2018

Friday Fun Facts

I come across a lot of interesting facts, figures and charts each week in my reading and research.

Many times it is not possible to write an entire blog post about them.

This blog post highlights several things that I found interesting. I hope you say the same thing when you are finished reading. If nothing else, one of these might prove to be a conversation starter at a holiday party over the next couple of weeks.


Here is an interesting chart showing the percentage of all voter surnames beginning with a particular letter. It is taken from the records of 172.2 million U.S. voters in all 50 states and D.C.  I would say that is a pretty good sample.

Surnames beginning with S are the most common followed by M and B.

There are very few I, Q, U and X surnames.

A Night Out

How about a comparison of a night out in various cities around the world.

They compared costs for club entry + two cocktails + taxi ride + a Big Mac to cap the night off.

Zurich is the most expensive city for a night out and Mexico City is the cheapest. Surprisingly, a night out in Miami costs more than a night out in any other city other than Zurich.

That is due to the high cost of club entry in Miami. In fact, club entry in Miami costs more than the costs of two drinks once you get in. I guess there are a lot of people with more interest in "being seen" than in drinking in Miami.

Expense Reports

I don't know how many of those nights out around the world are being expensed. However, you can see the rise of tech in the most common vendors that are showing up on expense reports.

Uber and Amazon have made great strides since 2015. Starbucks has held up year after year. There don't seem to be as many Big Macs being eaten by people on the road as there were three or four years ago.

Women Managers

We continue to hear that women are at a disadvantage in the workplace in the United States. However, this recent OECD report shows that there is a higher percentage of women in management positions in the United States than any country in the world except Latvia.

Women in management positions also almost matches the percentage of women in the workforce in the United States. There is a large gap in these numbers in most countries in the world. Very few managers compared to the number of women workers.

How often have you heard this?

Managing the Money

I especially enjoyed the next graph, in particular in comparison to the previous graph.

As you see from the graph above, very few Japanese or Korean women are in management positions in the workplace. It is clearly a male-dominated culture at work in those two countries.

However, at home, the women in Japan and Korea are controlling and managing all the money in about 60% of all households and only giving the husband pocket money when deemed necessary. That compares to 19% in the USA, 11% in Germany, 7% in the U.K. and 1% in Finland.

Who would have known any of this?

Now you do.

Pass on your new found fun facts.

Tuesday, December 11, 2018

Can't See The Planet For The Straws

800 demonstrators packed into Congressional offices and lined hallways demanding that Congress take action on climate change this week.

Most were students, some of which were in middle school.

128 were arrested by Capitol Hill police when they refused to disperse.

The focus of their efforts is to force House Democrat leaders to support a far-left plan for a "Green New Deal".

You should remember that term. I predict you will be hearing a lot about it over the next several years. It appears to be what Socialist Democrats intend to use to package most of their long sought policy goals--guaranteed income, Medicare for all, free college, spending on green technology and jobs, elimination of fossil fuels and the like. This is evident by looking at the platform of the Green Party that clearly spells all of this out under that umbrella.

Alexandria Ocasio-Cortez has been a leading advocate of The Green New Deal. This is how she described it during her campaign for Congress.

“The Green New Deal we are proposing will be similar in scale to the mobilization efforts seen in World War II or the Marshall Plan,”. “It will require the investment of trillions of dollars and the creation of millions of high-wage jobs. We must again invest in the development, manufacturing, deployment, and distribution of energy but this time green energy.”

The leftists claim that this huge effort is necessary because of "the science in the latest Intergovernmental Panel on Climate Change report shows the world needs to slash emissions 45 percent by 2030 and get to net zero by mid-century or risk warming more than 1.5 degrees Celsius. If that happens, small islands will be swallowed by the sea and millions will be conscripted to a life of poverty amid worsening weather".

Let's take a step back and look at this issue in context. That is something we like to do at BeeLine.

These activists want to take action to slash carbon emissions by 45% over the next 12 years.

How do you do that?

Let's not just look at the United States. If this is a problem, it is a global problem.

This is a chart showing the latest estimate on global carbon emissions.

Total global carbon emissions are estimated to be 37.1 billion tons. As you can see from the chart, the contribution of the United States is about 12% of the total and its emissions have been trending down since 2000.

The same is true for the European Union. Together, the EU and the United States are responsible for less than 1/4 of all carbon emissions in the world today.

In other words, the United States could eliminate all carbon emissions over the next 12 years and it would be less than 25% of what the climate alarmists state is necessary to avoid "catastrophe". Even if Europe also eliminated all carbon emissions, less than half the goal would be met. This is also not taking account of additional carbon emission increases going forward from other countries.

It is also important to note that the United States was the only major country in the world to actually reduce greenhouse gas emissions in 2017.

Greenhouse gas emissions decreased by 2.7% in the U.S.  Emissions from large power plants declined by 4.5%.

For additional context, consider that on a per-capita basis, U.S. carbon emissions in 2017 were the lowest they have been in 67 years!

France carbon emissions were up 3.6%. Yes, the country which is famous for the Paris Accord on Climate. That is also the country where people have recently taken to the streets and are burning cars and looting stores because of a fuel tax increase that was designed to help France reduce carbon emissions.

The EU as a whole was up 1.5% last year.

China was up 1.7%.

India was up 4.6%.

Of course, as you can see from the chart, the real problem for increased carbon emissions is in the rest of the world. South America. Africa. The Middle East, Southeast Asia.

193 countries have signed the Paris Accord (the United States now excluded) indicating that they are committed to reducing carbon emissions. That is almost every country in the world. However, carbon emissions keep climbing.

127 countries also signed the Kyoto Protocol on reduction in greenhouse gas emissions in 1997. This is also an agreement that the United States never formally ratified (although Bill Clinton and Al Gore did sign on). This agreement obligated the signatories to a 5.2% reduction in carbon emissions by 2012.

Ironically, although the United States was never formally part of the Protocol, it was the first major industrialized nation to meet the 5.2% target , although a portion of that result was due to the stagnant economy in 2009-2012.

The point of all of this is that talk is cheap when it comes to politics (and carbon emission reductions).

It is easy to talk a big game.

It is easy to participate in symbolic demonstrations.

It is easy to talk about how much you "believe" in man-made climate change and the "urgent" need to do something about it.

It is much harder to really do something about it.

The United States has actually been doing something about it without signing on to any high-minded and symbolic demonstrations of "commitment".

Looking at the data, why aren't these protestors storming the Chinese, Indian, Indonesian and Turkish embassies instead of the halls of Congress?

Why are they not supporting President Trump's tariffs on China? After all, those Chinese factories and the massive transportation costs to get those products to the United States are producing a lot of carbon emissions.

Why are they not opposed to illegal immigration? Don't they realize the additional energy, infrastructure and sustainability costs that will have to be borne with those additional people in the United States compared to what it is in their home countries?

These actions would all have much more meaningful impacts on what the leftists suggest is the real problem (global carbon emissions)  than demonstrating for a Green New Deal in the United States.

All of this reminds me of the story I saw about the Legoland amusement parks recently announcing a ban of plastic straws and lids in its parks.

Bear in mind that Legoland is an attraction that revolves around plastic bricks and toys. In fact, its newest park has 15 million of them. Almost all of them are made of non-biodegradable petroleum-based plastics.

Lego sells a reported 75 billion plastic bricks globally each year.

And they are concerned with the environmental impact of plastic straws at Legoland?

It used to be said that people often could not see the forest for the trees.

I guess we are now to the point that people can't see the planet for the straws.

Sunday, December 9, 2018

Justice for All

The fundamental belief underlying Democratic Socialists like Bernie Sanders and Alexandria Ocasio-Cortez is that the United States is an unjust nation. This injustice must be remedied by spending on massive federal programs to remedy the injustice.

By the way, in case you were not aware, the Social Democrats have re-branded themselves as "Justice Democrats". After all, they recognize that most Americans are rightfully wary of socialism. However, how can anyone be against "justice"?

Justice Democrats support the following:

Medicare for all
Free child care
Free college education
A guaranteed income
A "Green New Deal" with trillions of investment in sustainable energy development
"Investment of trillions" in rebuilding the nation's  infrastructure

They specifically mention spending "trillions" in the last two points but the reality is that each of these programs would cost trillions of dollars.

However, these "Justice Democrats" are vague and evasive when it comes to how these programs would be paid for. Their typical answer is that there is plenty of money to pay for all of this if we get "the rich" to pay "their fair share",  close "tax shelters" and tax Wall Street. They often point to European countries and suggest that they are the model for how it can be done.

This tweet is an example of those on the Left making the point that those of us in the United States are woefully under-taxed compared to Europeans and there is plenty of room to increase taxes to pay for increased federal spending.

This data comes from a OECD report entitled "Revenue Statistics 2017" that examines tax revenue trends in the OECD. It takes account of tax revenues at all levels of government among OECD nations. The OECD is comprised of 34 countries that have traditionally been market economies. You will notice that it does not include China, India, Russia and many other growing economies around the world.

It also misstates the correct U.S. percentage from the report--it is 26.0%, not 25.5%.

The list of countries above also omits other countries in the OECD such as Mexico (17.2%), Chile (20.4%), Ireland (23.0%), Turkey (25.5%) and Switzerland (27.8%) that have lower tax burdens or are very close to the U.S.

It is also interesting to note that tax revenues as a percentage of GDP is only 9.4% in China and 10.6% in Russia according to the most recent year reported by The World Bank. These are countries run by communists. The fundamental principle of communism is that government should exist to serve the interests of the proletariat (the working class) above all else. However, these countries are taxing and spending considerably less than the OECD countries.

However, where this data is most misleading is not explaining the significant differences in the sources of tax revenue. The simple fact is that when there are high rates of taxes as a share of GDP it necessarily follows that there are high rates of taxation on the middle and lower income classes.

The only way that you can maintain a high tax share across a country is to maintain a high tax burden on everyone. Taxes do not just fall primarily on the rich in these high tax countries, they fall heavily on everyone.

Let's look at where the tax revenue comes from the United States compared to the OECD averages in the report, as well as France and Sweden, the two highest taxed countries in the report. This chart compares the percentage of tax revenues from various sources as a percentage of total tax revenues.

Keep in mind that taxes on individual income, corporate income and property taxes are generally considered to be taxes targeted at the rich. They are progressive in nature. The more you make or have, the more you pay.

Consider the percentage of income taxes paid by various income groups in the United States. In the latest data available (2015) the top 50% of income earners paid 97.2% of all individual income taxes. In fact, the top 1% alone paid 39.1% of all individual income taxes. Compare that to the amount of the bottom 90%, combined (29.4%).

Social security taxes, value-added taxes and other consumption taxes (such as state and local sales taxes) are broad-based and generally apply to everyone across the board. As a result, they are considered regressive taxes as the burden falls disproportionately on lower incomes.

Consider the chart above, in the United States only 40% of the tax burden is borne through broad-based regressive taxes such as Social Security, Medicare and sales taxes.

The OECD average is over 60%. In France, it is 68%. In Sweden, it is 62%.

This also explains why you are seeing riots in France over an increase in taxes on fuel. It is yet another regressive tax in France that will hit working people the hardest.

Looking at specifics, if the United States were to raise similar amounts in social insurance contributions as is the case in France, it would have to levy additional taxes equal to 6.9% of GDP. That would require $1.4 trillion of additional taxes on payrolls. To put that in context, all Social Security, Medicare and unemployment tax collections for the 2018 fiscal year in the U.S. totaled only $1.2 trillion.

If the United States were to raise similar amounts in consumption taxes as Sweden, it would need to implement a value-added tax or national sales tax that would raise an amount equal to 9.2% of GDP. That would require prices on all goods and services in the United States to be increased by $1.9 trillion per year. To put that in context, that is greater than the entire amount of individual income taxes collected by the federal government in fiscal 2018 ($1.7 trillion).

It should also not be forgotten that despite the calls for more federal spending by the Socialist and Justice Democrats, the United States still ran a $779 billion deficit in fiscal 2018 with current levels of spending.

The Justice Democrats claim that their proposals for Medicare for all, free college, a guaranteed income and the other items on their platform are overwhelmingly popular with voters.

Opinion polls in the United States demonstrate that these policy positions are overwhelmingly popular. Indeed, throughout the industrialized world these ideas are considered moderate. This is a movement about freedom and justice. And it’s a movement of, by, and for working people. If the Democrats refuse to embrace this platform, they’ll continue to lose, either to Republicans or to us.

I don't doubt it. Who wouldn't want more free stuff?

However, in the real world, everything has a price tag.

It is easy to say someone else is going to pay the bill. Everyone likes it when someone else picks up the tab for us.

However, what is your answer if the FICA rate on your paycheck doubles or everything you buy goes up in price by 10% or more due to a new value-added tax?

What is your answer if your freedom is seriously curtailed in the process? Government decides who gets the free college tuition. Government decides which school you can attend. Government decides which doctor or hospital you can go to. Government decides whether you qualify for that hip replacement surgery. Government decides who cares for your children.

Make no mistake, this is the only way the Justice Democrat agenda works. It cannot work any other way.

The rich don't earn enough to pay these types of bills. You could tax them at 100% and it still wouldn't be enough.

And even if you could, there would still never be enough money to provide enough free stuff for everyone.

This socialist agenda would mean that tax costs would have to be increased massively on everyone and everyone would also have to accept a substantial loss in their freedom compared to today to accomplish what Justice Democrats want.

Keep all of this in mind as you hear more about these ideas over the next two years.

I predict you will hear a lot about all the "free stuff" these Democrats want to give you leading up to the 2020 election.

You will hear nothing about how it will be paid for other than we will get the "rich" to pay their "fair share".

Don't believe it.

However, if they are able to implement their agenda I have no doubt they will also provide justice in who pays the taxes to fund this agenda.

You might have heard the phrase before.

 "Justice for all."

Putting It Into Perspective

The recent volatility in the stock market in the United States has put a lot of people on edge.

People are worried about their 401(k) balances and nervous about their financial futures. The political pundits take to the airwaves and tell us how bad everything is. The economists warn that a recession can't be far away.

However. it might be helpful to put all of this in a little perspective.

Since Donald Trump took office equity returns (despite the recent sell-off), as measured by the S&P 500, are still up over 26%.

To gain even better perspective, compare United States equity returns to that of the major European countries since the Fall, 2007 before the market and economic meltdown that took place in 2008.

In other words, equity prices are more than twice as high as they were before the 2008 stock market  meltdown in the U.S. while Europe has not even been able to recover to that level after more than a decade. 

In fact, equity prices in the United States have more than tripled from the bottom of the market in February, 2009.  

How do we compare to China?

Since President Trump took office the China Shanghai Composite is down 17% compared to the 26% advance in U.S. equity markets.

Here is a comparison of U.S. and China equity returns over the last 11 years.

What does this tell me?

It seems all that we hear from liberals and the mainstream media is how bad it is in the United States.

The markets don't seem to agree. And they have not agreed with that assessment for a long time.

At the same time. the wide variance in equity returns between the United States and these other countries should cause everyone to understand that this large a disparity is unlikely to continue. 

Looking solely at this you would guess that the United States equity markets would underperform relative to these other markets over the next ten years. There tends to be reversion to the mean over time when you see this type of disparity in market returns.

Consider as well the rise in interest rates in the United States over the last year. Interest rate increases make it difficult for stocks to rise for the simple reason that risk-free cash becomes more attractive relative to stocks. Money flows to where it is treated best.

However, who really knows what the future holds?

Look at the problems facing Europe right now. Riots in France. Brexit. Pressure from Trump to increase NATO defense spending. Credit problems in Italy, Greece and Spain. The risks of ending their quantitative monetary purchase program. John Mauldin in Thoughts from the Frontline has an excellent article this week on the problems facing Europe.

A good portion of Europe is still at negative interest rates. How do they move from there and not also further damage equity prices?

This chart gives you an idea where the US stands today on global rates.

China also has to figure out a way that they can deal with Donald Trump. They had free reign to do most anything they wanted for the last 25 years. What now?

China has borrowed heavily over the last decade. Well over half of all the private sector debt created in this decade has been in China. When you are this leveraged you desperately need revenue to service the debt. China needs to keep its factories running and it needs to be able to sell its products into the United States to do that.

It is never easy being an investor. The times we live in today are particularly difficult.

However, it is easier when you try to put everything you can in perspective.

Thursday, December 6, 2018

Venezuela, California and Amazon

I came across three interesting charts this week on Venezuela, California (the next Venezuela?) and the research and development spending by various global companies.

The Guardian has a sobering article on Venezuela in which it chronicles "'A slow-motion catastrophe': on the road in Venezuela, 20 years after Chavez's rise" to better understand the collapse of that former South American economic power.

Venezuela's economy shrunk 15% last year. Inflation is expected to be over 1,000,000% this year. Mass shortages exist in almost every item needed to live---food, fuel, clothing, medicine and medical supplies. The country that still boasts the world's largest oil reserves, and what used to be the best economy in South America, has become a third world outpost.

It is also impossible to comprehend what socialism has done to destroy Venezuela in two short decades. Almost 10% of Venezuela's 31 million people have fled the country. You can be sure this number includes many of the smartest and most talented citizens it had. 90% of those remaining now live in poverty.

That brings us to California whose Democrat leadership seems determined to destroy the state in much the same manner as Chavez and Maduro did to Venezuela.

A new Democrat proposal, that will be considered in the state legislature in 2019, would extend Medicaid benefits in the state to illegal immigrants.

It is estimated that 1.8 million illegal immigrants live in California and are uninsured. It is estimated that 1.2 million of those would be eligible for Medicaid under the proposal at annual cost of $3 billion. Medicaid costs are normally shared between the state and federal government but in this case California should be paying the entire tab itself.

That number seems very low to me---it works out to only $2,500 per beneficiary. I would expect the cost to be at least double or triple that and that does not take into account the fact that such a law would undoubtedly entice more illegals into the state for the benefits.

Medicaid costs in California already exceed $100 billion per year. Costs have increased by over $60 billion in the last ten years.

Over 14 million are covered this year in an average month. That number was only 6 million a decade ago. Three-fourths of the increase was the result of the expansion of Medicaid under Obamacare.

Average annual costs are over $7,000 per participant. How does the state think it can extend coverage to illegals for $2,500 per person? Do they actually believe that the federal government is going to pay the 64% of the overall total cost it is doing for citizens?

Source: California Legislative Analyst's Office

If California continues on this path it is going to need a lot more tax revenue. They will need more companies who innovate, and employ more people, who make big incomes, and who pay a lot in taxes.

As I have written before, the top 1% of income earners who California pay half of all income taxes. The income tax also makes up 67% of state revenues. The recent stock market sell-off should be of particular concern to the budget officers in Sacramento. Taxes on stock option income and capital gains make up a significant portion of income for those high earners. If that money stops flowing in, California is going to be in a world of hurt.

That leads us to this third chart. Who would have thought that the company spending the most money on research and development in the entire world is a retailer?

I would not have guessed that in a million years.

It just goes to show you how far and wide Amazon is thinking to find more ways to incorporate itself into your life.

You can be sure that Alexa is listening to what you want so that Amazon can sell it to you in the future.

Tuesday, December 4, 2018

President Oposite Redux

I wrote a blog post six years ago after I had come to the realization that the best way to understand Barack Obama was to convert everything he said to the OPPOSITE of what he says he was going to do.

He ran on a message of "hope and change" but we got exactly the opposite. Here are a few of the examples I cited from Obama's first term. Nothing much changed in the next four years either.

He was going to bring us together.  He has worked primarily at creating divisions with endless class warfare rhetoric.

We heard how the United States of America would be respected like never before.  Our enemies have gotten angrier and we have angered some of our closest allies.

We heard how we would extend health care to millions and at the same time the tens of millions who liked their health care could keep it and premiums would be reduced by $2,500 per family as a result of healthcare reform.  A 2,300 page health care reform bill was passed on a strict party line vote that will increase our deficit by $1 trillion over the next 10 years, cut Medicare by $716 billion, force religious organizations to violate the most basic tenets of their faith and turn over many medical decisions to a government bureaucracy.  Health care premiums have not decreased by $2,500=they have increased by $2,500 over the last four years.

We heard how green jobs would be created by the millions to spur a economic revival the likes of what we had not seen in decades. Solyndra and many other "green" companies were given billions of dollars by the federal government and many went bankrupt without providing anything of value in jobs or economic growth.  At the same time, a project that would have increased our energy security and created thousands of jobs, the Keystone pipeline, was rejected.

We heard how we would lift more people out of poverty with a helping hand that would benefit the entire country at the same time. More people are on food stamps, Medicaid and disability than at any time in history.

Mr. Opposite (thankfully no longer President Opposite) is at it again.

Obama was at Rice University in Houston last week for a talk and he took time to take credit for the United States now being the world's largest oil producer.

Go here to see the video clip.

Bear in mind that this is also right after he extolled the virtues of the Paris Climate Accords which would have committed the United States to massive reductions in the use of fossil fuels. Those commitments are also now responsible for Paris burning with massive riots over increased fuel taxes.

Talk about President Opposite. That statement is counter to everything he said about fossil fuels for over a decade.

When Obama was President he did everything he could to demean and diminish all fossil fuels.

He blocked the Keystone Pipeline. He refused to support any drilling on ANWR and worked to constrain and restrict drilling on any federal lands. He supported regulations to hamper oil drilling.

And now he claims credit for the shale oil revolution?

That takes a lot of chutzpah.

General Motors was also in the news last week due to its announcement that it was closing plants in Canada and the United States including the plant that makes the plugin electric Chevy Volt that also has a combustion engine backup for longer trips.

Some may also remember this President Opposite moment when Obama stated he would buy a Chevy Volt after he left office.

To date, I have not heard any reports that Obama ever purchased a Volt. If he still wants one he better hurry because GM is discontinuing production of the Volt with the closing of these plants.

That statement from GM is also confusing as they stated they are going to discontinue the plug-in electric hybrid Volt in order to focus on electric cars? If a buyer did not buy the plug-in Volt (with gasoline engine backup) what leads them to believe that they can get someone to buy a fully electric car? If that is the case, why don't they start by just deleting the gasoline engine in the Volt? GM also seems to be talking out of opposite sides of its mouth.

The media likes to take President Trump to task for what they call his "lies" and "liberties with the truth".

I can guarantee you that Donald Trump has nothing on Barack Obama in that regard. However, the media has absolutely no interest in telling the truth about President Opposite.

Sunday, December 2, 2018

Why Is Paris Burning?

Why is Paris burning?

The images are disconcerting.

Most stories in the mainstream media just say the French riots are in reaction to rising fuel prices. That is not the reason. Paris is burning over rising fuel taxes that were instituted by France to combat climate change.

Credit: The Today Show

Credit: Alain Jocard/AFP

Credit: CBS News

Credit: Olivier Coret News Pictures

This is why Paris is burning according to

The French government is considering "all options" to control protests against rising fuel prices that have turned violent in Paris over the last three weeks, a spokesman said Sunday.
Speaking on France's Europe 1 radio, spokesman Benjamin Griveaux said the government is thinking about steps to prevent "serious outbursts of violence," including introducing a introducing a state of emergency.
Rising fuel prices are largely attributed to a leap in the wholesale price of oil worldwide.
But the protests have evolved into a broader demonstration against Macron, his government, and tensions between the metropolitan elite and rural poor.
Macron has borne the brunt of the demonstrators' anger instead of OPEC for reducing oil production, or the US for imposing tariffs on Iran, which crippled oil exports.

The problem with this "reporting" is that these protests have nothing to do with rising fuel prices due to a leap in the wholesale price of oil.

In fact, the price of oil has been fallen dramatically over the last eight weeks. (as you might have noticed at the gas pumps yourself).


Brent crude oil fell from $84.58 on October 5 to $59.46 on December 2---a 30% decrease.

Saudi Arabia has also not been cutting oil production. These are the production totals for the last 12 months through October.

Saudi Arabia Oil Production- Last 12 Months

It is true that Saudi Arabia is considering cutting oil production in the face of the declining price of oil to try to prop up prices. However, they realize that will not do them any good unless all other OPEC members (and Russia) do the same. However, all of these countries desperately need the oil revenues so it is difficult to cut back production while prices have declined so rapidly. They simply need the money.

Fuel prices have risen in France, not because of rising oil prices, but due to fuel taxes that have been implemented in order to combat "climate change". Diesel fuel taxes have been increased 7 cents and gas 4 cents per litre and they will continue to climb in future years based on laws already in effect.

You want to know why President Trump cites CNN when he talks about "fake news"? This story is a prime example.

President Macron of France has stated that fuel prices have to rise in line with other green initiatives made necessary by the Paris Climate Change Agreement.

The fact is CNN and the mainstream media would like to obscure the truth about why Paris is burning. It simply does not fit the leftist narrative it wants to promote.

CNN also does not want anything to support the notion that President Trump may have been right to exit the Paris Accords.

In the meantime, make no mistake that this is the future that the Democrats want for the United States.

Why is Paris burning?

It is because liberals are not happy unless the government is controlling even those things that it can't control.

I wrote the following five years ago as the Obama administration was working to put the entire U.S. coal industry out of business. At the same time, China was building  hundreds of coal-fired generating plants. You could say the same thing for oil and other fossil fuels in Europe. The Left seems to be intent to push its climate change agenda no matter what the costs.

Why is Paris burning?

It is because of thinking like this.

Only in a liberal mind does it make sense to...

shut down your most cost-effective energy generating source, 

shut-off your most abundant energy resource, 

raise electricity costs on all Americans,

and risk losing hundreds of thousand of jobs in the process.

In an attempt to solve a problem... 

that we are not even sure we have, 

and if we do, we are not sure we can do anything about it, 

because of natural or external forces that we cannot control, 

that may overwhelm anything we do anyway,

that ultimately works to the advantage of your biggest trade partner, 

that will undoubtedly result in more job losses for Americans over the longer term.