Inflation: Good or Bad

Before I decided to build my own house, I was thinking of buying a house. I was trying to figure out how much mortgage we could afford when a friend told me monthly payments would be fixed, and they would be getting easier to handle with pay raises. I didn’t understand what he meant.

When I was building my house in 1978, I was still naive about inflation. I made many trips to Narvick’s lumber yard ordering supplies. Under the heavy glass top of the counter was a newspaper clipping on what a 5% inflation rate did to the price on a pair of shoes. It was a real eye opener in real life terms.

Supposedly some inflation is good for us and too much is bad. Economists, politicians, and consumers disagree about where the Eden spot should be. Controlled economies try to keep it near zero by subsidizing staples with varying success. The worst rate today is Venezuela with several hundred percent.

Inflation is usually caused by human action. Supply and demand, technology, labor shortage, greed, interest rates, taxes, rising living standards, politics, and other reasons can raise or lower it. Inflation can by increased by tariffs on imported items. Tariffs are a hidden tax on the people. Before the income tax was instituted, the federal government was funded by tariffs.

The President just put a tariff on solar panels which significantly raises the price, cutting new installations, causing layoffs and reducing the growth of green energy. Another new tariff is on washers and dryers. Technology has greatly increased their costs and the new tariff will add another 15 – 20% to your purchase price. If Trump gets his way, kills NAFTA, and puts tariffs on all the items imported from Mexico and Canada. Inflation will soar. He has or will be putting a tariff on Canadian lumber and milk products raising the cost of housing and food.

Tariffs are a hidden tax on the people and most heavily on people already stretched by low wages. The rich don’t notice tariffs but the poor do! Tariffs cause inflation, inflation makes the Federal Reserve raise interest rates, which causes loan rates to rise, causing the price of everything to go up. Inflation and tariffs are bad!

Parents and Morality

Like most children, I lied to avoid punishment or uncomfortable situations. When I was older my Dad told me a man must stand behind his words. When one gives ones word, one must stand behind it and do what one said. One thing I am sure of, I changed myself and go out of my way to not threaten or promise something that I can’t or won’t do without giving my all. People who know me don’t ask for my opinion unless they want my honest opinion. Doing otherwise bothers me.

I am sure my Father would not have comprehended a President who flip-flops on major topics several times a day and vows to do something he won’t do. My Father was old school and would never consider voting for someone like Trump who would represent him and his country.

My mother taught me women are equal to men and to give them the same respect as a man. I think she was an early feminist and would be at home with today’s activism. I know she would have been heard for miles when Trump boasted about how he treats women and his affair with a porn star. They both respected the President of either party’s affiliation. Long after Kennedy’s death she found out about his cavorting and it depressed her.

Both parents made sure we were quiet winners and losers when playing games as with achievements in life. Bragging and taking credit for others achievements would have horrified them.

I know very few people who feel our current President honors the office even if they voted for him. Being President of the United States means doing what is best for 330 million Americans, leading free world, and projecting a great image of America. This President meets none of the criteria and is an embarrassment to two-thirds of the US and probably 90% of the world’s people.

Jobs Vs Immigration

First let me say I am anti-immigration and pro-birth control. I think our country would be better off at 200 million residents than the current 330 million and rising every day. Population growth is an economic and political goal. One requires the other to make the ideal demography work.

The confusion is in the number and type of jobs needed to support our economy. A few years ago Alabama passed its own immigration laws making sure no illegals had a job in the state. The idea was illegals took the jobs students and the poor would do. They didn’t, so crops rotted in the fields, stores were understaffed, landscapers closed, and manufacturers couldn’t fill unskilled and skilled jobs. After two years the law was quietly rescinded.

Expand the Alabama experiment to a national basis. We have hundreds of thousands of high tech jobs currently unfilled and several times that many low tech ones. This is with the previous system where immigrants filled many slots; and some highly publicized cases, took jobs away from local residents. No system will be completely fair to all.

Tens of thousands of the DACA kids are doctors, teachers, engineers, and have other highly needed and hard-to-replace jobs in a job market with many openings. We can’t support the Republican dream economy by exporting the people needed to build it.

Without immigrants, legal or not, who is going to work in the cattle, hog, and chicken slaughter houses, or pick fruit, strawberries and vegetables. Few people want to kill and cut up thousands of animals each day at those wages and danger. Lack of workers will drive prices up for less American harvested food.

Will We Desert the Kurds Now?

The Kurds defeated the ISIS with our help. We armed them, supplied them and supported them with air and artillery support. When the Iraqi military was struggling to find their butts with both hands, we got the Kurds to go past their tribal boundaries in Iraq and continued chasing ISIS into Syria. The Kurds are the only people in the area we can trust.

Yes, the Kurds would like to have their own country which would span Western Turkey, Northern Iraq, and Eastern Iran. They have a semi-autonomous area in Iraq, which we designated as a no-fly zone against Saddam, and are supported by large oilfields which Iraq allows them to keep some of the revenue. An oil pipe lane extends through Turkey to an oil port. Turkey’s closing that pipeline would damage the Kurdish economy.

Turkey has been periodically trying to subdue their Kurds with President Erdogan blaming the ills he caused on Turkey’s Kurds. He is now attacking the Kurds in Syria with Russian air support. As of today, the first Kurdish enclave is almost defeated. Since they lived there with their families, all were either killed or pushed out of their homes farther into war-torn Syria. Erdogan has said they will go after the ones we were advising and supporting. Trump has just ordered our troops out of the area leaving the Kurds without air support and defenses against the Turkish and Russian bombing.

During Desert Storm, the first Iraq War, we received intelligence help and more from the swamp people living in their ancestral homeland in the Tigris and Euphrates River Deltas. After the war we allowed Saddam to kill thousands and destroy their wetlands.

Are the Kurds going to be left to die like the swamp people after we promised to protect them? What does it say about America’s word of support?

Unbelievable

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Politics must play a part of being President and some lying must be done to preserve security and military plans. I seem to remember reading President Washington lied a few times in putting our first government together. Every President since has needed to lie to protect us and some did it for themselves. The most egregious before Trump was President Nixon after Watergate.

Our current President started lying almost immediately after the inauguration. Almost every day afterward he has lied at least once. They range from the size of his inauguration audience and voting to his successes. On occasion he has lied multiple times in the same day on the same topic on television and then said it was fake news. Sometimes the lies affect our allies, CIA agents and our international companies.

Being President is an ego trip which most Presidents have handled very well. Carter underplayed the office the most with Truman and Eisenhower next. The rest played it within the norms. Having a thick skin and understanding that insults are a part of being the leader is the same in almost any country. How the leader reacts is how people decide if they should be President.

Our current President seldom tells the truth about anything forcing his supporters and supportive media to lie also. Most of the lies are to boost his enormous ego. His outrageous narcissism creates most of his problems and his lack of self-control.

I do not know if he changed his personality if his approval rating would ever get much over 35%. How will he react when the House and maybe the Senate become Democratic majorities in ten months? Belittling an opposition party and its leaders will mean little gets done. A lot of Republicans might vote with Democrats to override vetoes.

A Divided People

Where are we trying to go with the National character? Today’s news is full of stories concerning bullying and sexual assault on one side and aggressive behavior in the form of pushing gun ownership and shooting.

What happens to people when we tell our youth they must act civilized and at the same time shoot at the center mass with their video games? How can a pre-teen or teen spend hours being aggressive in a video and then turn off the same skills they spent hours cultivating? Each year the games get more realistic and each year players are supposedly told to be nicer to others. Which side of the forming brain is winning?

Have we created a monster problem with our military because we promote a be-kind to each other and then brainwash them into being happy about killing others? After release from service, they are expected to regress to civility. After World War II, the soldiers were slowly let back into society so they could forget their war skills. Today the reintroduction can be hours. No wonder suicides are so prevalent.

How can we, as a nation, convince people it’s necessary to carry a gun and at the same time cherish the rights and feelings of others? Are we creating a nation of schizophrenics who are born loving everyone and then many are convinced by parents, friends, internet and social media to hate certain people. Gun manufacturers, retailers, and lobbyists pay millions each year to scare people. A few people are creating a permanent multi-divisional nation. Why do people vote for or idolize people who try to divide us by saying just the opposite from what they do. Why does the religious right excuse adulterers and sexist behavior?

Maybe we only need two divisions — ethical and moral, and those who are racist, adulterers and immoral!

Cronkite’s Biggest Mistake

January 30 was the 50th anniversary of the Tet Offensive. For the younger readers the Tet Offensive was the largest battle during the Viet Nam War.

By 1968, the Vietnamese had been fighting occupiers and each other for centuries. The French were the latest colonizers and were defeated in the Dien Bien Phu Valley. As a part of the agreement giving control of the land to the Vietnamese, the country was split. Each had its own government elected by the people. Ho Chi Minh, a patriot, who had fought against the Japanese occupiers, pled for independence after World War II, and defeated the French, was elected the North’s leader. His fight with France had been supplied by Mao so he became a Communist. The South was more fertile and wealthier so it became “Democratic”. The agreement was supposed to allow a unification vote in a couple of years. It never happened. So Ho started a process to do it by force. The restive peasants, called the Viet Cong, became guerillas whose aim was to topple the government and unify the countries.

We got involved when Eisenhower sent transport planes to the French and devised the Domino Theory in which Mao would take over one Southeast Asian country after another. Kennedy expanded our involvement with advisors, Johnson added troops and bombing, and Nixon added more totaling 2,709,918 troops. When Tet occurred, we had over a half million troops in Viet Nam with a terrible U.S. military and civilian command and control.

After many interviews with the North Vietnamese, we now know the leadership wanted to cool down the fight by pulling most of their troops back to Cambodia, Laos, and home. The V.C. would continue their operations at a slower pace. Two leaders persuaded the others, including Ho, to make one last all-out effort to persuade the American people that the war was unwinnable. Causalities were expected to be necessarily high!

The plan was for a simultaneous attack by the NVA and V.C. on targets all over South Viet Nam. Small and large bases and small towns and large cities would be attacked by the V.C. The NVA would strike Northern bases and cities, the provincial capital and historical city of Hue being the most important. Over 10,000 NVA troops and hundreds of V.C. captured the city and executed thousands of civilians. U.S. Marines and South Vietnamese troops were sent to oust them. It took over two weeks and destroyed Hue.

The plan went wrong because South Viet Nam used the new calendar and the NVA used the old one (Tet Holiday was a day later in the North.) causing the V.C. to attack a day early. This allowed the response to start against a smaller force and warned against the larger one to come. Hue was the meat grinder the North wanted and the Marines killed most of the NVA and V.C. American losses were 216 killed and over 1,300 wounded. Over half the attacking force died.

Walter Cronkite, who was a CBS anchor and considered the most trusted man in American, saw the Hue battle personally. Based on his belief, he told his viewers the war was unwinnable causing support to dwindle. The fact is the V.C. was almost completely annihilated and the NVA had been badly damaged and pulled back across the borders.

In reality the war had been won but Americans didn’t know it. It continued until 1973 when we left a poorly led South Vietnamese army to fight a well-trained and led NVA. The South lasted until 1975.

Our battle deaths were 47,434 and 10,786 non-battle with 153,303 wounded (sources disagree some). North and South Vietnamese fighters and civilians could total well into millions.

Fifty years later we have kissed and made up!

Hula Hoop Politics

I think the difference between the far right and the far left are often like a hula hoop with the ball bearings rolling around inside. Both wings are concerned about National Debt and, like the ball bearings, make a lot of noise. I think the difference is the left raises taxes and the right cuts expenses to pay it down. In the past both wings got together and made both happy. An example is the Clinton-Gingrich agreement where both met on a moderate middle ground to pay off the National Debt in fifteen years. Bush II, a self-proclaimed moderate, and Cheney ended that possibility with tax cuts and costly unpaid for wars.

Another area of confluence was Social Security. They had agreed on a plan to secure it for 75 years before the Lewinsky scandal forced Gingrich to back away.

Recently the far right and the far left were against the tax cuts because of the trillions being added to the Debt. The right was finally coerced to vote for it. Politics won over principles.

Until recently in our country’s history, wars occurred during Democratic administrations causing military build-ups after Republican defense cuts. Reagan ran on a un-needed military build-up and Bush II built it up to wage an unnecessary war in Iraq. Both wings were told a short war with Iraq was needed and wouldn’t be expensive so they voted for it.

The optics of the right and left show a political divide but reality is they often coincide. Now their bases pressure the wings to fight against each other instead of agreeing for the good of the country.. Patriotism is needed to rejoin the hula hoop.

Rocket Finances

Currently we are running with the bulls, but they are beginning to tire just as most people get into the race.  Many of us remember the 1987 Crash, the Dot.Com Crash, and the Great Recession.  In between these investment disasters have been retreats, retrenchments and pullbacks.

Sometimes the stock market goes up like a child’s rocket and other times like a Saturn V.  This time we have another Saturn V.  It feels somewhat like the great time before the Dot.Com Crash when my broker wasn’t available and wouldn’t return my calls.

One thing all investors should know and remember is no matter which rocket we are riding, it will not go into orbit.  Gravity always exerts its influence and brings the investments down.  Bonds usually fall slowly but stocks can move downward extremely fast.  Mutual funds and Exchange Traded Stocks move just as fast as the stocks on which they are based but are slower to get out of.

Some people will ride the bear down to the bottom and slowly climb back up.  It’s called a bear market until it reaches the old highs.  Others will see it coming and go to cash so they buy back in at a much lower level.

Whether you invest directly, through your IRA, or your 401K, the market will fall and rise again sooner or later.  No rocket can achieve orbit and will, sooner or later, fall back to earth no matter what a President says or does.  Rising markets create a measure of euphoria whether or not a person is invested so they buy things.  When it falls, people stop buying and this often creates a recession.  Booming economics are always followed by recessions because orbit is not possible.

Work for Medicaid

Every right winger knows Medicaid recipients just sit around smoking pot and drinking beer while hard working people pay for their Medicaid care. They should be forced to work to stay alive. Finding work is no problem because America has hundreds of thousands of job openings. All those wastrels need a little push to make them work or invent an item to become rich.

If this sounds preposterous, it is. However, I have been hearing it since Medicaid started. America Healthcare Act put it on stage front so the Republican Governors of Kentucky, Wisconsin, Indiana, and Arizona are looking to put work rules into the mix.

If those conservatives really want to cut Medicaid and welfare then they should go against another principle—Birth Control. Conservatives know we are paying for children of parents who can’t afford them. Some wastrels are supported solely because of having kids. Changing that program would be a way of cutting costs of both programs. Many areas of America are job deserts since mining and manufacturing jobs have left. Another reason not to work is jobs net less than welfare and those jobs don’t pay benefits but may cause loss of Medicaid.

Universal healthcare would fix most problems without creating many more issues. A healthier society means a better low-tech work force. The conservatives hate the ACA purely because it was a Democratic program. They forget it was based on a plan by a conservative think tank and enacted by Governor Romney.

One way to cut Medicaid was to extend CHIPs, which Congress just did for six years. This entire ruckus is for only a few recipients. The real numbers for those not on disability are: 42% working full time, 18% part-time, 14% sick, 12% doing family care, 6% in school, and 7% idle. Most of the 7% is in job desert areas like Eastern Kentucky.