Last updated September 20, 2011

How to Stimulate the Economy

September 13, 2011 (edited Septemeber 16)

In the previous commentary below, some of the major problems with the economy are enumerated. But where do we go from here to solve these problems? The mainr problem is that the majority of our jobs are being done in other countries. It was easy to lose them, but how do we get them back? Not so easy. One of the main drivers is the cost of oil. Every time I drive to our nearest city, it costs me $20 in gas to drive back and forth in order to get groceries and other essentials. If I could afford to buy a new car and not use my pickup, then it would only cost $10. That save me $10, and since my total gas costs me about $100 a month, I could probably save about $600 a year. Within 20 years I would therefore break even. For those who drive long distances, the saving would be much higher. We could lower the cost of oil and boost our economy accoridngly.

We can't wait 20 years to solve our problems. We let foreign countries, like BP, come and pump our oil in the Gulf of Mexico and ruin our beaches and underwater life. We just have a few large oil companies that control the trade, and they set the prices at whatever they please. If they don't get their way, then they just stop pumping. Harry Truman solved a similar problem with the railroads by just shutting them down. Reagan chucked out the aircraft controllers who were on strike. Our president is a smart man, but his conciliatory attitude isn't getting us anywhere. Other politicians talk big but don't "...carry a large stick", using Teddy Roosevelt's expression. We don't have a politician on the horizon, in either party, that is up to the task. Nor is the Tea Party an answer to anything. Quite a dilemma.

We could stimulate the economy rather quickly through innovation, but there is very little chance that will happen. The U.S. government is mostly in control of scientific innovation through government contracts and grants to U.S. universities. The grants go to the universities to professors who mostly have little practical experience and they get rather large salaries. Universities are primarily run much as the government is run. They are really political institutions that are not democratic. Most of these professors cannot be fired, and they do as they please, as long as they please there administration. We should open up development contracts and innovation to the public. The government agencies can ask for certain proposals, or proposals can be unsolicited. There are many scientists and engineers who were forced out of companies by early retirement as a result of company health costs for older employees. Less people on unemployment means less drain on government resources. If we had a government run and funded health plan, this situation could easily reverse itself. This is not likely to happen, so invite these highly experienced people to offer solutions to out problems at much lower costs and watch innovation return to its earlier years, such as the 1970's when such methods were in use amd worked quite well. This is probably the fastest way to help the economy.

Another burden on all of us is the takeover of the monopolies by foreign companies and unscrupulous U.S. companies. Consider, for instance, the phone companies. I have spent many hours questioning my phone company about their corrupt billing methods without any degree of success. They add on undefined superficial charges, overcharge, double charge, etc. Who do you get when you talk to their customer service? Do they speak good English? Do they understand you? We have to open up these markets and get rid of any and all monopolies. For satellite services, we conly have two main companies and one smaller one. This is completely insane.

So what about the "infrastructure", Yes, it does need a lot of help, and it will stimulate the economy to some degree. But how much will it help the job market? You can answer that question yourself, when you consider how many in your area is going to get one of these jobs. It certainly won't help the uninsured people who are out of a job or cannot do intensive labor or do not live in an area where these jobs are available. This is not the answer to our most difficult problems.

The scoundrels who are robbing us and spending their new fortunes in their hideaways in other countries or simply putting it on ice have yet to account for their actions. If they don't come in line, we may have another revolution that may our rival then one that we are yet to fully get over. This is not the answer, but many of us have to step up to the plate and exert our common senses and not just wail and rail about it, as is now the case with politics such as the Tea Party. They have no answer to anything, and they need to be countered by the majority of our people who will adopt a rational approach to our problems. Yes, our Congress is screwed up. Yes, our president is not up to the measure, but he still rates high in comparison. Unfortunately, I don't have a good answer to this question. Too badt. No good leaders on the horizon as yet.

July 23, 2011

Obviously, Congress doesn't know the answer to our countries problems or even how to go about solving it. Politicians are not project managers or scientists. They simply pass laws that most do not have an understanding of the impact of those laws. The Democrats are looking out for the welfare of the little guy, while the Republicans are hung up on low taxes and the National Debt and don't want to spend money on curing problems or working together. In industry, we call that "NOT INVENTED HERE" since only their ideas are good ones. Nor are all of the ideas of the Democrats highly successful. Obviously, we have to do something about the debt, but no one seems to understand much about how and what affects the National Debt.. Nor does anyone seem to be able to tell it like it is. Therefore, the public has little knowledge about what is going on, especially those less educated. Columnists and commentators who are just as much at fault due to their own political agendas.

I look at it from an engineer's standpoint, much practical real world experience and an extensive educational background. We saw that when Reagan lowered income taxes for the rich, those whose tax incomes were above $250,000 a year, the National Debt increased. That is a correlation factor. Interest rates for housing increased to the highest ever during the Reagan administration. We had to pay a 17.5% interest rate on our new house at that time. On the other hand President Clinton lowered taxes, and we had the lowest deficit in history. That is pretty strong evidence, and yet the Republicans ignore it. It seems that this is simply a "belief" on their part,and a very strong one. What make it so strange is that they always seem to cite Reagan and his policies while ignoring everything else. The Tea Party believers are willing to sacrifice anything in order to lower the National debt without offering any evidence as to why they believe lowering taxes and reducing the deficit immediately is of most importance. The president isn't doing much to challenge the Republicans, so nothing is getting done. There is so much "inertia" in our economy, and it is so large, that things will have to proceed slowly in order to be able to control the results of this action. That is also the way that things work in the physical world, and the same will occur for our economy. If they proceed recklessly,we will pay for their actions. It could wreak heavy damage on our country so great that few can imagine.

Another factor is oil prices. Jimmy Carter got caught in the oil crunch of the 70's, and interest rates climbed to the highest of that time while inflation also increased. Even though most of the oil that we buy is claimed to come from within the US, there seems to be no control of the price. That is, no control by our government that has ever been of any significance. The recent BP oil disaster of the past few years illustrated what foreign companies can do within our own country. Ruin wild life and wreck many US businesses. They never did pay for all of the damages they wreaked. The oil companies say they don't make a lot of money, which is something I find very hard to believe. Oil prices have sky rocketed, while their costs have not changed greatly. Yes, it will take money to develop the shale-bearing oil fields, and I would support some government help on that, if they do repay the loans.

Then we have the irresponsible stock market and banks. Here again, the Republican party wants no regulation of these groups who have nearly ruined our economy. Nor has the present administration done much about it. In fact, the Republicans seem to love it. They want to lower the amount of tax on those of the "super rich". That leaves the lowest paid to dole out the money that they earn to pay taxes. They could just as well have the poor send their money directly to the super rich, saving the government a lot of expense and hassle in collecting taxes and redistributing the money. The stock market is evil. In some cases, you can buy a stock, and the stock exchange can sell your stock without your permission. This happened to me twice during acquisitions, and my stock went down by a factor of 20:1 ! A very successful gambler recently stated that Wall Street took him for a ride, which is a pretty good indication of what is going on. These guys, along with the big bankers, are the present-day "robber barons". Their main efforts are in controlling money and stealing a good part of it.

So what can we do about it. Well, from my experience as a key member of the proposal team on two successful bids for $300 million dollar contracts at a large US company, I found that it takes time to develop a good proposal that will solve the problem. My job was as a troubleshooter, and I discovered various flaws in what we were proposing and corrected them. Didn't get much money for my effort, but I was satisfied in the accomplishment. The point is that it takes time and effort to investigate what you need to do in order to be successful in a project and to remove the weaknesses, prove that the flaws have been eliminated, and show that what you propose will indeed work. I see nothing of that nature occurring in the current efforts in Washington. In order to make tradeoffs, you need to make tradeoff studies. This takes time (the larger the system the longer the time) and an open mind on part of the individuals involved and the opportunity to ask questions and give answers. We now see childish actions on the part of Congressional contributors who, like small children, simply walk out and refuse to cooperate. Doesn't it make you want to take these nutheads by the collar, push them up against the wall, and then give them a knee in the nuts?

The Importance of the Fork

July 20, 2011

Ponder the question of the fork. MS-NBC reported today that scientific studies show that people who eat their food with a wide fork eat less than those who use a narrow fork. Astounding! But does this answer the question? Perhaps MS-NBC should follow up on this one. The key question to be answered is whether or not the wide fork was made in China. The food you eat may make a difference.

The Dead Zone of Politics

The author of this site speaks out in plain terms using science analogies

July 19, 2011

At this point in time, our world seems to be crashing down around us. Our politicians are fighting one another, and many are not willing to compromise on their ideals. Unfortunately, this is not an ideal world, and most of the politicians are lawyers, which is something to ponder.

One of the contributing problems is the "60 majority vote". Who came up with that one? Why don't we either go back to "majority rule" or at least significantly reduce the majority vote number? Using an analogy to mechanics, this 60 majority vote would be the engineering analogy of "dead space" in which very little happens. For instance, if we have a servo systems that rotates a mechanical object driven by a gear system, there is generally a dead space between the gears in which they are not fully meshed. If this dead space is excessive, the system becomes inaccurate and may even destroy itself. A similar effect is no happening in Congress wherein they can't get enough majority votes to pass a bill. This gives the minority the power to kill bills. For instance, when the Democratic votes are close to the Republican votes, it only takes a few votes by a few Congressmen to control the result. In a servomechanism, a somewhat similar thing happens. The gears don't rotate in the dead zone of a mechanical system, and that can cause various problems of various types, including noise and stickage. Too big a deadzone, and everything can simply stop. This shows the analogy to the 60 majority vote of politics.

In Congress today, the small Tea Party is very idealistic and insists on no taxes. By virtue of the 60-majority vote in the House, they end up controlling the overall vote (or non-vote) on taxes and the deficit. In the past, we have always before been truly democratic in insisting on majority rule for our congressional representatives in both the Senate and the House. But we now have minority rule that is controlling the two major parties because of the 60 majority dead zone. Sort of the inverse of democracy, the way it turns out. I hope that we do not end up in a situation like that which we see in foreign countries in which the minority are mistreated and in some cases murdered, while the few top leaders become rich and powerful. We seem to be headed in that direction Like an old song says: "The rich get rich, and the poor get poorer".

It took two wars, reduced taxes and eight years to raise this country's deficit to a record high level. Now some Congressmen believe they can solve those problems in a few weeks. Just getting us out of those countries will cost billions or trillions of dollars and is said to take up to ten years, so this will not happen quickly. As is also the case with engineering, it is often much easier to cause a problem rather than solve it. We have what amounts to a "many-trillion" dollar problem in trying to pay for the decisions of the past. A small number of Congressmen believe these problems will all disappear if we reduce taxes and cap the deficit. But this is the same thing that got us into this mess, so things could just get worse. If we cap the deficit and reduces taxes, we will be punishing the ordinary citizen while protecting the rich who don't need protecting. First step might be to go back to majority rule. You figure out the second step.

Innovative Solutions of the Past

January 26, 2011

The president has just given his State of the Union Address and has emphasized the efforts to advance our scientific capabilities. However, he has given little or no details on how to do this. In the recent past, most of scientific effort has been concentrated in the government agencies and the universities. Their efforts are generally quite expensive and have long development schedules. The universities may have great facilities, but they are often quite slow in their schedules, and the results may not be very practical nor at low cost. Similarly, the government agencies are devoted to extending project times so as to keep their groups active. There are other approaches that can be taken that can be more productive and save a considerable amount of development money.

Some 50 ago, the government agencies had different policies. One of them was to open up their projects to various bidders to solve difficult engineering problems. Yes, we still have something like that, but these projects are now more limited to companies of much greater size. The definition of a "Small Business" has increased to the millions of dollars of income, rather than the low limits of the past. The agencies do not particularly like to deal with very small companies for various reasons. At the same time, most larger companies have gotten rid of their older and more experienced employees by early retirement due the health costs and pensions. This, they believe, saves them money. However, many of their best and most capable engineers were replaced by more inexperienced and less capable ones. These retirees can be a great source of engineering power that can be utilized at much lower costs, along with others who may have been laid off without benefit of pension.

For example, let's say that we have an engineering problem to be solved, whether it be a private company or a government agency. They could put out an "Innovation Invitation" to bid on providing a solution. It wouldn't take much money to get interest, as many of them would be willing to work for pennies on the dollar. Similarly, small engineering companies with just a few employees would have the incentive to bid on these projects. This would be good for the government, the larger and smaller private companies, the retirees, unemployed, others, and the country.

Note that there are a few companies in India that are doing something similar to this, initiating low cost innovation projects that are proposed to them by larger companies. These companies are not acting in the interest of our country, and the innovator either receives a very small portion of the benefit or nothing at all. Make an open high offer, say even as high as $1 million to engineers in this country, and as much as tens of millions of dollars could be saved in much less time than you might imagine.

Further, we have the problem of health costs and how to reduce them. I just had three tests at a local hospital that took about an hour and a half by technicians, and the bill was $1700 dollars! These were not big expensive pieces of equipment, such as the Cat-Scan, and the tests were performed by nurses. The concept of having great equipment of small size to do health testing is wonderful, and there should be more of it. It also should be much less expensive, which it can be in most cases. For instance, I have an idea for a heart testing machine that would cost in the range of $1,000 to $5000 that would perform excellent tests of heart pulses and a trial fibrillation that goes beyond present capability. However, I have been told that just FDA approval alone could take many months and would cost more than $20,000,

Judging from recent events, the president and congress are evidently unable to assess situations such as this. Few if any of them have any practical experience regarding engineering methods, project management or real costs. The universities are devoted to themselves and generally do not work outside their own environment. In fact, the Many of their professors do not have any practical experience or have worked in a company environment. The National Science Foundation works well with universities, but I have been told that these universities are not allow to work with non-university personnel on their projects. The NSF could be a much better instigator of scientific developments, but their rules limit their efforts in various ways . I really doubt that our president, congress, or any of their advisors have the capability to properly determine how to properly address the problem of stimulating new innovative methods of scientific development, and the "think tanks" of Washington even less.

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