America's biggest boom ever

Is America About to Experience It’s Greatest Boom Ever? A Wildly Optimistic Prediction Based on Things Happening Beneath the Public Radar.

While everyone including the media has been concentrating on the woes of a depressed economy and a bitter and divisive election campaign, a glimmer of positive hope for things to come has been growing for several years. It’s not obvious yet except in places like North Dakota, Texas, and a few other areas. It’s growing potential remains unrecognized in most of the nation.  Actually, the coming boom is two different but related booms. Both based on the production of fossil fuels, The two resources are enormously plentiful in the US in deposits previously unavailable for economic production.

The first one, natural gas, has already reached glut amounts with production far exceeding demand. The rapidly expanding supply has resulted in record low prices that are now just a bit more than a third of European prices, and just a fifth of prices in Japan. This price difference has brought about a furious effort to produce LNG (Liquified Naturel Gas) tankers to supply American LNG to both Europe and Japan. The opportunity for profits for American gas companies is tremendous. This alone would be a huge positive change in our trade balance of payments and could quickly make us energy independent of imports.
Here is an excerpt from my book, Energy, Convenient Solutions, that describes the beginnings of the natural gas boom economy as far back as 2006.

(1) A Special Case, LNG or Liquid Natural Gas
T. Boone Pickens is promoting a plan for massive conversion of diesel trucks to LNG, Liquid natural gas. His plan would make large amounts of LNG available to power heavy trucks. California set forth a ballot initiative that would free up $5 billion for deployment of a million LNG vehicles on state roads. In 2006, the ports of Long Beach and Los Angeles adopted a plan to reduce drastically pollution from more than 16,800 Class-8 tractor trailers, the only trucks strong enough to transport the heavy containers in and out of the ports. They chose LNG for many reasons including safety and cost. Even with the expense of replacing diesel engines with LNG engines the ports look to save around $350 million each year. The ports have announced the approval of a new $1.6 billion Clean Truck Superfund. Wal-Mart, which operates one of the largest truck fleets in America, is testing four trucks to measure the possible money saved by the switch. I am certain other truck users are carefully watching the results.

Pickens is positioning himself to profit from this with several investments. He has a 40% ownership in Clean Energy Fuels Corp. that provides natural gas for vehicle fleets by designing, financing, building, and operating LNG fueling stations. He also has a 12% interest in a small Canadian company that has designed what could be the most advanced, efficient engine on the planet to replace diesels in new and existing trucks. It is powered by LNG.

Pickens is the type of entrpreneurial investor who will probably solve our energy crisis while generating many good jobs and enriching himself and countless others in the process. His efforts will also result in a great deal of tax revenue for several governments. Many other entrepreneurs and planners are investing in research, development and manufacture of advanced energy systems that will help us solve our energy crisis. Unfortunately the combination of promised new corporate taxes and the economic downturn of 2008 has already caused many valuable projects to be scrapped. Pickens and others have downsized or completely abandoned creative new investments in many things including much needed energy and alternative fuel projects. A more encouraging tax policy could reverse this especially if government would just stay out of the way.

Since the time that was written, the conversion of heavy diesel trucks to LNG has expanded as fast as manufacturers of heavy LNG engines could supply engines. With annual savings in fuel costs between $60,000 and $80,000 per year, conversion to LNG has moved from a luxury with air pollution advantages to an absolute necessity for financial survival. Heavy truck fleets from companies like UPS, Wal-Mart, and trucking companies serving air sensitive areas like LA are no longer testing LNG truck engines, they are converting to them as fast as possible to remain competitive. This quiet, but rapidly growing revolution in the trucking industry is proceeding virtually unnoticed by the public. The new LNG truck engines are not only less fuel costly, but they burn much cleaner, put far less CO2 into the atmosphere, and are much cheaper to maintain than the old diesel engines.

Another important factor:  Natural gas power plants are much cleaner than either coal or petroleum fired plants and are now a lot cheaper to operate. In 2000 Gas fired power plants made about 20% of our electricity. Gas power  plants completed and proposed since then will boost that percentage above 30% within the next ten years, the fastest expansion of any type of power plant including nuclear.
Commercial Gas fired power plants are not the only power generating system to benefit from cheap natural gas. Recently, many gas fired micro turbines were put to use supplying power for emergency services, hospitals, police and others in the aftermath of Hurricane Sandy. Capstone Turbine of California is the largest manufacturer of MicroTurbines in the world. They make various sizes of MicroTurbines: 30kW, 65kW, and 200kW. Products based on the 200kW turbine are also available in 600kW, 800kW, and 1MW configurations. In addition to power systems, Capstone MicroTurbines are used extensively to power busses in China. Capstione’s continuing sales to China are one of the few bright spots in our trade with China.
Natural gas is the number one fuel for home heating and is now increasingly supplanting fuel oil in many areas. It is also by far the most popular fuel for cooking. Industrial plants are increasingly relying on natural gas, with many plants drilling their own wells in places like Ohio and Texas.

One of the reason for the rapidly increasing supply of cheap natural gas is the relatively new process of fracking where deep underground shale is shattered releasing the massive amounts of natural gas locked in shale formations. Until this new process was developed, this gas was not economically available. Like any new process, fracking continues to improve in both cost, efficiency, and safety. It has made available vast fields of natural gas previously locked in shale. There is enough gas available in known fields to supply our need economically for many decades to come. Once the LNG tankers are plying the seas, the natural gas boom will be in full swing. That, however, is merely the first boom to hit America.

The same shale that holds vast amounts of natural gas also holds an estimated 1.5–2.6 trillion barrels of petroleum. That’s almost half of the world’s known deposits. In contrast, the worlds conventional oil reserves are estimated to be 1.317 trillion barrels as of January 1, 2007. The search for new conventional oil deposits has been going on for more than a hundred years and new fields are getting harder to find and more difficult to extract. In contrast, the search for oil shale has been going on for a relatively short period and could be underestimated by a factor of three or more. That means the US could have as much as 4.5–7.8 trillion barrels of petroleum locked in shale.

This graph shows not only the rapidly expanding production in North Dakota, but a similar trend in Texas because of improved methods of extracting oil from old fields. The growth in North Dakota is from a single shale deposit, the Bakken,  and there are several other as yet untapped shale deposits that could be just as large. Unless something (like the administration) stops it, the increased production of petroleum will follow the already huge growth in natural gas and a boom in energy will result as the US becomes an energy exporter rather than an importer. ow big the boom will be and how long it lasts will be at least partly dependent on the actions of our government. Will the administration support the boom or destroy it? That is the question. To this point their efforts have not been supportive, but the boom continues to grow in spite of their efforts.


Like natural gas, petroleum in shale is yielding to fracking and other new extraction techniques. Experts have estimated that new extraction techniques in shale and even in fields depleted of oil available to conventional extraction, could drop the cost of US produced petroleum at the well head below $5 per barrel. Even with world oil prices at half of their present level, oil from shale is becoming profitable. As of November 1, 2012, world crude prices were $87 per barrel for WTI crude (West Texas Intermediate) and $108 per barrel for Brent crude (North Sea Standard). Rapid expansion of production from the Bakken shale formation in North Dakota has already created an oil boom there. As more investment in infrastructure for extracting crude from shale goes into place, the boom will expand. The Bakken is huge, but it is only one of a number of oil shale deposits in the US, and new fields continue to be discovered. All that is needed is the investment in new drilling and fracking infrastructure, and the transportation system to move the oil to refineries. It is actually possible that the US could move from an oil importing nation to an oil exporting nation within just a few years. This coupled with LNG would generate an unprecedented boom creating many high paying jobs and expanding manufacturing as energy costs go way down. The biggest factor, the billions now going to oil producing nations would be replaced by billions coming in from nations purchasing oil from the US.

There are a few caveats that are quite obvious. The continuing anti energy, anti business policies of the Obama administration could easily stop the booms before they get very far. Increases in taxes could dry up new investment needed in oil production infrastructure and in the transportation of LNG. A plethora of new federal regulations could slow or stop the booms before they develop. Behind all of this is the socialist, anti capitalist agenda of liberal Democrats who, if they were honest would change their name to the Socialist or Communist Party. I see the Republican House of Representatives as the only bulwark against the U.S. becoming a socialist dictatorship. There may still be a concerted effort by the administration, aided by the Senate and the media to have the government take over the entire energy industry, especially the oil and gas industries. They certainly will not let capitalist organizations lead the US into a new boom economy and get the credit for it. Whatever happens, the administration and liberal Democrats will take credit for the boom and their sycophant media will dutifully report this as a fact. If the boom is big enough, Obama will use it to run for a third term in 2016. Count on it.

You can rest assured the anti fossil fuel, global warming crowd will do everything they can to prevent or stop these fossil fuel booms. Unless, of course, their Pied Piper is overwhelmingly given credit for the boom. Such being the case, they will be very quiet about global warming. They will probably tout the reduction in release of CO2 as trucking companies and power companies switch to natural gas from coal and petroleum fuels. They will be caught in the dilemma of whether to continue with their anti fossil fuel agenda and go against Obama’s claimed economic success, or reverse their agenda and tout the conversion from diesel to LNG as it will cut in half the discharge of CO2 into the atmosphere by heavy trucks. Then there’s a similar reduction in CO2 emissions as coal and oil fired power plants convert to cheaper natural gas. It will be interesting to see which way their efforts go. It is even possible some will go one way while others go the opposite.

Who is it that really and truly pays taxes - Friday, July 6, 2012

For those of you who don’t like my political views, this piece is completely a-political. It is written so people can understand the effects on everyone that taxes have and how many taxes on the “wealthy” are actually paid by average and even poor Americans.

Who is it that really and truly pays all those taxes, and I mean all, every penny? That includes all payroll taxes, income taxes, FICA, unemployment taxes, sales or value added taxes, real estate taxes, and all those hidden taxes on practically everything. I'm sure you heard all those comments about 51% of Americans paying no income taxes at all, mostly those with low incomes. The Washington ruling elite, their bureaucrats and the wealthiest Americans would like you to believe that, but it is patently untrue. In actual fact, those who pay no income taxes pay a larger portion of their disposable income to the government than those who do pay income taxes. Statistically, the more income above the minimum required for basic necessities one has, the smaller the percentage taxes take out of total income.

Politicians like to use class warfare in their rhetoric about income tax rates for "the wealthy." Unfortunately, those same politicians have built an income taxing system that is extremely complex and that provides endless exemptions and deductions (the infamous tax loopholes) for their friends and supporters. These "loopholes" are finagled by lobbyists for an immense range of beneficiaries. How often do you hear about wealthy individuals or companies who pay virtually no income taxes? Remember GE last year? If you are wealthy enough, you can buy exemptions from almost any tax for a tiny part of that amount in campaign donations or even slipped "under the table" to the right people. Still. that doesn't change anything about who actually pays those income taxes as described in the next paragraph.

Corporations, businesses, professionals, any person or organization that provides goods or services, do not actually pay any of these  taxes. They merely pass these costs down to the end users or consumers. The only time they actually pay taxes is when they buy something as an individual consumer. This means that the entire cost of government is borne by those same end users and consumers. At 32% of GDP as it was in 2007, 32¢ of each and every dollar spent by every consumer was tax. This applies to rich and poor alike. Since 2007, liberal Democrat spending aided by Obama’s efforts, has upped that to 44% of GDP. That has increased taxes on everyone by 37.5%, more than a third. The estimates the CBO made as to the cost of Obamacare is pathetic. As usual, it will probably cost more than four times the CBO estimate, should it be implemented. This cost will raise the tax portion of everything to at least 50%, another raise in the taxes paid by everyone of 13.64%.. This means that by 2014, the taxes paid by everyone will have increased by 56.25% in just 7 years.

Let’s follow some tax dollars and see who actually pays—where the tax debt ends up. The figures reported have been taken from the actual financial statements of real companies. The names have been changed to prevent law suits.

EXAMPLE, STEP 1: XYZ Mining in Arizona digs copper ore out of the ground in several Arizona copper mines. They refine the ore and sell it to copper users. In 2010 their sales were nearly a $billion. Their net earnings before taxes were $211 million, or 21.1% of sales. Federal income taxes on those earnings were $47 million. Taxes other than income taxes were $22 million. These included state and local taxes, franchise taxes, and federal direct mining taxes. Payroll taxes, including both portions of FICA were $67 million. The total tax portion of XYZ’s expenses were $136 million or 13.6% of total sales. Out of every $1,000 worth of copper sold, $136 was for taxes that the purchaser of the copper actually paid for. XYZ simply passed that tax burden on to those who bought their copper, a fabricator or manufacturer.

STEP 2: ABC fabricating of Texas bought the raw copper ingots from XYZ and produced copper pipe among many other products. A financial analysis similar to XYZ shows that for every $1,000 worth of pipe sold, $227 was for taxes. Factoring in the portion of the taxes XYZ paid, adds $42 to that amount for a total of $269 out of the $1,000 of sales. This amount is simply passed on down the chain to the purchaser of the pipe, a contractor.

STEP 3: A building contractor in Dallas bought some of this pipe for a major building project. A financial analysis similar to XYZ and ABC shows that for every $1,000 worth of pipe used and priced in the project, $296 was for taxes. Factoring in the portion of the taxes XYZ and ABC paid, adds $84 to that amount for a total of $380 out of the $1,000 of the contract price. This amount is simply passed on down the chain to the purchaser of the pipe, a building owner.

STEP 4: The building owner leases space in the building to a group of dentists. Their financial analysis shows that for every $1,000 of the building lease income attributable to the extensive copper piping in their suite, $198 was for taxes. Factoring in the portion of the previous taxes paid adds $123 to that amount for a total of $321 out of each $1,000 of the rent paid by the dentists. This amount is simply passed on down the chain to the dentists who lease the space.

STEP 5: The group of dentists have many patients that pay for their dental services. Their financial analysis shows that for every $1,000 of the patient fees they receive, $321 was for taxes. Factoring in the portion of the previous taxes paid adds $140 to that amount for a total of $461 out of each $1,000 of the fees paid by the patients. This amount, the entire tax burden applied to each of the 5 steps combined, is actually paid by the end user, the patient who is at the end of the chain, the final or end user.

Conclusion: It is always the end user of any product or service that actually pays every penny of all taxes. This tax burden falls on rich and poor alike and, as in the above example, currently averages about $46 out of every $100 spent by every individual, regardless of income or wealth status. That percentage can be accurately calculated another way. Currently, our federal government consumes about 41% of our GNP. Add to that approximately 5% consumed by state and local governments. It’s funny how that adds up to the same $46 out of every $100 spent by every individual, regardless of income or wealth status.

Raising taxes (especially on the wealthy) increases the cost of absolutely everything. From gasoline to bread to apartment rent to health care, increasing taxes will always raise these prices for the consumer. By the same token, lowering taxes will always lower these prices for the consumer. These are demonstrable and proven facts from time immemorial. So, no matter how you slice it, the poor always pay a far higher portion of their needed income from any and all sources, than do those not considered among the poor. The less income one has, the more important that portion is that goes up the chain to pay all those taxes. Said another way, the loss of that $46 out of every $100 spent is much more damaging the less income one has. That $46 is far more important to a low income family trying to get by, than to a slightly wealthy family or even the one down the street making $50k per year.

EXAMPLE 1. A poor family has a total income including welfare payments of $1,600 a month. They pay no income taxes. Assuming they spend all of their income, 46% of what they spend, or $736 is taxes that were passed down the chain. Their total taxes are $736 or 46% of their income

EXAMPLE 2. Another family makes about $5,000 a month. They invest $500 per month in savings and pay $225 for income taxes. They also have a mortgage payment of $1,000 each month. This leaves them with $3,275 of disposable income which they use for all household necessities, food, clothing, transportation, insurance, etc. etc. Assuming they spend it all, 46% or $1,622 is taxes that were passed down the chain. Their total taxes are $1,847 or 34.63% of their income.

EXAMPLE 3. Another family makes about $15,000 a month. They invest $3000 per month in savings and stocks, and pay $2,000 for income taxes. They also have a mortgage payment of $3,000 each month. This leaves them with $7,000 of disposable income which they use for all household necessities, food, clothing, transportation, insurance, etc. etc. Assuming they spend it all, 46% or $3,268 is taxes that were passed down the chain. Their total taxes are $5,164 or 34.43% of their income

EXAMPLE 4: Another “wealthy” family makes about $100,000 a month. They invest $40,000 per month in stocks and savings, and pay $15,000 for income taxes. They also have a mortgage payment of $10,000 each month. They make charitable donations of $5,000 per month. This leaves them with $30,000 of disposable income which they use for all household necessities, food, clothing, transportation, insurance, etc. etc. Assuming they spend it all, 46% or $13,800 is taxes that were passed down the chain. Their total taxes are $28,800 or 28.8% of their income. Lets see, here’s the resulting tax table:

Current Income Tax System
Family (monthly)  Income  Disposable  Taxes  Tax %  Left to Invest
Poor                      $1,600         $1,600        $736   46.0% $0
Lower middle       $5,000       $3,525     $1,847 34.63%       $500
Upper middle      $15,000        $7,104   $5,220   34.43% $3,000
Wealthy             $100,000 $30,000 $28,800   28.8% $40,000
Who thinks this is fair?

The table below gives the same figures with the “Fair Tax” 15-25% base
Family (monthly)  Income  Disposable   Taxes     Tax %      Left to Invest
Poor                   $1,600      $1,600            $0         0.0% $0
Lower middle    $5,000            $2,295        $750 15.0% $1,955
Upper middle   $15,000            $6,780      $3,250 21.7% $4,970
Wealthy     $100,000 $31,200    $25,000      25.0% $43,800

The table below gives the same figures with the “Fair Tax” 20-30% base
Family (monthly)  Income    Disposable    Taxes      Tax %    Left to Invest
Poor                  $1,600             $1,600          $0           0.0% $0
Lower middle   $5,000          $2,295    $1,000         20.0% $1,445
Upper middle $15,000          $6,780     $4,000         26.7%         $4,220
Wealthy         $100,000        $31,200   $30,000         30.0%       $38,800

It is obvious from this information and from the examination of the P&L statements from any business that business do not pay taxes, they merely collect them from their customers and pass them on to the government. They represent a substantial part of every end user purchase of goods and services completely paid for by individuals as long as they are not a business expense. In 2006 the percentage that represented tax was 32%. That figure has blossomed to 44% since liberal Democrats took over Congress and the Whitehouse. By 2014 it will swell to at least 50% thanks mostly to the Obamacare tax. While this number is growing, business profits and thus tax revenue, will shrink as the economy sinks farther and farther into the tank.

So, I repeat, who really pays the taxes? The truth of the matter is that very few members of the public understand the realities of any taxes. Every business, large or small, every professional, every taxable entity or organization—all workers—appear to pay taxes to many governments. But just who is it that actually pays these taxes? Corporations do not pay taxes. Businesses do not pay taxes. Professionals in their professions do not pay taxes. Organizations including those who are not-for-profit do not pay taxes. All of these “taxpayers” merely collect those taxes from customers or clients in the price of their products and services and then pass them onto the government just like the much more obvious sales tax. Even the so-called company paid portion of FICA taxes add to the cost of an employee and so are really taken from the employee.

What happens if lawmakers enact a windfall profits tax on the oil companies at 50% of net profits? It's really quite simple. Every dollar increase in taxes will be met with a slightly larger total increase in fuel prices at the pump to make up for the increased cost of doing business. As with all business, this cost will be passed through to the consumer or end user. That would add as much as another nickel to the price of gas at the pump. So who is paying that excess profits tax? It's the ignorant motorist who voted those self-serving oafs into office just to punish the oil companies.

Today, I read the following report on the Internet. It only goes to prove how stupid the human animal is, individually and collectively. Humans are almost exactly like overgrown lemmings, a plague of death and destruction on their own kind. They are reproducing themselves out of existence.

Reports like the following, almost completely ignore the only realistic, rational, effective way we humans can prevent the coming calamity. I seriously doubt humans have the collective intelligence and will to do the only thing that could possibly prevent the mass starvation, food wars, race riots, religious battles, deliberate exterminations, and other violence certain to accompany a worldwide economic collapse. A sad note is that only one nation on the planet has the brains and will to do something about it. That nation is certainly not the United States. Read and weep. My words are in this serif type font.

The report is in this, non serif font.

According to a study released by researchers at Jay W. Forrester’s institute at MIT, the world is headed for a “global economic collapse” if humans around the planet do not waver in their consumption of natural resource. Not only is global economic collapse imminent at the current rate of resource consumption and population growth, “precipitous population decline” will also occur.

Recent findings published in the study coincide with those of the Limits to Growth which is an academic report from 1972. Smithsonian Magazine wrote about an Australian physicist named Graham Turner who famously said: “The world is on track for disaster.”

According to the report which was produced for The Club of Rome, the researchers conjured a computing model in order to forecast various scenarios based upon the current models of global resource consumption and population growth. A computing model is a mathematical model of a complex process or system which requires conditions for testing.

The majority of the computer scenarios processed indicated imminent economic collapse would occur right around the year 2030. I disagree. I see it as happening much sooner.

Unlimited economic growth potential is still a possibility, however, governments around the world would have to enact policies to limit the expansion of our ecological footprint (human demand on the Earth’s ecosystems) in addition to investing in green technologies.

The only possible way humans can limit or reduce our ecological footprint (the current politically correct term) is to stop our ridiculous population growth. Population growth, barely mentioned in one paragraph in the article, is the absolute singular cause of the events that will lead up to total collapse. All the best efforts at slowing resource consumption are feeble, futile efforts. They will make for only a slight slowing of the devastation sure to come, a delaying tactic.

Twelve million copies of the recently published report were distributed in thirty-seven different languages around the world. While there are those, such as former governor of the Federal Research Board and Yale economist Henry Wallich, who strongly disagree with the findings detailed in both the Limits to Growth as well as the more recent MIT study conveying similar findings. Wallich believed that the regulation of economic growth would be equivalent to “consigning billions to permanent poverty.”

I would revise Wallich’s conclusions and say, economic growth without population control will be equivalent to “consigning billions to permanent poverty, starvation, wars and devastation.” Think the Congo wars and desolation expanded to include the entire Earth.

Do you believe that a global economic collapse is truly imminent by 2030 based on the current rate of consumption and population growth as forecast by MIT’s computing model?

Read more at http://www.inquisitr.com/215867/global-economic-collapse-imminent-mit-researchers-predict-next-great-depression-2030/#4rHYFWpyoZLboVm4.99

I believe a collapse is not only imminent, but has already begun. The first signs?

1) Food shortages, riots and starvation is growing in the third world.

2) Total world production of food is declining and has been for a number of years.

3) Several ocean fish stocks have collapsed or are being harvested at unsustainable rates.

4) There are many more signs in evidence, but the overpowering reality is that we are depleting all of our resources at an accelerating rate. Since those resources are limited, it is obvious we will run out. That is true no matter how effectively we deal with economic growth. Even if we stopped it entirely, that would only delay the end a small amount, a few years at best.

For a more in depth view of this problem, read: http://decimatenviro.blogspot.com

In my opinion, we could solve this devastating problem, not easily, but effectively. Also, in my opinion, I see us as ignoring it and letting nature take its course to the New Dark Age of Man, whatever that portends.

A Sudden Realization - an Ahah! Moment

It took several minutes to sink in, but a newly recognized reality found its way into my mind. This startling (to me) epiphany brought a new and deepening understanding of something that had long eluded my mental grasp. This happened during a discussion within a group I belong to of about a dozen members called The Socrates Club. We meet on a weekly basis to discuss subjects and questions submitted by members. They are a bit heavy on the intellectual side with a number of retired professors and PhDs—educators—teachers. I am one of the minority, not an educator, not a PhD.

One of the professors was expounding his disgust at Republicans and their anti education focus—their anti intellectualism. Another professor, also a PhD I believe, was saying how much he liked what Obama was doing as President and that he would certainly vote for him. My instant reaction was to wonder why these intelligent men could possibly approve of what Democrats were doing and what Obama was doing as President. I was a bit upset, thinking, how could they be so blind? I have great respect for the intelligence of each of these men from many discussions we have had.

Then came this sudden burst of brilliance this AHAH! moment—this mental nirvana. I then knew exactly why they expressed these feelings and thoughts. (In the comics this is portrayed with a lightbulb turning on above an individual’s head) After the light went on it made perfect sense. From their perspective they were absolutely right. I remembered a quotable statement I wrote many years ago and included in my first published collection, Words from the Lakeside.

“Somehow, we always get back to the basics. Right and wrong, good and evil, like beauty, are in the eye of the beholder (or doer). Their rules are not immutable. They are lifestyle—cultural, social, political, or religious creations. They depend entirely on one’s own situation and belief system—whose side you are in, what your belief system demands, to what group you belong, or who eats whom. I am sure Genghis Khan, Hitler, and Saddam Hussein had quite different views of right and wrong from their victims."

—HJ, May 8, 2001

Why I never connected that thought with the political beliefs of individuals is beyond me. What I expressed in that paragraph more than eleven years ago now seems obvious to me. We each see good or evil, positive or negative, in any situation or activity, in the light of our perceptions of how it affects us, our families and friends. Different people have very different views based on many things including culture, race, sex, sexual orientation, religion, economic conditions—virtually any definable human condition, real or imagined. Right and wrong, good and evil are based on our perceptions, not reality. The next line in the same quotation applies to all creatures in our world including humans.

“Good and evil, right and wrong have very different meanings for a zebra than for a lion.”

Group 1, those who favor Obama and liberal Democrats: To many groups of individuals, what Obama and liberal Democrats are doing is commendable. These include almost all members of the following groups: government employees, union leaders, recipients of welfare and other government largess, socialists, communists, African Americans, and all entertainers including sports and TV news. Also in this group are a majority of the following: educators, the intellectual elite, union members, college students, owners and officers of mega corporations and especially of mega banks, trial lawyers, financial professionals, and major investors in the stock market and commodities.

You will note that most of these groups are little impacted by the recession. They believe and agree with those saying economic conditions are steadily improving. For example, investors in the stock market and large corporations are doing quite well, at least better than they were a year or so ago. You will also notice that few if any of these people consider themselves Middle Class Americans. Most of them are toward the top or bottom income segments while few are in the economic middle class. The exceptions are those other members of group1 who happen to fall in the middle income category. To a varying extent, all of these groups are being supported or at least helped financially by government. Consider all of the entitlements these groups receive. Actually there’s something from the government, a handout, for almost everyone. And who is it that pays for this growing financial drag on our economy? Hmmmmm?

Another factor is that these people usually make political judgements (emotional decisions) on the basis of what politicians say, not what they do. They are greatly influenced by the media and subject to their obvious bias.

Group 2, those against Obama and for conservative Republicans: The other groups of individuals see Obama and liberal Democrats as enemies of mostly the middle classes. Those who are the ones not faring so well with what Obama and liberal Democrats are doing, They are losing ground economically and see increasing government control and interference as intolerable. These include almost all Americans of self or independent motivation, such as: the owners and employees of small and medium sized businesses (the ones who create most private sector jobs), family farmers and small to medium corporate farm owners (not the mega corporate farm owners as they’re in the other group), entrepreneurs, and inventors. Member of this group were the ones most impacted by the mortgage melt down so skillfully created and manipulated by liberal Democrats.

Not so you say? Media talking heads were so totally committed to the support of group 1 that they hid what was happening at Fannie Mae, Freddie Mac, and Countrywide Financial. They labeled all those who warned of what was going to happen (and did) as racist, or anti poor and worse. If they had done their duty (as they loudly proclaim it), these shenanigans would have been exposed and maybe corrected before the disaster occurred. They deliberately avoided any mention of the real causes of the mortgage crisis and severely castigated those who did. If this had not been done, if the media had investigated and reported honestly, the truth would have been common knowledge and many more of those now in group 1 would be firmly in group 2. I wonder why? Hmmmmm?

One obvious reality is that this debacle moved more real wealth from middle class Americans to the 1% than has ever happened—by far. The number of middle class Americans who lost their entire fortunes, their nest egg for retirement, and were reduced from being somewhat secure financially to being penniless is staggering. Some say as high as fifty percent were devastated by the loss of the entire equity of their homes, the major investment and savings of most. Many went from a 30% to 50% equity to zero or being under water. At the same time, the banks (collectively) went from partial owners of these homes to 100% owners. And who made up these mostly paper losses for the banks, the megabanks who took over most of the small banks? These losses were made up on the backs of the same taxpayers who lost their equity. They received a double whammy.

These people are more apt to judge a politician by what he does rather than what he says. Still, politics is a totally emotional activity. Reason has very little to do with the selections of any voter.

Group 3, those in the middle, the uncommitted moderates: God only knows who they are and he's not telling. Years ago they were referred to as mugwumps, those who sit firmly on the fence with their mug on one side, and their wump on the other. They are hard to figure, but the TV talking heads have a great deal to say about everything and influence the final decisions of many. Experts who estimate these things say the media move at least half of centrist voters to vote according to their guidance. That is a major factor in any election.

Here’s a prediction from a respected black commentator who is on the conservative side. It bears out what I said about group 1.

By Dr. Walter Williams - October 2011

Can President Obama be defeated in 2012? No. He can't. I am going on record as saying that

President Barak Obama will win a second term.

The media won't tell you this because a good election campaign means hundreds of millions (or in Obama's case billions) of dollars to them in advertising.

And that's why I know Obama will win. The American people are notoriously ignorant of economics. And economics is the key to why Obama should be defeated.

Even when Obama's policies lead the nation to final ruin, the majority of the American people are going to believe the bait-and-switch tactics Obama and his supporters in the media will use to explain why it isn't his fault. After all, things were much worse than understood when he took office.

Obama's reelection is really a very, very simple math problem. Consider the following:

1) Blacks will vote for Obama blindly. Period. Doesn't matter what he does. It's a race thing. He's one of us,

2) College educated women will vote for Obama. Though they will be offended by this, they swoon at his oratory. It's really not more complex than that,

3) Liberals will vote for Obama. He is their great hope,

4) Democrats will vote for Obama. He is the leader of their party and his coat tails will carry them to victory nationwide,

5) Hispanics will vote for Obama. He is the path to citizenship for those who are illegal and Hispanic leaders recognize the political clout they carry in the Democratic Party,

6) Union members will vote overwhelmingly for Obama. He is their key to money and power in business, state and local politics,

7) Big Business will support Obama. They already have. He has almost $1 Billion dollars in his reelection purse gained largely from his connections with Big Business and is gaining more everyday. Big Business loves Obama because he gives them access to taxpayer money so long as they support his social and political agenda,

8) The media love him. They may attack the people who work for him, but they love him. After all, to not love him would be racist,

9) Most other minorities and special interest groups will vote for him. Oddly, the overwhelming majority of Jews and Muslims will support him because they won't vote Republican. American Indians will support him. Obviously homosexuals tend to vote Democratic. And lastly,

10) Approximately half of independents will vote for Obama. And he doesn't need anywhere near that number because he has all of the groups previously mentioned. The President will win an overwhelming victory in 2012.

-- Dr. Walter Williams

My own conclusions are fairly simple: People are driven and will vote according to their perceived self interest weighted by their emotions. The self interest of those in group 1 is perceived as being served by the pronouncements of liberals, socialists, the liberal media, and the entertainment world. These left of center groups need only give token attention to group 3. They could care less about group 2 except to immolate their candidates with ridicule, hatred and contempt. (It has become their modus operandi to call any who oppose them racist and other emotionally damaging names at every turn.) They know full well that class and other hatreds trump reason at election time and will use negative campaigning almost exclusively. It always works because it is infinitely easier to destroy than to build.

Sadly, Republicans candidates have adopted the same negative emotional strategy in their presidential primary campaigns. They have abandoned any high ground they had and lowered themselves to the egregious level of their liberal Democrat opponents. How stupid can they get? Their words will be used liberally by Democrats against whoever ends up as the Republican candidate. It’s like a comic opera or an old time burlesque routine. But they are politicians so what else could you expect?

I see the point Dr. Williams is making, but I see his predictions as too simplistic. One big and well known factor is that many in parts of the first group simply do not vote, at least not in as high a percentage as those in group 2. Also, I think the mix of ideas and understanding among many members of the first group accurately see socialism and expansion of government for the destructive force it is. In the end, everyone but a very select few will suffer major degradation of their lifestyle. Here’s what they know to be true. A government controlled economy has never in history succeeded for very long. A nation with men (and women) free to own property and generate wealth on their own initiative will quickly run circles around any similar nation with an economy controlled by government. This has held true since the Chinese tried it more than three thousand years ago. Look at the very different China of today as compared with the one in Mao’s Cultural Revolution between 1966 and 1976. It’s amazing what a little bit of economic freedom and the reversal of socialist doctrine can do.

As Margaret Thatcher remarked, “The problem with socialism is that eventually you run out of other people’s money.”

Or, as George Bernard Shaw said, “A government policy to rob Peter to pay Paul can be assured of the support of Paul.” That quote accurately describes the government policy of liberals. That same policy has already generated a great many Pauls and reduced the number of Peters. I think Dr. Williams may be using reverse psychology to frighten the anti Obama forces so they will work harder to defeat him.

My conclusions? People will support and vote for those who they perceive will do the most for them and theirs, even to the detriment of many others. Voting is an emotionally controlled activity. It is completely self serving, the absolute opposite of an altruistic or even rational decision. Many will vote for those they think will punish any who have more than the one voting, even if they lose something in the process themselves. There is a major component of humanity whose most powerful desire is to see those with more, much more, of almost anything, brought down to or below their level. Think the men who flew those airplanes into the Twin Towers. That is an extreme example of this same human trait.

The following quote explains the described political reality in a democracy. It has been attributed to many sources.

“A Democracy cannot exist as a permanent form of government. It can only last until the citizens discover they can vote themselves largesse out of the public treasury. After that, the majority always votes for the candidate promising the most benefits from the public treasury with the result that the Democracy always collapses over a loose fiscal policy, to be followed by a dictatorship.“

Lessons from Illinois and other liberal, compulsory union states

I have several questions for any liberal who reads this.

1) Do you actually believe that spending 2.7 trillion dollars per year on government welfare/entitlements/incentives/grants/social programs, while total revenue is only 2.2 trillion per year and shrinking, is in any way sustainable? That does not include any military expenditures. How long will the Chinese continue to make up the difference?

2) Is there any of this short blog that you can disprove with facts?

3) What is the real reason you continue supporting, promoting, and voting for politicians whose efforts are destroying our nation?

4) What is the real reason you willfully choose those who continue wild spending far beyond our ability to pay?

I would really like to see your answers to my questions.

Here are lessons from Illinois and other liberal, compulsory union states. Is the country as a whole going down the same route?

President Obama's home state is extremely unhappy. This is because Illinois has instituted several severely damaging changes in taxes on both business and individuals. Illinois has demonstrated just how economically devastating bloated government can be.

In January, 2011, the corporate tax rate was increased from 4.8% to 7.0%, a 45% increase. Since that time, the industrial juggernaut Caterpillar has made it clear to Illinois officials that it chose to build its newest manufacturing plant outside of Illinois due to the "business climate and overall fiscal health" of the state. That plant would have added about 1,000 jobs to the state. A number of other large companies are going to do the same thing for the same reasons.

Other smaller businesses have followed suit and actually moved their corporate headquarters from Illinois to neighboring states. Modern Drop Forge Co., which manufactures precision tools and has about 250 employees, along with Internet company, FatWallet.com, an employer of more than 50 workers, are among those businesses that have pulled up stakes and left since the corporate tax increase.

The exodus of companies and reluctance to expand in Illinois provide a great lesson to Obama and his cohorts who plan to increase taxes or limit tax deductions, which are essentially equivalent, on American companies. This will result in fewer American jobs and therefore fewer overall tax dollars as these companies will instead choose to expand overseas.

Obama and others may label this as unpatriotic. What a joke. Is the destruction of our economy, the decimation of the financial health of America’s middle classes, the transfer of great wealth to Goldman-Sachs and other Wall Street giants patriotic? The fact is companies must answer to their investors as to the financial decisions they make. If corporate tax rates are substantially higher in America than another potential location, then a decision has to be made that is right for the investors. Investment money always moves to where it will provide the maximum return to investors. This is one immutable law of economics. In spite of this reality, Obama fully expects companies to forego profitability for “the good of the country” even if it bankrupts the company. That is pathetically ridiculous.

At the same time they raised corporate taxes, Illinois raised personal income tax rate from 3% to 5%. That’s a 66% increase in the taxes individuals pay to the Illinois Treasury. In the eleven months since the tax increase, the Illinois unemployment rate rose from 9.0% to 9.8%. In 46 states, unemployment rates declined during the same time.

Illinois' own President Barack Obama is calling for increases in the personal income tax rate of American families earning over $250,000 per year by ending the Bush-era tax cuts and by making those earning $1 million or more to have a minimum tax rate of 30%. Do you have any estimates of the net revenue increase these taxes will bring in? Because of the negative effect on our economy, it is far more likely there will be a net decrease in revenue.

When Obama released his budget, he quipped, "At a time when our economy is growing and creating jobs at a faster clip, we've got to do everything in our power to keep this recovery on track." What recovery? According to our government's own employment numbers (not unemployment, a suspect number at best) the number of people employed in the private sector continues to drop. Add to that the rapidly rising cost of food and fuel and his words seem to be more likely evidence of glue sniffing than rational thought. The only indication of the tiniest improvement in the economy is in highly suspect government statistics. They routinely change the method used to calculate these numbers to claim things that are patently untrue.

They claim that massive increases in personal income taxes along with increases in corporate tax bills will help strengthen the economic recovery? Of course that’s untrue. Their claims are simply false propaganda. These actions kill jobs and destroy any chance for economic recovery. Illinois is a perfect example of what we can expect overall for the nation.

Illinois politicians said the increases in tax revenues would whittle down the enormous and growing state deficit. Actually, the opposite occurred. Illinois added $2 billion more in debt in 2012 and now has a deficit of some $7 billion. Are these politicians really that stupid or are they dedicated to moving jobs out of Illinois and destroying the state's economy? Historically, when taxes on business are raised, and/or government increases controls and reporting, revenue goes down. The reverse is also true. Why is it that liberals refuse to recognize reality? The only rational conclusion is that they actually want to decimate the American economy—to destroy the wealth of America’s middle class and reduce them to dependency on government.

It is informative to note here that by far the largest transfer of wealth from the 99% to the 1% was engineered by liberal bureaucrat thieves who looted Fannie Mae and Freddie Mac with the aid and blessings of liberal Democrats in Congress and Barack Obama. I see this as simply one of many actions designed to destroy America’s middle class and turn our country into a Marxist Communist dictatorship.

President Obama says higher taxes are necessary to pay down the debt. He knows higher taxes will produce the opposite results for America, just as in Illinois. It would be advantageous for voters to look at Illinois, and maybe Michigan, California, New York and other liberal, compulsory union states (and at their great financial success ) The real fact is, corporate tax hikes will ruin economies and push more companies and jobs out of the state and country.

Another example of the (beneficial?) effects of liberal policies combined with compulsory union membership:

Remember King Lyndon’s Great Society programs? Part of that was his Model Cities program which cost billions of taxpayer dollars and was a total failure. I need only repeat one of King Lyndon’s pronounced promises: “Detroit will be a shining example of the benefits of our Model Cities program.” It is quite telling how accurate Johnson’s prediction was. It certainly has become an example of the results of the policies of his “great society” programs now being greatly expanded by Obama and his cronies. Go to the following site for a more in depth description of the results of this example of liberal Democrat efforts and policies.

http://www.thedailycrux.com/content/3247/Government_Stupidity

Or better still, take a drive through the inner city of Detroit and see for yourself the results of fifty years of liberal Democrat policies and labor union efforts. By sure to do so in broad daylight because doing so at night carries a high risk of being car jacked and murdered. Actually, you can see a lot of abandoned homes and buildings just by driving through on I-75. I did that myself a short time ago. Burned out homes and factories were quite evident, even from the Interstate. Much of the city of Detroit looks more like the bombed out center of a third world city than an American one. The media elite boneheads are now beginning to extol a growing renaissance of Detroit in direct denial of realty and in spite of the fact unemployment is nearing 50%. Also, 30% of those working are employed by government. This shining example of liberalism in action has lost 60% of its population in the last 50 years. Those who fled the city were mostly middle class workers and included virtually all of the whites. They have been largely replaced by uneducated and poor Muslims and Hispanics with their huge birthrates.

Now those same morally deficient snake oil salesmen and tyrants are using the same process that has clearly devastated all of the most liberal states, to do the same thing to America with absolute certainty. There may in fact be enough ignoramuses at the public welfare and employment trough, in government unions, and that listen to a totally corrupt and deceptive media, to win the next election. Maybe there are enough of those who have had their fires of hate fanned by emotional blackmail to bring down America. (Thank you reverend Wright!) It is obvious to me that the left’s “spread the wealth to equalize economic conditions” means making everyone poor and dependent on government.

When I pointed this out to my Socrates discussion group, one of the many liberal members said I was wrong, that it was not liberal Democrat policies that brought about the demise of the American auto industry that caused Detroit to collapse. I then asked him what he thought was the real cause of the demise of the Detroit’s auto industry. “Why, the failure of the auto industry to compete with cheaper and higher quality foreign cars.” He replied.

I then asked him what he thought was the reason for that. “Older factories, antiquated equipment and the failure of management to modernize and adapt new manufacturing techniques.” He answered.

“I couldn’t agree more,” was my surprising (to him) reply. “And just who or what was it that prevented the industry from doing those important things?”

He had no concrete answer and mumbled something about greedy executives and poor management, so I continued. “The UAW demanded benefit and labor cost increases that took capital that could have been used for modernization, while union work rules prevented the adoption of new manufacturing methods, especially in the use of automation and robots. These union efforts were backed and supported totally by all liberal Democrats. That’s why liberal policies, politics, and support for unions are responsible for the demise of Detroit so I will stand on my original reasoning.

These examples are undeniable realities, and there are many many more. If Detroit is not enough, think New York, California, Illinois, Wisconsin, New Jersey, and all the other blue states that are virtually bankrupt. It certainly wasn’t conservatives who ran them into the ground. Now that the voters in several of those states threw out the Democrats and elected Republican governors and state legislatures, Democrats are using every legal and illegal tactic they can to continue the fiscal carnage they have wrought on those states. What do you think they will look like in five or ten more years? And how about Fannie Mae, Freddie Mac, Amtrak and the Postal Service? Competitive private entities clearly beat the pants off these government operations. These private companies make a profit (that word liberals hate) and pay taxes (the word liberals love) to boot. Those four (and every other government operation) are terribly inefficient and require huge infusions of tax payer money to keep operating. Currently they are all drowning in the red ink of substantial losses.