I REMEMBER RONALD REAGAN

I remember Ronald Reagan, the fortieth President of our nation, for the firing of 40.000 air traffic controllers, drastic cuts in school lunch programs, the Iran-Contra Scandal and moving up retirement age while reducing retirement benefits. Under the disguise of “Trickle Down Economics” he took it from the needy and gave it to the greedy. He hid his lack of vision for the nation behind his nationalistic rhetoric and demagoguery while practicing management by default. He generously delegated authority in order to sleep through most of his 8 years in the office. With the help of Saudis, he manipulated markets to lower oil prices from $40 a barrel to $12 a barrel in 1984 while turning a blind eye to devastating effects of the oil bust after hiding behind the principles of free market economics. His energy policies resulted in shutting down thousands of stripper wells, pushing hundreds of independent oil producers out of business and laying off nearly half a million oil field workers, causing, in the process, exploratory rig count here in the USA to drop from 3650 to nearly zero within a year period, creating the conditions for today’s high energy prices while pushing oil belt states into an economic depression. As far as I am concerned, Ronald Reagan was all image and no substance. He was nothing more than an empty shell of spin and glitter. God bless his soul.  

ANIMAL CRUELTY

The following acts constitute animal cruelty;

Abandonment, Acid dosing, Anatomical alterations, Asphyxiation, Beheading,, Bleeding, Blinding, Bone breaking, Bottom drag fishing, Branding, Burning alive , Caging, Clubbing, Competitive activities and racing, Debeaking alive, Declawing,

Destroying eco systems necessary for animal survival, Dismembering alive, Drowning, Drugging, Ear or nose piercing, Electrocuting, Eradication, Exhibition and commercial exploitation, Feeding alive to predators, Food deprivation, Force feeding, Forced fighting, Freezing to death, Gassing, Hammering, Hanging, Harpooning, Hunting , Implanting, Infecting with infectious diseases, Infecting with viruses and bacteria, Injecting with viruses and bacteria, Intentional driving over, Isolation, Kicking, Killing by starvation, Killing in a trash compactor, Killing with explosives, Long term captivity, Mechanically dismembering alive, Microwaving alive, Neglect and negligent treatment, Oxygen deprivation, Physical abuse, Poisoning, Recreational hunting, Ritualistic killing, Roping, Scalding, Sled racing, Stabbing, Subjecting to extreme pressure and temperatures, Subjecting to lab work and experimentation, Subjecting to radioactivity, Subjecting to research, Surgery with insufficient anesthesia, Tagging, Bear trapping, Using as a live bait, Water, food and air deprivation.

Please stop cruelty to animals because their well-being is a measure of our civility and an indication of degree of advancement of our civilization.

ABORTION, THE GREAT DIVIDE.

ABORTION, THE GREAT DIVIDE.

No other issue has been as divisive as the abortion in current sociopolitical structure of our nation. On one hand, no one can deny the fact that an unborn child deserves the right to live as intended by nature. On the other hand, a woman’s right to choose can not be ignored, because an unwanted child can become a source of resentment, neglect and lack of happiness. I know this much for sure that if a child is born, he or she should not be born into a lifelong of poverty, neglect and rejection, because this will be the cruelest thing to inflict onto a new born. The society has an obligation to provide a newborn with unbounded love, care and support. Every child should be surrounded with means that can bring acceptance and happiness. Unfortunately, there are millions of children around the world who are suffering from hunger, lack of health care and education. Many die before they can reach their first birthday anniversary. In this respect, the entire humanity is guilty of crimes against humanity.

Furthermore, the global political leadership is also, in my opinion, guilty beyond any reasonable doubt, of wasting our global resources on whimsical wars and conflicts while failing to stop genocides that violate the very principles of humanity. The magnitude of their ignorance can not be measured by any known methods available to humanity today. Under these unacceptable conditions, the validity of principles of theocracy that supports life can not be hold true for any religious and political leadership who oppose abortion. Those leaders who support right to life are curiously absent when it comes to sustaining a newborn’s right to happiness. In fact, many of these leaders are strangely silent when humanity needs to stand against personal whims of political leaders who wish to declare wars and kill millions of innocent men, women and children in order to win, in most cases, a supposedly noble place in the dusty pages of history, primarily, to satisfy their egos. It becomes a meaningless echo when those leaders talk about “Peace on Earth” during certain times of the year. Their rhetoric becomes nothing less than the lowest form of self centered demagoguery while their agenda for the betterment of humanity becomes self serving global destruction.

There is so much energy devoted to arguing pros and cons of abortion that many other important issues that are extremely important for the advancement of any society go unresolved. Here, in the United States, the issue of abortion is so divisive that it dominates the entire political process. In order to end this political division of our people, a compromise needs to be reached, so that our political leadership can turn its attention to solving our ever increasing social, political and economic problems.  This compromise is The Great Compromise, a road to build bridges between the opposing parties of the abortion issue.

It is generally accepted that a human embryo takes a more familiar shape after the first trimester of a normal pregnancy, therefore, no abortion should be allowed after this period. Partial birth abortion should be considered a severe criminal act because it takes away the life of a fully developed unborn. After the first trimester, an abortion should only be allowed if the pregnancy poses an unmanageable risk for the mother’s life or results in an abnormal anatomy which will make it impossible for the newborn to lead a normal and independent life. The decision to terminate must be approved by two medical doctors independently in consultations with the mother of the unborn. The decision should be made by the medical community only with legal authorities and courts being left outside the decision process. On the other hand, an abortion should be allowed within the first trimester of a pregnancy without any interference if expectant mother wishes to do so. This compromise will allow a woman’s right to choose, but only within the first trimester of pregnancy while protecting the right of the unborn to live once the fetus is fully developed. As a result, once the time period of the first trimester ends, woman’s right to choose terminates to uphold the right of an unborn to live.

Of course, the best approach to abortion is prevention, because the best abortion is the one which does not takes place in the first place. All restrictions to prevention methods approved by medical profession should be removed at all levels of governments regardless of differences of opinion.  

History of our country is full of examples of great compromises. Our constitution is one such example. I believe there is a good possibility that the abortion issue can became another such example.

TERRY SCHIAVO, THE LONGEST EXECUTION

The tragic demise of Terry Schiavo in 2005 constitutes to be the most significant event in the recent legal history of the United States. Quite possibly, it is the first time; a court has knowingly and willfully exercised authority on the legal status of an INNOCENT PERSON instead of a person found guilty and convicted of a wrong doing. This self propelled expansion of authority of the courts and the legal system is a significant contradiction to the individual freedoms guaranteed under the specific amendments of our Constitution. The U.S. Congress must take action to reverse this self propelled expansion of authority of the courts in order to forever guarantee individual freedoms expressed in our constitution and therefore must restore the credibility of our legal system for all.

In my opinion, no court  in the United States or anywhere else in the world, whether petitioned or not, should have the authority to impose a judgment on an innocent person which will result in bodily, physical, mental or psychological harm or injury, dismemberment, anatomical alteration, limitation of bodily functions or death by any means, even that person may or may not be fully capable to sustain normal daily mental , physical, anatomical and  physiological functions with or without internal and external medical assistance or other means.

Terry Schiavo was never convicted of any crime or wrong doing. She was completely innocent and yet our legal system put her to an excruciatingly painful death. I sincerely believe that no legal system in the world should have the authority to put an innocent person to death just because of that person is not completely well and can not take care of self. Those who are involved in her demise should be brought to justice as soon as possible.

I urge the Congress of The Unites States to step up to the plate and immediately take all necessary steps to insure that no one else will suffer the terrible fate Terry Schiavo was subjected. We owe at least this much to a person we have so cruelly victimized in the name of justice.

IRON CURTAIN

It was a cold December day in 1970 and I was on a SABENA flight from Istanbul to Brussels where I would connect an Air Canada flight to my final destination Calgary via Montreal. The French built Caravelle jetliner had one scheduled fuel stop in Prague, then capital of Czechoslovakia, a member of the Warsaw Pact and a Communist country behind the Iron Curtain. First leg of the flight was uneventful with the minor exception of an emergency noise dive to prevent a mid-air collision over Bucharest. Once landed in Prague, at a safe distance from the terminal building, the passengers of the Caravelle, including me, were taken to the International Passenger Lounge of the Main Terminal building by bus since safety concerns would not allow passengers to remain onboard during fueling. First thing I noticed at the Lounge were soldiers in khaki uniforms, donning AK-47s, strategically placed and carefully scanning passenger traffic, ready to use deadly force on a moments notice. Undeterred, I involved myself in a little window shopping until I suddenly realized that my party was leaving the lounge to be taken to the bus to return to the aircraft. In an effort to catch up with the rest of the passengers, I lurched toward the gate but suddenly stopped by two soldiers and escorted into a room where I was briefly interrogated by two civilian members of the airport security. After a short questions and answers session during which my passport was in the custody of the security, I was determined to be harmless and taken back to the aircraft, at which time, was fully boarded and ready to depart.

Now, every time I travel by air and see heavily armed guards at the terminals, I remember this little bone chilling incident in the land of hammer and sickle back in 1970 while yearning the good old days when I used to fly without the constant reminder of ever present deadly force, countless check points, metal detectors and strip searches. I am now a firm believer that there is no substitute for a world living in peace and harmony. All we need to achieve that tranquility is a little more understanding, mutual respect and cooperation between different nations, cultures and religions of the world while refusing to follow the lead of war mongers, criminals and saboteurs. 

GLOBAL WARMING AND CLIMATE CHANGE

GLOBAL WARMING AND CLIMATE CHANGE

According to Astronomer Carl Sagan (1934-1996), Europe experienced a “Mini Ice Age” between 1560 and 1850. It is safe to assume that during this period, there were no Green House Gases to initiate a climate change, therefore the drop in temperatures have to be a result of, either a decline in the overall energy output of our Sun or a change in an unknown cosmic phenomenon. We now know that the energy output of our Sun is not constant, because the number of spots on our Sun’s surface increase and then decrease within an 11 year cycle. During periods of high Sun spot activity, the level of Gamma Ray Radiation from our Sun increases corresponding to the release of higher levels of energy. Is it possible that our Sun, in addition to its 11 year cycle, has a secondary cycle of a longer period that can be correlated with long term changes in atmospheric temperature?

A close investigation of our planet’s geologic record clearly shows that there have been several sea level changes in the natural history of Earth. If these sea level changes can be explained by significant temperature changes in Earth’s atmosphere, then it is possible to conclude that our planet has experienced climate changes throughout its history. The evidence that can support this theory is the sudden extinction of species throughout the geologic time frame. As the climate changed, the species that were not able to adapt perished in large numbers. The fossil records support this possibility.

Nevertheless, today, there is no denying that industrial pollution has an increasingly significant effect on our climate. However, what percentage of our climate change is the result of industrial pollution? Is there more to the climate change than just pollution? This is a question that has not been aggressively investigated. It is a sad reality that human activities are constantly changing our environment in ways that have never been foreseen before. As humans, we are constantly destroying eco systems that are so vital to the future of our planet. Areas that were once lush forests are now highways and shopping malls. The magnitude of this self destruction is also the degree of our own ignorance in the face of catastrophe.

 If we are to survive, as human species, a certain extinction as a result of climate change, like many species before us, we must act now and act decisively. We must reinstate and protect our forests and wild life habitats. To that end, we must start planting millions of trees and plants every year in every possible land available to us to reverse the current climate change. In that respect, governments at every level, have an undeniable responsibility. During the period of Carboniferous, large plants might have played an important role to stabilize the Earth’s atmosphere. We must also limit our uncontrolled and ever accelerating expansion into our environment. The lands available for development must be regulated and, if necessary, must be limited. If we fail to do so, we will be the next species whose fossil records will be unearthed in the future by those who could act decisively.

A CITY OF ETERNAL TRIBULATIONS

According to researchers, the city of Jerusalem has a history that goes back to 4^th millennium BC making it one of the oldest cities in the world today. It has sites that are holly to Judaism, Christianity and Islam. Throughout its history, it is said to have been attacked 52 times, besieged 23 times, captured and recaptured 44 times and has been totally destroyed twice. There is no accurate estimate of how many lives have been lost or affected during these violent events and the magnitude of bloodshed resulted. At the present time, it is at the center of yet another religious and political conflict and is the most significant stumbling block to the current peace prospects in the Middle East.

It is status as the most significant holy city to all major religions implies that its violent history will most likely to continue into the future as all competing sides will try to gain control of its territory unless it becomes an open religious city, like Vatican, free of national and political interest, dedicated to serve the needs of the faithful of all religions without restrictions and limitations. Its rule has to be based on a religious triumvirate consisting of a Rabbi, a Bishop and a Mullah and decisions have to be made unanimously.  Its territorial integrity must be guaranteed by all nations present and future without any interference.  Only then, the city of eternal tribulations can be a city of eternal peace and after such a long and violent history, it certainly deserves that.

DEMOGARCHY

What should we expect from a Congress whose majority of members are either millionaires or billionaires? Do you think they really care about average Joe or are they in the Congress to protect their own wealth? After all, they played an important part in bringing down our economy under Bush. Wall Street Bankers and the super rich couldn't do it alone. They had to have help from our elected representatives both in the House and in the Senate. So, what should we call a system of government of the elected rich? Democracy, Oligarchy, Plutocracy and Plutarchy don't quite define it? How about Demogarchy?

THE GREED IS GOOD FOR YOU, BUT…

Have you ever noticed, during certain economic times, the stock market goes up a few hundred points one day and goes down a few hundred points the very next day? Certainly, economic conditions of the country do not change that quickly and every body knows that. The explanation given by stock market experts assume that the trade is influenced by the market psychology. I respectfully differ.

Those wild gyrations of the market, in my opinion, are the indications of a heavily manipulated stock market by large institutional investors. Controlling billions of investment dollars, they can buy and sell stocks in order to turn a quick profit. Unfortunately, this practice victimizes the small investors and drove them out of the market. Now, ours is a free country and the government can not tell the investors whether or not they can buy or sell to please the small investors, but amount of money controlled by small investors is absolutely crucial to the economic well being of this country.  Those few dollars you invest in a company sponsored 401k plan or the few bucks you struggle to deposit in your savings account every now and then are the backbones of our economy. When those dollars begin to dry up, the large institutional investors begin looking for other sources of large money supplies. Incidentally, that is exactly why some members of the U.S.  Congress have been trying to privatize the Social Security, the most lucrative source of large amounts of money, so the large investors can get their hands on it.

But, is there a solution to prevent manipulations in free stock market? I believe there is a way to do just that in form of a small sales tax. Every time securities change hands, the government implements a small sales tax on the amount exchanged and that will discourage whimsical and arbitrary sales of securities while introducing long term stability into the markets. In fact such a tax should include all forms of securities such as stocks, bonds, commodities, foreign currencies, options, derivatives and numismatics. With such a tax in place, markets will calm down opening new opportunities for investments of all types, including foreign capital, in turn benefiting our economy and creating new employment opportunities for all. 

COMMUNISM AND CAPITALISM, FRATERNAL TWINS?

If you took the Economy 101 during your formative years, you would know that communism and capitalism are two very different economic systems. In the communistic system, the government owns everything. In the capitalistic system, the people own everything. However, in their extreme forms, the difference between the two seems to disappear. Here is how.

Let us for a moment consider a milder form of communism, in which, the government owns most of the things, such as properties, cars and businesses and the people are allowed to choose and own their clothes, tooth brushes and toys for their children. However, in the most extreme case of communism, the people are not allowed to own anything, not even their tooth brushes. You live in a government owned apartment, sleep in a government owned bed and wear government owned clothes. You go to work at a government owned business using government owned transportation.

Now, let us look at the capitalism. The people own everything, their homes, cars, clothes, etc. etc…However, we also know that the amount of things owned by people differ between individuals in a capitalistic society, some own more and some own less. At the present time in the United States, I have been told, the top 1% of our population owns about 90% of our GNP. But let us take this a little further down the road. Let us for a moment assume that the top one tenth of 1% of our population owns 99% of our GNP. In a much more severe case, only a handful of individuals will own 99.9% of our GNP. And finally, in the most extreme case, one individual will own everything. The rest of the population will own nothing, not even their tooth brushes, very much like the communist society I described above. 

Are we, as Americans, headed in that direction? You be the judge.

ECONOMY

ECONOMY

It is no secret that out country is facing significant challenges and our leadership is working hard to come up with answers and solutions. As far as I can see, the financial health of our country is one of those challenges.  However, I am concerned that we might be looking at trees while failing to see the forest. We all know what happened when housing bubble burst and financial institutions faced melt down. However, I do not agree with expert opinions on what caused it. Here is my take on the issue and how to prevent it from happening again. Here are some of my observations on the health of our economy;

1)      In the 60s, every time there was a tax cut for the consuming segment, the economy recovered and the recession ended. Nowadays, after every tax cut for the consuming segment of the economy, I am talking about working class Americans, Pacific Rim Countries experience another economic expansion and every time there is a tax cut for the producing segment of our economy, the rich and the wealthy, U.S. Dollar takes another nose dive against Euro.

2)      In the 60s, every time a recession ended, jobs were created, but nowadays, all recoveries are jobless in general.

3)      After the WWII, the US economy supplied goods and services to the rest of the world without any competition from war torn countries like, France, Germany, Britain, Japan and China, but that is not the case anymore. We are no longer the only supplier of goods to the rest of the world and it appears our competition is strong. The proof? Our ever widening trade gap with the rest of the world, which means, our jobs are being shipped abroad.

So how we can solve the challenges we are facing today?

Remember the Economy 101 where we were first indoctrinated about “Supply and Demand”? Well, today I believe it is no longer supply and demand, but rather it is supply, demand and distribution of money, meaning fiscal and monetary policies of our government. Phrased differently, it should read if the money supply to consuming segment of the economy is larger than the money supply to the producing segment of the economy as a result of Fiscal and Monetary Policies, it results in inflation. Similarly, if the money supply to the producing segment of the economy is larger than the money supply to the consuming segment of the economy again as a result of Fiscal and Monetary Policies, it results in deflation. Now, let us introduce the names of two prominent economists, (luckily they are still around), Paul Volcker and Alan Greenspan, well known deflationary economists and former Fed Chairmen whose main job was to fight inflation. For the nearly 20 years, they were at the helm at Federal Reserve and relentlessly pursued a “Deflationary Policy” draining money supply from the consuming segment and in doing so, preparing our country for the financial meltdown we had recently experienced. Tipping point came, when 2^nd Bush Presidency and Administration, further reducing the money supply once again to consuming segment by means of tax cuts to the top 2% in order to reduce the taxes on the producing segment of the economy.  Suddenly, consuming segment had no money to pay mortgages, credit cards, car loans and college tuition expenses, among others while producing segment shipped astronomical sums of capital to foreign countries (decline of dollar against Euro beginning from a parity) for investment in order to reduce labor costs to be competitive in a global economy.

So what do we do now? Almost everything we consume come labeled “Made in Somewhere Else” and as a result, the tax cuts for the consuming segment no longer create jobs here in the United States. The new technologies that are supposed to create new jobs are years away and are not exclusive to us. Trade deficit is in billions every month and the budget deficit is in trillions every year. Our government printing so much money that we stopped publishing M1 Money Supply Data during the Administration of Jr. Bush. A real dilemma, I would say. For whatever its worth, here is what I think we should do;

1)      Switch from a system of taxation on net profit to taxation on gross revenue in order to simplify tax code and increase transparency, both for individual and corporate filers. Under this new regime, corporations and businesses can only itemize payroll expenses for the first US$ 40,000 of compensation for each U.S. based employees only (non transferable between employees) including salary and wages, medical, dental and other health insurances, (part time, commission, contract and performance based pay should be excluded from itemization and no other itemization should be allowed). Tax rates should be readjusted and lowered in order to prevent an effective tax increase.

2)      Increase personal exemption significantly (to 24,000 from current 6,000 dollars per individual) while eliminating itemized deductions for individuals in order to eliminate taxing people living under poverty. According to our tax tables for 2009, if you made 5 taxable dollars last year, our government wants 2 dollars back in taxes.

3)      Increase to top tax rate to 70% for those earning over 1 million dollars.

4)      Remove cap on income subject to social security tax while reducing social security benefits for high end beneficiaries while increasing benefits for low end recipients, which will stimulate demand.

5)      Remove Federal Guaranties from Students Loans that are sold to secondary and tertiary financial institutions by primary lenders. Forgive the first US 100,000 of existing student loans, whether current or not, to reduce the deflationary burden on the consuming segment, primarily middle class.

6)      Rigorously implement on new rules on credit card companies and impose new rules to limit bank charges.

7)      Eliminate all taxes on new business start ups and venture capital investments in the USA for the first 5 years, if they continuously employ at least 1 full time employee with benefits and health insurance.

8)      Gradually switch from a payroll based taxation to a consumption based tax system, which should exclude food, pharmaceuticals and other essential consumer items.

9)      Impose a sale tax on all security exchanges including stocks, bonds, commodities, numismatics, foreign exchanges, options, futures and derivatives in order to reduce short selling and market manipulation.

10)   Coordinate taxing authority of states, counties, municipalities and local governments with that of the Federal Government, including toll roads, user and processing fees, real estate taxes, insurance deductibles and other forms of hidden taxes, in order to prevent over taxation.

11)   Eliminate all property taxes on primary residence at federal, state and county levels.

12)   Eliminate all taxes on U.S. citizens working overseas as expatriates to make it easier for U.S. citizens find jobs in other countries. (Did you know that the U.S. is the only country in the world that taxes its citizens working overseas?).

13)   Eliminate all tax breaks for companies and corporations and phase out all government subsidies.

14)   End the military operations in Iraq and Afghanistan immediately (we can change regimes but we can’t change cultures) and reduce the number of US bases in foreign countries while scaling down the size of the US military.

15)   Reduce or completely eliminate foreign aid.

16)   Reduce the cost of higher education and replace student loans with grants.

17)   Repeal the Bush Bankruptcy Law.

18)   Make it illegal to charge interest rates and fees to non-performing credit card loans and loans sold by primary lenders.

The list goes on, but the idea is simple. Increase the money supply to consuming segment of the economy until a balance between the consuming and the producing segments of the economy is established. Because right now, our economy is top heavy and as a result, it will keep on tipping over.

Now, critics will probably say, this is socialism. I am really not interested in what it is called. Main question here is to identify our nation’s economic challenges so necessary solutions can be found.  Furthermore, our so called capitalist system has proven itself to be unsustainable in its present form and it has to move to the center. It is no wonder that our economy came close to being bankrupt under Reagan and finally became bankrupt under Jr. Bush, both Republicans and supporters  of the “Trickle Down” economic theory. It is clear to me that economies can’t be built from top down, but they should be built from bottom up. Our country’s economic development proves that to be true.

Former Clinton Labor Secretary Robert Reich makes an important observation in his new book “Aftershock: The Next Economy and America’s Future”. On page 21, Fig: 1, he demonstrates a correlation between wealth distribution and the depression of 1929 as well as the great recession of 2008. It is another sign that our economy is top heavy and unless we implement a better tax system to insure a fair distribution of wealth, our problems will not go away. (You should really bring this chart to the attention of your wievership).

As far as I am concerned, it is clear beyond any reasonable doubt that our economy is suffering from a significant imbalance of money supplies to consuming and producing segments of our economy. Accordingly, all remedies should be directed toward striking a balance in the money supply between these two segments in order to induce a recovery with job creation. I firmly believe that nothing else will work and a robust economic recovery will be a pipe dream.

FREE OR FAIR TRADE

FREE OR FAIR TRADE

Is your job outsourced to a little know location in South East Asia? Did your last employer close its plant here in the good old U.S.A. and open shop south, north, east or west of the border? Do most of the items in your shopping bag have a stamp that says “Made in Somewhere Else”? Welcome to the new world of “Globalization”. Now, I am not the complaining type, but if you have been unsuccessful finding a job with decent pay lately or you had to move back into your parents house because that college degree you just earned isn’t worth a dime, this might be a good time to stand up and be counted, although that may not necessarily make a difference at the end, because, in part, your elected officials might appear to be listening while they aren’t and your government of the people may be acting as if it is the government of the special interest.

I am sure you have heard this before from a number of officials in charge and I regret repeating it, but this is a very complex problem involving World Trade Organization (WTO) and its excruciatingly painful and complicated rules, member countries of European Union and emerging third world markets and thousands of diplomats from every habitable part of the world who are trying to communicate through hundreds of translators, sometimes in vain. You might not have realized this before but it is a mess out there in the realm of free trade. Although how we got there in the first place is another story, I have been told that our very own government might have played a role in all these by offering tax breaks and incentives to companies who ship jobs overseas. How quaint.

If my understanding is correct, this whole idea of Globalization has started when a few corporate bosses had instilled the idea of “One World” into a number of government officials with highly visible positions. The concept was that in order to fight poverty around the world, factories must be built and jobs must be created everywhere around the Globe, creating wealth for everyone. Very noble indeed. However, I do not know if anyone mentioned the fact that elevating living standards in poor countries might in fact result in decreasing living standards in rich countries simply because it will involve transfer of economic activity. That part of the story seems to remain a little fuzzy.

Now, I am not a cynic, but I have this persistent suspicion that the real motive behind this One World idea was in fact a desire to open up cheap labor markets. If you are an employer with hundreds of employees, it would make sense to cut your labor costs to be more competitive around the world by simply hiring people who can do the same or comparable job for smaller pay. After all, if an employer at an overseas location can build the same product you are offering for much less because their labor cost is a fraction of yours, then you have no choice but to move your operations into an area of comparable labor costs.  If you don’t, free market economics will swallow you alive.  This, in my opinion, is a real dilemma without any gold lining. Or is it?

We know we can not erect trade barriers by imposing import taxes because WTO will descend on us with all its might. We really do not want that. Only possible avenue I can think of is changing our corporate tax structure to make it more appealing to our corporations who do business globally to keep our jobs here in the U.S.A. Here is how to do it.

Currently our business tax structure is based on net profit. The difference between revenue and business expenses are considered net profit and a business entity pays a fraction of net profit as taxes. If you made no profits, you pay no taxes. (Think GE, Exxon, Conoco, etc. etc.) However, this system requires volumes of increasingly complex tax laws, by-laws and rules as well as an army of Internal Revenue Service (IRS) employees to check business records, books and accounting procedures and is more open to manipulations, mistakes and irregularities. After all, the government would like to know if that three martini lunch you just had with clients is really tax deductible.

A more practical way to assess taxes is to use revenues as tax bases. In the revenue based tax system, no one really cares about how many martinis you had for lunch or if that convention in Hawaii is tax deductible. Only thing that can be tax deductible is your payroll expenses such as employee pay, health insurance and fringe benefits up to a government set limit per employee. So, if you are a CEO with an annual pay of several million dollars, only a very small fraction of that pay can be tax deductible. Similarly, if you are an unskilled worker earning minimum wage, all of your earning may be considered as tax deductible.

Let us illustrate with an example; you are a US based corporation. Your annual revenues are XXX million dollars and your net profit, after deduction of all your legitimate expenses are zero. In the current tax system you pay no tax. In the new system you pay taxes on XXX dollars albeit at a smaller rate. There are no deductibles except certain amount of your payroll expenses, say first 40,000 dollars of wages per employee, non- transferable of course, (no cap and trade here) for each and every one of your US based full time employees, who have been employed for the entire calendar year and are based in the USA. So if you paid employee ZZZ 48,000 dollars last year, you can deduct 40,000 of those dollars from your taxes. But what about your CEO, whom you paid 5 million dollars last year in salaries and bonuses? Same thing, you can claim a deduction of 40,000 dollars. No more.  Now, what if an employee of yours was paid only 24,000 dollars last year, including wages, medical and dental insurances, bonuses and spiffs? Yep, all 24,000 dollars are deductible.

Now, you can not claim that 40,000 dollars for an employee, working at an office or a factory located at an oversea location, such as India or Mexico? All those expenses at those overseas locations CAN NOT be tax deductible. If you are NIKE and your entire manufacturing operations are based on locations outside of the USA, your corporate taxes go will up, several times over what a US based corporation will pay. So you have two options, move your operations overseas and become an international corporation, pay your taxes in the country you are operating or remain a US based corporation and hire people here. If you choose to be an international corporation, your payroll expenses will probably go down but your transportation costs will go up every time the price of a barrel of oil goes up. Choice is yours.

There are several advantages to this system. It simplifies the tax code, discourages cheating and most importantly reduces pressure on corporations to ship jobs overseas to cut labor costs, but most importantly it helps build our economy by creating jobs since in reality our government is actually paying you to hire.

IT IS THE ECONOMY, WISE GUY…

According to Wall Street gurus and financial market pundits, housing meltdown and mortgage crises have dragged down the economy into its current miserable slowdown, causing bank failures, market gyrations and significant losses of employment. I respectfully disagree. I believe that it is the other way around, in which, a

slowing economy has caused the mortgage crises and housing meltdown, bank foreclosures and losses of employment. Here is why;

Inflationary pressures during Jimmy Carter Administration have encouraged then Federal Reserve Chairman Paul Volcker and later, his successor Alan Greenspan to adopt deflationary policies that have severely limited the money supply to the consuming segment of the economy in order to control inflation and to repel stagflation. To further complicate the matters, Ronald Reagan, during his Presidency, adopted the principles of Supply Side Economics proposed by Economist Arthur B. Laffer, Sr., reducing the tax burden on businesses while following the strict monetary policies of the Federal Reserve. The expectation was that an economic expansion in the producing sector of the economy will trickle down to consuming segment, hence the term “Trickle Down Economics”, so often quoted by Ronald Reagan himself.  Unfortunately, the result of these misguided policies was a top heavy economy, in which, consuming segment of the economy suffered through insufficient money supply while producing segment had to concentrate into the export markets in order to function, with the help of government efforts to establish a global trading system called “World Trade Organization”, which, in turn flooded the U.S. markets with cheap foreign products, driving many  U.S. manufacturers out of business and exporting U.S. jobs to foreign locations.   However, despite all of these miscalculations, the economy was able to survive, in part, because the oil prices were low during the 80s and 90s and the inflation was in check. An ever increasing credit card money supply was also doing its share to shore up the shortage of liquidity in family finances.

Unfortunately, the whole balance of the economy was overturned after the election of 2000. Huge budget deficit incurred to support wars in Iraq and Afghanistan required a massive borrowing of foreign capital and an unlimited injection of newly printed money supply, which, in turn, forced the Federal Reserve to suspend publication of M3 money supply figures to prevent overexcitement in the financial markets. However, the global economy did take notice and the dollar lost ground against all other major foreign currencies, making imports more expensive to purchase, creating inflation concerns once again. The tipping point came when oil prices surged after global demand for oil caught up with the current production limits imposed by OPEC countries. This increase in energy costs, coupled with ever increasing credit card interest rates kept draining money supply from the consuming segment of the economy until there was no money left to pay the rent, the mortgage, the car loans, the credit cards and the other financial obligations of a typical American family. Despite that, current political leadership in Washington kept reducing taxes on the producing segment of the economy, hoping that their model of Reaganomics will resolve the matter to everyone’s satisfaction, while ignoring the real problem of insufficient money supply to the consuming side of the economy. They, sadly, have failed to realize that due to globalization, Reaganomics will no longer be able to provide a solution to our current economic problems. Today, in the global economy,  any tax cut for the rich will once again push the U.S. Dollar into a nose dive against all major currencies whereas a tax cut for the poor will result in another economic expansion in the Pacific Rim Countries.

Regrettably, the worst is not over yet. The economy is in a downward spiral and it will remain so until corrective actions involving both monetary and fiscal policies are taken. The measures that have to be implemented are not going to be easy, but our options are limited and the time is running out. The first order of the business will be to restore the right amount of money supply to the consuming segment of the economy in form of tax breaks for the low income wage earners and middle class families to counter balance the increases in energy costs. Income tax code has to be simplified and revised in order to reduce the tax burden on the 90% of working low income Americans. Credit card segment must be regulated, although a cap is not recommended, to prevent backdating ever increasing credit card interest rates onto existing account balances of previous purchases. Social Security income formulas have to be reworked to increase the low monthly payments to many while placing a cap on the maximum benefits for the financially secure in order to strike a balance on the overall expenditure. The cap on the social security taxes for the high end earmers must be removed to integrate baby boomers into the system. Corporate tax structure should be shifted from net profit base to gross revenue, incorporating lower rates, while introducing rules to prevent shipment of local jobs to foreign locations. A national health care system should be established to relieve U.S. businesses and corporations from shouldering the brunt of ever increasing health care costs to make them more competitive in the global markets. Tax incentives to corporations who outsource jobs have to be eliminated. Student loan debts should be forgiven up to a maximum of 90% of their outstanding balance, if over $100.000, and if under $100.000, they should be fully forgiven for those experiencing financial hardship.  Federal Government guarantees on student loans should be voided if the primary lenders choose to sell the loan to secondary lenders or other financial institutions. Latest bankruptcy laws should be reversed to allow hard working Americans a second chance in their pursuit of happiness. All government subsidies should be reconsidered and those are not necessary should be eliminated. In order to fight outrageous prescription drug costs, imports of pharmaceuticals from Canada, member countries of the European Union as well as countries with reputable manufacturers should be allowed. A workable energy policy that incorporates renewable energy sources including wind, geothermal, solar and nuclear power has to be drafted and implemented in order to reduce our dependence on foreign energy resources with the full participation and support of our government. Last, but not least, fiscal responsibility has to be exercised by eliminating deficit financing in all levels of government.

A healthy economy strikes a balance between supply and demand with the government in a regulatory role. When this balance is lost, as it is in our current economic situation, economies do shrink. It is becoming increasingly clear that our economic policies have moved further to the right, more than it should, creating the current economic crises. It is high time to realize that the world has changed and the business as usual is not going to solve our current problems anymore. The old ideas do not work in a new global order. If we can not take the necessary steps to bring our economy back on tract because of some rear sighted partisan politics, our economy will continue to shrink, raising the possibility of further economic discomfort down the road for many of us. I, for one, do not wish to see that happen.