Monthly Archives: June 2018

Politics

Corruption Close to Home

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State and Local Government Buildings (clockwise from top right: MA Statehouse, Gorham NH Townhall, NY City Hall, NJ Statehouse)

Most of our discussions with others about politics center on what is going on at the National level.  What goes on at that level is certainly a source of valid concerns.  But there are problems at the lower levels as well.  I once heard someone say “If you think there is corruption in Congress, you would be shocked to find out what is going on in the State Legislature”.  I agree wholeheartedly with this statement.

Most political positions in the United States are at the State and Local level.  The vast majority of these positions are part time, with very little monetary compensation in return for the time and effort it takes to run for office and then work in that office if elected.  On the other hand, the power and authority invested in these “part time” and “volunteer” positions, is quite extensive.  They have the power to tax, the power to spend, and the power to regulate.  All of this makes for VERY fertile ground on which corruption can spread.

Most of the corruption at the State and Local levels involves Real Estate.  This is due to the power of elected officials from the Legislature to Town Councils to drastically effect the value of land and property.

There seem to be two common forms of Real Estate corruption.  The first is to buy land that is zoned for one purpose (say “light industrial”), and then get those in local power to rezone it (say to “multi-family housing”).  The zoning of land, meaning what the owner is allowed to build on it, has a dramatic influence on the value of that property.   In this example, I could potentially buy a “light industrial” lot for say $500K, get it rezoned so that I could build an apartment complex on it (rezoned to “multi-family housing” ), and suddenly the lot could be worth $2 Million. I don’t even have to build the apartment complex; I could just sell the land to someone else who wants to do that.  In doing so, I just made $1.5 Million.  All I had to do was convince some politician friend to make the zoning change.  And what do you think influences this low level politician to do that?  All too often the answer is simply “corruption”.

The other common form of Real Estate corruption is to buy land out in the boondocks, where there is little to no infrastructure (few roads, few utilities, no sewers).  Then use tax funds whose expenditure you are responsible for to build improvements and provide infrastructure out to that land.  The land is now worth a lot more, as it now has attributes and access it did not have before.  In this case, I could buy some land out in the countryside for say $100K.  Then I use my “influence” with the town council to have streets and sewer lines expanded out to my property.  Then I sell it for $250K, more than doubling the value of my investment.  Again, the mechanism for raising the property value is “corruption”.

There are plenty of other ways for corruption to take place at the State and Local level.  Anything that involves tax rates, revenue expenditure, and of course, regulation, can easily also involve corruption.  Those that want a specific expenditure or a specific regulation change too often are involved in “influencing” what they want by finding a way to corrupt the officials involved.

What to Do

First off, it is just as important to be involved in local politics as national politics.  At a bare minimum, we need to know who are local officials are and what they are doing.  We need to scrutinize the changes they make, and ascertain their motives.  We need to work to quickly get rid of anyone trying to personally enrich themselves (and/or their friends) at the expense of the rest of us.

We need to make it that the time/effort spent in public service is worthwhile.  I think that everyone should be properly compensated for work, and work in government should not be an exception.  A decent salary today for someone in management is around $100K per year.  This is roughly $50 an hour.  When salaries or compensation are below this level, good people don’t want to do it.  Unfortunately, the people that will do it have found other ways to get money.

War

“Little Crappy Ships”

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USS Coronado, a Littoral Combat Ship (LCS)

The United States Navy has, in the past decade, made a major shift in its shipbuilding program.  The Navy has to continually build new ships to replace older ones that wear out.  In the past, the Navy built both surface combat vessels and nuclear submarines.  The surface craft include the Aircraft Carrier, Cruisers, Destroyers, and Frigates.  The submarines include both Ballistic Missile Submarines and Attack Submarines.  And, of course, to project land power, the Navy also builds a number of Amphibious Warfare ships.  But now, this has changed.

In the last decade the Navy has built two Aircraft Carriers, one of which, the Gerald Ford, doesn’t work (see earlier post on this debacle).  It also built 12 Destroyers, 12 Attack Subs, and 10 Amphibious Warfare Ships.  It completely stopped building Frigates, building 11 “Littoral Combat Ships” (LCS) instead.  The LCS now represent about a quarter of the decade’s new US Navy ships.  And since the Navy has only built four Destroyers since 2011, the LCS will be an even greater percentage of the Navy’s new ships.

The “L” stands for “Littoral” which means “along the shore”.  For hundreds of years, navies have known to stay away from any part of the land where fortress guns could shoot at them.  Forts were made of stone on land, whereas ships were made of wood and could sink into the sea.  Now the US Navy thinks that sending ships along the coast is somehow a good idea.  The problem is the land is even more dangerous nowadays.  An average tank could shoot at and sink an LCS with ease.  The LCS’s don’t have the weapons to adequately defend themselves against missiles launched from trucks.  Plus coastlines are great places to set up minefields.

Not only is the LCS improperly armed to defend itself, it is inadequately armed to attack anything on land.  Its single gun fires a six pound shell, whereas a tank typically fires a fifty pound shell.  The LCS is too small to incorporate the Vertical Launch System (VLS) found on Cruisers, Destroyers, and even Subs.  The VLS is how ships fire cruise missiles.  Instead, the LCS is armed with a number of very short ranged anti tank missiles.  I cannot tell you how lop-sided the battle between a $4 million tank (which doesn’t sink) and a $400 million LCS would be.  Let’s just say that it’s a laughable waste of money for the LCS builder/owner.

Unfortunately, the LCS has other problems as well.  They break all the time.  And not minor things either.  I am talking about major engine failures and damage to propeller shafts and the like.  These kinds of problems can take up to a year to repair.

Half the LCS are built as triple hulled catamarans (see the picture for an example).  They are actually too wide to operate in restricted waters.  They can’t carry enough fuel to cross the ocean without refueling, so would have difficulty escorting convoys or a Carrier on patrol.

In short the US Navy has wasted BILLIONS on ships that have no realistic mission, and cannot possibly take over the missions now performed by aging Destroyers and Frigates.  The Navy had already put too many eggs in the Carrier group basket.  Now it is literally building worthless lemons.  LCS is a “Little Crappy Ship”

What to Do

The Navy needs to make a major change to its ship construction program NOW.  Frankly, it should abandon the LCS’s that are even partially built and throw them on the scrap heap.

Naval warfare radically changed with the development of increasingly sophisticated anti ship missiles.  The future of naval warfare in now UNDER the sea, not on it.  The Navy should greatly expand its submarine building program.  It should also look into building Destroyers/Frigates with greatly improved anti missile capability.

As for warfare against enemy coastlines, the answer is drones, both in the air and underwater.  They can go after fast and lightly armed enemy patrol boats and the like.  And at a fraction of the cost of an LCS.

Culture

Family Change – Part 2

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The recent “#Me Too” movement is aimed at publicizing and shaming those accused of attacking women.  I certainly feel that those who have forced themselves on women need to be held accountable, regardless of their position or “who they are”.  Violence against anyone is wrong and unwarranted, and we need to protect potential victims and punish perpetrators.

There has been an even more universal attack on women over the last sixty or so years.  Whereas sexual violence, luckily, is still the exception, the attack I refer to has impacted far more women.  It has been even more damaging to their children.  This recent “attack” has led to dramatic change for families in much of the world.

This attack is really the repercussions of what is usually called the “Sexual Revolution”.  This post is not about the “right or wrong” of changing morality, but about the impact on families (women and children bearing the brunt) that the historic change in morality has had.

For most of history, a man was financially responsible for the care of his mate and their children.  Marriage was, for the most part, a binding contract that helped ensure that the spouse and children were cared for (at least financially).  This contract was strengthened by the accepted norms of society and conduct.  Those that were irresponsible, and did not care for their families, were shunned by others as reprehensible individuals unworthy of responsibility or association.

This changed dramatically in the 1960’s.  “Free Love” and the changes in morality meant that men could more readily have sex with women, free of responsibility.  Divorce became more and more frequent, to the point that it is now actually the norm in most western cultures.  Children born out of wedlock are starting also to become the norm.  And all of this has meant dramatic and significant damage to the Family structure, the basic building block of society.

Much of the responsibility for this lies with men.  Too many seem too ready to abandon children and family responsibility.  This is not without significant consequences to the children involved.  A missing parent leaves a void that nothing ever fills.  Nothing can compensate for the loss of support and guidance due to a missing parent.  Children of divorce or abandonment carry significant emotional scars for life.  Many also experience extreme need, as the single parent (most commonly the mother) is unable to shoulder the financial burden.

We do have laws for child support. But these are woefully inadequate to supply for the true needs of children.  Even when child support is paid, the split in resources between separated parents impoverishes both of them and the involved children.  But the emotional damage is worse, especially when each parent insults or is disrespectful of the other in front of children desperate for role models.

We, collectively, will all pay as more and more families fail.  We literally pay for the increase in crime, drug use, and other problems that are a direct result of family disintegration.  We also pay in other ways.  Many no longer acquire the values that should be learned as a youth in a stable family with responsible role models.  And this affects all of us as civility, honesty, respect for one another, and overall kindness within society all seem to be dropping off at an ever accelerating pace.

What to Do

Recognize, and teach your children to recognize, that sexual relations bring serious and significant responsibilities into play when an infant is created as a result.  A child is a long term and, for many, an almost overwhelming burden.  If one engages in sex, one must be willing to accept and shoulder these responsibilities.

We cannot force others to behave better.  But we can take a good hard look at ourselves.  And we should ensure that we do not shirk our own family responsibilities.  We should do everything we possibly can to take care of and raise our children.  We need to be good role models.  We need to provide financial and emotional support.  Without it, and without the foundation of strong families, society will have an increasingly difficult time.

Economics

Corporate Welfare

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President Obama and Elon Musk (Businessman)

Currently, one of the greatest economic problems we face is Corporate Welfare.  This is where the government literally gives money to businesses.  The most egregious example is outright grants.  That is why the picture is of Elon Musk with President Obama.  Mr. Musk is an expert at getting grants from the government.  His electric car (Tesla) and space businesses (Space X) are utterly dependent on them.

One of the longest programs going is agricultural subsidies.  Originally this money was intended to tide over poor farmers during the Dust Bowl and the Great Depression.  Now, the vast majority of this money goes to corporations who own and operate the vast majority of farmland in the country.  Other industries also receive various levels of subsidies, most notably Energy and Housing

The government does more than just “give” money to businesses.  Most of the financial support is actually through tax reductions.  These are usually called “tax incentives” to mask the reality of what is going on.  The government makes it so that businesses don’t have to pay taxes on certain activities or property.  For example, when Donald Trump built the Trump Tower in New York, he was given a 40 year “tax abatement” for the property.  This meant he paid no property tax or other city taxes on the tower for 40 years.  This tax break was worth more than what the Tower cost to build!  And this is just a small case in point.

The government also erects barriers to prevent new competitors from “disturbing” the activities of those it wishes to so protect.  Corporate lobbyists regularly influence governments at all levels to pass laws that are beneficial for their firms, while detrimental to the competition.

During the last financial crisis, the Government went all out to provide money to banks and corporations it deemed “too big to fail”.  A lot of this was done to protect the investments of Goldman Sachs, the investment bank formerly headed by the Treasury Secretary of the time, Henry Paulson.  Other massive government investments were made in General Motors, which is arguably the worst run company in the country.

What has happened is that Free Markets and true Capitalism have been grossly distorted.  One of the core principles of Capitalism is that businesses that consistently lose money should fail.  That means that they go bankrupt, and the owners and investors lose what they had put into the business.  The government has now intervened, and has protected those that should have lost, at the expense of the common taxpayer!

What to Do

Corporate subsidies need to end.  Businesses should succeed or fail based on their own merit and profitability.  Taxpayer money has no business being given to business.

We need to let things fail.  Propping up failed businesses only prolongs and increases the economic pain.

Tax codes should be as simple as possible, eliminating “incentives” and “abatements”.  Taxes should be a percentage of a person’s or a corporation’s gain.  This is how a lot of government favoritism could be eliminated.

We need to insist that our representatives in government adopt these principles.  Unfortunately, too many want to keep their own “tax breaks” while taking away those going to others.  We all need to be willing to do what in the end will benefit us all.