Global Thoughts — 8 October 2008

At Yosemite National Park in California

As I near my 5th anniversary next month, we watched the highlights of our wedding video with my two kids. Elizabeth thought the dancing on the chairs was very funny but she said she wanted to be a part of the wedding show. We just finished a 2 week holiday in California; a bit ambitious with little kids but we had a great time and except for United Airlines losing two suitcases for a day, we were OK. It was worth it for my wife; she got to see me in her polka dot underwear and pajamas as did the room service staff of the hotel we were in! We went to Beverly Hills, San Diego, Yosemite National Park and Napa Valley. September is a great month to travel and we had no problem with strollers at any of the places we went. Elizabeth’s become a back seat driver and she tells me “Daddy, It’s Not Right” repeatedly when I take a wrong turn. At the end of this article are links to notes and a few photos from the trip.

Here is a list of the Top 10 Shocking Things 2 Year Old Elizabeth Said During This Trip:

1. Leave Daddy Alone — He’s Driving.
2. No photos now, I’m on Break Time.
3. I’m too busy now.
4. Bye bye hotel.
5. Where is engineering (to help get a battery compartment open on a toy)?
6. Actually…not really.
7. The train is open…I have information.
8. I’m organizing.
9. I’m all packed and ready.
10. No, Daddy…you have to read the paper.

Turning to the world which did not go on holiday while I did….

In August 2005, I had a day of discussions with a Saudi in Evian, France, and we discussed in detail the subprime problem as I saw it. At that time, I correctly predicted that in 3 years the whole deck of cards would fall and there would be chaos. Columns were written about this in Global Thoughts. So if you have been with me through the years, you know that what is happening now is no surprise and that it actually all happened right on schedule. There is no reason for me to explain what has happened; we all know by now. The more interesting question is what happens next and this month’s edition tries to provide what both candidates for the presidency are not providing — an action plan forward. I’ve read Obama’s 60 page plan and it mostly tells you that there are problems and that he wants them solved but doesn’t tell you how except in a few cases. Just to say that he is going to reduce drug prices in the US by expanding competition among drug companies and allowing elderly people to purchase drugs abroad is not really saying anything. It’s interesting that the top few drug companies control so much of the market but it doesn’t give you a clue as to how to change that reality. It might be a good thing to have a few leaders so that you don’t have to get 1,000 companies together to institute changes, just as now the top 3 banks control close to a third of all deposits in the US.  Drugs sold abroad won’t have the same protection against defective products and people will gladly pay a premium for US products so as to be assured that their drugs won’t kill them. McCain’s platform really tells you nothing except what he is for and against.

First, a review of issues of interest this month.

US Presidential Election — The most basic reaction I’m getting from people who just watched the second debate between the two presidential candidates is that people are depressed over the two choices. They said almost nothing about how they intend to actually solve problems beyond telling people that every problem is critical and demands a solution (and then listing the results they want to see as the solutions that they will each offer — ie: I will reduce poverty), that someone else is to blame (ie: Wall Street, Government) and that they have great faith in America’s workers. Bless your lucky stars — Global Thoughts is coming to the rescue this month with IVAN’s ACTION PLAN FOR AMERICA. See below.

 If I have to predict, I’m going to say that Americans will elect Obama president unless something happens to change the trend. He is ahead in the electoral college and the economy is trumping foreign policy as an issue. McCain solidified his Republican base by choosing Palin at the risk of alienating independent voters who cannot stomach her. Palin seems to think she might become president if McCain assumes office and that is a most worrisome thought. I have a feeling that McCain is not telling all he knows about his health. My own feeling is that I can’t vote against McCain based on the man he is (a relatively decent patriot who has devoted the greater part of his life to serving his country honorably and has actually achieved results as a bipartisan leader in the senate), even though I feel that the man will not be an effective president (he will have few friends in Washington, will be bombastic against a Democratic congress with few friends in his own party, will continue making enemies for America around the world, will be weak on dealing with the economy, and wind up being irrelevant) and has no clue what to do. The choice of Palin was totally political and irresponsible and basically says I’d rather lose an election than lose a war, but I’d rather screw the country with Palin as president than lose an election. He did not lead during the recent bailout moment of truth and right now the world does not need a maverick but a steady hand who can reconcile and persuade. Palin keeps saying she would just sit back and trust the generals who run the wars — not exactly much of a civilian leader there which is precisely why we elect one as president. Obama is a big question mark and he lacks the experience necessary for the job and the only thing he has ever really done in his political life so far is run for offices one after the other. The little we know about him is that he is an ideological liberal but a very disciplined ruthless pragmatist and a good persuader with a lot of experienced advisors and those actually are pluses and the skills most needed in the White House as a president with little more than a bully pulpit as the weapon of choice.  I can’t vote for this guy but because I’m in New York and the Democrat always wins, my vote doesn’t count anyway. In the end, Obama will win and it will probably be for the best. 

Government: Part of the Problem or the Solution?

A big change is happening in the country. The Republicans are losing on the main argument they have won on since Reagan. And that is whether Government is part of the problem or the solution. Sarah Palin talked out of both sides of her mouth during the vice presidential debate when she on one hand called for government to stop the greed and corruption on Wall Street and also said that government should stay out of people’s way. It is inevitable now that government is going to regulate the investment banks more and that investment banks will not be what they were. Every 10 years there is an article about the end of life on Wall Street as we know it but there are cycles and you can be sure that in another 5-10 years there will be excesses as there were during the late 90’s with the $5,000 bottles of wine and private jet planes, but there is going to be a real change. In the 70’s, Congress legislated mileage standards for cars in response to the oil embargo but then they forgot about them during the oil glut of the mid 80’s. Now they did it again but I think these will stick because the whole world cannot go on paying for oil at the price of $100 and above per barrel and another oil glut is unlikely with the rise of the developing world as consumers.  A lot of these rural republicans who like to trash government rely heavily on government subsidies for their rural occupations such as agriculture and oil. Right now as people hurt they need government to step in and provide a floor underneath them. The bailout of the various companies would have been vociferously opposed had it come from a Democratic president but Paulson is a nonideological treasury secretary who along with the fed chairman convinced everyone that they had no choice but to go along. The Republicans came around on the second round not because the bailout bill was significantly better but because it was loaded up with $150 billion of pork spending that won their votes and because $1.2 trillion was lost in the hours after the first vote, which was significantly more than the whole program was supposed to cost. There really is no alternative to the bailout and I think that the fed and treasury have done right so far in the past few months (and I’d bet that if it were all over again they’d bail out Lehman too and I have to wonder if Paulson would have bailed out Goldman Sachs if it were them on the block instead of a competitor to his former company), but I need to discuss what else needs to be done and will later on below. The Republicans are guilty of hypocrisy on this bailout bill, but that is why they are losing in Washington; they talk about small government but they became big spenders and have their own special interests that cost money. Last month I called for raising the FDIC insurance limits on deposits and at least they did that. Although I back the fed’s moves, I am concerned that the US Government is going to wind up holding lots of worthless assets at some point and will be driven to print money to make up the shortfall – this could lead to inflationary problems.

The Republicans have totally trashed this country’s government with a bunch of ideologues who think that government exists only to fight terrorism and communists and that it does not exist to provide services to the public or fix problems. They drove up deficits, mortgaged the country’s future to foreign capital and sabotaged an economy for the benefit of oil producers, predatory lenders and short-term fixated public companies. They totally screwed small business owners, married couples and the middle class with policies that stifled innovation and immigration, taxed the institution of marriage and made health care unaffordable. The Bush tax cuts and McCain’s proposals on this count are a farce — I get more cash back from my Amex card and even the new AMT tax relief passed last week as part of the bailout bill was a joke — the exemption from the tax goes from a person who makes $44,000 a year to $46,000 a year. Really — it’s all gimmicks from both parties when it comes to the taxes and the numbers. On governance, I can’t help but note that Clinton is the only president in the past 30 years that balanced the budget and I want to see the Democrats back in control of the government if for no other reason than at least they are honest — they want to raise taxes but get government in the business of providing services, infrastructure and oversight. The Republicans say they want to do otherwise but wind up charging fees, raising taxes and still not providing any services, infrastructure or oversight.

Economy — The bailout bill might buy time until the new congress and president have time to take serious action but without such action it will only delay the inevitable. From watching the markets this week, the world might not wait and the cracks are growing in all directions. We know there will be more bank failures in 2009. One byproduct of this situation is that the rest of the world no longer thinks it is immune from the US economy; they still rely on the US dollar which has held its own if for no other reason than it is doing better than the others which is a good enough reason for now. The rest of the world is now tanking and even Dubai real estate brokers are shell-shocked and bored sitting in lobbies. China has to face its realities now that the Olympics are over and people in India are worried according to my business partner who was there this month. Brazil keeps discovering new sources of oil but it is also going through internal convulsions trying to reconcile its national interests with its rather powerful companies who have been the developers of its national resources and want to keep its hold over these industries. Lower oil prices and poor economies are forcing Russia, Iran and Venezuela to contemplate the end of their respective bouts of hubris. In a certain sense, this is all good for the US long term. The US will recover but meanwhile all the other parties who had a sense of comeuppance are going to take their hits and be reminded that the US is at the head of the game table and that you simply cannot decouple from it. The Russians have been making moves on the US around the world but it will be hard for them to pledge economic muscle soviet-style without stretching their own system so either they will play a game of folly and stretch themselves thin or they will be found to be full of hot air and the countries involved will realize they have to deal with the US and not serve as pricks for the Russians that basically give them zero benefit. I would not rush out to buy GE or Goldman Sachs or Berkshire Hathaway just because Buffett did; he made deals where he wins no matter what; I can’t say the same for the shareholders. I do agree with him that these companies are well positioned for the future, but how difficult the future will be depends on many factors to be played out over the next few months but can not yet be predicted. Travel bargains are coming; September saw a major drop in business and luxury travel. I will sit on cash for now. Gold is not recommended as an investment at this time due to its continued volatility and the reduction in jewelry purchasing.

Middle East — Iraq is headed for a drawdown of foreign troops in 2009. Iran will continue its nuclear designs and it will be successful in producing a bomb in 2009 unless stopped. I will discuss strategies below. The Palestinians are at the bottom of everyone’s list and it won’t help that foreign donor countries have less to share with them now. Tzippi Livni will form a government; it won’t take long for Barak to buckle since he has no power of his own except to cause Bibi Netanyahu to become prime minister if he makes it impossible for Livni to govern. So he will have to put up with the fact that he doesn’t respect her and give her some room to govern so that his party can stay in government. It is a certainty that if his party goes to elections and gets trounced, he will be ousted as party leader. So he is boxed in at her side. I can’t believe that Livni proposed Mofaz as foreign minister; he can’t even speak English. Shows how much she thinks of that ministry that she would nominate him as her successor.

Asia — My new prediction is that within 3-5 years, North Korea goes out of business. It is now where East Germany was in its final stages. The people of North Korea now know enough to know that their government is corrupt and empty and that with money you can get pretty much whatever you want in that country, including safe passage to South Korea with VIP treatment for $1,500.  Its neighbors including South Korea don’t want this to happen — it will cost a lot more to integrate North Korea than East Germany into the region. East Germans made half as much as West Germans; North Koreans make 1/15th of their southern neighbors and the country is a wasteland. There is no contest on the military front; the South could obliterate the North. So the game continues for as long as possible and the strategy is to contain its nuclear program but not implode its governing entity. In Pakistan, Musharraf is out as I predicted (although a year later), but the new government is highly unstable and may not last past a year. The US has pretty much written off the country and it is acting as if the government doesn’t exist which further weakens it. I will discuss strategies now.

IVAN’S ACTION PLAN FOR AMERICA

Whoever is the president, America needs real change. Here are some ideas. The paragraphs are long but it is an easy read because I rapid-fire a lot of ideas one right after the other and, unlike the two candidates, give you a sense as to how I might implement them:

Economy and Taxes — The cause of the subprime mess was people’s mortgages which were inflated based on home values that were not sustainable and variable rates that were artificially low at the beginning to suck them in. So far nothing is being done about them. Bankruptcy judges should have the power to write off part of a mortgage. We should get rid of the myth of home ownership; people didn’t really own their homes. They were renting them paying mortgages that were never going to be fully amortized anyway. We should go back to 30 year fixed mortgages with a decent downpayment instead of variable rate mortgages with no money down that created so much uncertainty in the market and left people not knowing their futures (and not worrying about them either when the market could do no wrong).  There should be tax code changes to equalize the scenario of renting and owning a house. If you are renting it should be because you cannot afford to buy but the tax code should not penalize you for doing so and driving people into ownership situations that makes no sense just because they want the tax benefit for doing so. The marriage penalty should be abolished. People running hedge funds and the like should be paying taxes at ordinary income rates as opposed to getting away with capital gains treatment. The top federal bracket should be 28% and the only sizeable deductions that should remain on an individual tax return are charity capped at 20% of one’s income, state and local taxes, education costs capped at $20,000 per student per year, child care, medical and health insurance expenses, and social security income (which I think should not be taxed at all). I think that instead of letting people defer pre-tax income, they should pay their taxes now but be allowed to accumulate the appreciation on their pensions tax free. The government gets the money now and people don’t have to worry that they will be taxed at a higher rate in the future on their earnings. All of this would actually decrease significantly the tax burden, get rid of deductions that are confusing and that skew priorities, encourage women to work and encourage those who desire private education and insurance. Also it’s not fair that the tax code rewards activity and that all the benefits are pulled away for people who make more than $50,000 a year; if an activity is to be encouraged or discouraged, it should be so for people all along the totem pole which is why I do not favor phasing out deductions or declaring that people who make above $100,000 a year are somehow rich because a guy with a wife and 2 kids in school is not rich at that level of income. The definition of rich should be elastic to account for geographic differences and dependents, if we have to talk about rich. A family that has to shell out for hurricane insurance is stuck with a huge bill that a family in Vermont doesn’t have and the cost of living in Manhattan is not that of Houston. You can never make it make sense, which is why I don’t like defining the term Rich and penalizing them.  Insurance pools should be designed to allow individuals or small companies to aggregate to get the rates larger companies get and make insurance more affordable and portable. There is no insurable reason not to do so; it simply makes the playing field more honest and forces insurance companies to not have small companies and individuals subsidize other clients. Mandating insurance to guarantee coverage doesn’t seem to work (Obama) and providing a $5,000 tax credit to purchase insurance (McCain) is spit in the bucket when it costs about $25,000 a year to insure a family in New York. Insurance needs to be mandated to provide more coverage to prevention and maintenance rather than reaction to illness and this could be rewarded through incentives for people to stick to insurance carriers rather than keep exercising the option to switch on an annual basis. While on the concept of insurance, government can help figure out how to get all these carriers to move away from paper toward some kind of standard electronic filings and the electronic storage of medical files; the amount of paper waste that is involved in filing claims and obtaining medical records is beyond my comprehension. This would undoubtedly lower costs. To encourage savings in the country and to help the banks recapitalize, I would have a tax holiday on all deposits in savings accounts on deposit for at least a year. If someone is only making 3% interest in a bank, it is a lousy investment but when you tax it, it’s equivalent to 2%. Getting rid of the tax makes it equivalent to a 5% return and that makes it a somewhat decent incentive to save.

Domestic Issues — Health care has been dealt with above via the tax code. Immigration should be encouraged; the H1B quota should simply be removed and incentives given for qualified immigrants who can add to the nation’s talent pool. The border with Mexico should be made into a real border with 2 full lines of fences and watchtowers because borders should be borders, but there should be an amnesty for illegal immigrants here for 5 years and there should be a system to allow people to enter the country and do undesirable work to keep costs low and free up Americans to do other things. Air and train travel should be viewed as national rights and priorities and government should regulate these industries more to ensure the availability of air service, stability of carriers as well as fair and rational pricing (but not turn the clock back to the 1970’s entirely). The idea of paying $600 for a family of 4 to change an air ticket and to force everyone to buy nonrefundable tickets without any real choice should be regulated away as an abuse of an oligarchy. Amtrak is a joke that has made it ridiculous in terms of costs to take a train instead of a car (I paid $30 for a ticket from Manhattan across the river to Newark on a Sunday morning) and the service has become a step above developing countries. Banks and Wall Street need more regulation to force people to show a higher fiduciary duty in dealing with other people’s money and to make fees for delivering value rather than pyramid schemes that do not deliver value. Disclosure regulation needs to be less onerous but more practical. Prospectuses go on and on with risk factor language that means nothing but complies with disclosure laws.  Less attention should be toward regulating insider trading which I think cannot be stopped and more attention should be toward cautioning main street consumers that they trade equities at their peril and at an information deficit; it may be a good thing to encourage passive investors to trend toward mutual funds instead of trying to think they know best how to judge and time the market. Global Warming should be treated as a man-made problem regardless of whether or not it is because we do not know for sure. I don’t know the ins and outs of carbon trading and taxation but it seems the rest of the world likes this idea and I think the US should be at the forefront of the world on this one and be seen to be dealing with it. Right now, the US is not the biggest polluter but it is seen as the worst big neighbor. As for public and private education, I’ve never figured out how a voucher system would really work but I think the thing to do is to let the tax code allow people to deduct from taxes whatever they spend on private education. This will be the best way to encourage people to do what they want. The market should be left alone to let people sort through the myriads of choices and come up with services that give people what they want for themselves and their children. Public schools will be forced to change if the markets desert them; I would rather see fewer children in better public schools than lots of them in lousy schools. I don’t think that everyone needs to go to college or that government should throw money at everyone, especially if they are not interested in being educated although I understand that lack of education leads to public costs later on. But we can’t judge education by stupid standardized tests that wind up the focus of education.  Local school boards know best how to give incentives to teachers and students and there have been good initiatives to learn from. Some school boards give students cash bonuses for good attendance and grades and merit awards to teachers help attract and retain good teachers. Energy independence moves should include encouragement of wind power and upgrade of electrical grids, offshore drilling, development of sugar-cane oriented ethanol as per Brazil’s model, development of alternative energy sources such as algae, electric or hybrid powered automobiles with higher mileage efficiencies, and taxes on petrol phasing in over the next few years as more of these sources become available to force the market to move and to ensure that petrol is not the most cost-effective model for transportation. America is not a country that will ever move from private vehicles to public transportation in most cases because it is simply too big. Rather than trying to force people to do things that don’t make sense to them, we should make it more sensible for people to do that which they will do. Getting people to ride 150 miles on a train when they have to continue in a car for another 150 miles to a rural location with a family is not going to make sense. Government should improve the highway system and allow toll roads to be built but done in a way that does not force even more traffic onto fewer free roads. I have no problem with people paying for the roads they use and tolls do deter traffic. Cities should receive assistance in making mass transportation efficient — New York City would have so much more productivity if workers knew when the next train was coming when they entered a subway station. Social security and medicare — I would not privatize social security. I would not tax social security income. It should be a straight-out pension and it should be worth the same to each person according to what was contributed. If you tax its benefits, it is not worth the same to each person. I would raise the retirement age based on life expectancy tables and the experience of working people, and I would allow people to contribute more money into the system if they want to get more out of it. If we encourage people to contribute into the system and make it more attractive (ie: matching contributions or bonuses for keeping money on deposit for a long time), it should make the system more sustaining.  We need more savings accounts and more responsible spending. Credit card companies should not be allowed by law to charge 23% annual interest and more usury and consumer-friendly transparency laws are needed; it is the lower classes that are either stupid or desperate enough to be taking these cards and paying all that interest and credit card companies get away with terms and conditions that nobody can understand —disclosure does not mean a telephone operator reading a 5 page disclaimer at 120 college-level words per minute over the phone. That is not healthy consumerism but basically a few banks making money from other people buying things they shouldn’t be buying. It will not cause a recession for people to buy things they can afford. Congress needs fewer mandates to state and local governments unless it is prepared to give them the money to pay for it — otherwise it is just shifting federal taxes and responsibilities onto the state and local governments. In general, the federal government should invest more in infrastructure to give the nation a better change to do more business and make it become more sense for America to produce things or services the world wants. America is actually a relatively cheap place to manufacture when you consider worker productivity, tax incentives and the weak dollar, and in places like India you get what you pay for and Americans hate having Indians solve their problems over the phone. I would like to see the US do more for its veterans and on Medicare. I don’t know enough about these issues but I am sympathetic. On the whole, if it is not obvious, America needs to bring down its deficit and reduce its reliance on foreigners to finance its debt.

Foreign Policy — Free Trade is a word that seems to mean almost nothing. I’m not sure what it is these days. I am not a protectionist but it is silly to be an altruist free trader if your country is at a disadvantage and the other guy wouldn’t agree to the same terms if it were his choice. The only type of trade that makes sense is when both sides win. If the other country has unfair advantages, it is not a win-win, which is why labor and environmental standards are relevant. I am not big on unions when they become corrupt and protectors of mediocrity, but I do believe in labor laws and worker protections against abuses (but not worker job protections if unwarranted or the marketplace demands downsizing). I generally like low tariffs to allow people to buy things as cheaply as possible. Of course, that means that people might favor imports and that hurts domestic suppliers. Unless you have a reason to protect that supplier, you prefer your supplier to get with the program, get more efficient or get out of that line of business. Over the long term, that’s what is necessary anyway. Wal-Mart hurt some people but it also gave lots of people the ability to afford things they could otherwise not. I hope that answers this question. Military Conflict — I want to move toward the China role of having fewer armed entanglements all over the place and simply doing more business with everyone. They are profiting by making friends all over while we are spending ourselves into oblivion putting troops everywhere and making people hate us. The Iraq war simply has to end. If the Iraqis can’t get themselves together, tough luck on them. I would keep some troops in rural Iraq as a base to keep the Iranians in check but otherwise let Iraq be Iraq. America’s treasury (not necessarily American oil companies) should get some concessions there since America paid all this money into the country to rebuild it and get rid of Saddam and we deserve to get paid back some of what we invested there, especially since Iraq’s national treasury runs at a surplus. With Iran, I would do with them as Israel did successfully with Hamas. Have the head of my intelligence agency tell its leaders that we will start knocking them off one by one and stop all visas to the west for them and their families until they are all gone unless they come to the table on the nuclear issue and get out of that business.  The heads of Iran care only about themselves and their business interests and they will come clean once it hits home for them. Offer the Iranians a new deal if they come clean; the mullahs can stay in power for all we care until their own people elect them out. Take away the Yankee bogeyman in Iran and Cuba with the stupid embargo and you’ll start seeing changes. Start talking in earnest with Syria, offer them a new deal with their place in the West and have them make a deal with Israel. Once that happens and the Iranians are neutralized, the Palestinian and Lebanon issues will be easy to solve since there will not be outsiders stirring them up just to keep instability alive in the region for their benefit. The Saudis are leaning on Pakistan to stabilize the country and trying to broker a deal in Afghanistan whereas the Taliban joins the government but abandons Al Qaida ideology; this seems to be where the country is going anyway. This is good for Saudi Arabia as it sets up Pakistana and Afghanistan as an effective counterweight against Iran. Afghanistan should be ruled at least for the short term by a dictator backed by the West because the country is too unstable to withstand an election for anything other than Taliban; Karzai has been a corrupt coddled failure and the military force being used there has no chance if all that is left is him at the top. Russia is run by a mafia at the top and should be treated that way — no visas to the west and no goodies unless you have policies friendly to us. If you don’t want to protect foreign investors and have rule of law, fine, but that means nobody is going to invest in your markets and the US government isn’t going to protect those that do. I wouldn’t propose to expand NATO to include Georgia or Ukraine and it is self-defeating to make promises of protection and intervention that we don’t intend to keep and it only infuriates and causes paranoia on the other side to make moves in these theaters and creates the need to spend money on both sides of the aisle. They are clearly within Russia’s sphere of influence as Latin America is for us. We should both agree to stay out of each other’s territory in terms of trying to position military power or encourage political hostility against the other within those countries, and in return I expect the Russkies to stay out of Cuba, Venezuela and stop fiddling with a nuclear Iran. Germany is totally not interested in having problems with Russia and that is under a conservative government and is openly acknowledging that NATO is a paper tiger, a fact that is not necessarily a problem. I think we should just look for a peaceful coexistence and let the Russians feel comfortable enough that they should encourage more liberal economic policies rather than lock themselves down out of paranoia. So far they are only hurting themselves — their oil production is down and on a poor trajectory for the future, and the Europeans are working long-range to wean themselves from dependence on natural gas from the Russians who they see as a bullying supplier. But they can force the US to significantly raise defense spending around the world if they cause just even a little trouble, so why go there? Nuclear drawdowns with the Russians should continue and the Americans should recalibrate its strategy of putting missiles all over Eastern Europe and decide if the cost is worth the benefit. In Asia, support the multi-party talks on Korea and make it easy for the North to climb down from the nuclear tree while not making moves that make them worry that they will lose control of their country which nobody really wants anyway. China has enough problems of its own right now to deal with and is too smart to be looking to become a military power to threaten the US; the US should insist that as a purchaser of that country’s products, they will adhere to safety standards or we should simply refuse to buy. I basically want to see less military spending abroad, less taxes at home and more emphasis on economic development. More foreign aid to stimulate economies and education around the world, especially places like Iraq, Pakistan and Egypt. I want to see America replacing madrassas teaching jihad to hopeless people with vocational schools teaching trades. Helping countries build roads and develop phone and internet networks and making sure that the money is not stuffed in pockets and not having embassies in Bagdad with 1,000 employees, only half a dozen of whom speak Arabic. The stuff that will make the world safer and will cost us much less cash in the long run, and enable us to balance our budget and lower our taxes.

I am reading a book called “The World is Curved…Hidden Dangers to the World Economy” which is said to be worth reading. I’ll let you know about it next month.

For Travel Notes and Photos from California, please click here.

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