Monday, July 30, 2012

Another Detrimental UN Meeting

    There was a United Nations Conference on Sustainable Development last month at Rio de Janeiro. A previous conference on the same subject was held 20 years ago. The latest was a big deal for two points of view. 45,000 people attended, and there was some controversy on whether it was a success or failure.
    The conference was in two parts. The first was a round of negotiations for concluding a nonbinding global agreement sketching a path toward a green economy. The second was a round of speeches by government notables endorsing the pact.
    From my point of view, the conference was both a failure and a success. It should not have been held in the 1st place, because the whole premise of the operation is to redistribute wealth on a global basis. I see nothing wrong with a green economy, but that is usually a guise for the real intent of many attendees.
    The favorable portion was that the negotiation was for a nonbinding, rather than a binding agreement. More importantly, a number of attendees from Marxist environmental organizations walked out. I say Marxist to repeat what I have said many months ago, which is that the Marxist movement in the US has infiltrated environmental organizations in order to accomplish their Marxist agenda.
    I'm also a little concerned about the participation of corporations. If these corporations have the foresight to watch the details of organization to see that they are not intrusive on basic corporation rights and goals, I have no problem. But if corporations will be swayed by the Marxist conversation, considerable damage can be done to the world economy. For example, there was a five-day forum concerning a voluntary initiative for companies committed to upholding human rights, protecting the environment, and fighting corruption. While these can normally be considered as "mother's milk" items, Marxists can extend these to extreme positions. As a secondary example, Marxists usually interpret "human rights" as a justification for the redistribution of wealth.
    Business and institutions made a commitment of 700 voluntary actions. We don't know what these are. But, we can assume that those coming from Marxist environmental institutions would be detrimental. Fortunately, the Marxists seem to have walked out of the proceedings, such that their affect would be minimal.

A Favorable Development for Socialistic Operation

    There's a short article in the July 9 issue of Chemical & Engineering News entitled, "Members of Congress Back Open Access". What is this about?
    The Marxists in the federal government have a general program of supplying taxpayer funds through various federal government departments to individual researchers at various universities. Generally speaking, these research projects do not produce positive result, other than to fulfill the socialistic program of spending more money. However, occasionally something of significance is discovered.
    The question is who has the rights to the discovery. The previous implication was that the researcher or the university had rights, but fortunately Congress now seems to dispute that. "Open Access" means that the general public should have rights to the invention or discovery. The logic in this is that since the taxpayers paid for it it should be of benefit to the taxpayers. This is at least consistent with the general socialistic principle of benefits for all, and simultaneously seems to satisfy the capitalistic principle which says those that pay for something should have the benefits of its development.
    I do not agree that government should be supporting research of this general nature, but if it does, any benefit should obviously go to the taxpayer. Congress is correct in this aspect.

Sunday, July 29, 2012

Negative Aspects of US Patenting Procedure

    Congress is presently in controversy over MTB's. Why should you be interested? Because most things that Congress does affects you and perhaps generations to come.    MTB stands for Miscellaneous Tariff Bills. Before we go into that detail, we need to know a little something about tariffs, which is another name for import or custom duties.
    When a material comes into the US from a foreign country, it must pass through import control. At that port location, Federal Customs Officers either allow free access of the material into the US, or they charge a fee depending upon the customs duty classification. This is standard procedure for most countries of the world. For example many years ago when I lived in Italy, I brought home a throw rug from Beirut and came into the airport at Rome. At that point, the customs officer charged me some x dollars in customs duties to bring the rug into Italy. An officer actually accompanied me to the bank to obtain the money, in order to pay the customs duty. This system operates on
an international basis and involves huge sums of money.  In fact, prior to the establishment of the US Federal Income Tax, the operations of the federal government were funded primarily by import duties.
    While import duties are a source of income for the government funding, another purpose is to protect local suppliers or manufacturers. For example, there are steel manufacturers in the US and abroad. Generally, the price of imported steel from the foreign supplier is less than the price of the US manufacturer, usually because the foreign manufacturer has lower production costs. However, Congress sees a disadvantage in having to obtain all steel from foreign sources, which will be less reliable in times of emergency for production of military equipment, etc. Therefore, if applies a custom duty on foreign steel imports to equalize the price and perhaps also to give American suppliers a slight price advantage, so that they can stay in business.
    However, import duties have other ramifications. In the case of the steel example, after application of import duties, steel prices are higher for manufacturers of finished goods such as automobiles, refrigerators, water heaters, etc., and this carries through to higher consumer prices. However, the local steel manufacturers continue to offer jobs in the areas where they are geographically located. Where the balance for higher consumer prices and more local jobs lies is anybody's guess.
    Conversely, elimination of import duties favors importation of foreign manufactured goods, which is generally less costly than US manufactured goods. The US manufacturers of similar products cannot compete and go out of business, reducing the number of local jobs, but the consumer can buy at lower prices. Where the balance lies with respect to
lower prices to the consumer and the loss of income by job loss is anybody's guess.
    Another aspect is the the relative standard of living. In the absence of custom duties, a low-cost foreign manufacturer will have jobs in his country. Those wages will increase the standard of living for the foreign population. Simultaneously, the export customers pay a lower price for their goods, but have reduced job income, with which to pay. An example for the US is textile manufacture. At one time, factories in the Northeast were humming with the manufacturer of basic textiles. Those facilities are now desolate, as most textiles are now imported. In addition, clothing manufacturer in New York City was a major business. This has departed to imports from many countries, such as Guatemala, South Korea, and China.
    With that background, we can now look at MTBs.
    The US has very large volumes of Custom Duty Manuals showing all manner of products. In addition to the types of goods, there is large variation in the dollar value and the product source to which customs duties are applied,. The Miscellaneous Tariff Duties  (MTBs) are basically a mechanism by which Congress establishes exemptions to the custom duties without changing duties themselves.
    A specific controversy involves chemicals. Over time, the chemical industry has established a global supply system, which involves company investments not only in the United States, but also in foreign countries. In many cases, there is an economic advantage to producing chemical intermediates abroad and importing them to the United States for further conversion to finished products. The economics of this procedure is only favorable in the absence of or very low custom duties on the intermediates.
    As an example, let's say XYZ company has the desire to build a plant to supply propylene (gas) which will be transformed to an acrylate monomer (liquid) and finally to a polymer (solid), which will be molded to various consumer products. It could build the plant in Houston, but also finds that it will have significantly lower production costs if it builds the plant in Thailand. Since the first product is a gas, which is difficult to ship, the Thailand plant will also go through the next step conversion to a liquid, which will be shipped to the US. All of this has favorable costs compared to complete manufacture in the US, providing there is no customs duty.
    Since the plant for conversion of liquid to the solid polymer would be in Houston and all are part of the same XYZ company, the company lobbies Congress for an MTB (duty exemption). Congress is than faced with a dilemma. If it grants an MTB, it loses duty on the liquid import, but it gains investment and job creation in Houston for conversion of the liquid to solid polymer. Alternatively, not applying an MTB forces the XYZ company to pay custom duty on the liquid and increase its total production cost. It may not then be able to compete with a complete foreign manufacturer, which exports solid polymer directly to the US.
    The consternation in Congress also arises with respect to "earmarks". Congress has generally agreed among its members to avoid earmarks, which are advantages given to a small segment of the population. An earmark example is the "bridge to nowhere" in Alaska, which benefited only the locals. Some say that a MTB in the case of the XYZ company is not an earmark, but in fact it is. While it theoretically benefits the polymer consumers, which might be the general public, it more specifically benefits the XYZ company and the city of Houston.
    All told MTBs can have associated advantages and disadvantages. However, one thing is clear. Elimination of custom duties from the US is unfavorable to the economy. While it generally reduces consumer costs, because foreign manufacturer is cheaper, it generates a loss of US jobs and the ability to improve standard of living through productive ability and capacity. Low prices of imports are temporary, while the productive capacity and know-how of the US is lost more or less permanently. However. If one is of a Marxist mentality, all import duties should be abolished, which will favor foreign manufacture and lead to global equalization of wealth, which is a Marxist goal.

Saturday, July 28, 2012

Import Duties and MTBs

    Congress is presently in controversy over MTB's. Why should you be interested? Because most things that Congress does affects you and perhaps generations to come. MTB stands for Miscellaneous Tariff Bills. Before we go into that detail, we need to know a little something about tariffs, which is another name for import or custom duties.
    When a material comes into the US from a foreign country, it must pass through import control. At that port location, Federal Customs Officers either allow free access of the material into the US, or they charge a fee depending upon the customs duty classification. This is standard procedure for most countries of the world. For example many years ago when I lived in Italy, I brought home a throw rug from Beirut and came into the airport at Rome. At that point, the customs officer charged me some x dollars in customs duties to bring the rug into Italy. An officer actually accompanied me to the bank to obtain the money, in order to pay the customs duty. This system operates on
an international basis and involves huge sums of money.  In fact, prior to the establishment of the US Federal Income Tax, the operations of the federal government were funded primarily by import duties.
    While import duties are a source of income for the government funding, another purpose is to protect local suppliers or manufacturers. For example, there are steel manufacturers in the US and abroad. Generally, the price of imported steel from the foreign supplier is less than the price of the US manufacturer, usually because the foreign manufacturer has lower production costs. However, Congress sees a disadvantage in having to obtain all steel from foreign sources, which will be less reliable in times of emergency for production of military equipment, etc. Therefore, if applies a custom duty on foreign steel imports to equalize the price and perhaps also to give American suppliers a slight price advantage, so that they can stay in business.
    However, import duties have other ramifications. In the case of the steel example, after application of import duties, steel prices are higher for manufacturers of finished goods such as automobiles, refrigerators, water heaters, etc., and this carries through to higher consumer prices. However, the local steel manufacturers continue to offer jobs in the areas where they are geographically located. Where the balance for higher consumer prices and more local jobs lies is anybody's guess.
    Conversely, elimination of import duties favors importation of foreign manufactured goods, which is generally less costly than US manufactured goods. The US manufacturers of similar products cannot compete and go out of business, reducing the number of local jobs, but the consumer can buy at lower prices. Where the balance lies with respect to
lower prices to the consumer and the loss of income by job loss is anybody's guess.
    Another aspect is the the relative standard of living. In the absence of custom duties, a low-cost foreign manufacturer will have jobs in his country. Those wages will increase the standard of living for the foreign population. Simultaneously, the export customers pay a lower price for their goods, but have reduced job income, with which to pay. An example for the US is textile manufacture. At one time, factories in the Northeast were humming with the manufacturer of basic textiles. Those facilities are now desolate, as most textiles are now imported. In addition, clothing manufacturer in New York City was a major business. This has departed to imports from many countries, such as Guatemala, South Korea, and China.
    With that background, we can now look at MTBs.
    The US has very large volumes of Custom Duty Manuals showing all manner of products. In addition to the types of goods, there is large variation in the dollar value and the product source to which customs duties are applied,. The Miscellaneous Tariff Duties  (MTBs) are basically a mechanism by which Congress establishes exemptions to the custom duties without changing duties themselves.
    A specific controversy involves chemicals. Over time, the chemical industry has established a global supply system, which involves company investments not only in the United States, but also in foreign countries. In many cases, there is an economic advantage to producing chemical intermediates abroad and importing them to the United States for further conversion to finished products. The economics of this procedure is only favorable in the absence of or very low custom duties on the intermediates.
    As an example, let's say XYZ company has the desire to build a plant to supply propylene (gas) which will be transformed to an acrylate monomer (liquid) and finally to a polymer (solid), which will be molded to various consumer products. It could build the plant in Houston, but also finds that it will have significantly lower production costs if it builds the plant in Thailand. Since the first product is a gas, which is difficult to ship, the Thailand plant will also go through the next step conversion to a liquid, which will be shipped to the US. All of this has favorable costs compared to complete manufacture in the US, providing there is no customs duty.
    Since the plant for conversion of liquid to the solid polymer would be in Houston and all are part of the same XYZ company, the company lobbies Congress for an MTB (duty exemption). Congress is than faced with a dilemma. If it grants an MTB, it loses duty on the liquid import, but it gains investment and job creation in Houston for conversion of the liquid to solid polymer. Alternatively, not applying an MTB forces the XYZ company to pay custom duty on the liquid and increase its total production cost. It may not then be able to compete with a complete foreign manufacturer, which exports solid polymer directly to the US.
    The consternation in Congress also arises with respect to "earmarks". Congress has generally agreed among its members to avoid earmarks, which are advantages given to a small segment of the population. An earmark example is the "bridge to nowhere" in Alaska, which benefited only the locals. Some say that a MTB in the case of the XYZ company is not an earmark, but in fact it is. While it theoretically benefits the polymer consumers, which might be the general public, it more specifically benefits the XYZ company and the city of Houston.
    All told MTBs can have associated advantages and disadvantages. However, one thing is clear. Elimination of custom duties from the US is unfavorable to the economy. While it generally reduces consumer costs, because foreign manufacturer is cheaper, it generates a loss of US jobs and the ability to improve standard of living through productive ability and capacity. Low prices of imports are temporary, while the productive capacity and know-how of the US is lost more or less permanently. However. If one is of a Marxist mentality, all import duties should be abolished, which will favor foreign manufacturer and lead to global equalization of wealth, which is a Marxist goal.

Friday, July 27, 2012

Beware of Social Scientists Who May Be Marxists


In the July 16 issue of Chemical & Engineering News, Saleem H. Ali reviews two books.

The first book is entitled, "The Race For What's Left" by Michael Klare. He considers the subject in the concept of what social science research has developed as the "resource curse". This broad ranging theory suggests that mineral wealth has negative effects on countries possessing such mineral wealth. He uses diamonds and colombium/tantalum ore as examples for fueling conflict in Central Africa.This is not always the case, as I am reminded of the discovery that vanadium strengthens steel and that the first significant vanadium mine was in the high reaches of Peru. There is no record of internal conflict.

Even so, we cannot dispute the fact that the nature of man is to seize whenever possible the assets of another person. We see this in legal cases challenging wills, in civil wars for control of government, the stealing of production know-how, etc. While all of those ancillary matters are regrettable, it makes no sense to consider that the basic material should somehow be declared of no value so that there is no contest.

Klare also points out that mineral resource capture cannot be accomplished without use of energy. So what? That is the cost of doing business. It comes in only as a factor for judgment in determining the value of a project.
Klare finally reveals himself as an environmental Marxist by suggesting that the wealth of a producer should be confiscated by high taxation, so that this wealth can be better distributed across the population.

The second book is entitled "The Oil Curse" by Michael Ross. Ross has support from from nonprofit organizations Oxfam and Revenue Watch, of which the latter is an activity of George Soros. There's no indication that these organizations promote wealth distribution in the traditional Marxist sense, but the involvement of George Soros justifies keeping a watchful eye.

Ross's book tends to be rather abstract, as indicated by the fact that the "curse" results from oil's scale, source, stability, and secrecy. My feeble mind finds difficulty in connecting these attributes to some negative conclusion. For example, he somehow tries to relate these attributes to women's rights in the Middle East.

The most interesting aspect is that reviewer Ali seemed to have a general negative attitude, similar to mine, 
toward both of these books. I thought this surprising, since C&EN writers generally have leftist leanings. It all became clear when I noticed at the end that Ali is director of the Center for Social Responsibility for Mining at the University of Queensland in Australia, and therefore is not a direct part of the C&EN culture.

Thursday, July 26, 2012

Basis of US Financial Difficulties

    Rudy Baum, Editor-in-Chief of Chemical and Engineering News continues his promotion of Marxism.
    In his July 16 editorial, "Storm Thoughts", he starts out rationally enough. He says no society can afford to harden the infrastructure that supports it to make that infrastructure resistant to such destructive forces as the recent storms that ripped across the Midwest and middle Atlantic states.
    Unfortunately, he then goes on to say that our infrastructure is basically neglected. Roads, bridges, ports, lrvees, water systems, and the electrical grid been ignored for too long. That's false. In my various travels by automobile, I have found the road systems completely adequate. I don't deal directly with ports, but but have heard no complaints with ship docking services.
    He is also on to rant against the looming sequestration, which may take place on January 1. The term sequestration apparently has been manufactured in order to explain mandatory budget expense reductions, which will be effective because a previous committee was unable to develo an appropriate program.
    Rudy bemoans the state of budgets for agencies such as the National Institutes of Health, the National Science Foundation, and the National Aeronautics and Space Administration, and then goes on to explain that we have reduced unnecessarily our interplanetary space explorations such that we are dependent on the Russians. That is true and regrettable, but the basic problem is the lack of money caused by political hacks granting benefits of health, education, and food subsidies to a large segment of the US population. Since the remaining 50% of federal income tax payers could not afford the expense, massive borrowing by the federal government has put the government in extreme position.
    Rudy ends his article by saying the problem is not that we are broke, the problem is that too many US citizens are willing to contribute their fair share to supporting the social contract. However, the real fact is that producing Americans have been bled to death to support the indigent and the crazy programs dreamed up by various government agencies, with Rudy Baum's support.

Wednesday, July 25, 2012

Good News for the Death of Carbon Sequestration

    Jeff Johnson has a nice article in the July 16 issue of Chemical & Engineering News entitled, "Stumbling on the Path to Clean Coal". The subtitle is, "Carbon Capture and Sequestration appears stuck, dashing hopes of cutting CO2 while burning coal".
    The dictionary has only two definitions for "sequestration". The legal definition is the seizure of property. The chemical definition is the limitation or prevention of normal ion behavior by combination with added materials. However, a new definition has developed, which is the process of removing carbon dioxide from the atmosphere. Note that these definitions are different from the "sequestration" denoting mandatory cuts in government expenditures on January 1.
    We should also look at recent use of the term "clean coal". Previously, clean coal had a meaning of form of relatively pure carbon. That is, it had little or no contamination from sulfur or mercury. When the term is now applied to coal, meaning no carbon dioxide emission on burning, it is obviously an unrealistic interpretation of the English language. There is no carbon dioxide in coal, and therefore coal cannot be significantly contaminated by carbon dioxide.
    In spite of these difficulties with language, the total article gives good news. While the House of Representatives cleared legislation to require carbon dioxide reductions to the atmosphere and a Cap & Trade program in 2009, a price on carbon dioxide emissions expired the next year. Jeff says that today Congress members have no intention of putting a price on carbon emissions and many even challenge the scientific basis of climate change. That is wonderful news, because there is absolutely no basis that carbon dioxide emissions to the atmosphere cause any damage to the environment, and any attempts at major control would be horrendous.
    Unfortunately, the Department of Energy does not give up easily, even when it's wrong. It has provided $6.9 billion for R&D funding on carbon sequestration since 2005, and half of that has come from the American Recovery and Reinvestment Act of 2009, which was President Obama's stimulus package.
    A subsequent report by the Congressional Budget Office also states that carbon dioxide each sequestration would increase electricity costs from coal-fired power plants by 75%, because of the cost of new equipment for CO2 capture.
    Organizations, such as the Congressional Research Service and the World Watch Institute "find a" great need for carbon sequestration. There is no indication as to why this would be necessary, and we can only assume that this would be the usual complaints of Marxist type environmental organizations.
    Jeff goes on to say that the use of natural gas and electricity production has increased, with a consequential reduction in the use of coal. However, coal gives one third of the US total CO2 emissions and 80% of the CO2 emissions from electricity production. So what? There is no evidence that atmospheric carbon dioxide increase is detrimental to the environment.
    Robert Hilton is a vice president of Alstom, a global construction and engineering firm supplying equipment for carbon dioxide capture. He bemoans the trend in Congress toward realization that carbon dioxide capture from coal burning plants is not necessary. Naturally so, it is his business to supply such equipment. However, it is clear that Alstom was not willing to put its money where its mouth is. It rejected an offer to put up only half of a $668 million project to sequester carbon dioxide in a West Virginia electric power plant, with the Department of Energy putting up the other half in taxpayer money.
    However, a negative shadow on the situation is that the EPA has proposed a new rule to limit CO2 emissions from new power plants to 1000 pounds per megawatt hour. Since the present technology for new, coal-fired power plants would have emissions of 1650 to 1750 pounds of CO2 per MWh without carbon sequestration, it appears that no new coal-fired power plants will be built, unless Congress takes further action to control the EPA's abuse of power.

Unemployment and the Economy

    We have heard about unemployment and the poor economy for many months, and it is time for little perspective.
    Unemployment results when there is a surplus of goods and services in an economy. Have you recently been to your local super market and look at breakfast cereal offerings? If you have a favorite cereal, it may take you five minutes to go through the two aisles of offerings. Or, suppose you want to buy a new shirt, and you go to Wal-Mart. Again, there are a great many offerings. How difficult is it for you to find a barber to cut your hair or someone to do your fingernails? What if you need a new water heater for your home? Do you have to get on a waiting list or is it immediately available? What if you want to buy a new house? Is there a shortage of houses?
    The answer to all of these questions is obvious. There are no shortages of goods and services, and since that is the case, there is no need for further employment, in the traditional sense.
    However, there are various ways to make jobs. Some of these may sound obnoxious or ridiculous, but they have been used in the past.
    We could have riots, in which mobs destroy property, such as stores and public buildings. This leads to the need for people to supply building materials and for re-construction.
    Similarly we could develop a major war. This would involve employing people a as soldiers, which directly employs them. Also, many soldiers and civilians would be killed to reduce the need for employment. Property would be destroyed and require goods and services for reconstruction.
    We could engage in employment activities, which would not be constructive or which were of questionable value. This would include mostly government jobs, which are self perpetuating, as opposed to private industry where standard economics will decide the merits of job continuance. Some examples of irrelevant government jobs are preparing and enforcing regulations inhibiting profitability of private industry.
    Lastly, we could also develop a whole new attitude toward progress that would be primarily to make the pie larger. Rather than offer to the consuming public a new breakfast cereal, the public could be offered a new form of entertainment, a lower-cost food supply, significantly reduced costs for housing and transportation, etc..
    Such progress would be accomplished primarily by private industry. We have many historical examples of such progress. We owe our home lighting primarily to Thomas Edison. We owe most of our telecommunications mostly to Alexander Graham Bell. We owe most of our air transportation to the Wright Brothers and Boeing. We owe our mass private transportation system to Henry Ford. Who knows what advances and benefits for society will be accomplished by the next entrepreneur?
    Where does government stand on this? Generally speaking, elected officials and their subordinates are so busy politicking, which is another way to say they increase their power and personal benefits at the expense of the general public, that they make no valuable contribution to the society. In addition, they usually are not qualified to aid in making new product and services available, because they tend to look at all matters from a legal perspective. Subordinates hired by elected officials in many cases come from universities, where their expertise has been in teaching, rather than the realities of goods and services, other than education. This tends to develop within government a sophistication, which can be intimidating to the voting public and foster continuity and expense unjustified by results. In other words, jobs are made where none are needed.
    It would be ideal if government had the ability to develop a perspective based upon practical potential realities. The closest it has achieved is in the activities of NASA, which has shown tremendous progress in developing our understanding of interstellar space and other worlds. The difficulty is that it has no foreseeable improvement to the standard of living of the voting public. However, this is not an indication that an interstellar space program should be discarded. It only means that it should be put in the perspective of basic research, with a limited application of funds. We can place it in the same category as Capt. Cook's sea voyages around the world, which had little purpose except to see what he could find.
    The basic question is whether government has the capacity to develop a technological society of better advantage to its citizens, without inhibiting personal freedoms. Up to now, it has not shown that capability. We are presently engaged in a program of using the same size pie and dividing it among more people of the world. It is not that we should avoid improving living conditions in our fellow man in other countries, but that should not be our main objective. The US is a country and a society, and the major obligation of its government should be to its citizens.
    Government has shown some slight capability in looking for developments "outside the box". Picking up on the investigations of Mann, a university professor, government has engaged in a project of climate control. It has also reduced the essence of climate control to emissions of carbon dioxide which have no scientific basis other than supercilious speculations of sophisticates. The objective of government in this operation appears to be an opportunity for increased taxation, redistribution of world wealth, and increased political power of elected officials. As indicated previously this comes about because of opportunism without associated capability.
    Conversely, while private industry is also opportunistic, it does have associated capability. However, one of its
deficiencies is a lower capacity for capital than can be obtained by government. This limitation only limits the sort of projects in which private industry can be involved.
    While government has been engaged in an ill-conceived attempt at climate control, it misses the more obvious possibility of weather control, with more direct associated advantages., in the middle of a US drought. Simultaneously, there have been disastrous floods in China and India, and even in sections of the US. It would seem much more reasonable to try to control weather than to control the larger aspects of climate. This might involve more extended possibilities of trying to control where it rains and how much, but also might involve avoiding that more direct problem and concentrating on equalizing availability of water for agricultural use.
    The Southwest is traditionally known as an arid area, which is deficient in water for maximum agricultural production. Why not develop an irrigation system to supply agricultural water in the whole area east of the Rockies to Iowa? How do we do this? There are two obvious possibilities. The first is to pipe water from the Great Lakes to the Southwest. One problem is that the states associated with the Great Lakes consider this their private reserve and will not make the water available. The legal eagles in the government can battle that one out.
    Another possibility is to desalinate ocean water. Salt water, from either the Pacific or the Gulf of Mexico, can be piped to a high elevation, where it can be desalinated by membranes to agricultural quality and subsequently flow by gravity to irrigate the Southwest. Advantages? Construction opportunities for engineers, pipe manufacturers, dirt movers, new farming, farm equipment, produce handling, ad infinitum.
    Any other major projects that should be considered? How about birth control? That's would reduce the need for jobs, but would also reduce customers. How about malaria control? That would increase the population, but would also increase personal energy and productivity.
     Until we can see such opportunities for new developments, how about improving efficiency of our current operations? We know that the general standard of living is boosted by increased energy consumption. What can we do to improve our energy supply? Should we be reviewing various governmental restrictions to determine what is practically necessary and eliminate others?

Tuesday, July 24, 2012

School Abortion, Border Patrol, Dodd-Frank & Federal Reserve

Open e-mail to Rep. Neugebauer concerning his Newsletter:

Randy,
    You are partially on the right track in trying to withhold funding for school districts who directly or indirectly promote abortion. I say partially, because the federal government should not be funding any local education systems. Local school boards can then decide whether they promote abortions from local taxes.
    I agree completely with your objection to the closing of nine interior Border Patrol Stations. My information has it that these interior Border Patrol Stations seem to be doing a better job at apprehending and "prosecuting" illegal aliens compared to the stations at the border.
    I agree with your suspicion that the Dodd-Frank bill is likely doing more harm to the economy than good. It should be repealed or radically changed.
    I also agree with your implication that the Federal Reserve position should be changed. It is too secretive and too dictatorial to be consistent with a transparent government.

Monday, July 23, 2012

President Obama on Private Enterprise

    Pres. Obama recently told business owners that they had not been successful based on their own efforts, but rather by building on the successes of others. He said this in the context of "government research", mentioning that government had invented the Internet. The President's comments caused a real hubbub, and this is steel being discussed by television news several days later. In fact, I just heard it again on Fox News.
    When Pres. Obama made his remarks, I also happened to be reading the latest issue of Chemical Heritage. This is a magazine published four times per year by the Chemical Heritage Foundation and basically contains stories involving chemical history.

    The latest issue contains two interesting stories. The first is "The Story of Neon". Henry Cavendish found in 1785 that when he removed nitrogen and oxygen from a sample of air, a small residue was left. Ramsay and Strutt repeated the work and named the residual gas Argon. By fractional distillation, Ramsay and Travers found that the residual gas was actually a mixture of neon, krypton, and xenon. They also found that when a glass tube of neon was energized with high voltage, they obtained a crimson light.
    Simultaneously, William Hampson in England, Carl von Linde in Germany, and Georges Claude were working with liquid air. Claude ramped up the distillation process to produce 10,000 m³ of liquefied air per day. He established a company with Paul Delorme and named it L'Air Liquide. After separating the nitrogen and oxygen, which were sold, he conducted further research on the residual gas, but found nothing new. However, large quantities of neon, krypton, and xenon were then available as byproducts from the liquid air distillation process.
    In the late 1890s, Daniel Moore, a former Edison employee, filled glass tubes with nitrogen or carbon dioxide, which gave a white light, when subjected to high voltage. The business was commercially profitable, until tungsten filaments were used in incandescent light bulbs.
    Adapting Moore's concept to neon, Claude filed his first patent for neon lighting in 1910. with subsequent demonstrations at the Paris Motor Show. Claude formed a second company selling neon lighting franchises at $100,000 plus royalties. In the US, Earl Anthony founded the first California dealership for the Packard Motor Car Company and advertised with Claude neon signs. Corning Glass Works supplied class tubes and Egani Neon Glassblowing School in New York taught sign construction.
    Neon also became useful as a switching mechanism for electronic devices, although there is no record in Chemical Heritage as to who first recognized the application. Airco neon was used in early computers, because the neon switches ran cooler than vacuum tubes. The ANITA calculator was a commercial success at $1000, but neon switches were replaced by transistors in the 1970s.
    Harold Edgerton was a professor of electrical engineering at MIT and specialized in high-speed photography. His first flash lamps used mercury or argon but he later switched to xenon in the 1940s.
   
    THERE IS NO INDICATION THAT ANY OF THESE INVENTORS OR DEVELOPERS WERE GOVERNMENT EMPLOYEES OR RECEIVED TAXPAYER FUNDS TO SUPPORT THEIR WORK.
      
    The second story is entitled, "The Rocks at the Top of the World" and involves vanadium.
    Vanadium was first discovered by Mexican Andrés del Rio in 1801, but he could not obtain confirmation from Paris that it was a new element. Vanadium was rediscovered by Nils Gabriel Sefstrôm, a Swedish chemist, in 1830. It was isolated by Sir Henry Roscoe. John Arnold discovered that adding a small amount of vanadium to steel made the steel alloy stronger.
    In Peru, Eulogio Fernandini owned a lead, silver, and copper mine and a smelter high in the Andes. He and Rizo Patron, manager of the smelter laboratory, were searching for fuel to operate the smelter. They collected various samples on their horseback trip, and on a cold night decided to burn one of the samples that looked like coal. It produced a large amount of obnoxious gas. Patron analyzed the sample on his return to the lab and decided that he discovered a new mineral, which contained vanadium.
    In the US, Joseph Flannery manufactured stay bolts used primarily for steam locomotive boilers. He needed a high-strength steel alloy and knew about the vanadium findings in Peru and the strength of the steel alloy from vanadium addition. He sent two geologists to Peru. Their report to Flannery convinced him to purchase the Minas Ragra mine from Fernandini. Flannery established the American Canadian Company. By 1910 the company was producing 700 tons of vanadium pentoxide, which changed the face of stainless steel production. In 1907, vanadium steel-alloy production was less than 1000 tons per year. In 1919, the annual production rate was 1,100,000 tons. Henry Ford used it for the crankshaft, axles, gears, and springs in the Model-T. Ford. It was used in parts of the Panama Canal lock gates and in the first plane-mounted cannon in World War I.   

    THERE IS NO INDICATION THAT ANY OF THESE DISCOVERERS OR DEVELOPERS WERE GOVERNMENT EMPLOYEES OR RECEIVED TAXPAYER FUNDS TO SUPPORT THEIR WORK.

    Pres. Obama's claim that business owners owe their success to others who have not had a direct part in the present operations, is correct. This is obvious, from the above recounts. However, it is incorrect to imply that significant developments must come from government research in various departments, such as the National Science Foundation, with its grants to universities. There is no doubt that some occasional advantages will be made through this mechanism, but it is a generally inefficient process, because the researchers involved lack motivation equivalent to those persons described in the above stories.
    Pres. Obama later tried to explain his position by switching to a discussion of infrastructure. This was a weak attempt, since it is obvious that his original intent was to promote big government and expensive taxpayer research projects by castigating private enterprise.

Saturday, July 21, 2012

Reforming Congress

     Warren Buffett recently said, "I could end the deficit in 5 minutes," he told CNBC. "You just pass a  law that says that anytime there is a deficit of more than 3% of  GDP, all sitting members of Congress are ineligible for re-election."
    The problem with "passing such a law" is that there is no chance it would ever be approved by both houses of Congress, and therefore could not become law.
   
    I'm not sure where the proposal for the Congressional Reform Act of 2012 originated, but it says:
 
                            Congressional Reform Act of 2012               
         1. No Tenure / No Pension.
            A Congressman/woman collects a salary while in office and receives no
        pay when they're out of office.
        2.
  Congress (past, present & future) participates in Social Security.
            All funds in the Congressional retirement fund move to the
        Social Security system immediately. All future funds flow into
        the Social Security system, and Congress participates with the
        American people. It may not be used for any other purpose.
         3.
Congress can purchase their own retirement plan, just as all
       Americans do.
        4. Congress will no longer vote themselves a pay raise.
        Congressional pay will rise by the lower of CPI or 3%.
        5. Congress loses their current health care system and
        participates in the same health care system as the American people.
         6. Congress must equally abide by all laws they impose on the
        American people.
         7.
All contracts with past and present Congressmen/women are void
        effective 12/1/12. The American people did not make this
        contract with Congressmen/women.
 

        Congress made all these contracts for themselves. Serving in
        Congress is an honor, not a career. The Founding Fathers
        envisioned citizen legislators, so ours should serve their
        term(s), then go home and back to work.
 
    Again there us no chance that Congress would submit such a bill to the President for his signature to make it  law. To do so would require that the majority of Representatives and Senators be masochists, which they are not (a masochist (plural masochists) is someone who enjoys pain, or who derives pleasure from harming oneself or being harmed by others ... ).
    However, the situation is not impossible to correct.
    The first Amendment to the Constitution allows the people to to petition the Government for a redress (to set right; remedy or rectify) of grievances.
    It would be an almost impossible task to establish a sufficiently large petition with signatures to Institute the Congressional Reform Act of 2012 in one fell swoop. However, it is not impossible, if broken down to separate petitions for local and state individual Representatives and Senators. The message to each Representative and Senator would be the same: "Vote for the Congressional Reform Act of 2012, or we, the undersigned, will vote you out of office in the next election.
    With the breakdown to individual petitions, this would still be a massive undertaking. It will require leadership, organization and money. The last three contenders for the Republican nomination (Ron Paul, Gingrich, and Santorum) could qualify. Ron Paul is a bit old, but his son, Rand could replace him. Ron Paul has also shown an extraordinary ability to develop an effective political organization.These people are now lame ducks, and with success on this project, they could have a good chance at the Presidency. Washington won the Revolutionary War and became President. Eisenhower did the same with World War II.
     While financing the working team will be a major consideration, I believe funds are available through cooperation with  the Tea Party and many individuals, starting with Warren Buffett.
    Pushing the Congressional Reform Act of 2012 on the Internet is great, but it also needs practical application for accomplishment. Perhaps some will be able to pick up on the few suggestions I have made here.
 

Thursday, July 12, 2012

SyriaSen. Cornyn, I have been recently impressed in your willingness to speak out and try to have some influence on various subjects, but your latest on Syria leaves me cold. I have not read your plan nor do I need to read it. We should not be involved in Syria in any form of recommendation or even consideration. We have already spent too much money trying to reform the world into our socialist/communist image, and we are now broke. Consider also the fact that when the Syrian rebels decided to take on the Syrian government militarily, they chose that option, with the associated risks. Let's also take a look at our own history. In the war of Independence, many colonial lives were lost, but it was their option. They chose to fight the British. Consider also the advent of France into the conflict and the subsequent French Revolution. I repeat stay out of Syria and don't even talk about it.

Sen. Cornyn,

I have been recently impressed in your willingness to speak out and try to have some influence on various subjects, but your latest on Syria leaves me cold.


I have not read your plan nor do I need to read it. We should not be involved in Syria in any form of recommendation or even consideration. We have already spent too much money trying to reform the world into our socialist/communist image, and we are now broke.


Consider also the fact that when the Syrian rebels decided to take on the Syrian government militarily, they chose that option, with the associated risks.


Let's also take a look at our own history. In the war of Independence, many colonial lives were lost, but it was their option. They chose to fight the British. Consider also the advent of France into the conflict and the subsequent French Revolution.


I repeat. Stay out of Syria and don't even talk about it.

Tuesday, July 10, 2012

Rio De Janeiro Meeting on World Pollution

    Cheryl Hogue reported in Chemical Engineering News (6/25/12) that 45,000 people and 200 companies met at Rio de Janeiro to consider making the world a safer place through reduction of pollution. They like to call it "greening", but I think that's too non-specific a term. I prefer "reduction of pollution".
    While I don't have the complete agenda, Cheryl lists a number of subjects, on which I would like to comment.
    The subject of sound management of commercial chemicals in use and waste throughout their lifecycle particularly met my eye. I generally agree with the importance of the subject, but disagree with any of the implications involved. The agreement in Rio de Janeiro presumably confirmed the idea that underdeveloped countries should be able to use regulatory systems developed by other more advanced countries. Cheryl did not specifically say so, but we have seen the subject surface before and always under the proposal that chemical companies should be giving away their know-how. I repeat what I've said before. Know-how is private property and anyone wishing to use it should be required to purchase it, since it has been achieved by the owner at some considerable expense. More specifically, an underdeveloped country should not be able to obtain toxicological and similar information previously submitted to other government regulatory agencies as confidential know-how. In other words there should be no free-ride on the data of the originator. In the US, we have Manufacturer Safety Data Sheets, which contain substantial toxicological information available to chemical product users for avoidance of health problems. There were also suggestions on waste disposal with the same purpose. If a potential manufacture in an undeveloped country has intention of producing, he can either use the limited available information from the MSDS, which may be satisfactory to his government, or if not, he should be required to license the necessary know-how including basic toxicological data from the original generator.
    A second subject was so-called "challenges posed by electronic waste and plastic waste". As I see it, there is no environmental challenge. Electronic waste and plastic waste should simply be buried in landfills, which would be available in the future for mining.
    Next was persistent organic pollutants (POPs). Included in this group were hydrofluorocarbons (HFC's), which are widely used as refrigerants and replace previous refrigerants that were claimed to deplete the ozone layer in the upper stratosphere. The complaint now is that the HFC's are potent greenhouse gases, which is another ridiculous assertion, because their concentrations in the atmosphere would be so low as to be insignificant.
    The only good news is that I didn't see anything about carbon dioxide emission control, which would really be disastrous on a worldwide economic basis.
    Next, there was reference to greener government procurement and joint initiatives related to sustainability. Those general terms are only used to incite the general public to agreeing to the setting of controls which would be not only detrimental to local economies but to the world at large.

Monday, July 2, 2012

Pros and Cons of Socialism/Communism

    I believe we need a little basic review on Government 101, with respect to socialism and communism. They are essentially the same with some minor differences.
    Socialism generally involves socialized projects, such as school systems or roads, wherein it is impractical for individuals to generally have their own personal facilities. A socialized project involves a group of individuals and there is generally no profit incentive. This is different than a corporation, which also involves a group of individuals, but the group has a profit incentive. Socialized projects generally have advantages, which is why they exist. However, the danger involved in a slow change in public thinking which could lead to an attitude that everything should be socialized.
    Communism is a developmental stage from socialism to dictatorship. In communism, all commercial aspects are socialized, but rather than maintaining control of each project by a separate leadership, all projects are controlled by government. That government may initially be a combination of a leader, which we can call the President and a controlling committee, which we can call a Congress. The development to a dictatorship occurs when the President has a strong controlling personality, and the Congress is willing to forfeit its responsibility for control.
    Because of the similarity of socialism and communism, I am developing a new term, which I call "Socom".
    Socom is attractive to individuals for a number of reasons, among which are: 1. Division of society assets among the population will give me a greater share than I already have. 2. My risks on various elements of life, such as my health and my economics will be eliminated by a guaranteed supply of products and services from government. 3. I will no longer have the responsibility of finding my own employment, since government will supply it. 4. Since my employment is guaranteed, I need only apply minimal effort to my job, and in cases of less than my minimal effort, I cannot be fired nor my salary reduced.
    However, Socom also has downsides for individuals, among which are: 1. Because of human tendency, most persons in the Socom system will tend to apply less than minimal effort to any job or project, since it is to their benefit in allowing extra time for recreation and amusement. 2. The collective result of less than minimal effort leads to degradation of the product and service system, such that product/service shortages appear much more frequently. 3. With the collective "less than minimal effort" of most individuals, government then has fewer assets for continued distribution to individuals, which result in decreases in the so-called "guaranteed benefits". 4. The shortages and decreased benefits to individuals leads to general public dissatisfaction and greater acceptance of a move of Presidential powers to Dictatorship. 5. A Dictator has specific ideas of what he wants to accomplish and how to do it, and in the process he handles dissenters with imprisonment or death. So much for individual rights.
    Business schools generally base their teaching program on studies of individual companies and corporations. Law schools generally base their teaching program on studies of case law. I will now use a similar system, with the difference that my examples will be fictitious rather than actual.
    Situation 1: There are 16 adults in a lifeboat without communication in the middle of the ocean. They have 1 gallon of water. Someone says, "Let's divide the water equally; each having a cupful". They agree and do so. Sound reasonable? They are all going to die soon anyhow. It might as well be together.
    Situation 2: Steve Jobs has a government assigned position as a janitorial supervisor. He has an idea for a new electronic device but it can hardly support his family on his government income, without the possibility of buying tools. He also can't find anybody to work with him in such a risky and abstract project. Therefore, he decides to play solitaire in the evening. No Apple. No Macintosh. No iPhone.
    Situation 3: Louis Pasteur supervises a truck fleet in the Department of Transportation. He picked up a reasonably good education in microbiology at Socom expense, and he notices that many children are dying from tuberculosis. However, he has no laboratory and his government supervisors keep breathing down his neck, even though he knows that they can't fire him or reduce his salary. To keep busy in his off time, he takes up baseball. No pasteurization of milk and the children continue to die of TB.
    Situation 4: Rodgers and Hammerstein like music and are thinking a joint effort in composition. They have limited time, because there government jobs keep them busy licensing chicken coops. They also know they can't get a copyright for personal advantage on anything they produce, but they decide to take a shot at it anyhow. There is a government grant for music and they apply for it, but are turned down, because the sample they showed was not classical music. No Oklahoma. No Sound of Music. No South Pacific.
    Situation 5: The control panel at the New York City water treatment plant has a faulty switch. The operator becomes aware of this and his written instructions are to immediately call maintenance. However, it's five minutes to three, and he plans to go to a ballgame. He leaves and while he is at the ballgame, all the system water pumps automatically shut down and the city is without water for two hours while maintenance is contacted to make emergency repair. Three houses also burn in that period of water shutdown.
    Situation 6: US Socom has decided that there should be no carbon dioxide emissions from US power plants. Socom bases that decision on a statement from a university professor and supported by a number of quasi-scientists, who were not willing to offer clear scientific evidence why they believe this is so. Socom requires all electricity generating plants to install equipment, which will capture every pound of carbon dioxide from a burned fossil or sustainable organic fuel. The cost of renovation is subsequently so great that Socom cannot afford to operate all electricity production plants. Socom sets the allowable residential heating in winter at no higher than 60°F and no lower in summer than 85°F. Most of the population bears this discomfort, because "that's life". Frozen food sections at all supermarkets are reduced to half the normal choices. No more Bluebell Rocky Road ice cream. Only vanilla.
    Situation 7: US Socom is decided that all US residents should have free healthcare. The hospital emergency rooms become flooded with "patients", all having serious problems, such as a headaches, hang nails, baldness, gray hair, and long toenails. There is a long waiting line, because there are many patients and very few doctors. Those persons waiting for treatment are unable to do their government appointed jobs on such things as proposing new regulations to limit the supply of automobiles. There are very few doctors, because many intellectually qualified persons have seen no personal advantage in expanding long hours in medical school, even at government expense and with the low mandated salaries of subsequent practice. Socom then decides to list treatable illnesses, in order to limit the number of patients. However, the supply of doctors continually diminishes. As an example, broken legs are classified as a non-treatable illness and those afflicted must resort to home treatment.

Obama Health Care

    Apparently, I was not alone in my disappointment with the Supreme Court's decision allowing the Obama Health Care Law to stand. The news is full of criticism for the US Supreme Court. This criticism is obviously based upon the hope of many that the Supreme Court would declare the law unconstitutional.
    However on further thought, I think the heat the Supreme Court is taking is rather unjustifiable. It is not the Supreme Court's basic responsibility to correct all actions taken by other branches of government. The primary responsibility for this horrendous law lies with us.
    Notwithstanding how we cast our individual votes, we the people are responsible for electing a socialist/communist House of Representatives, Senate, and President, which passed the Health Care Law according to legitimate rules.
    "All that is necessary for the triumph of evil is that good men do nothing." (Edmund Burke)