Monday, August 25, 2014
Redevelop and Recycle Major US Cities
My wife and I traveled to Oklahoma and Missouri a couple
of weeks ago. We arrived in the St. Louis area the day after the Ferguson, Missouri ( an urban suburb of St.
Louis) riots began following the shooting of a young black man by a white police officer. During our two days
of visiting the city of St. Louis we had an opportunity to drive around some of the less desirable residential neighborhoods
of the city and see some of the abandoned industrial areas. The city of St. Louis has a population of about 300,000
compared to its peak population of 856,000 in 1950. Like Detroit and many other US cities the maximum population and
operating industrial capacity peaked in the early 1950s. Since the post World War II period many changes have occurred
in the economies of US cities. Much of the abandoned property looks as if it has been existing in a war zone.
The reduction of property values in all cities impacted by the reduced population and industrial activity has created large
areas of poverty with no hope for revitalization.
time has come for all Americans to make a major investment in the redevelopment of abandoned urban land and recycling
of building materials that are salvageable. Small scale programs of this type have been initiated in Detroit
and Cleveland. It is time for the US government to launch a major program that cleans up a significant percentage
of the abandoned property over the next 10 years. I don't know how much it would cost but an investment of $100B over the
next 5 years would be a good start. I see the federal government issuing grants to US cities and counties
to execute specific proposals to clean-up blighted areas. The contractors hired to do the work must commit
to hiring workers from the impacted areas so that skills can be learned and money injected into the local economies.
Once the land has been cleared the land must be returned to natural state with trees, grasses or other natural covering. After
clearing the land the ownership would remain with the city or country administering the program. It would be hoped
that at some time in the future the land could be returned to productive use. All funds generated from the
sale of recycled materials would remain with the city or country administering the program. In the mean time the
land would be green space within the urban area, not a blighted area.
I would prefer for this program to be funded through the transfer of budget dollars from entitlement
programs. However, if necessary, I would be willing to transfer spending from other budget areas to fund this program.
I would even be willing to include this program in a overall budget deal that is developed consistent with
the Simpson-Bowles fiscal responsibility recommendations.
We all need to help redevelop and recycle blighted portions of US cities where many of our parents and
grandparents grew up and the businesses that helped make the US a great country got started. We can also help some of
the people living in these areas do some productive work and gain some marketable skills. We can also help our
large urban areas improve their competitiveness in attracting new business and residents, Recycling materials is also
a good thing.
The time has come to redevelop and recycle major US
Sunday, August 3, 2014
Haunted Empire - Apple After Steve Jobs
Sometimes interesting books appear completely unexpectedly.
I recently received Haunted Empire - Apple After Steve Jobs by Yukari Iwatani Kane as a gift. This book is
essentially a sequel to Walter Isaacson's Steve Jobs with respect to the future direction of Apple Inc. and
the lasting influence of Steve Jobs on the direction of the company. I highly recommend this book to anyone that
is interested in understanding how Apple has evolved over the past couple of years. The manuscript was completed late
last year so it is very current on all of the issues that Apple and its Chief Executive Officer, Tim Cook, have faced since
the death of Steve Jobs.
It is clear the author believes that Apple
is a company that has peaked in terms of its overall market influence and is now in a long term decline. Apple
has performed fairly well financially since Jobs death but the market (high tech, investors, users, media) continues to express
concerns that Apple has not revealed its next blockbuster product area (wearable tech, Apple TV, or something else).
As I read the book I could almost hear Ms. Kane laughing at Apple's recent PR efforts to convince the market that
their minor product upgrades are a big deal. From the author's perspective Apple has passed its technology leadership
position to other companies like Samsung and Google.
includes interesting discussions of many of Apples big issues that they have had to address over the past few years such
as: labor issues at its supplier factories in China; intellectual property battle with Samsung in courts all over the
world; its international corporate structure designed to minimize US taxes and its legal problems related to its e-book business
plan. Apple in one of the largest, if not the largest, publicly traded company in the world in terms
of market capitalization. It is no longer the small technology company trying to beat the big guys. It is the
biggest of the big guys.
We will see if the author is correct in
her assessment. Will Apple develop a sensational new product line? Can Apple keep growing the company and
maintain its profit margins? Will Apple's major legal issues finally get resolved? Stay tuned. I am sure
there will be many more books about the legacy of Steve Jobs and the history of Apple in the years to come.
Thursday, July 31, 2014
The Value of Labor
I was reading an excerpt from
Wonkblog in the Wednesday, July 30, Washington Post today. Matt O'Brien, the author, was lamenting
"for the middle and working classes, real wages have been stagnant for the past 30 years and housing equity has taken
a nose dive. At this rate, it won't be long until the American Dream isn't even a memory for the middle class."
O'Brien doesn't provide any causes for the outcome that he accurately described.
The fundamental underlying cause for the American loss of middle class income and wealth is the increased participation
in the global economy of hundreds of millions of workers in China, India and other Asian nations during the
same period. The value of labor around the world has been reset by market forces greater than the power any
individual government. Once trade agreements were established and the World Trade organization was created the
power of global competition for work and jobs was unleashed. US workers protected status that had existed
since World War II was removed. US workers have been forced to compete against hundreds of millions of low wage workers
that were never part of the global economy in earlier decades. When large amounts of new capacity are added to any market
the value of the product declines. In this case the product is unskilled and semiskilled labor. US labor has a
lower market value today than it did 30 years ago because of a massive increase in global labor supply. It is a market
fact. It should be no surprise.
Politicians don't want
to discuss the truth behind this issue. They talk about redistribution of wealth and fairness. They don't
talk about the fact that the global trade rules were changed by actions by governments. Market forces worked.
The governments didn't understand the impact of unleashing the forces of a truly global labor market.
Or maybe they did understand what would happen and didn't tell the people the truth when the rules were changed. After
all, hundreds of millions of people in other parts of the world have much improved living standards. On a global basis the world is better off. Some people won, some people lost.
US unskilled and semiskilled labor were among the losers. The only way to materially impact this
problem is for US citizens to increase their competitiveness through education and training. There is no other way.
Handing out free stuff by the government doesn't solve any problem over the long term. US citizens must increase
the value of their labor significantly if they want their labor to have a value that delivers a comfortable life.
Friday, July 25, 2014
Real Impact of ACA
Many people have analyzed the Affordable Care Act (ACA) since
it was signed into law in March of 2010. The Democrats controlled both Houses of Congress after the 2008 elections.
President Obama thought he had a "mandate" for his agenda from the electorate. Obama and the leadership of
the House and Senate ignored the Republican minority and jammed the law through the Legislative Branch even though it was
clear that much of the details of the implementation of ACA would be determined by regulators after it was signed
into law. It is not hard to appreciate how Republican lawmakers felt after being ignored by Obama, Pelosi
and Reid on one of the most important and controversial pieces of legislation in decades.
There have been all kinds of issues surrounding the ACA since the law was passed. The Supreme
Court challenge, freedom of religion related lawsuits and implementation issues have grabbed the headlines. The
ACA has been subject to thousands of hours of cable TV news coverage and millions of published written words.
But the real impact of ACA hasn't received a lot of direct coverage. After the Tea Party
formed in 2010 and the Republicans reclaimed control of the House of Representatives in the November 2010 elections,
the Obama "mandate" dissolved into nothingness. Barrack Obama has accomplished nothing of significance since
the ACA. He is paying the price for his arrogance in jamming through the ACA without bipartisan support. It appears
the Republicans have a very good chance of taking control of the Senate in the November 2014 elections with a very slim
majority. If this happens we should expect the Republican agenda being passed through Congress at warp speed forcing
Obama to sign the bills or veto them, putting himself in a position of denying the will of the people's elected representatives.
If we think we are having fun in Washington DC today, it will get really fun if the Republicans win the Senate in November.
The real impact of the ACA has been complete gridlock in the US government, created
by Obama and his Democrat colleagues. The damage builds every day that passes with no progress on other key issues.
Whatever good Obama thought he accomplished with ACA he has offset with the damage he created in his relationship with Republicans.
Hopefully, historians will examine this period and acknowledge the problems Obama created and how his administration was a
The next two years could be really fun, not.
Friday, July 11, 2014
Obama's Executive Failures
Barrack Obama is in the second half of his sixth year as President
of the United States. Many of us pointed out years ago that he was not qualified to be President because he had no track
record of demonstrated executive skills at any time in his professional career. Over the years there have been many
circumstances which demonstrated Obama's executive leadership failures. However, none has been as visible and undeniable
as the massive numbers of illegal immigrants crossing over the Texas border. In addition to the blatant illegality of
the people crossing over the border a humanitarian crisis has been created by the numbers of minors crossing without adult
family members present. Obama assured us months ago that the border situation was under control. He either was
misinformed or purposely mislead the American people. No matter which is true, it is clear Obama failed to act to protect
our nation from the invasion of illegal aliens and allowed a humanitarian crisis to be created.
Obama is now being criticized by well known people in his own party for his failure to observe the
situation first hand by visiting the Texas border while he is attending fund raising events in Texas, just a few
hundred miles away. The criticism is well deserved. He criticized George Bush for flying over the damage caused
by Hurricane Katrina and failing to immediately go to the gulf. The illegal immigration issue is equally as important
and Obama is now the one failing to go to the scene of the action.
was ranked as the worst US president since World War II in a recent poll. No kidding! We are stuck with Obama
for another two and one-half years. However, we have the opportunity to remove the Democrats from controlling the Senate
in November. If the Republicans can gain control of the Senate and retain a majority in the House of Representatives
the stage will be set for the Legislative Branch to put extreme pressure on Obama to change direction on many critical issues
during the last two years of his term. Obama may veto many bills in these circumstances. If he does so he will
take personal responsibility for his actions.
It is time for the
United States to elect a President with demonstrated executive leadership skills. We have over two years to find the
right person and elect them. We can't afford to elect the wrong person in 2016.