Old Tales

It’s a sure sign of getting older when little things trigger a memory from prior decades.  Case in point.  Our washer croaked earlier this week.  Instead of the usual hum and swish, it started making a loud grinding noise and some oil appeared from underneath.  My non-professional diagnosis—transmission failure with chipped gears.
The washer was about ten years old. We bought it from a lady who moved into an apartment that already had appliances and for the last couple of years, it worked well.  

Until now.

During our research for a replacement, I remembered the first washer/dryer combo we bought waaaay back in the 1970s (a Kenmore of course) lasted around fifteen years. The dryer a few years longer.  The next one lasted about ten. There were others, including the working one we gave away when we bought this last one. Each generation of washers seemed to last a shorter time.

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Washing Machine
My wife bought a new one this week and it should be delivered next week.  It has as few bells and whistles as possible—no complicated computer, minimum “energy savings” features that we could find—and it was the cheapest.

I was reminded of the old engineering maxim—the more complicated a device or system, the more that can and will go wrong.  From the reviews of the current washers, none, except one, had a “favorable recommendation” percentage higher the 45%.  The more complicated, the more “efficient”, the less favorable the review.  Many of the cited failures could be contributed to operator error.  Obviously, the designers have never heard of user testing, or if they had, ignored the results.  There is a truism in engineering: if your untrained users can’t operate your device, it won’t sell and and those who do buy will complain.  Maybe that was why all those high-efficiency, state-of-the-art appliances were all on sale.

The one exception mentioned above was the one my wife bought.  It had a high “recommendation” rating in the 80% range.  It was also the cheapest and least complicated machine in the store.  I would bet if you checked it’s sales rating, it would also be the best seller.

Rule to remember: Technology will not increase sales if your average user can’t understand or operate the device without help beyond reading the manual.

Until the new washer is delivered, my wife is visiting the local laundromat.  That was a shock too!

I effectively moved away from home when I entered college at age seventeen.  I did my own laundry.  

It cost me $0.95. A quarter each for two machines, one for whites, one for non-whites. Detergent cost a quarter out of a vending machine.  The little box was divided in half to allow equal applications for two washers.  A dryer cycle cost a dime. I used two consecutive cycles. Most of my clothes were iron-free as they were known at the time.

When my wife returned with a pile of damp clothes from her first trip to the laundromat, I asked her how much it cost.  “Four-fifty for three loads,” she replied.  She brought the clothes home to be dried in our still-working dryer.

You just don’t realize the change in cost for inflation until it slaps you in the face.  Two washer loads, at a quarter each, plus two dryer cycles cost $0.95 forty years ago. Three wash-only loads today cost four and a half bucks—six times as much per washer load!

I view this not as an example of inflation. I view this as an example of deflation of the value of our currency.  Using the value of a dollar forty years ago, today’s dollar now has one-sixth the value or $0.12.  A dime and two pennies.

And, as long as Fed Chairman Ben Bernanke keeps the presses running, that value of the dollar will continue to slide.  In another forty years, if inflation does not increase, it will cost around $30 to pay for three loads of laundry.  Unfortunately, inflation cannot be expected to increase arithmetically.  As long as the idiots in Washington have access to printing presses, inflation will increase.  More likely geometrically. 

Ninety-five cents for a trip to the laundromat forty years ago.  Four Dollars-fifty cents today. thirty dollars forty years from now—if we’re lucky.                                

Friday Follies for March 30, 2012

It’s been a while since I’ve posted Friday Follies. Since I have no single topic today, it’s time revisit the Follies.
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Heard on the Morning Radio. Inflation, as it is currently calculated is around 3%.  If the rules that existed during the Clinton Administration in the 1990s were used to calculate inflation, today’s inflation rate would be 6%.  If the rules that existed during the Reagan Administration in the 1980s were used to calculate inflation, today’s inflation rate would be 11%.

If we want truth in government, and by extension in government reports, let’s use a standard set of rules that doesn’t mislead the public. Let’s return to Reagan’s rules and make sure we really know how much the democrats have screwed us.

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Obama wants us to be just like the Euros. He thinks European-style socialism must come to the US.  After all, everyone knows the Euros always knows best.

Then we see something like this and I’m glad the Euro idiots are over there instead of over here.

Dim Bulb: Jean-Luc Melenchon

Who: French presidential candidate Jean-Luc Melenchon.

What: He is calling for a 100 percent tax rate on all annual income over 1 million euros.

Why it’s dim: Let us count the way! But at the very least, this is a great way to get rich people to change their residency to other countries. Spain is beautiful this time of year, and its government could use a few additional high-income taxpayers.

Cure: A bit of economic common sense among politicians.

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For you local readers, the Raymore City Council finally repealed the city’s Business Excise Tax on a vote of 6 to 2. Mayoral candidate Pete Kerckhoff and Councilman candidate Charlene Hubach voted to retain the tax. 

I think it’s important to remember who voted to retain an unneeded tax whose revenues, according to Mayor Pro Tem Jeff Adams, isn’t budgeted.  Jeff Adams is also a candidate for Mayor.

The Raymore City Council repealed the city’s wheel tax earlier this year.  I’m glad the city is allowing Raymore’s residents to keep more of their own money instead of finding new ways to spend the unneeded revenue.

Raymore is fortunate that in addition to fully funding our annual budget, the city also has an emergency fund twice as large as required by statute.

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Obama’s attempt to punish the oil industry failed yesterday in the Senate on a vote of 51-47. The democrat lie about ending “subsidies” to the oil industry didn’t pass muster.  The reality is that there are NO subsidies.  The bill proposed by Obama and the dems would punish the oil industry by disallowing tax credits and deductions that are allowed to ALL business entities. The so-called subsidy was allowing the oil industry to keep their own money.

The dems knew the bill would fail.  It was just an effort to retain support for their class warfare advocates.

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A state liberal judge decided Missouri’s constitution admendment, “unfair and insufficient.” The judge’s decision is filled with inconsistencies.

Court says ‘no’ to voter photo I.D. ballot measure

A Cole County judge has struck down a measure that would only let voters with a photo identification cast a ballot.
Circuit Judge Pat Joyce called the proposal — which would be put to a vote of the people this November – ”insufficient and unfair.”
According to court documents, she says the ballot summary includes the phrase “Voter Protection Act” even though the phrase never actually appears in the constitutional amendment. Secondly, the summary says the amendment would allow the General Assembly establish an early voting period, when in fact the amendment would “restrict the time period during which advance voting may occur.”
She has sent the measure back to the legislature to fix it — “Because significant change are required here and policy choices need to be made as to how to reallocate the words in a revised summary statement, the Court chooses to vacate the summary statement and to provide the General Assembly an opportunity to revise it.”
The ballot title approved by the Legislature asks voters: “Shall the Missouri Constitution be amended to adopt the Voter Protection Act and allow the General Assembly to provide by general law for advance voting prior to election day, voter photo identification requirements, and voter requirements based on whether one appears to vote in person or by absentee ballot?”

Judge Joyce must have very good eyes to see words that don’t exist in the text of the amendment.  If there is any way to impeach a state judge, Judge Joyce should be first on the list to be removed from the bench for bias and incompetency.                                                       

Inflation strikes!

When Mrs. Crucis and I had been married only a few years, the Viet Nam War ended.  Nixon had been elected and was making good on his promise to end the war.  The peace talks finally bore fruit.  But another fruit, one created by LBJ and the democrats had ripened too.  Inflation and debt.

Most citizens now don’t remember those days. The days of high, over 10%, inflation, interest rates over 20%, and wage and price freeze.  It happened at the end of WW1, again after WW2, and in 1976, with Jimmah Cahtah in the White House, instead of using the wisdom of past presidents to keep their hands off the economy, Jimmah had to meddle.  Home mortgage interest rates skyrocketed to nearly 25%.

The turmoil continued until Reagan was elected.  Within two years, interest rates fell like a rock off a cliff, employment was up and the recovery was well underway.

I scanned the news websites this morning and what do I see.  Jimmah Cahtah redux.  For those of you who don’t know, the Consumer Price Index measures inflation.

The cost of living in the U.S. rose in February by the most in 10 months, reflecting a jump in gasoline that failed to spread to other goods and services.
The consumer-price index climbed 0.4 percent, matching the median forecast of economists surveyed by Bloomberg News, after increasing 0.2 percent the prior month, the Labor Department reported today in Washington. The so-called core measure, which excludes more volatile food and energy costs, climbed 0.1 percent, less than projected.
The biggest jump in gasoline in more than a year accounted for about 80 percent of the increase in prices last month, leaving households with less money to spend on other goods and services.


The biggest jump in gasoline in more than a year accounted for about 80 percent of the increase in prices last month, leaving households with less money to spend on other goods and services.

The government, for decades, has manipulated reports of inflation by dropping data for the most volatile items affected by inflation, fuel and food.

The “core” items mentioned in the article are those that do not include food and fuel.  When you add food and fuel, the CPI doubles, more than double if you delve into the figures.

One reason why the price of oil has spiked is inflation.  The Dollar is still the currency of oil.  When the fed pumps out more dollars, it takes more dollars to buy the same amount of oil, i.e, the price goes up.  Some analysts have declared if the fed hadn’t run off more dollars in their so-called “Quantitative Easing,” the price of oil would be in the $80 range instead of the current price over $100 a barrel.  In short 20% of the increase of oil can be attributed to inflation.

Dollar Inflation the Primary Cause of Rising Oil Prices

I’m under strict instructions, and have been from the beginning, to not talk about the dollar.” -White House Deputy Press Secretary Dana Perino, March 17, 2008 – Link

There is a direct relationship between Dollar value and oil prices. All crude oil purchases worldwide have been conducted exclusively in U.S. Dollars for over thirty-five years. [1] When Dollar value falls via inflation (i.e. the creation of money by the Federal Reserve and other banking mechanisms), oil prices rise. [2] [3] [4]Petrodollar Inflation; it occurred during the 1970′s oil ‘price shock’, and it is occurring right now. [1] This phenomenon could be called
Oil is a critical economic and strategic resource – because every country needs oil to develop and prosper, they also need U.S. Dollars. This has raised the demand, and value, of the Dollar worldwide for several decades. [1]
However, the U.S. Dollar is continuously devalued (inflated) by Federal Reserve and U.S. government monetary policies. [5] Due to recent ‘super-inflation’ of the Dollar, oil producing nations are losing money – or rather, wealth – by selling oil in Dollars. To prevent losses, oil producing nations will sell some or all of their oil in other currencies (Euros, for example). This further devalues the Dollar, since oil buying countries no longer need them to purchase oil.

So when you hear Bernake talk about more “Quantitative Easing,” know, too, your gas at the pump will be going up as well. 

To paraphrase, Obama’s Pastor and mentor, Rev. Jeremiah Wright, “Obama’s chickennnsss!…have come home!…to roost!”

Inflation? It’s here!

Here, from government sources, is what you’re not being told.  Inflation is here and has been for some time.  The feds have been “massaging” the data to make it appear better than it is.

Go over to NFO’s site and check it out.

What makes gas prices go up and down?

This was the subject of a discussion on a local radio station this morning.  I’ve heard the same questions from friends and acquaintances for years.  The dems blame “Big Oil” as if they created the pump price in some gigantic conspiracy. The ‘pubs blame the lack of supplies, that an oil shortage exists, and the weakness of the Dollar.  Both…are wrong for the most part.

The dems, if they want some conspiracy, should look at the oil cartels and the FedGov for regulating and limiting production. The ‘pubs are partly wrong because there is plenty of oil on the market—it’s just priced higher for a number of reasons.  There IS the fact that 30% of the oil price increase in the last three years has been due directly to the weakness, the loss of the Dollar’s exchange rate across the world currency market, i.e., inflation, contrary to the claims of the FedGov. There is no shortage of oil, on a world-wide basis although there is a shortage of domestic production. But the question really is drives the pump price, what drives it up and what drives it down.

The pump price is driven by replacement costs—what it will cost the gas station to replace the gas you’ve just pumped into your car. That pump price follows the current price for “light, sweet crude” on the international commodities market. Light, sweet crude is the type of oil that is used for gasoline production.

When that price goes up, the local retailer raises his price.  Why?  He must make enough on his existing supply to pay for the replacement gas that will be priced higher.  If he doesn’t, he can’t maintain his margin, i.e., net profit.  No net profit, no business and another gas station closes.

But…but…why doesn’t the pump price drop when the oil price drops!?!

It does.  Just not as quickly as the price increase.  Why? Because the gas station has gas in their tanks bought at the higher price.  If the station lowers the price of that gas in the tanks, they lose money. (See comment about margins above.)  The gas station can’t lower pump prices until they receive new supplies at the lower price.

What does that mean today?  Last week, oil dropped about $16 over the week ending under $100 a barrel.  If that price is maintained, i.e., it wasn’t just a two-day blip and the price bounces back to the high, you won’t see that pump price drop until your local station receives new supplies.  That can vary depending on the station’s sales volume and the size of their tanks.  Along the interstates and other high volume stations, you may see lower prices by the end of the week—maybe.  For lower volume stations, it may be as long as a week or more before their pump price drops.

Oil industry spokesmen have said to expect a $0.10 drop per gallon over the summer.  For us near KC, that would be around $3.599 to $3.699 a gallon.

What can we, as a nation, do to lower gas prices?  Well, three things actually.
  1. Increase domestic production and remove the regulations that limit drilling and increases the cost of production. Domestic production will increase internal supplies.  The price will still be governed by the commodity market but there will be no or little delivery costs and that will help with internal pricing. It will also create a supply buffer in case of interruptions from overseas supplies.  Like that occurring in Libya.
  2. Eliminate the regional gasoline formulas created by the EPA.  These regulations prevent gas formulated for KC, being sold in St. Louis, or even in Wichita, KS.  I’ve see as much as $0.10 price differences between gas sold in Belton/Raymore, MO and that of Peculiar, MO just five miles further south from KC. All the different formulas dictated by the EPA directly drives up cost.  There is no cost reduction for volume under the current scheme.  Let’s pick one good formula and that will be the standard across the nation.  If that’s a strict California formula, so be it. (Better yet, let’s eliminate the EPA completely. They’ve never met their original mandate and have been a complete failure.)
  3. Stop printing money like it’s toilet paper or it will soon be worth no more than toilet paper.  If it weren’t for the Fed wildly printing money (they call it quantitative easing) the price of oil would be 30% less.  That would be a drop from $100/barrel to $70/barrel.  Think of the impact at the pump for that. The corollary is to also cut Federal spending and debt that directly impacts the strength of the dollar on international markets.
Regardless, none of the three above will drive a quick change.  It will take years, 3-5 at least. The dems will say, “See!  See! Increasing production won’t change anything!” True, for the short-term. But it will change prices for the long term.

It’s time we stop being short-sighted, looking for quick fixes, it’s time to be looking at the long term and that must start now.

Random Shots for Friday

It’s that season again.  Which season? Baseball? No.  Spring? No.

It’s Tea Party season!!

This year will be the first in three years we won’t be going to a Tea Party on April 15th.  As far as I can find, the closest will be in Topeka tomorrow with all the usual suspects.  Gregg Knapp, the new morning radio host for KCMO will be there in place of Chris Stigall who is now in Philadelphia. 

The Political Chips website lists another gathering at the Liberty Memorial tomorrow.

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Remember the spending cuts in Boehner’s sell-out to the dems?  Yes, that one that was supposed to be $38Bn and when the truth came out really only contained $352 Million in discretionary cuts.

Another of Boehner’s lies has just been exposed.  He claimed the cuts were permanent.  Yeah.  This morning it was revealed that those measly $352 Million cuts last until…October 2011.

Yep, that’s right. The cuts last until the end of the fiscal year. At that point the CR expires.  Any cuts that were included will have to be re-negotiated again.

Hear that Ohioans?  Kick Boehner out in the next Primary.  He’s unfit to hold ANY elected office.

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The FedGov claims that inflation is only 0.5% for the second month in a row.  They exclude fuel and food price increases.

Why?

We have to eat. We have to travel further than we are able to walk.  Food and fuel price increases affect us everyday. Why the masquerade?  It makes the FedGov look good.

I found this tidbit in today’s Morning Bell from the Heritage Foundation.

Food and fuel prices keep going up, leading to an increase in the cost of living in the United States for the ninth consecutive month. 

The Bloomberg report is more explicit.  Gasoline prices have gone 3.5% from the last month. At that pace the yearly inflation rate is 42%. Food price went up 0.8% for a yearly increase of 9.6%.

Gasoline

Energy costs increased 3.5 percent from a month earlier, the most since December. Gasoline prices increased 5.6 percent.

Food costs rose 0.8 percent, the biggest increase since July 2008. 
The cost of medical care increased 0.2 percent after a 0.4 percent increase the prior month. Apparel costs dropped 0.5 percent in March after a 0.9 percent decrease a month earlier.

And what is the FedGov doing to combat this?

They’re printing more money that will feed more inflation. Again, from the Bloomberg report…

The Federal Reserve last month reiterated a plan to complete a second round of bond purchases that’ll pump $600 billion into the financial system by June. 
Starting in May, Utah residents will be able to shop in a currency other than the dollargold, something that hasn’t happened since 1933. 
Utah became the first U.S. state last month to recognize gold and silver coins minted by the federal government as legal tender. More than a dozen other states are considering similar measures, and are expected to follow Utah’s example. The move, proponents say, is caused by declining faith in the U.S. monetary system and concern about rising inflation.  

With the price of Gold approaching $2,000 an ounce, maybe this is an idea whose time has come—again.

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Oh, if you were planning on driving from Kansas City to Denver today?  You can’t get there from here!

Due to a late season arrival of Globull Worming, I-70 in Eastern Colorado and Western Kansas is closed until they can get the plows out to clear the Interstate.

Inflation is up

We’ve been fortunate, so far, amid all the injuries committed by the dems on our economy, that the inflation rate has been low. It now appears that we’re entering a period of stagflation (a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation) wordnetweb.princeton.edu/perl/webwn.)

There has been an ominous bit of economic news. The government announced that the monthly rate of inflation has increased to 2%.

WASHINGTON (AFP) – US inflation rose two percent in March compared to the same month a year earlier, according to the consumer price index published on Monday.

We’ve been fortunate that inflation has been low. The that is about to end. The government, in order to meet it’s increasing expenditures and debt will have to print more money. If they can, they will sell more treasury notes. But that will not bring in sufficient cash to offset the money presses. The last treasury note sale was abysmal. China, who had been the buyer of much of our debt is dropping out of the game. They hold too much of our debt as it is and they’re in the process of unloading it.

When we get to the point where no one will buy our treasury notes, we’ll approach the same state that Greece and several other European states find them selves. High debt, higher spending, no or little income and unable to meet the socialist demands of the population. They have been caught in the socialist economic conundrum: the problem with socialism is that eventually you’ll run out of other people’s money.

The whole castle of cards that is the US economy could find itself in the same situation as Greece—and tumbling down. Europeans have been indoctrinated in socialist propaganda for generations going back to the popular uprisings of 1848 and earlier. The governments there have taken lessons from those uprisings and have disarmed their populations. That’s not true of the US.

We’re more fortunate that we have a strong and growing grass-roots movement of the Tea Parties to direct our opposition to the democrat regime in Washington. The Tea Parties are not politically aligned to any party. Neither the democrats, who insist the Tea Parties is a republican front, nor the republicans who view the Tea Parties an ignorant upstarts with the sophistication to understand Washington politics. Both are incorrect to their detriment.

The actions of Charie Crist is a prime example. Crist was a RINO. When he saw he wouldn’t win the Florida primary for Senate against Rubio, he showed his true colors and said he’d run as an independent. And…who is giving him assistance? David Axelrod, Obama’s senior adviser.