2008-05-15T14:30:57Z Don Salyards Copyright 2008, Don Salyards SPHPBLOG
What is inflation? Inflation describes a rising GENERAL level of prices; in other words, when the prices of almost everything go up. Inflation occurs when the federal government “prints” money at a faster rate than the growth of real goods and services. When you have too many dollars chasing too few goods, prices rise. By the way, the Federal Reserve System runs the currency and credit “print shop”, and is solely responsible for inflation.

At the risk of boring you completely (which we economists do well), let me say that there is no method to measure inflation that is without problems. In 1978 the BLS started using the Consumer Price Index (CPI) to measure inflation. The BLS had a “market basket” of specific products and services which included food items, gasoline, and durable goods. They would measure the month by month changes in the prices of the items in the market basket and thereby determine by how much prices changed over time. The problem with the CPI is that the items in the “market basket” needed to stay the same for measurement purposes, but items such as personal computers, which didn’t exist in 1978, were not part of the market basket. Other items (slide rules and 8-track tape players) needed to be excluded. This necessitated an ever-changing market basket, adding some items and subtracting others.

Since February, 2000 the Federal Reserve System has utilized a concept called “core inflation”, which is widely used for political purposes. Core inflation is most often calculated by taking the Consumer Price Index and excluding certain items from the index, most notably energy and food! The obvious problem is that energy and food prices are increasing rapidly and impact the average American family the most, yet they are not calculated as part of “core inflation”.

Economist John Williams says the only reason the inflation rate is so low is because the Reagan and Clinton administrations rewrote the way the CPI is calculated. In his monthly online newsletter Shadow Government Statistics, Williams has attempted to recreate the inflation rate using its older guidelines. Under his calculations, inflation is actually running at an annualized rate of around 10 percent.

The Federal government has a motive to understate the inflation rate. Welfare payments and social security payments are tied to the CPI, where even a one percent rise in the index can lead to hundreds of millions of dollars of increased Federal expenditures.

To conclude, inflation is not easy to measure, yet there is little question that a 4% number severely understates the pain that is now felt by the American consumer.
]]> http://www.donsalyards.com/index.php?entry=entry080504-025810 2008-05-04T00:00:00Z 2008-05-04T00:00:00Z
1. The merger of Northwest and Delta Airlines will be beneficial to consumers.

2. The soon to be received $168 billion dollar stimulus package, which pays many families from $300 - $1,200, will revive the sagging American economy.

3. The Iraqi army will eventually be able stand and fight without the aid of US troops.

4. Gasoline prices will never reach $5 a gallon.

5. Once Obama’s Pastor Jeremiah White fully explains within the context of his entire sermon the statement, “The government lied about inventing the HIV virus as a means of genocide against people of color.” we will all feel more at ease.

6. Increased government intervention in __________ will bring about efficiency, improved quality, and cost savings.

7. We shouldn’t foreclose on the homes of people who didn’t understand the terms of their sub-prime mortgages when they signed the loan papers.

8. The only thing that stands between the United States of America and complete energy independence from foreign producers is the allocation of more land to corn, and the conversion of more corn to ethanol.

9. Expect unity and solidarity within the Democratic Party when their National Convention ends in Denver.

10. Test scores in America’s public schools will go up if we can just find more funding for public education.


Tad Salyards Quote of the Week. “Any animal that steps on your foot and breaks it doesn’t qualify as a pet.”
]]> http://www.donsalyards.com/index.php?entry=entry080427-024403 2008-04-27T00:00:00Z 2008-04-27T00:00:00Z
It is a long-known fact that the group, known as the Fundamentalist Latter Day Saints, practices polygamy. It is also known that many of the wives are young. Charges of sexual abuse remain to be substantiated, but should be investigated. It is my belief that Texas authorities didn’t need to raid the ranch. They should have investigated the charges of the 16 year old as a separate matter.

The news media made a spectacle of the story, showing photos of the women dressed in “Pioneer” clothing, with long hair. The ranch is now referred to by reporters as “the compound.” The dress of FLDS women is not much different than the dress of Amish women. Both FLDS and Amish dress differently that mainstream America. Both groups live somewhat secluded from the popular culture, attempting to save their children from being exposed to it. There is no crime in this. However, the practice of polygamy isn’t a religious right in the United States of America; it is illegal. The Amish don’t practice polygamy, the FLDS do.

The taking of multiple wives is accepted in Islam and is widely practiced by Muslims throughout the world. However, if you’re a Muslim living in the United States of America, you give up your religious right to multiple wives and must have only one wife. The uniquely American experience with polygamy began with the Mormons, whose prophet, Joseph Smith, Jr. practiced polygamy in Nauvoo, Illinois. After Smith and his brother were murdered at Carthage, IL in 1844, Brigham Young took the majority of the Mormons West to Utah, where polygamy was widely practiced. While the Mormons practiced polygamy openly in Utah, the rest of 19th century American society abhorred it. When federal authorities attempted to stop polygamy in Utah in the 1870’s they were threatened by armed Mormon militia.

Ultimately, in the early 1880’s US deputy marshals began extensive “polyg hunts” throughout Mormon territory, causing many polygamists to flee into Canada or Mexico. Those who continued to practice polygamy were forced into hiding. Many Mormons went to the penitentiary. In 1882 the Edmunds Act was passed, which disenfranchised polygamists, redefined polygamy as a crime and provided for legal action against violators. The mainstream Mormon Church, today known as the Church of Jesus Christ of Latter Day Saints, no longer advocates or practices polygamy, but it should be remembered that the Mormons discontinued the practice only because of the enforcement of Federal authorities. It should also be noted that the FLDS church in Texas is not in anyway affiliated with the Mormon Church (Church of Jesus Christ of Latter Day Saints).

If the people of the United States and their governmental authorities don’t have the “stones” to enforce polygamy laws, then the FLDS, Muslims, and any one else should take on as many wives as they wish and have hundreds of children if it is their desire. On the other hand, if the people of the United States wish to enforce polygamy statutes in this country then the FLDS should immediately be allowed to return to the ranch with their families, with the understanding that federal authorities will enforce the Edmunds Act. Existing husbands, wives and children should be documented and all births and deaths recorded by government authorities. Whether or not a man has one or five wives, he should be required to support all of them and his children, without any welfare payments. If any man at the ranch takes another wife or sexually abuses an under age female, he should go to prison.
]]> http://www.donsalyards.com/index.php?entry=entry080420-014922 2008-04-20T00:00:00Z 2008-04-20T00:00:00Z
Opportunity cost is based on the fact that every minute of every day, whether we want to or not, we are deciding how to use our time. For example, if a man decides to sit down in a chair and watch a football game for three hours, he misses out on the benefits of some other activity that he could have experienced during that three hours. The benefits of the “next best” activity that is forgone is called opportunity cost. For example, if the next most beneficial thing the man could have done during the football game was to split wood for his winter heat, watching the football game may cost him some warmth when the cold January winds blow.

But opportunity cost is not just about work, nor is it about money. If a housewife decides to spend an hour doing the laundry and the next most beneficial use of her time would have been to take a nap, the benefits of the rest are the opportunity cost of doing the laundry. Even people engaged in leisure face the ever-present dilemma of opportunity cost; the person that jogs for an hour gives up the enjoyment of playing tennis during that hour, and so on.

Because our lives are like a candle, each one with a certain time to burn before the flame is extinguished; opportunity cost is an obsession for many economists, including me. The other day my wife and I helped a neighbor pack for a move to a new apartment. I was astounded to find that he probably owned 200 movie DVD’s! As I packed them into boxes my first thought was that at $15 each, he had probably spent nearly $3,000 for these movies. But then, my economist brain focused in on the real cost of those DVD’s; the benefits that he could have received by spending between 500 and 700 hours doing something else. After all, if a person worked a 40 hour week, he would have to work nearly 18 weeks to “spend” 700 hours. With 700 hours, the young man could have taken a complete semester of college courses, or spent time playing tennis, or taken dancing lessons, or learned to cook, or gone on numerous vacations, etc.

It seemed to me that the young fellow had spent nearly 700 hours of “consumption” time watching movies, when he could have benefited greatly by using some of those hours in “investment” time (activities spent educating himself or otherwise improving his future prospects for success). Why did he instead spend all of this time watching movies? First of all, he enjoys movies immensely, so he should spend some time watching them. But secondly, I suspect that he ignored the fact that there were some really beneficial alternative uses for his spare time. Don’t get me wrong, if watching 700 hours of movies gave him more satisfaction than anything else he could have done during every one of those 700 hours, the young man should have watched 700 hours of movies. I suspect, however, that even he would acknowledge that he would have been better off if he had watched a few less movies and reaped the benefits that would have come to him using at least some of his time doing something else.

One reason that we economists are a bit “wacky” is that any time we contemplate doing anything, we think about the opportunity costs of our time. If we are about to embark on activity A, we first consider if activity B, C, or D would be a better use of our time. We then engage in the most beneficial of those activities. At the university where I work, the members of our economics department have only one or two department meetings per year. Professors in other disciplines spend many hours annually in weekly “department meetings”, often spending time going over mundane details. We economists use email instead. If information needs to be disseminated or an important issue comes up, we inform each other via email. We share our feedback with each other electronically and even “vote” via email, which enables us to avoid most meetings all together. I’ve often asked myself why professors in other departments don’t operate the way we economists do. I think I know the answer; the minds of economists are programmed to always consider the “opportunity costs” of time spent in meetings, whereas professors in other departments ignore opportunity costs. This also explains why we economists get along so well together; none of us want to spend time dealing with “petty issues” that cause personal strife in so many organizations. After all, time is just too valuable to spend dealing with the “small stuff.”

A word of warning is in order. While employing the concept of opportunity cost in your daily life will make you extremely efficient and I recommend it highly, it may also tend to alienate you from others. It is easy to observe how others spend their time and to become judgmental. Remember that an activity that you deem to be wasteful may be a necessity for someone else. Remember that every person has his or her unique preference schedule for work and leisure, so if you’re a workaholic, you’ll have to remember that the other guy might actually prefer watching a movie to doing anything else. In that case, he should watch his movie and you should shut up!]]> http://www.donsalyards.com/index.php?entry=entry080413-041831 2008-04-13T00:00:00Z 2008-04-13T00:00:00Z
You see, the market is color blind. It is blind to gender and religion. At the extreme, it is even blind to education. When a young girl graduates from high school and opens up a small coffee shop, her customers don’t care if she went to college or not. They don’t care if she is black, white, Latino or Asian. They don’t care if she is a Jew or a Gentile, a Hindu or a Muslim. They want a really good, cup of Java, prepared just like they want, fairly priced, and served with a friendly attitude!

The young man who drops out of 8th grade because he is bored with school would be doomed to a life of poverty in most countries. However, that young man in the United States, with a lot of hard work and genuine ambition, might get a small bank loan to buy a used dozer and a beat up dump truck. With that he will get excavation jobs. If he does a good job and charges a fair price his business will grow. Twenty years later he might have fifteen trucks, twenty dozers, thirty-five employees, and a net worth of a million dollars. These success stories occur every day in the United States of America.

Of course, the odds of success are a lot better if a person expands their education beyond high school, either learning a craft or going on to a college or university. For people who learn a skill the American Dream isn’t just an outside possibility, it is almost a certainty. Whether one is an electrician, a cosmetologist, a teacher, an engineer, or a physician, he or she is respected for unique skills. The electrician wires the home of the cosmetologist, who cuts the hair of the surgeon. The surgeon drives a car designed by the engineer who pays the teacher to instruct his children. All parties involved gain through skill specialization and exchange of services. True dignity isn’t embodied in the type of work performed, but in the skill that one brings to his or her chosen profession! Both the hands of the pianist and those of the carpenter contain rare skills that the other cannot duplicate.

I ran into an electrician the other day who told me that for every five electricians now retiring from the profession only one new youngster is now entering. Only two years in technical school are required for a young man or woman to enter the profession as an apprentice electrician. From then on, good wages are assured in a profession in which jobs will never be outsourced to China. The same is true for plumbers, auto mechanics, engineers, computer technicians, and other occupations.

Many employers will assist in training employees who will work for them. Persons of any gender, race, and religion are welcome with open arms. I once told my class that if a person was a good mold designer with CAD skills, I would hire that person if they were a transvestite with polka-dotted skin and two heads! Just give me a person who is serious about making a good living and who is dedicated to trading a fair day’s work for a fair day’s pay. There has probably never been a better time in history for a young person to enter the skilled professions in this, the land of the American Dream.]]> http://www.donsalyards.com/index.php?entry=entry080406-015743 2008-04-06T00:00:00Z 2008-04-06T00:00:00Z
Tomorrow, March 31, 2008 is one of the most glorious days of the year; opening day for Major League Baseball. The Twins open with a night contest against the Angels, their last year at the Metrodome before christening their new ballpark in 2009. The Cubbies open at 1:20 p.m. against the Brewers at the friendly confines of Wrigley field. Virtually all major league teams open on Monday.

On opening day hope springs eternal. Winning the pennant is well within reach; what the heck, going to the World Series is all but assured on opening day! Your team is in first place; undefeated! The new players arriving from the farm team are all future Hall of Famers! None of your pitchers will have to undergo Tommy John surgery; they’ll be throwing endless 97 mph fastballs all season long! Your ace closer will throw changeups so nasty that opposing batters will look like fools.

Some believe that sporting events are meaningless and that our society puts far too much emphasis on games. To be sure, there are smudges on the sporting world such as steroid use, thrown boxing matches, corked bats, and soccer thugs. But, for countless people from Miami to Madrid, loyalty to a sports team routinely yields tremendous amounts of personal satisfaction during a season. Sports gives people something to look forward to each day. Many lasting friendships develop in the context of sports, either as participants or as fans. Families grow closer through sports, whether it is the bond between a soccer mom and her children or the fond memory a man has of the time his now deceased father took him to see Harmon Killebrew play at Metropolitan stadium. As I write this blog a bunch of students from Winona State University are returning to Minnesota on a cramped bus from Springfield, MA having witnessed their men’s basketball team win its second NCAA division II basketball championship in three years. Once again, sports has served to bond people together.

In my final hours, should I have the luxury of looking back on my life, I’ll recall the day I took my daughter Tara to Lambeau field to celebrate her 21st birthday. I’m pretty sure she will take the same experience with her. Each of my readers can probably recall an experience with family or loved ones, shared at a sporting event, absolutely stuffed with indelible memories.
]]> http://www.donsalyards.com/index.php?entry=entry080330-071220 2008-03-30T00:00:00Z 2008-03-30T00:00:00Z
In February, 2006 Bear Stearns, the New York investment brokerage firm, approved a bonus pool of up to $305 million for 13 staff members, or more than $20 million each. That same year Lehman Brothers disclosed that it would pay its average employee $335,441 on net income of $4.0 billion. That was fine with me. I figured that these big boys were capitalists of the first order and that those fellows on Wall Street must have earned their keep to receive salaries and bonuses like that.

This was the same time that bankers were processing sub-prime real estate mortgages in large numbers. These loans included low “teaser rates” for the first three or five years, with higher interest rates later. Many of the mortgages were processed as “no doc” loans, meaning that the borrowers weren’t required to document their income, assets, or liabilities to gain loan approval. These “no doc” loans later became known in the industry as “liar loans”. Some of the loans were made for as much as 120% of the appraisal values, which had been rising steadily for several years.

Assuming that housing prices would continue to rise at 6-10% every year and assuming that refinancing would be available at low, fixed rates before the “teaser” rates morphed into their previously disclosed higher rates, homeowners just might come out all right. The problem with assumptions is that they don’t always work out. Many of the borrowers were naïve folks who were just trying to get into their first home or were attempting to move into larger homes they couldn’t afford. However, there were also large numbers of speculators who bought several properties, hoping to ride the “equity wave” a couple of more years and sell the homes at a nice profit. In the end, it really didn’t matter; these were risky loans made to unqualified borrowers, by lenders who should have known better.

The mortgage lenders, whether they were large national outfits like Countrywide, internet lenders like DiTech, or your local banker down the street, were basically middlemen, who sold the mortgage loans to investment banking firms like Bear Stearns. Bear Stearns “packaged” these home loans into mortgaged-backed bonds, which were sold to large banks and other institutional investors. These “hedge funds” don’t actually limit risk, but through the use of short selling and other derivative contracts may actually increase risk of default. Hedge funds also charge high fees and can be extremely profitable to firms like Bear Stearns. After some time, hedge funds represented up to 30% of the portfolios of large banks and institutional investors throughout the world. During these “good times” firms like Bear Stearns and Lehman Brothers made billions in profits from these funds, enabling them to pay large bonuses for key employees.

Now matter how well you dress up a pig, it is still a pig. Hedge funds were crappy investment vehicles with a high default risk. As home loan teaser rates expired and mortgages cycled into higher interest rates, borrowers tried to refinance their homes, many of which had actually gone down in value. As people started to default on their house payments, hedge funds faltered. Holders of sub prime backed securities started to lose money. The big guys like Bear Stearns were running out of cash and their large institutional customers were finally reaping their well-deserved losses. Between January and March, 2008 Bear Stearns stock fell from $90 a share to $2.84 a share. On March 17, 2008 Bear Stearns was purchased by JPMorgan Chase for a mere $2 per share, but not before the central bank of the United States Government, the Federal Reserve System, agreed to guarantee up to $30 billion of Bear Stearns’ lousy securities for the benefit of JPMorgan.

By opening its discount window to JPMorgan, the Federal Reserve System (the Fed) started a new precedent. Prior to last week, the Fed opened its discount window only to banks. For the first time in history, the discount window is now open to investment banking and brokerage firms. In essence, the Fed will now allow shaky and irresponsible investment bankers to exchange their bad loans for cash. The Fed might as well be accepting cereal box tops as collateral from some of these investment bankers! By monetizing the bad loans of investment bankers, the Fed will create either inflation or higher interest rates, the costs of which will be paid by taxpayers and consumers.

A huge moral hazard problem has been created. The large investment banking houses have been given tacit permission by the Fed to act irresponsibly anytime in the future, knowing they will always have the Fed to buy their cruddy loans. The mega banks are free to pay high salaries and extravagant bonuses during the good times, but are conveniently insulated from losses during the bad times. That’s not my understanding of Capitalism.

The Capitalism I am familiar with is the best economic system on the face of the earth. People and businesses are free to take risk, make investments, and even to invent new financial products, with the understanding that they will reap the profits or losses inherent in their activities. When you serve consumers well and provide them with a superior product or service at a reasonable price, you stand to make a profit. When you’re stupid and offer inferior products or services, you’re supposed to suffer losses, even to the extent that you lose your business and fortune.

If my businesses suffer losses, I don’t think that we will be able to get a loan at the Fed discount window. These days, I guess Capitalism is just for the little guys.
]]> http://www.donsalyards.com/index.php?entry=entry080323-073017 2008-03-23T00:00:00Z 2008-03-23T00:00:00Z
Hillary Clinton is an intelligent woman. She is as qualified to be President as many who have occupied the white house, but I won’t vote for Hillary because she’s such a plastic phony. I remember that evening on national television when Bill confessed to his problems with Monica Lewinsky and Hillary stood by his side. She told the American people that she was no “stand by your man” Tammy Wynette type. Sure, Hillary. Everyone knows that you rode Billy’s coattails to the Governorship of Arkansas and to the Presidency of the United States so that you could fulfill your political ambitions.

When asked about her marriage in an interview on October of 2007 Hillary responded; “I know the truth of my life and of my marriage, my relationship and partnership, my deep abiding friendship with my husband. It's been enormously supportive to me through most of my life.” If you carefully read those words it sounds more like a description one person might make about another prior to establishing a Limited Liability Corporation! Funny she didn’t mention the world “love.”

I would vote for a female president. I’d vote for a woman like Condi Rice in a heartbeat, but not a frigid, conniving fake like Hillary Clinton. Contrary to what many people think, if Hillary is elected it won’t be the end of the world. She will have an ex-president for a confidant and advisor, and not a bad president at that. I’m only worried if Hillary gets the famous 3:00 a.m. call because Bill will most likely be somewhere else!

Barak Obama is a phenomenon; something just short of a religion. He’s the best orator in a presidential race since John F. Kennedy. No one can say so little so well! People really like this guy; he’s the “unplastic”, the “unHillary.” Not since Ronald Regan has a candidate for president had as much Teflon attached to him as Barak Obama. Guys like Jesse Jackson and Al Sharpton are confrontational racists who assume that all white people are bigots. They stand there with their hands out demanding reparations for their “victim” constituents. Barak is not of this ilk and I’m proud of him for that. Barak doesn’t believe that all white people are out to get the black man. He believes that good people can work together for a brighter future without degrading each other.

Obama’s lack of experience doesn’t scare me, but his propensity toward socialism does. I can’t vote for someone who still believes that more money will cure public schools or that more government will improve the quality of health care. Once in a while Obama will say something brilliant that gives me a shred of hope. Recently, when asked by a black voter what he was going to do about all of the Mexicans taking black jobs, Obama told the gentleman that blaming Hispanics isn't the solution; that the lack of skills and education is the real reason for high black unemployment rates. In my heart of hearts I hope that Barak is merely faking his socialist tendencies until he gets elected, at which time he will instantly think like a free-market University of Chicago Economics professor! Despite my fantasies, I just can’t pull the handle for Obama in 2008.

John McCain is a war hero and true American patriot. I deeply respect him for his service to this great nation. His age isn’t an issue for me. I’m glad he doesn’t bow down before fundamentalist Christians in Alabama who kiss poisonous rattlesnakes at their worship services. If McCain has to be a Republican, at least he’s not going to waste a lot of time trying to block stem cell research or repeal Roe vs. Wade.

But doggone it, McCain has been in the Senate since 1986. In that time period I’ve seen federal government expenditures rise from one trillion dollars to over 2.5 trillion dollars. The US public debt has risen from $3 trillion to $9.3 trillion dollars. I remember the old days when the Republicans promised us a smaller government. I soon realized that both parties would grow the size of government, but hopefully the Republicans could be counted on to grow it more slowly that the crazy spend-nutty Democrats. Today’s so-called Republicans are worse than the Democrats with respect to spending. McCain, my friend, while you are not solely responsible for the bastardization of the Republican Party, you have been in Washington for over twenty years, mister. You’re judged by the company you keep; you’ll not get my vote for President.

So who will get my vote as President on November 4, 2008? I’ll vote in November, you can be sure. Too many men and women have lost their lives in our armed forces defending my right to vote. I’ll head to the polls on Tuesday, November 4, 2008 to honor their sacrifice for all of us. I’ll vote for a congressional representative, I’ll vote for mayor, and I’ll vote for a city council representative. County judges will receive my vote. But this time, for my first time ever, where it says “President of the United States,” on the voting machine, I’ll not be pulling the lever for any of these three jokers.

]]> http://www.donsalyards.com/index.php?entry=entry080316-010031 2008-03-16T00:00:00Z 2008-03-16T00:00:00Z
If she is elected President, Mrs. Clinton aims not only to take control of the profits of the energy companies, but to socialize health care as well. For Hillary, big government represents competence, goodness, and fairness. However, the track record of the Federal Government in virtually everything it has touched during the last fifty years indicates that Government is incompetent and inefficient at best; coercive and unfair at worst.

With the exception of defensive functions (a national defense, a court system and a police force to enforce the actions of the court), and the building of infrastructure like highways and airports, most other activities of government are outright tyrannical. If government is made for man, instead of man being made to serve government, then it follows that the government should be limited in size to allow its citizens the maximum freedom to pursue their lives, liberty, and property.

It is a myth that government can efficiently run an economy. The Soviets tried it on a grand scale for fifty years before their socialist economy collapsed. Tragically, the government of India followed the Soviet economic model (complete with five year plans) from 1950 through 1996. By doing so, the government of India set back the Indian economy fifty years. The United States fought a war in Vietnam, supposedly to stop communism from spreading throughout Asia. After we left, the government of Vietnam struggled with socialistic economic policies for nearly twenty years, only to realize that it wasn’t working. Now, three and a half decades later, the Vietnamese have become capitalists with US firms among the largest investors in the Vietnamese economy. The Chinese came to the same realization as the Vietnamese. During the leadership reign of Deng Xiaopeng, the communist party of China made a “deal with the devil” (Chinese Capitalists). By now everyone knows that the Chinese are some of the greatest capitalists the world has ever known.

The real end to socialism came on November 9, 1989 when the Berlin wall came crashing down. East Berliners, oppressed by their socialist dictators for 28 years, over-ran stores and businesses in West Berlin, in an unquenchable thirst for modern goods and services. Keep in mind that East Germans and West Germans were the same people. South Koreans and North Koreans are the same people. Only the economic systems are different. Socialism leads to poverty and oppression. Capitalism leads to prosperity and freedom. Everybody in the world knows this. Socialism isn’t even defended in the economics departments of Universities these days. There are perhaps only three men in the entire world who think socialism is a good economic system, Fidel Castro (Cuba), Kim Jung Il (North Korea), and Hugo Chavez (Venezuela). The people of Cuba and North Korea know what tyranny is. The Venezuelans, now facing food shortages because of Chavez’s government price controls, are going to find out.

With all of this evidence supporting capitalism, I find it astounding that ANY American want to slide down the slippery slope of socialism. Economic ignorance abounds. We must deny government the right to take the property of private citizens, except for defense and infrastructure. When government plays “Robin Hood”, taking the earnings of those who produce and giving it to those that don’t produce, this is the greatest crime of all. The income transfer from producers to non-producers lessens the incentive for producers to continue working or expanding their businesses and enterprises. The “handout” also ruins the incentive of the non-producer to get a job or invest in further training and education. With producers less interested in producing and looters even less likely to become involved in productive activity, the entire economy suffers.

I don’t care if the socialist is Hitler, Stalin, Pol Pot, or Monica Lewinsky’s boyfriend’s wife; socialism doesn’t work. Americans who believe it works and are willing to elect leaders who are successful in implementing Socialist legislation will lose a significant amount of their freedom and prosperity. Tragically, they won’t even realize what has happened until it is too late. As the late economist Milton Friedman once said, “The society that values equality over freedom will have little of either. The society that values freedom over equality will have a great deal of both.”]]> http://www.donsalyards.com/index.php?entry=entry080224-123945 2008-02-24T00:00:00Z 2008-02-24T00:00:00Z
My loyal Geek, Jordan Ogren, spent the last few weeks trying to figure out what was wrong. He poured over reams of computer language and code. Finally he found out that our problem was not related to a programming glitch; it was because of the fact that we had bumped up against our storage limit with the internet service provider. We are now in the process of increasing that limit, but it will take a couple of days.

Hopefully, by Sunday, February 24 we'll be back on line! Thanks to those of you who've tried and tried again, only to conclude that I'm sick of blogging or have been hit by a bus! My absence has been solely due to the fact that the technology needed to run this blog has far outstripped my geekness.

Tell your friends and neighbors that we're back to stay! See you Sunday!

Don Salyards ]]> http://www.donsalyards.com/index.php?entry=entry080222-071038 2008-02-22T00:00:00Z 2008-02-22T00:00:00Z
Our economy doesn’t need fixing. It is incredibly resilient. Within months we recovered from the crash of 1987, when the stock market lost 22.6% of its value in a single day. Our economy survived the savings and loan crisis of the late 80’s and early 90’s. It roared on, despite the terrorist attacks on September 11, 2001, creating jobs and prosperity. When left alone by government, economic distortions caused by terrorists, Enron, sub-prime lenders, and stock speculators will eventually self-correct, albeit with some pain inflicted on those businesses and individuals who’ve acted stupidly.

The Federal Reserve System (The Fed) exists to control money and credit in the United States. It’s primary responsibility, in the opinion of this economist, is to maintain a stable, non-inflationary money supply. The Fed can use monetary policy to control interest rates. If the economy is in recession, the Fed can lower rates in the hope that businesses and consumers will borrow more and spend more. This is precisely what the Fed attempted last week when it lowered the federal funds rate by ¾ of a percent. I’m not sure this “easing” of rates was necessary at this time. I think a bit more patience would have been in order.

The Congress can engage in “Fiscal Policy” to boost an economy in recession. Bush snuggled up with Congressional leaders last week to propose an “economic stimulus” package where the government will, in essence, spend $150 billion that it doesn’t have and hand it out to American families. This is supposed to increase consumption expenditures, which will boost the economy. Where will this money come from? The government will sell $150 billion in US bonds, meaning that we will borrow it from the China, Saudi Arabia and other governments who purchase US securities.

The additional $1,200-$1,600 that eventually arrives in US households will likely be spent to pay off credit card bills, or to pay higher mortgage payments for a few months. Even if some of the spending actually stimulates the economy, the timing may be off, as the economy might already be recovering when the stimulus occurs. The end result could actually be inflationary.

The reason that Politicians are now bringing the economy to the forefront has nothing to do with economics and everything to do with politics. There is, after all, an election coming up. I wish the politicians would leave the economy alone. Let Wall Street speculators take their well-deserved losses. Let homeowners who bit off more than they could chew move out of their expensive houses into more affordable accommodations. Let the banks that made those lousy sub-prime loans continue to lose additional hundreds of millions of dollars.

Dear politicians, stop treating Americans like stupid dupes, bailing us out every time we make a mistake. We’re better than that. People willing to face the consequences of their mistakes or successes built our nation. This fostered an atmosphere of personal responsibility and integrity that created the most prosperous economy the world has ever known. Please, fair politicians, have the courage to leave us alone so that we can make technological innovations, invest capital, start businesses, and create jobs. Laissez faire!
]]> http://www.donsalyards.com/index.php?entry=entry080127-065522 2008-01-27T00:00:00Z 2008-01-27T00:00:00Z
Generally, I think my wife and I have done pretty well raising our children, but in my opinion we made one huge, colossal, incredible, nasty mistake. My wife doesn’t share this view, but she doesn’t move horses from Minneapolis to Chicago either. The mistake was allowing my daughter, at the age of five, to attend summer “horse camp” at a little ranch near our home. For a hundred bucks she went over there every day for five days. She learned how to ride the horsies, feed the horsies, clean out the stalls of the horsies, and do whatever horsie owners do. The result was nothing short of complete horsie addiction. This, along with a lot of daughter persistence, led to buying an old nag, selling that nag and buying a better nag, selling the better nag to buy a good show horse, buying another horse keep the show horse company, and taking both horses to college (which necessitated the purchase of a triple horse slant load goose neck trailer with front dressing room and rear tack, and a 3/4 ton used Chevy pickup to pull the trailer).

Several years ago we got rid of the horse trailer and the pickup, but one horse remains in our inventory. So last week I borrowed an old horse trailer from a farmer friend. It had not been used for a few years, so I had the bearings checked. I toyed with putting “new rubber” on all four tires prior to the trip, but wanted to minimize my “horsie” expenditures. The tires were old and one of them was particularly bad, so I replaced it with a new tire. I figured the other three tires would last for the 120 mile trip to Minneapolis and the 340 mile trip to Chicago. In other words, I tried to “horse around on the cheap.”

There were no problems on the trip to Minneapolis and we picked up horsie at his boarding stable near Prescott, Wisconsin. The temperature was -11 when we left Minneapolis, and I’ve since found out that cold temperatures are very hard on tires, especially bad tires. We made it to I-94 near Osseo, WI before the first tire on the horse trailer blew! After limping along to the next exit we were lucky to find a wonderful gentleman who had a small tire shop. When he looked at the sizing number on the side of our blown tire he told us that tires of that size designation haven’t been sold for 25 years! He sold us a good used tire and we were again on our way. Forty miles later another tire blew up and disintegrated, which was a psychological blow, given that this was supposedly our best “used” tire. We had to limp our trailer along I-94 at about 10 miles an hour before finding an exit at Warrens, Wisconsin. The fix for the second blown tire took a lot longer and by the time we were on our way again it was nightfall.

By now, we only had one of our original tires left. It was Saturday night, no garages were open, and I prayed that the last tire would hold together. I’ll have to admit that I prayed a lot; first for our safety and second that we wouldn’t be stranded again. We lucked out. The last old tire hung together. At 10:00 p.m. we got horsie to his new digs near Streamwood, Illinois about 5 hours behind schedule. It was a big relief when we unhooked that trailer. It was also an important lesson for me; when dealing with horse ownership, you’re in the “sport of kings” and it doesn’t pay to do it on the cheap!
]]> http://www.donsalyards.com/index.php?entry=entry080120-034311 2008-01-20T00:00:00Z 2008-01-20T00:00:00Z
Her summer in Sri Lanka had seemed like an eternity for Marcus. Every day, doubts entered his mind as to whether or not she would return for her Junior year of college, if her parents would find a match for her in Sri Lanka, or whether she would fall in love with another man. Marcus’ fear of losing Subani was as intense as his love for her. Suddenly his decision to leave his job on the foundry floor to pursue his degree in engineering made more sense to him than ever. With a degree in engineering he could earn a decent living to support a family. As he and Subani drove up I-94 and crossed the Wisconsin boarder the talk was non-stop. Marcus thought about a day, perhaps years in the future, when Subani would give him a son or daughter. The idea of being a father to her children was for him not an act of progeny or a biological event; it was the privilege of a lifetime.

Subani’s summer had passed slowly for her. She had always looked forward to summers at home, but her heart and thoughts this last three months had been with a strapping, handsome fellow in Hubbard, Wisconsin. Summertime had been a beautiful in Colombo, punctuated with sunny days, fresh fish, and tasty mangos. Subani “went through the motions” of shopping with her mother at the market, attending various social events with family and friends, and giggling with the household servants while helping them prepare meals.

Everything was predictable until three weeks after her arrival. On one of the walks that she and her mother take every afternoon, Subani’s mother blurted out, “You’re in love with someone, aren’t you, my dear? I can see that your mind has been somewhere else ever since you arrived back home. You can confide in me, honey. I’ll never speak a word of it to your father.” “How did you know, mother?” exclaimed Subani. “I was a girl once, too, my dear,” said her mother. “I had those same feelings and a secret of my very own, but that is another story for another day.”

Subani was astounded that her mother was so perceptive, but they had always been close. Her mother was her confidant, her protector, and her best friend. Subani opened up and told her mom the entire story about the handsome young man she had met in Hubbard, Wisconsin. She talked about his smile, his character, and his serious attitude toward his engineering studies. Subani even showed her mother a photo of Marcus, which she had tucked hidden away in the folds of her wallet.

For a while her mother just walked in silence. Then she said, “Subani”, how serious is your relationship with this young man? Subani answered, “Some day he and I will give you a grandchild.” “Not soon, I hope!” said her mother. “No, mom, not for a few years,” said Subani. “Your father will not hear of this for a while,” said Subani’s mother. “We’ll break it to him slowly, over the next two or three years. Our first hurdle is to convince him conceptually that interracial marriage doesn’t mean the end of the earth. We’ve got a big hill to climb.” “I know, mom,” said Subani, as they hugged in the dusty street.]]> http://www.donsalyards.com/index.php?entry=entry080113-071927 2008-01-13T00:00:00Z 2008-01-13T00:00:00Z “Barak Obama, the junior Senator from Illinois, will be elected President of the United States in 2008.”

My rationale for this prediction, as stated thirteen months ago, was this: “Despite Obama's lack of tenure and experience in Washington, Presidents are elected on the basis of image and charisma and Obama is incredibly rich in both. Not since John Kennedy has this country seen a politician as infectious and riveting as Obama. An excellent orator as demonstrated by his keynote address at the 2004 democratic national convention, if Obama chooses to run for President, Hillary Clinton doesn't have a chance of getting the Democratic Party nomination. Obama can muster more charm in thirty seconds than Hillary can display in an entire evening. In an open forum debate with Obama, Hillary Clinton would be cannon fodder. The Democrats would be stupid to nominate anyone other than Obama and they aren't going to be stupid this time around. I predict that once Obama has secured the Democratic nomination and his campaign gets up to full steam, there isn't a Republican on earth that can beat him in 2008.”

It remains to be seen if the Republican nominee can beat Obama in November 08, but Obama unquestionably mopped up Hillary in Iowa last week and has a very good chance of winning in New Hampshire next Tuesday. If Obama wins in New Hampshire, Hillary will be “toast” by the time the ballots are counted on “Super Tuesday.” Obama has a lot of money and a lot of charm. Hillary has no charm whatsoever, and is indeed “cannon fodder” when she shares the stage with Obama. She appears tight and nervous. She lacks sincerity. Obama appears smooth and “electric”. However, even putting aside charismatic considerations there are other a couple of other reasons why I think Obama will beat Hillary Clinton as the nominee of the Democratic Party.

First, as far as gender and race issues are concerned, Obama overshadows Clinton. A year ago, many voters were pretty excited about the prospect of electing the first female President, but that pales in significance now that they have the opportunity to elect the first black President. After all, when you have the opportunity to elect as President of the United States a guy who couldn’t even drink out of a water fountain in Selma, Alabama fifty years ago, that’s pretty exciting stuff. It speaks mountains about the progress that this nation has made in the arena of civil rights.

Second, Obama is a candidate of change and Hillary is not. After watching it’s second “Bush” struggle through a Presidency that borders on idiocy and having already experienced one “Clinton”, the public has lost it’s appetite for political dynasty. Most voters are so tired of established politicians (as evidenced by historically low Presidential and Congressional approval ratings) that they don’t care who’s elected or what his or her specific stands on issues happens to be, as long as it represents a change from the status quo. For example, many voters don’t care if Hukabee or Obama don’t have any experience in foreign affairs. They figure that the new guy, no matter who it is, can’t possibly screw it up any more than what has happened in the last eight years. As the voters look at the list of Republican and Democratic candidates, they seem to value one characteristic over all others, a fresh face. Sorry, Hillary, but you’re not a fresh face.

Don’t get me wrong. I’m not going to vote for Obama. In fact, I don’t know whom I’m going to vote for this year. It used to be that I could count on the Democrats to rob me of my economic freedom, while sparing me some of my civil liberties. On the other hand, Republicans would leave me with something in my pocketbook, at the expense of my civil liberties. It now seems that politicians from both major political parties want to make my government bigger and my tax burden unconscionable, all while robbing me of more and more of my personal freedoms. Will we ever learn that Government can’t solve the problems of our society? Is there no human activity in which we believe the Government doesn’t make wiser decisions than we as individuals can make? God help us.]]> http://www.donsalyards.com/index.php?entry=entry080106-074305 2008-01-06T00:00:00Z 2008-01-06T00:00:00Z
1. Seung-Hui Cho, age 23 killed 32 students and professors at Virginia Tech University. Of course, his handgun is to blame.

2. Bad, sub-prime mortgage loans caused large losses for banks and resulted in record foreclosures in the housing market. Apparently, gullible homebuyers didn’t read the hundreds of pages in the loan documents that the federal government had previously put in there to protect them, so we need more regulations and more documents for the next time that ignorant consumers and stupid bankers meet again.

3. The Iraq War continued, but with reduced violence in the later part of the year due to the “surge” of American troops and their deal making with rival forces. There may be light at the end of the tunnel here if the Democrats don’t raise the white flags after the next election.

4. Oil prices climbed to within pennies of $100 a barrel. Historically high gasoline prices were supposed to put pressure on consumer budgets, but Christmas shopping sales broke records in December. I’m not worried. If we use enough corn to make ethanol we can just buy our food from the Chinese!

5. Despite scares about lead and other tainted Chinese products, the US trade deficit with China ran at high levels again this year. What’s a little lead when you’re saving money!

6. Global Warming continued to be a “hot topic” as Al Gore won a Nobel Prize for his environmental activities, including his film, “An Inconvenient Truth.” Meanwhile, December’s heavy and frequent snows finally induced me to purchase a new snow blower. It was the environmentally sensitive thing for me to do. After all, even with this new pollution-emitting blower, my carbon footprint is still a lot less than Al Gore’s.

7. A bridge on I-35W collapsed during rush hour in downtown Minneapolis, focusing attention to the condition of the nation’s infrastructure. It was a miracle that only 13 people died, as the bridge fell nearly sixty feet into the Mississippi river. While Louisiana politicians wring their hands, Minnesotans will have their new bridge constructed before the end of 2008.

8. The beginning of the 2008 Presidential Campaign is now almost a year old. Most Americans are nearly ready to throw up, but we haven’t been able to determine if our queasy stomachs are do to the character of the candidates or the continuous nightly newscasts from Iowa.

9. The debate over illegal immigration continued in 2007, but there is little evidence that anything will change in the near future. There are too many votes at stake on both sides of the issue and besides; I can’t do without my Mexican landscaper.

10. Iran’s Nuclear Program got a lot of publicity this year. I’m not worried; the Israelis have a lot more to worry about than I do, and they have the military might to take care of this problem when necessary.]]> http://www.donsalyards.com/index.php?entry=entry071230-081628 2007-12-30T00:00:00Z 2007-12-30T00:00:00Z
I’m one of the lucky ones. Emergency room physician Dr. Morales was genuinely sympathetic and caring. A really cool nurse named Andy shot me up with generous doses of morphine and humor to ease the pain, and a CT scan confirmed that my appendix had to come out as soon as possible. By 6:30 a.m. on Tuesday morning one of the world’s most experienced and competent surgeons, Dr. Suzanne Jelense removed what she described as a “very nasty, inflamed appendix.” I spent the next two days in the hospital getting some of the best health care that a human being can receive. Every person I encountered at Winona Health (from the receptionist, to nurses, to the housekeeping staff) treated me with friendliness, decency, and competence. Because of their care, because of some good luck, and because of the love and support of my friends, I was discharged a day early from the hospital and am doing fine.

A couple of thoughts occurred to me during my stay. First, I remember thinking about how Hillary Clinton and John Edwards want the Federal Government to run health care, and I was damn glad it hadn’t happened yet. The Feds can’t do anything right, and I can’t even imagine that the Feds could do health care correctly. But I know one thing for sure; if the Federal Government takes over health care and Hillary Clinton or John Edwards ever need to have surgery, neither one of them is going to check into a Government hospital! They’re going to use their substantial cash to stay in a private hospital with the best medical care, a hospital like I enjoyed this week in Winona, Minnesota.

Second, while it may seem exciting and romantic to have lived a hundred years ago, I realize how fortunate we are to live in this modern day. Depending upon whom you believe, the first appendectomy in the United States was performed either in 1885 by Dr. William West Grant in Davenport, Iowa, or in 1886 by Dr. Robert Hall at Roosevelt Hospital in New York City. The bottom line is that if you were a farmer living in a Nebraska sod hut in 1865 (or for that matter, a wealthy East Coast industrialist) and came down with appendicitis, you were a dead man. You would have lain on your bed until your appendix burst and would have died within hours. In my case, the obituary would have read: “Here Lies Don Salyards, Dead at Age 58”. Go to the cemetery and look at the ages of folks buried there. It was a rare person who lived to be 70 or 80 years old. The reason is simple; if you became ill, even with disorders that would be routinely treated today, you probably would have died back then. Many people never made it out of their childhood years in the 1800’s.

Three weeks ago, for the first time, I became a grandfather. Since the minute that Tad and Lisa told me that my grandson, Marek, was on the way, I’ve given a lot of thought about the cool things we will be able to do together. You know, stuff like fishing, wrestling around, and going to a water park. And when he’s a teenager, I’ll break his heart by making him a life-long Cubs fan, for which he will probably never forgive me. And, if the good Lord’s willing, if I take good care of myself, if we can keep the government out of health care, and if good people like the ones that work at Winona Health continue to perform like they do, all of those dreams just might come true!]]> http://www.donsalyards.com/index.php?entry=entry071223-025058 2007-12-23T00:00:00Z 2007-12-23T00:00:00Z