Friday, October 31, 2008

Trucking regs will hurt Upstate economy

From the 03 November 2008 Greater Niagara Newspapers

By Bob Confer

Just when you start to think it couldn’t get any tougher to do business in New York State, it does.

David Paterson and the State Department of Transportation have spent the past few months fine tuning regulations which would inhibit the flow of goods across the Empire State. The State plans to experiment with a series of laws in the Finger Lakes region that would restrict tractor trailers in excess of 45 feet in length from travelling state and local roads and allow them to travel just on the interstates. They would be permitted to travel the lesser roads only if there was a direct and exclusive route to their client or if an emergency situation presented itself (such as inclement weather). After working out the kinks in the Finger Lakes test, the DOT plans to apply these regulations to the rest of the state.

Governor Paterson is pushing these regulations – which are being levied without the support of the state legislature - because he believes that the residents of rural upstate New York should not be subjected to what he considers “big trucks”. He claims the vehicles ruin the solitude and quality of life in the countryside and put undue stress on the infrastructure. This plays well on the emotions of the rural residents but does nothing for rational analysis of what the true outcome will be.

Without a doubt, these regulations will push a sickly upstate economy further into ruin.

This can be said with the utmost confidence because 45-foot trailers are dinosaurs. 53 ft. trailers are quickly becoming the industry standard. I asked our local traffic broker how many of each trailer size he schedules per week. Of his 125 loads, 95 are 53 ft. trailers, 30 of them are 48 ft. trailers and he doesn’t broker a single truck at 45 ft. in length (Paterson’s absolute maximum). That means the average tractor trailer won’t be able to travel the roads as freely as they can now.

One of two things will have to happen. The truckers will have to abandon the longer trailers or schedule lengthier routes. Both options will cost money. Lots of money.

If forced to go to the shorter trailers, load sizes will have to be cut by 9%. That will require the scheduling of a second truck, perhaps a common carrier. That will cause overall shipping costs for that same quantity-shipped to rise by 20% to 35%. That could equate to hundreds of dollars in new charges depending on where the truck is going.

If the drivers are forced into travelling longer routes it’s nearly as expensive. The New York State Motor Truck Association provided an example of a manufacturer’s daily shipments from Syracuse to Corning Glass. Right now, that truck travels 200 miles round trip. Were Paterson’s law to go into effect, the new round trip would be nearly 300 miles. Assuming one such trip a day, five days a week, the law would add an extra $63,627 per year in costs for that one trucking route.

Realize that the truckers and businesses can’t eat those costs. To make ends meet they must pass them on to their customers. That means you’ll be paying more for food at the grocery store or products at the department store because it will cost so much more to get it from Point A to Point B.

Even worse than that, you could be out of a job because of Paterson. Many times in these pages I’ve written about how expensive it is for a manufacturer to operate in New York State. Because of Albany, it’s 4% more expensive to work here than it is in our competitors’ states. The only financial saving grace we can offer our customers exists in delivery. That’s because the Niagara region is within 500 miles of 55% of the US population. So, a client may choose our goods, though more expensive at the piece price, because they can save on shipping. If Paterson’s laws were to take effect they would take away that lone advantage we have. Hundreds of New York businesses would then lose their existing customers (and potential customers) to their competition in the Ohios and Indianas of the world.

It’s obvious that the Governor has put little thought into the repercussions of his anti-business, anti-consumer trucking regulations. In his twisted mind he may think he’s doing good for Upstate, but in reality, he’s harming it. Someone’s going to be hitting the road and it won’t be the truckers…it will be all the businesses who know what’s best for them and their future.

Friday, October 24, 2008

Race is an issue on the ballots

From the 27 October 2008 Greater Niagara Newspapers

By Bob Confer

Though the national media won’t touch it with a 10 foot pole, race is a key issue in the November election. For a good many people it will be the sole deciding factor. There are a lot of people who are voting for Obama just to put a black man in the Oval Office and there are just as many people who are voting for McCain to keep a black man out of the Oval Office.

In some polling locations the presidential lever isn’t the only place on the ballot where race will come into play. Voters in two states – Colorado and Nebraska – have the chance to vote for the end of affirmative action in their public colleges, state employment, and government contracts. If the voters pass this they would join California (1997), Washington State (1998) and Michigan (2006) as states that have successfully put an end to preferential treatment based on race or gender.

This movement has been a long time coming. Its proponent and primary financier, businessman Ward Connerly (who is black, by the way), has indicated that it’s not a sprint but a marathon. He figures if he works slowly but surely, one or two states at a time, he can most effectively get all Americans on board with his desire to promote real, not forced, equality.

Connerly is right. It does take time. Look at how long it took the women’s and civil rights movements to bring about much-needed change in America. Putting an end to discrimination and hate is no easy task. And, that’s what affirmative action is…it’s racism with a smattering of sexism thrown in. It’s racist against whites and sexist against men. This brand of hatred needs to be killed. Just as we’ve been hearing from the hypocritical discriminated masses for years, real equality needs to be based on who you are and what you’ve done as a human, not on the color of skin or what reproductive organs you might have. A productive citizen should never be cast aside because a bleeding heart requires an underperforming minority or woman to take his place because it feels good; it’s a bad practice - both philosophically and operationally - in which everybody loses.

Connerly’s most recent efforts for this cause couldn’t come at a better time. It seems custom-made for this November’s election. Based on what we’re seeing in the national political scene it seems that affirmative action is a moot point. Barack Obama didn’t get to where he is because of a race quota in the presidential campaign. He got there because of his accomplishments. Similarly, Hillary Clinton and Sarah Palin didn’t give him a run for his money because we felt it legally necessary to place women into the fray. They, too, got where they are because of who they are not what they are. This contemporary, well-documented success of blacks and women sans helping hand might heavily influence the voters of Nebraska and Colorado.

Not only is this timely, but the initiative couldn’t happen at a better place, either. It’s believed that the outcome of the vote in Colorado will determine what America as whole thinks about affirmative action. That’s because Colorado, a key battleground state, is a perfect snapshot of our collective America. It is looked at as a “purple state”, one that is neither decidedly Democratic nor Republican by majority and whose leanings can change on a whim. The most recent Rasmussen Reports show this. According to the poll, Obama leads in Colorado by 5 percentage points, while a month ago McCain led by 2. That leaves one wondering what will come of affirmative action. You just don’t know if the Democratic trappings (pro-affirmative action) or the Republican’s traditional values (anti-affirmative action) will manifest themselves…just like on Main Street, America.

So, on the morning of Wednesday, November fifth I and many others will be looking at more than just the presidential and local results. We’ll be watching Colorado and Nebraska with interest. You can’t blame us. We’re curious as to what mindset we’ll see at the polls. Will the America of old - one that was built on the foundation of hard work and real results – reign supreme, bringing an end to affirmative action? Or, will the New America – one of entitlements and ugly liberalism – maintain its stranglehold on us, keeping affirmative action alive?

Friday, October 17, 2008

Bush is the new FDR

From the 20 October 2008 Greater Niagara Newspapers

By Bob Confer

Let’s take a step back and ponder a presidential legacy.

George W Bush’s presidency is, without a doubt, one of the most liberal in American history. Under his watch the role of government has been redefined. It has become much larger and more intrusive. The many things he’s done are completely Unconstitutional and, therefore, completely illegal.

Here’s a president who, facing an economic nightmare, has unleashed unprecedented amounts of government intervention in our free-market systems, all in an effort to calm the fears of our citizens and reinvigorate financial development. What his administration has done has forever changed our economic landscape, infusing socialism into our capitalist markets.

He’s the same man who years ago used a bloody attack on our soil to further the interests of his administration. Using the deceased as martyrs to pump up our feelings of fear, revenge, and nationalism, he took us into a war that was unrelated to the attack, a warzone that in the years preceding was off-limits to us due to the antiwar sentiment shared by most Americans.

Bush used that same attack on our home front to legitimize federal efforts to squash the First, Fourth, and Fifth Amendments. He initiated a domestic spying program in which our government could eavesdrop on its own citizens, mark them as enemies of the state and detain them indefinitely through the suspension of writ of Habeas Corpus.

Bush, rightfully so, has been derided for all of this and his presidency has been labeled as one of the worst ever. I’m glad that people feel this way and understand the damage he has done to our great nation. But, on the other hand, I can’t help but look at that commonly-held disdain for Bush with a lot of cynicism, finding some dark humor in the mass hypocrisy. You see, everything that I’ve written here about George Bush could easily have been written to a “t” about Franklin Delano Roosevelt. He, too, was guilty of all of the above, yet he’s always been put on a pedestal and worshipped as one of our greatest presidents. It could be argued, quite easily, that his reign was a lot worse than Bush’s.

FDR, like Bush, faced an economic disaster of historic proportions while in office. And he, too, bailed-out the economy by putting billions of dollars into the market by instituting a wide variety of programs and giveaways that most Americans would call socialist or communist. Remember, he introduced means to control prices by subsidizing crops, he employed hundreds of thousands through the Civilian Conservation Corps, Tennessee Valley Authority and other such government employment, he pushed the National industrial Recovery Act as a means to dictate how competition should occur, he introduced two still-standing Securities Acts and he brought to us the granddaddy of all public giveaways (Social Security). Unlike Bush’s methods, FDR’s bailouts moved from the bottom up, rather than the top down. But, just like Bush’s plans, all of them showed promise for a short-term rescue but were saddled with painful long-term implications that subsequent generations would have to struggle with.

FDR, like Bush, used an attack against America to pull us into an unrelated and unpopular war. Bush, for years, eyed Iraq as place to take our troops, but found Americans to be strongly opposed. Roosevelt, for years, was intent on intervening in the European conflicts, but antiwar and isolationist sentiments were far too powerful in the States. Both men got what they wanted, although it took unbelievable tragedy. Bush was able to make people believe that Iraq was somehow connected to the 9/11 terror attacks and found Congress and our people suddenly (if only temporarily) amicable to an Iraq war. FDR was able to use the Japanese attack on Pearl Harbor (which he allowed to occur) to get people interested in joining the foray into the completely unrelated European Theatre. Somehow, both men successfully duped the nation into war.

FDR, like Bush, also used the war to cast aside the rights of the individual. Just as our government now uses the Patriot Act to jail people without following standard procedures, it did the same under FDR’s watch, but worse. The US interned, detained or excluded over 300,000 Japanese-Americans (men, women, and children) branding them all as enemies of the state, regardless of guilt or innocence.

As you can see, the presidencies of Bush and FDR share some eerie similarities. Their only difference: Bush is hated while FDR is revered. It’s too bad history works in such odd ways because, truth be told, FDR deserves the same treatment as Bush. His presidency was no better than Bush’s and - looking at Constitutional principles - it could be considered a whole lot worse.

Thursday, October 9, 2008

The Cold War Revisited

From the 13 October 2008 Greater Niagara Newspapers

By Bob Confer

The economy is the Number One issue these days, as it should be. We are living in some historic times. Unprecedented acts of federal intervention are taking place and when we finally crawl out of this financial meltdown America will never look as it once did.

As important as this situation may be in the media and water-cooler conversation, it and other newsworthy national issues (presidential election, anyone?) should not temper our understanding of foreign developments. Because of this unrelenting focus on the home front, our trusted news sources and average Americans alike are almost completely oblivious to the fact that the Cold War is back.

It’s a long held belief that the Cold War ended round about 1990. Depending on whom you ask, it ended in either 1989 when George HW Bush and Mikhail Gorbachev declared it so at the Malta Summit or in 1991 when the USSR officially ceased to exist. Some folks, though, - like me - insist that it never really ended. To us, the Cold War was put on hiatus, the Russian Machine taking its time to collect itself and get all of its ducks in a row following the collapse of the Soviet Union. You can’t help but make such an assessment when you see the great recentralization of powers that has been taking place in Russia under the leadership of Vladimir Putin, a member of the USSR’s old guard and a former KGB thug who has nothing but total disregard for democratic principles.

Now that Putin has exerted domestic rule in ways that he sees fit he has turned his attention to reenergizing his efforts to knock America down a notch or two. It started in August when Russia and Georgia got into a tussle. George has been a serious ally – or better yet, pawn – of the United States since its days of new-found independence. Our government has provided them with almost $2 billion in military training and equipment since 1992, most of that since 2001 under the guise of “an investment against al-Qaeda”. Truth be known, Georgia is not a stomping ground for al-Qaeda. Therefore, this investment was really used to strengthen ourselves against Russia. With this taken into consideration it appears that Russia’s brief occupation of Georgia was bait to induce America into a proxy war (the Vietnam and Korean Wars are perfect examples of proxy wars that occurred during the original Cold War). We didn’t take the bait this time.

Not to be outdone, Putin has decided to bring the posturing and preening of the Cold War’s good ol’ days right to us. It was announced last month – unbeknownst to most Americans because of the economic crisis - that the Russian military will be paying a visit to the Americas. Putin has found a good friend in Venezuelan President Hugo Chavez, the same man who hates our guts but is okay with receiving our oil money. Back in July, Chavez requested a strategic alliance with Russia, one which Putin gladly accepted. Russia is allowed to have three of its state-owned energy companies set up shop in oil-rich Venezuela while, in exchange, Venezuela is afforded protection from the United States.

Under this pact training exercises will commence this November. Russia will be deploying 1,000 troops and doing a Teddy-Roosevelt-style sail-by near US waters with a huge fleet led by their nuclear-powered flagship, Pyotr Velikhiy, the best of the Peter the Great series of cruisers. The ship is a beast (by Russian standards) equipped with nearly 200 guns and launchers and outfitted with more than 20 Granit missiles which have an effective range approaching 200 miles.

The drills are taking place in the Caribbean, obviously meant as scare tactic directed towards us. But, fear not. The Pyotr, as threatening as it sounds, is no match for our Navy, so we really have nothing to worry about. But, we will when the time comes. To Putin’s credit, it’s a well-thought-out effort that may pay off for him psychologically. It makes perfect tactical sense for Russia to throw its weight around while we are in an economic crisis and our collective national psyche is feeling weakened and nervous. This will only add to those feelings of misery.

So, prepare yourself for some fireworks next month and the few months following. These won’t be fireworks in the literal sense, but they will be in the figurative, political sense as Bush and his successor trade barbs and meaningless threats with our enemy of yore.

Welcome back, Cold War.

Friday, October 3, 2008

The Worthless American Dollar: Part Two

From the 06 October 2008 Greater Niagara Newspapers

By Bob Confer

Last week’s column focused on recent trends in attempted economic recovery and how they cause short-term inflation. The column ended with the prediction that the wide variety of bailouts deployed by the government this year will create real inflation in excess of 20% over the next two years.

Not to further your anxiety over our economy’s health, but you must know that inflation will not end there and we will see a rather prolonged and agonizing decrease in the value of the Dollar. This decline will go on for decades and it will be, once again, the fault of Big Government. Just as it has this year with its attempted salvation of Wall Street and Main Street, Uncle Sam will have no choice but to let fly with the printing presses to satisfy its Messiah Complex.

This constant increase in monetary supply will start in ten years and the expenditure of these increasingly-worthless dollars will be focused on our aging Baby Boomer population. There are 79 million Boomers in America, representing over a quarter of the total US population. They are on the brink of retirement and, therefore, entitlement. The oldest of the Boomers reach 62 years of age this year, the year they can start receiving Social Security. These Boomers are only 3 years away from Medicare and 3 to 5 years away from the Normal Retirement Age.

So, you can consider the floodgates now open. And, oh, what a flood it will be! The money to pay for all their benefits has to come from somewhere and the current “somewhere” is just about dried up. As a matter of fact, Medicare will be insolvent within a decade. It’s already paying out more than it takes in and its treasury will be completely dried up by the end of 2018. Social Security faces similar danger: In 2017 it will begin to face an input/output imbalance, one that will completely empty its reserves just 32 years from now.

With the piggy banks empty, the government will have to either cut benefits, initiate a major reform of the system, or find some money. Looking at the three options, cuts are a real long-term possibility only for X’s and Y’s now supposedly paying for their own Social Security. But that’s out of sight out of mind because it won’t occur, if it does at all, until 2041.The second option, the reformation of social welfare, is currently out of the question because it won’t occur until the financial crisis has actually happened. That’s just the way our government works. It’s a reactive, not proactive entity, one that thinks only in the short-term. That’s why FDR (Social Security) and LBJ (Medicare) so willingly signed our nation away. The long-term results meant nothing to them or their administrations, so why worry? That’s the same psychological underpinnings behind Bush, Paulson, and Bernanke so willingly dumping $2.5 trillion of fiat money into the economy this year. Someone else further down the road will pick up the pieces.

That leaves the need for more greenbacks as the only way out - and easiest way out - for our poorly-led nation to weather the storm. The Government really can’t tax anymore than it already does to fill these accounts. Doing so would kill the lower and middle classes who, as I mentioned in last week’s column, have fewer dollars to spare as they face decreasing purchasing power in the wake of government-created inflation. So, rather than taking money, it will resort to making money (which, ironically, really has the same effect on the individual as an increase in taxes).

But how much will the Mint need to produce? That’s where the economics start to get a little dicey. Over the next few decades, Social Security will grow from 4% to 6% of our economy. Medicare will grow from 3% to 11%. Basically, just these two facets of Big Government will more than double in aggregate, becoming 18% of our total economy. All things being equal, that will require the creation of $60 trillion in new dollars to prop up those faltering systems. That’s an average of $2.6 trillion per year over the 23 years immediately following the year 2018, when Medicare first needs it.

Realize that our money supply grew by $2.5 trillion this year which has been and will be responsible for inflation levels many of us have never experienced in our lifetimes. Unless Washington wakes up and reforms social welfare, such pain will be the norm of our lives in the not-so-distant future.