California Isn’t the Only Place Stupid Decisions Are Made
All Made By Politicians
By Chuck Diaz
While the media continues to blame California’s problems on defense cutbacks, they fail to mention the true causes of what have led to the “welfare states” demise. I don’t intend to downplay the fact that there have been defense cutbacks, but the straw that broke the California business’s back is far more than just defense.
In previous issues of Speak Up America, I have pointed out that excessive environmental regulations have done much of the damage. Companies can’t get out of California quick enough. In the October issue of Speak Up America, I pointed out that 227,000 jobs had been lost in Southern California alone, attributed to excessive environmental regulations. But environmental regulations aren’t the only thing killing the once golden state.
Attacks on business don’t just come from environmental regulation. In an article that appeared in the fall issue of Friendly Exchange, and written by Farmers Insurance Chairman and C.E.O. Leo Denlea, entitled, “Worker’s Comp – A California Crisis,” the author points out that California’s workers compensation costs have increased 250 percent between 1981 and 1990. That translates to an increase from $4 billion to over $10 billion per year. The causes are as startling as the statistic itself.
In California if an employee can prove 10 percent of a stress condition is job related, he or she, or it, can receive workers compensation. Imagine that, all you have to do is prove a 10 percent job related condition and you’re home free. As a result, stress claims have increased 700 percent in the same time period.
Mr. Denlea further points out, in his article, that “fraud mills” employ people called “cappers” who approach laid-off employees outside unemployment lines and convince them that “they can make big money by filing workers compensation claims against their ex-employers.” Authorities in California estimate 20 to 30 percent of all claims are fraudulent. This in turn has resulted in a 187 percent increase in medical treatment costs between 1980 and 1988.
Peter Ueborroth, the man Mayor Bradley called to rebuild Los Angeles and who also headed the Council on California Competitiveness, issued a report that stated, “Dueling doctors who often render extreme positions at the behest of dueling lawyers on either side of a litigated case, can add thousands of dollars to the cost of handling a workers’ comp claim.”
Along with opening California’s doors to any new arrival, who wants some form of welfare, from any other state, California has dug its grave real deep over the years. Pete Wilson, California’s governor, inherited the mess and you can be sure the people who created the mess are now blaming him.
Not letting any grass grow under their feet the environmentalists have just won a major battle over water. The $18 billion a year agriculture business was handed a blow when President Bush signed into law a new Western water policy that will end up cutting California farmers water as much as one third. Why? So the salmon downstream can have an improved spawning ground.
This means fewer fruits and vegetables will be grown and prices will definitely go up. But what the heck, you can afford it.
I wrote this in 1992 and today we can see what Bush’s Western Water Policy has done to California. I’m tired of getting oranges from Peru and Roses from Kenya. I’m tired of Democrats defending every country on earth but ours.
I’m tired of a media that sides with anyone who hates America and carries the water for the Democratic Party.
But what really pisses me off is a government filled with politicians who no nothing about business. Every part of “business” should be removed from the Federal Government.
Negotiating trade deals is business, negotiating contracts for military and contract decisions is business. There are many parts of the government that are business like overhauling every military item from Jets to Jeeps.
Decisions concerning buying military equipment has to be made with a business brain and not a political brain. I’ll give you two examples of how stupid a president can be with a military contract decision.
In a January 10th, 1992 World and News and World Report magazine an article titled “The Pentagon’s Big Gamble” it discusses the effect of cutting military contracts on our economy. President Bush, a Republican, wanted to cut Fifty Billion from defense spending by 1997, five years later.
The article points out the pluses and minuses of cutting back on companies that provide our hardware like aircraft, tanks and submarines. One stands out like a sore thumb. President Bush’s decision to cut the B2 program.
The B2 contract originally called for 132 aircraft to be built a Five Hundred Million Dollars each. Sounds like one hell of a lot of money for an aircraft doesn’t it? Wait, it gets better.
Being the great businessman, he isn’t, president Bush cut the contract back to twenty aircraft. This, of course, raised the unit price from $500 Million each to $2 Billion Dollars each. The rest is just math.
Twenty aircraft at $2Billion is $40 Billion. One hundred thirty-two aircraft at $500 Million is a total of $66 Billion. President Bush thought it was a better for the country to have the twenty aircraft than one hundred and thirty-two for $26 Billion more dollars. That means he turned down 112 aircraft to save the $26 Billion which would have bought them. That would be a price of $232 Million each.
The extra 112 aircraft would have had an item cost of less than half if he would have built the aircraft and looked for the $5.2 Billion Dollars per year saving somewhere else. But it doesn’t stop there,
Because of Bushes cuts in 1992 they estimated that by 1997 800,000 jobs would be lost in the defense industry. President Bush, the politician, should not be allowed to make business decisions. If fact, no politician should be elected to any office that requires business decisions to be made.
Lastly, how much in Federal income taxes do you think were lost because of the 800,000 jobs lost? If we just straight-lined the loss from year one to year five it would require that 160,000 jobs per year would be lost. This may or may not be what actually happened, but we need something to hang our hat on.
Next, we have to estimate the average income tax each lost job would have paid. On this estimate I’ll go low and say $10,000 for each job. That means in year one, $1.6 billion, $3.2 billion year two, $4.8 billion year three, $6.4 billion year four and $8 billion year five. Using my unscientific result would be that the Federal government lost $16 billion plus the State taxes lost, the money spent in sales taxes etc. etc.
This means president Bush’s $50 billion cost $16 billion so he really only saved $34 billion and lost 112 B2’s in the deal.
The second example of presidents gone wild is a decision president Obama made. At least unlike Bush, Obama is a Democrat and we can expect stupid decisions from them. But I digress.
The F-22 is a fifth generation Air Force fighter aircraft that can cruise at faster than the speed of sound. Fifth generation means it is it is the highest technological aircraft in the world. It is also a stealth aircraft with a RADAR signal the size of a lead marble.
America spent billions during the Research and Develop (R&D) stages of the F-22. This means the first F-22 that was delivered to the Air Force cost Billions of dollars. When they delivered the second F-22, the R&D cost per aircraft was cut in half. Do you understand that?
An air superiority fighter like the F-22 was designed to protect America, but president Obama decided to cut the program to 187 F-22’s from an original plan of over 750. That means each F-22 cost the billions of dollars spent in R&D divided by 187 plus the cost per aircraft. But the cost was too expensive for president Obama to continue the program.
In war games against all other Air Force fighters the F-22 has a kill ratio of 140 to 1. The F-16 had a production of more than 4,400 aircraft which helped it be a one of the lowest cost aircraft per aircraft.
If General Motors spent millions on a new car design and then decided, at the end of R&D, to only build 187 cars each car would have to be sold for millions of dollars.
Such is the fate of the F-22. president Obama cut it because it was too expensive. He also cut the thousands of jobs that the F-22 program would provide for American workers, approximately 16,000. Had he allowed the production of the F-22 to continue the price per aircraft would have gone down with each aircraft delivered. America’s air defense would have been secured for the future. But president Obama is not worried about America’s defense.
Without getting into the numbers as I did with the B2 above I’ll just point out one part of president Obama’s thought process. To continue production in 2009-2010 the F-22 program needed $1.75 billion. Instead president Obama spent $750 billion on bailouts, but he wouldn’t bailout the F-22. He spent over $3 billion on cash for clunkers but couldn’t find $1.75 billion to keep America safe and keep the jobs the F-22 program had created.
According to News and World Report dated August 13th 2104, new car sales in the 2009-2010 time period dropped $3 billion dollars. Now ain’t that just a coincidence?
At the same time president Obama placed an order for 2,443 F-35’s which, in my opinion, isn’t the aircraft the F-22 is, but president Obama will tell you the new F-35 is a better aircraft than the F-22, but it is not. He couldn’t reduce the F-35 buy and keep the F-22 at 750 because he can make that kind of decision. The F-22 is the finest aircraft America has ever produced and that is not arguable. In fact, it is so great, president Obama did not allow the F-22 to be sold to any ally nation. But he allowed the F-35 to be sold to ally nations.
Donald Trump is the best thing that’s happened to America in decades. He’s actually doing a better job than president Reagan because he’s overcoming all the hatred the left can gather. He is truly remarkable.
If there was only a way to require all presidents to be successful businessmen it would really help the country. I don’t mean one hit wonders like Mark Zuckerburg, Bill Gates or Mark Cuban. I mean businessmen who have started with very little and build it over twenty years or more.
I’m tired of writing this stuff, I hope you got my point.