Kyoto Protocols Would Have Accelerated China’s Plan to Reverse-Exploit EurAmerica

In 1978, the year China emerged onto the world stage with its four modernizations, China, a country with four times the population of the United States, had a paltry gross domestic product of $216 billion, less than eight percent of the United States. China exposed her strategy of four modernizations to the world as if to say,”Please invest in China and we will ensure that our workforce is educated, and that our business infrastructure is stable for your investment.” Yet, this openly expressed strategy, that may have seemed to the rest of the world as a difficult but noble goal for China to achieve, was only the tip of China’s Grand Plan, and only the part she wanted the world to see.

EurAmerica’s history with China was one of gunboat diplomacy, exploitation, and forced trading. When China opened her borders again in 1979, EurAmerica’s merchants were enthusiastic to exploit an opportunity once again. Yet, China had not forgotten EurAmerica’s role in the Opium War, the Sino-Japanese War, and the Boxer Rebellion. China would never open her border again to be exploited. When she finally opened her border in 1979, it was from a position of power, deep strategy, and long lived planning that suggested EurAmerica was finally ripe for reverse exploitation. China’s grand plan was to emerge as the 21st century world power.

What boldness of purpose China must have felt as she aligned her nation’s efforts to that decade’s long task. Looking back today on her impossible achievements, one must give pause to the monumental economic goal she set for herself in 1978, indeed greater than America’s technical goal of landing on the moon early in 1961. Yet, with such a miniscule $216 billion GDP and few material assets how could China possibly build her empire to surpass that of the United States?

Through a hybrid statist-capitalist political structure, China would create a conduit through which American businesses would willingly draw down the wealth of Europe and America and transfer it to China in order to share in the prosperity of that wealth transfer. Through the centralized imposition of forced savings on its people, China would provide low cost labor to sell goods at low enough prices to cause EurAmerica to look the other way as their neighbors’ jobs went to China. Through low interest loans, China would entice EurAmerican politicians to spend beyond their means to temporarily ease the pain of EurAmerica as China’s sucked away their life force. These were the basis of her strategy.

Similarly to how a business cycle contains early adopters and late stage laggards, China planned a capital extraction cycle for EurAmerica, in which China would extract capital in multiple phases, each phase having an optimal extraction strategy. First extraction would be through the early adopter “gold rush” investors rushing into China to stake a claim. China would also plan for early majority, late majority and laggard’s capital extraction.

In 1978, China assessed America’s assets:
• America’s most valuable assets were intellectual capital that resulted from 200 years of publicly funded primary and publicly subsidized secondary education
• America’s physical assets included business assets, commercial, and residential real estate worth $7 trillion in addition to public assets of land, buildings, and infrastructure
• America produced 26% of the world’s GDP at $2.8 trillion and consumed a quarter of the world’s goods
• America’s debt was as low as it had been since WWII as a percentage of GDP and its 110 million workers were capable of doubling their loans to provide China more capital
• America’s Baby boomers were entering a peak spending phase followed by peak saving
• America’s constitutional republic allowed a relative few capitalists to control the direction of her economy

By 1978, multinational corporations had steadily grown in number and size for two decades. China’s success depended on corralling MNCs through direct foreign investment to create massive inflows of capital quickly monetized as hard assets and infrastructure.

China would entice merchants to invest by offering access to the future potential purchasing power of its people. However, given China’s low household incomes, market penetration would be low to start. Therefore, to entice the early adopters, China would create special economic zones that provided the perfect investment opportunity of cheap educated labor, loose regulation, low taxation, strengthened business law, and enhanced infrastructure and transportation, in which businesses could produce goods at very low arbitrage costs to sell back to their home countries for high margins.

With low cost of goods from special economic zones, early adopter businesses were highly profitable and banks poured investment into China as a result. But, China could not complete her Grand Plan to multiply her GDP 50 times by enticing early adopter investors alone. She had to implement a plan timed to extract maximum dollars from EurAmerica at each phase of her exponential growth.

During the next stage, the early majority stage, China manipulated baby boomers’ peak spending phase:
• China’s low prices secured America’s baby boomers as loyal customers
• Prior to America noticing a substantial loss of jobs, China secured free trade agreements, and mined American businesses for their intellectual capital.
• She reinvested profits back into America’s debt to keep America’s interest rates artificially low in order to spur on higher levels of consumer spending and government borrowing.
• China supported lobbying of America’s mass investment vehicles to fund MNCs. 401Ks and IRAs, created in ‘80and ’81, funneled money through the stock market into MNCs for investment into China.

Then, America was drawn into the late majority stage as America’s baby boomers entered their peak saving years. 401Ks and IRAs artificially fed the stock market frenzy. Baby boomers sensed they knew how to invest in a bubble market that kept rising. With access to low interest rate loans kept low by China’s reinvestment, speculators borrowed money to bet on the rising stock market. America ultimately increased its debt to pump up stock values to build more Chinese factories.

Inevitably, the stock market bubble burst, leaving America’s baby boomers with lower retirement savings. The stock market that seemed destined to go up forever finally reversed rapidly decreasing valuations. However, the debt that had funded its escalation remained.

During the late majority phase:
• More businesses began to invest in China just to remain competitive with businesses that had moved offshore earlier.
• Tens of thousands of businesses transferred factories to China to obtain low cost labor
• Millions of Americans lost jobs
• With a generation of education completed, China now was able to take more advanced jobs as well as factory jobs. America’s bastion of protected, more technically competent jobs was not a bastion after all.
• American retail outlets for Chinese goods grew exponentially
• China continued to loan its excess profits back to the American government to keep interest rates low.
After having lived through the weakness of the stock market, real estate appeared to be the baby boomers’ best retirement savings alternative. In the early stages of the Great Ponsi, housing prices went steadily up. With low interest rates, Americans could now borrow on the value of their homes to continue funding China’s growth. China’s final stages of extraction saw the housing bubble increase beyond what had ever been experienced before.

Even though American jobs were increasingly being driven offshore, the frenzy of increased housing prices allowed additional borrowing from Americans, feeding the China gold rush further. This behavior was not unexpected, following a pattern of historical boom-bust cycles and was part of China’s planning. As a result of the stock bubble and the housing bubble, America’s total debt had risen to over $55 trillion. With such exuberance in the housing market, secondary debt markets participated in credit default swaps to the tune of an additional $42 trillion. China now had extracted close to the maximum of America’s value, leaving America with the corresponding debt.

So China extracted maximum value, first in trade secrets and early adoptive money, then by IRAs and 401Ks, then by stock market and home equity loans, then by 2nd mortgages and housing speculation. China monetized the massive cash flows as quickly as possible, building infrastructure and excess manufacturing capacity, while leaving America holding debt in exchange.

Without any other rising asset values to borrow from, America has tapped out its debt. Having maxed its debt, America can only print money to finance its trade deficits. Without further real debt derived money extraction to give China for infrastructure investment and without a real ability to pay for low cost Chinese goods, America is fast losing her worth to China as an infrastructure vehicle. Recognizing that maximized extraction and rapid monetization of America’s wealth is nearing its end, China is now finalizing the implementation of her strategy, that of pulling out of American debt before other countries that maintain reserve currencies create a run on the dollar.

In thirty short years, China was able to accelerate her GDP from $216 billion to $11 trillion. She amassed reserve capital of $3 trillion. She reversed America’s fortunes from the greatest creditor nation to the greatest debtor nation. She gutted America’s factories while creating the world’s largest manufacturing base in her own country. A measure of output that highly correlates to GDP is energy consumption. In June of this year, 2011, China surpassed the United States as the largest consumer of energy on the planet. While the U.S consumes 19 percent of the world’s energy, China consumes 20.3 percent.

In 1992, the world came together to discuss the impact of climate change resulting from energy consumption. The talks resulted in Kyoto protocols being initially adopted in 1997 that attempted to create a framework for reducing greenhouse emissions. The protocols called for 33 industrialized nations to reduce their greenhouse gases to 1990 levels and then to maintain emissions at those levels. Although it called for emerging countries like China to voluntarily lower levels, it did not require them to be mandated.

Of course, all of the countries who had no requirements to reduce their emissions signed the agreement. The United States, under scrutiny from environmentalists and others did not sign. China did sign. This was an additional strategy perhaps not envisioned in 1978 that nonetheless would have assisted in accelerating America’s slide had we signed.

GDP highly correlates to energy usage. In 1990, America’s real GDP was about $8 trillion as compared to $14 trillion in 2011. Kyoto would have caused America to either:
• Invest billions in the attempt to lower our energy usage per dollar of GDP
• Pay billions to other countries to have them produce less so that we could grow our GDP from $8 to $14 trillion
• Or, maintain our GDP at 8 trillion

In the meantime, China’s GDP in 1990 was $1.3 trillion and has since grown to over $10 trillion. China’s energy use has correspondingly grown as well until the point that this month, she overtook America as the greatest polluter. Kyoto was a grand idea that was doomed from the start because of the flaw that allowed the now greatest polluter to play by different rules. It attempted to cap the economic growth of America while allowing other countries to grow unfettered.

China had a Grand Plan that has been executed with the finesse expected of a centrally planned economy. Kyoto added nicely to that plan. America has been thwarted by China’s plan but now has the ability to reverse course. Given China’s size and growth rate, she will pass us soon if she has not already and her stride will be too great for us to catch her. However, by avoiding traps like Kyoto, and understanding that economic gamesmanship can accomplish a much greater destruction of a nation’s wealth than warfare ever could, perhaps America can once again right its course.

Is America Prepared for Kamikaze Finance?

Brett Arends, in his April 25th Marketwatch article entitled “IMF Bombshell: Age of America Nears End”  reports that the IMF has predicted 2016 as the year when China’s economy overtakes that of the United States.

http://www.marketwatch.com/story/imf-bombshell-age-of-america-about-to-end-2011-04-25

Perhaps the word bombshell is the right allusion.  What comes to mind is America’s shock and disbelief in 1941 that the Japanese could fly formations of attack aircraft for so long under the radar right above sea level to destroy Pearl Harbor.  Just as Americans were unprepared to foresee the stealth attack of Japan even after years of her militaristic advances, Americans have stood helplessly by as the armaments of American financial defense sit helplessly in Congressional harbors of polarized politics.

Two concepts of financial attack seem reasonable afterthoughts.  First is that exponential financial expansion is hidden from radar until the last few years of growth.  American appeasers failed to recognize that as China expanded it’s economy 10 percent per year for 30 years, the law of exponential growth meant China’s economy would grow 800 percent in thirty years, but that the  greatest 400% would occur in the last seven years.  

The second even more ingenious stealth move unforeseen by America but creating an even more shocking surprise attack is that by holding the exchange rate low for so many years, the Chinese were able to fly even lower to the ocean swells and build a purchase power parity empire undetected by conventional financial defenses.

In preparation for this two pronged financial assault,  China has been building the hegemonic relationships that thwarted Japan’s  military attempt to over take the United States just 6 decades ago.   China also was successful in its hegemonic strategy to preemptively gut American factories through the “treasonous”  collaboration of multinational corporations and international banks residing  in financial cells right here in America.  

Our American factories, that were so successful in mounting a war of attrition against the Japanese in WWII, now lay dormant in the rust belt as 24 percent of our capable American workers line the “soup kitchens” of the American social welfare system and charitable organization’s generosity.  This time around, without the physical and financial capabilities to defend ourselves from within, it may be Americans who are forced to display patriotism through financial kamikaze during the end stages of the American empire.

How Could America Have Squandered the Gold of Ancient Egypt and the Incas?

Gold has been the store of human endeavor since ancient times. While each ounce of gold can hold only a finite amount of labor, perhaps 1,000 hours in non-industrialized nations, some of the gold locked in Fort Knox has touched millions of hours of labor from civilizations untold. For gold’s greatest benefit, as with all money, is not its storage of value but its lasting ability to temporarily hold value in the exchange of non-coincidental barters.

For millenniums, money was the interchange commodity for simple trades as between farmers and herders. The farmer gave the herder a coin in winter for meat, and the herder returned the coin at harvest time for a bushel of vegetables. Farmers and herders relied on the value of gold because precious metals took effort to mine and purify, were tested for weight and purity, and could be stamped, coined and carried. With such a universal appeal, precious metals became synonymous with storage of value and dominated the world’s choice for money.

At one point, America held within its coffers 70% of all the gold that has ever been purified from ancient Egypt and the Incas through modern times. But it was our misjudgment as to the true value of gold that robbed our forts of ingots and brought America to the precipice of ruin. As history’s greatest superpower, why did America not learn from ancient empires that tumbled down the path to insignificance, and why did we allow our government to amass more debt than has ever been owed by every other soul that has ever lived?

1964 marked an accelerating turning point in America’s misfortunes. In 1964, President Johnson was elected to enact Great Society reforms just as America was increasing her involvement in Viet Nam. Baby boomers were entering the work force just as multinational corporations were beginning an upsurge of direct foreign investment and the transfer of jobs to overseas markets. America’s use of oil was peaking just as political undercurrents were coalescing around oil as a geopolitical force.

Six simultaneous assaults on the American dollar joined to fuel the American financial malaise; a lack of fiscal adherence to a gold standard, military excursions in support of American interests, funding of the great society, a lack of will to respond to oil cartels, multinational corporate indifference to the plight of the American worker, and a financial industry gone wild.

America did not Steward Its Gold

Even though, for 600 decades of recorded history, gold was the stable base of transactions, the world has temporarily abandoned this gold standard for the last 5 decades. Our abandonment was not because of the world’s enlightenment that gold is an unnecessary physical impediment to the electronic age of finance. It is because, with no viable alternative, the world has clung to the hollowed out American dollar that inflated beyond the discipline of the gold standard.

In the 20th century, industrialized nations twice attempted to redistribute wealth through great wars that left all of Europe bankrupt. Afterward, America held 70 percent of the world’s processed gold, and became through Bretton Woods the gold-backed, paper money guarantor of the free world. During the next 15 years, America squandered her gold to cover currency imbalances, until by 1960 the dollar lost its legitimacy. Interestingly, it took Spain over a hundred years to squander its 20,000 tons of Inca gold.

From 1971 until now, America and the rest of the world have had little choice but to allow our currencies to float, giving up the imperfect discipline imposed by a gold standard. As a result of America’s freewheeling monetary policies, it is now encumbered by a spend drunk Congress and an obliging central bank that have conspired to reduce the value of America’s 1971 fiat dollar to a mere 17 cents today.

Scholars suggest that the reason for the dollar’s fall was the inevitable Triffin dilemma which requires America to carry a current account deficit to provide the world with reserve currency. Yet debt financed trade imbalances are not required to provide reserves. Reserves could just as well have been sold to other countries as given to them through trade shortfalls. No, America’s post war monetary policies quickly gambled away the historical hegemony that was bestowed on us at the end of two world wars.

This five decade hiatus from a gold standard will prove only temporary. Gold’s appeal as the engine of financial growth has not been lost on China. At the end of World War II, U.S. gold reserve was over 18,000 tons but has since reduced to 8,000 tons. China is executing a strategy of purchasing approximately 250 tons per year and, as the world’s largest producer of gold, producing 320 tons per year, and now has surpassed all but the U.S. as the second largest holder of gold with 2,000 tons.

Military Excursions Drained America’s Coffers

Without the ability to borrow vast moneys, earlier civilizations relied on warring, exploration and conquest to quickly expand their stores of gold. This strategy was not without consequences. To fund war, Rome engaged in coin clipping and smelting with lesser metals to reduce size and value of denarius in attempts to pay soldiers with coins of veiled value. After 200 years, the Roman denarius reduced from 100 percent silver to only 5 percent just prior its army leaving Rome unprotected from invasions and fall. Interestingly, it has taken less than 100 years for America’s dollar value to plunge that amount.

As all empires have before, America found that its wars must be financed with inflation. The Fed supported an excessive expansion of the money supply (dollar clipping), creating debt to fund each of America’s wars. The Civil War added 2.8 billion. WWI added another 21 billion. WWII created another $216 billion. The Korean War was financed with taxes. Viet Nam increased the debt $146 billion. Cold war expenditures cost 1.6 trillion. The first Gulf War cost a mere $7 billion. In contrast, Iraq cost $786 billion and Afghanistan cost $397 billion. Not including the 700 foreign soil U.S. military bases that contribute greatly to America’s balance of payments deficit, her major wars added a total of $3.4 trillion dollars of carried debt.

The Great Society Became the Broke Society

President Johnson outlined The Great Society in his State of the Union Speech on January 4, 1965, saying “The great society asks not how much, but how good; not only how to create wealth but how to use it.” Notwithstanding the good that was done by these programs, they drained America’s future potential GDP growth and the money that would fuel her economic engine.

46 years later, Great Society initiatives touched education, health, urban renewal, transportation, arts and culture, Medicare and Medicaid, the Food Stamp program, Project Head Start, The National Endowment for the Arts, The Corporation for Public Broadcasting and federal aid to public education for a total expenditure of $9.5 trillion dollars.

America’s Addiction to Oil Made Us Slaves to the Oil Cartel

Oil enabled powerful nations to create a world order that flowed money from agrarian nations to those that controlled hydrocarbon powered machines. Oil was the catalyst that propelled the 20th century’s world leaders into fortune and thrust the world into war. Oil is a finite fuel, controlled by a few nations that are barely separated geopolitically and have common ancient civilizations and modern goals.

Already struggling from Viet Nam and Great Society debts, America found herself the object of a politically motivated oil embargo in 1973. Fuel prices soared and supplies tightened to cause the 70’s stagflation in America. From then until now, America has not found the political will through fluctuating fuel prices to organize an intervention away from oil dependence.

Since the embargo, America has consumed 250 billion barrels of oil at a total cost of $11 trillion dollars. This debit line in our national budget has only one trade, oil for dollars. Had America given our energy war a smidgeon of the effort of placing a man on the moon, we could have easily reduced energy consumption by 20 percent for the same productive output, transportation, and environmental comfort, and saved 2.2 trillion dollars. Surely, the costs to achieve such a modest conservation would have to be netted from the gross, but those costs could have been internally generated and added to America’s GDP.

America’s Multinational Corporations (MNC) were Indifferent Citizens

While America fought the war on poverty, her political leaders surrendered to the war on American jobs. Certainly, with the relative world peace supported by America’s military, globalization was bound to occur. With the risk of direct foreign investments reduced, the last five decades have unleashed an acceleration of money flow and intellectual capital from America to other countries.

While over 4 trillion dollars have been invested overseas by American uberwealthy, America has also been a receiver of investment, so that the net outflow has only been 0.7 trillion. However, the loss of America’s wealth and jobs has been much greater, contributing to a stagnant workforce where one in four able Americans has been idled. MNC direct foreign investment has indirectly added $4 trillion dollars to America’s debt.

The Fed Financed MNCs and Saved Banks but Failed to Keep America Employed

During most of the 17th century, Europe embroiled itself in wars that killed 30% of its population. Some of the world’s largest banking houses failed as royal debtors defaulted, including England in1672. Finally, in 1694, the king agreed to give the Bank of England authority to print all of England’s bank notes in exchange for bank loans to support his war with France. The newly created Central bank, having transferred its risk of loss to British subjects, profited simply by printing money for the monarchy. However, this excess printing did not stop the emptying of England’s coffers.

After America revolted to escape the monetary control of the Bank of England, Hamilton, the United States’ Secretary of the treasury, proposed a charter to a create a similar central bank for America. Against Thomas Jefferson’s insistence, the First Bank of the United States became the precursor to America’s Federal Reserve. Some say major banks manufactured a bank run in 1907 to destabilize the Treasury and instigate support for the Federal Reserve Act of 1913 establishing the Fed, a quasi-agency, private enterprise with a quasi-public board.

From the establishment of the Fed until today, many have argued that major Fed decisions have enriched banks at the expense of the American People. An example is the erroneous decision the Fed made to keep interest rates high for an extensive period of time as America and the World clearly were entering the Great Depression. Also of heated debate was the decision to bail out the banking industry at the start of the Great Recession.

Nonetheless, Fed decisions combined with lobbied efforts to reduce financial regulations, allowed Wall Street to orchestrate multiple financial bubbles that consecutively destroyed value in American portfolios. It cost taxpayers $88 billion to bail out the S&L crisis. The boiling and bursting of the dot.com bubble evaporated $5 trillion dollars. Notwithstanding that the credit default bubble lost the world $30 trillion in value, it has thus far cost America $51 billion in bank bailouts, $787 billion in stimulus, $1.5 trillion in quantitative easing, $5 trillion in lost property values, and with over 5 million bankruptcies and 5 million foreclosures, ruined trillions of dollars worth of wealth generating credit.

In Conclusion

Adding up the numbers versus our $15 trillion dollar debt, it is amazing that the resiliency of the American economy is thus far holding ground:

10,000 tons of gold: $0.5 trillion
Wars: $3.4 trillion
Great Society: $9.5 trillion
Lack of Energy Policy $2.2 trillion
MNC DFI: $4.0 trillion
Banking Debacles: $12.4 trillion +
Total $32.0 trillion

The idea of currencies unsupported by gold reserves is not in itself troublesome. Whether Crowley shells, tally sticks, or paper money, if the market has trust in its role as a place holder for non-incidental barter, any money will do. However without the external discipline imposed by a gold standard, America must instead substitute gold’s imposition for a President strong enough to stand for American sovereignty, a Fed subjugated to defend a stable currency, a Congress selfless enough to impose its own financial discipline, and a willingness of American businesses to defend American jobs. Otherwise, America’s five decade reign over this short lived worldwide fiat money dollar system will come to an end.

America Needs a National Medical Evacuation Response

In 2011, America is not yet capable of mounting an effective national medical evacuation response to a disaster of the scale of Japan’s tsunami. We are striving to overcome 60 years of EMS, emergency management, and hospital response history within America’s federalist system of government. Our federalist system gives to local and state governments those responsibilities which are not expressly given to the federal government by our constitution. Federalism has served its constitutional purpose, but has made delivery of large-scale, emergency services much more difficult.

During the last six decades, after national emergencies, each of America’s presidents capitalized on America’s temporary disaster urgency to push America through its federalist trenches toward a national capability. Yet 60 years of presidential bully pulpits have still left us short of mounting an effective national response.

Americans want a national capability to protect our citizens in times of emergencies. Well before the next great disaster strikes, America must resolve to overcome the last of our federalist obstacles to create a truly effective force. Below is an abbreviated history of our development thus far. Notice that progress occurs after disasters. Note especially that President Clinton used another Japanese incident as a catalyst. Let us resolve that Japan’s tsunami can be the catalyst to take deliberate steps toward a comprehensive national medical evacuation capability before America’s next great disaster.

•1949 – Soviets successfully detonate a nuclear bomb.

•1950 – Congress passes the Federal Civil Defense Act, the first act that encourages interstate compacts between states to share disaster resources. However, with minimal funding, the program fades.

•1964, Hurricane Betsy floods New Orleans, at the time the costliest hurricane in our history.

•1964, Without federal tools, President Johnson works tirelessly and uses immense political capital to introduce temporary legislation to aid states.

•1964, The United States has no capacity to respond to a major disaster. Ground and rotor ambulance industries are just beginning. The country’s federal emergency response capabilities are spread over 100 disparate agencies that do not cooperate.

•1969, Hurricane Camille devastates the Gulf Coast.

•1970, President Nixon signs the Disaster Relief Act, making Johnson’s efforts permanent.

•1971, San Fernando earthquake rocks southern California.

•1971, Nixon submits bill to consolidate federal disaster assistance.

•1974, Tornado “super outbreak” of 148 tornados rips through 13 states.

•1974, Later amended as The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Nixon’s legislation finally passes and gives the President the right to declare a federal emergency upon request from a Governor and to give grants to states to prepare for emergencies.

•1974, The bill leaves unresolved the issue of over 100 federal agencies involved in disparate aspects of disasters and emergencies.

•1979, With support from the National Governor’s Association, President Carter creates the Federal Emergency Management Agency (FEMA) to consolidate federal emergency operations.

•1984, With the goal of strengthening cold war national defense, President Reagan establishes the National Disaster Medical System (NDMS), as a cooperative partnership of the Departments of Health and Human Services (HHS), Veterans Affairs (VA), and Defense (DOD) with a primary emphasis of overseas military operations, but with a secondary goal of providing a civil disaster response.

•1986, NDMS refocuses on domestic response to large-scale civil disasters. Yet, NDMS has shortcomings. DOD cannot cede control of its own operation, adding time. With military emergencies as its primary mission, its assets also may not be available when a civil emergency erupts.

•1992, Hurricane Andrew devastates South Florida.

•1992, States recognize that they need compacts for times of emergencies. Several steps lead to Emergency Management Assistance Compacts (EMAC).

•1995 Terrorists attack Tokyo subway with sarin gas.

•1996 Congress ratifies EMAC.

•1996, In response to the sarin gas attack, President Clinton signs the Weapons of Mass Destruction Act and merges functions of civil defense and emergency management. His new FEMA cabinet position receives authority for counter-terrorism.

•2001, The World Trade Center and Pentagon are attacked.

•2002, President Bush signs the Homeland Security Act creating the Department of Homeland Security (DHS), consolidating 40 federal agencies under DHS, and reducing 2,000 separate Congressional appropriations accounts.

•2003, DHS absorbs FEMA and disperses functions such as preparedness within DHS.

•2003, President Bush issues a series of Homeland Security Presidential Directives that establish DHS as the lead agency responsible for domestic incident management, directs joint operations to use the National Incident Management System (NIMS), and directs DHS to prepare a national plan for incident management.

•2005, America lives through Hurricane Katrina. With losses exceeding $200 billion and over 2,500 lives, Katrina exposes disaster management weaknesses at all levels: federal, state, and local. It also highlights the difficulties of mounting a national emergency response.

•2005, During Hurricane Katrina, 66,000 personnel are deployed under EMAC, straining its capacity to administer resources, and exceeding the receiving states’ abilities to effectively use the personnel that are sent. EMAC begins efforts with FEMA to support larger future missions.

•2005, Then-Senator Obama introduces S.1685 which would have directed DHS to ensure that each state plan for realistic evacuation of individuals with special needs in emergencies.

•2006, President Bush signed the Post-Katrina Reform Act, re-focusing FEMA’s responsibilities within DHS to lead the nation in developing a comprehensive emergency management system.

•2006, FEMA signed an ambulance contract to provide ground transportation to NDMS mobilization centers. DHS entered into a regional ambulance contract later expanding this to a national contract. Yet, with a limited contractual function, our nation’s ambulance services still are not capable of effective national coordination.

•2008, the National Response Framework (NRF) replaced the National Response Plan. It is the core document for the new emergency management structure, and includes annexes that outline emergency support functions. Some key policies and associated plans to implement these policies are yet developed. The NRF represents a significant change in guidance that has helped direct the nation toward a more comprehensive national response capability.

•2011, nationally we have over 15,000 ambulance companies, 800 rotor wing operations, 100 fixed-wing air ambulance companies in the United States, capable of eventually being co-opted into an effective national emergency medical services strategy. America still cannot adequately transport special patients during national emergencies. We have over 5,000 Hospitals and 12,000 nursing homes that must be given realistic options for evacuating during large scale emergencies. And our network of medical facilities, transporters, and emergency management must be tied together into a real time network of emergency receiving facilities. The national task is ahead of us.

Read more at http://www.epi-center.us

The Great Bear is Angry

If the Republicans are Elephants and the Democrats are Donkeys, then I see the American middle class as a Great Bear, mellowed by decades of ‘elephant ear’mark treats, but now wounded by globalization and no longer tamed by either political party.

The three beasts have been thrown into a grudge cage and are gnawing and clawing for survival. Gone are the glorious decades of one party supremacy. The Great Bear gave the Donkey two years to strip irresponsibility from the wealthy elite, but instead the Donkey wasted its political capital on special interests. With one fell swoop, the Great bear has thrown the Donkey against the rope, and is giving the Elephant the chance to take down the excesses of the Donkey’s social welfare desires.

But while the Bear may not have the memory of an Elephant, it has the anger of a Bear, and after the Ass’s clock is cleaned, the Bear will gnash at the stoic excesses of the Pachyderm, taking back the tax break that was so selfishly placed at its feet as a token of appreciation for subduing the Donkey. The Great Bear has been caught in a steel trap of trade deficits, tax deficits, and technology transfer deficits, and is fighting to free itself.

It is not wrong for America to reduce its social programs. We cannot eat what we have on our plates. It is not wrong for America to reduce its government size. We cannot carry that much social administration. It is not wrong for America to reduce the burden of its entitlements. We did not create a future generation large enough to carry it. It is not wrong for America to insist that the wealthy pay more to move our country forward. They have gained true wealth for the last three decades while the Great Bear has lost true wealth in the same period. It is wrong for the Elephant, the Donkey, and all their special interests to force the Great Bear into a grudge cage just to see a future for its cubs.

Is Democracy Unique?

I have had the pleasure of discussing the benefits and costs of Democracy with a few dozen people from countries representing many forms of government across the globe the past few days on a Linkedin.com discussion group.  I was asked what it is that differentiates Democracy.

I know that our system of government has let America down.  All governments have for they are formed by the frailties of humanity. Americans ring true, however, that our government of the people has also picked us up time and time again.  We wear our scars openly, and proclaim the remarkable feats of the delegates who struggled together in Philadelphia to create our freedom experiment.

It may sound cynical to focus on this one issue above others, but I think the very best thing about Democracy in whatever form is that power transfers peacefully.  Every two years, I still witness the process with respectful awe.  

Our political system is influenced by the theory that power corrupts. We can vote corruption of thought out of office. We can impeach absolute corruption. And we can reverse even the will of the masses through our courts if we veer from our constitution.  Anyone wishing to amend our guiding document must pass through the twin guardians of constitutional convention and super majority.

The price of this incredible freedom is the messy, grindingly slow pace of progress that non-democracies find intolerable.  I would not have it any other way.

Can Job Voucher Plan Overcome Government Waste, Fraud, and Abuse?

In all the discussions which I am proposing my voucher plan, the issue of unscrupulous business owners gaming the system by replacing current full time employees with short term, part time voucher employees is the most prevalent concern. In any government program, there is always waste, fraud, and abuse, and you are right to be skeptical.

Safeguards must be put in place to guard against the few unscrupulous employers that would game the system. A simple fix is to allow only businesses that are growing to employ voucher employees, and to dictate that any company that lays off a full time employee must first let go all voucher employees. Certainly, the voucher plan introduces opportunity for waste, but what could be more wasteful to the economy than paying valuable workers to sit on the sidelines of the economy.

As a small business owner that has hired and fired hundreds of employees, I can speak with authority on the issue of replacing full time employees with part time voucher employees. Anyone who has managed a small business knows how hard it is to find, train, and keep an employee that fits the business. Full time employees are the backbone of a small business, and no prudent employer would let go such a valuable employee that has taken years to develop and replace them with short term, part time employees.

Some mention that there are better ways to stimulate the economy than my voucher plan. I am hopeful that they are correct. I am concerned that the government has very few economic bullets left to try. Interest rates are effectively negative. Quantitative easing may help temporarily but in the process may destabilize financial markets and corrupt our position as the reserve currency of the world. Bank infusions haven’t eased credit or access to capital. Consumer spending won’t be coaxed given excessive consumer debt. Stimulus has some merit when focused on future competitive infrastructure like energy independence but is limited.

My voucher plan has a specific three part focus that is paid for without increasing the federal budget. It uses dollars already allocated for the unemployed to employ all through the free market. It circumvents bank illiquidity giving “capital” to small businesses that have been cut off from capital and credit in this recession but have traditionally provided the hiring out of recessions. It provides intellectual capital to small, non-multinational companies that historically have been the breeding grounds for innovation; that critical factor that must be spurred to counteract the transfer of jobs overseas. It is an idea that merits a serious review.

Job Voucher Plan Helps Reduce Bureaucracy

I share most Americans’ concerns that creating bigger bureaucracies to help fix our debt problems is a cure that kills the patient.  A benefit of my job voucher program, (www.jobvoucherplan.com) is that it allows the government to support a program for all Americans to begin working without creating a new bureaucracy.  

The voucher program will be no more difficult to administer than the current unemployment program; in fact much easier. It can be administered by the same state workers that currently administer the unemployment program.  It will actually reduce their workload.  With many less unemployed persons requiring verification of evidence of job seeking, the program will reduce pressures to balloon the bureaucracy further to deal with our much larger unemployed population and the inherent social problems that are being manifested by the long term unemployed.

The job voucher plan simply passes payments that would have gone directly to unemployed persons through businesses, expecting that businesses will use the abilities of our citizens then to spur innovation and productiity.