One Man's Opinion


The Turning of the Tide.

After hearing about how the American Marines were being pushed back in the Pacific and how the British and French armies were being pushed back in Libya toward El Ale Main, Egypt, it seemed to most of us that Britain would soon be invaded and our last critical location to marshal an offensive for invading Europe would be lost to the Germans.  But Hitler made a classical mistake when he delayed organizing for an invasion of England and turned his attention toward Russia where he opened a second front.  This gave America the time to make a giant effort to turn every manufacturing company into production of war materials.  The Battle at El Ale-main was raging when the German Panzer tank and supporting vehicles under the command of General Erwin Rommel simply ran out of gas.  That was the turning point of the War in North Africa.  According to conventional wisdom, Nazi Germany boasted the most highly efficient and well-outfitted war operation of World War II, including military technology (from Tiger tanks to U-boats to rocket-powered jets) that put their armed forces leaps and bounds ahead of the Allies.  But historian James Holland challenges this generally accepted view. For all its “massively over engineered” weapons, he argues, Germany was in fact far less efficient than Britain and the United States at manufacturing and supporting its tanks, airplanes, and other wartime machinery. In his view, Germany’s operational shortcomings, including a crucial lack of resources, paved the way for its defeat nearly as soon as the conflict began.  The Germans were thought to be invincible because of their highly regarded Panzer tank designed by Ferdinand Porsche that just rolled over those of France and England.  It was thought that Germany was invincible because of their highly-sophisticated industrial and manufacturing capability.  But this was proven wrong in the battles with the U. S. Sherman Tank especially under command of General George Patton.  The Panzer, as powerful as it was, also was a slow six gear machine that had frequent breakdowns.  Germany made only 1800 of them, while America made over 46,000 of the Sherman model tank.

Here at home, I graduated from Junior High school and registered for the tenth grade at the North Hollywood High School. I took the basic curriculum, for example, Algebra II, English, History, Life Science, Spanish and Oral Arts.  I joined the baseball team as a back-up infielder.  However, I never played in one league game.  In those days, the school athletic coaches always played to win and that meant back-up team members just watched unless there was an injury.  When the baseball team boarded the bus for the 26 miles ride to play our final game against San Fernando high, the first team 3rd baseman, who had been sick and absent all week, was not on the bus.  Coach handed me a uniform and cap.  I was excited anticipating as a 10th grader to be able to play in a league game.  When we arrived at the field in San Fernando,  standing over by his folks’ car was the regular 3rd base player and even with a bad cold he played the full game although we won by 5 runs and were never really challenged.  I learned something then that in competition, the message is “Kill, Kill, kill”, i.e., never give the opposition a chance, even when you are going to win the game anyway.  If you are ahead by 5 runs play to make it 6.

In the Summer of 1944, the long-anticipated invasion of Europe by Allied forces took place on June 6th.  The weather was awful and the attack had to be postponed twice.  But this probably helped the Allies as the German high command doubted Supreme Commander, General Eisenhower, would attempt to launch the hundreds of small vessels  carrying 150,000 American, British and Canadian soldiers across the English Channel in such bad weather.  In fact, Rommel who was the senior German officer commanding the Western front and its defense strategy, had taken leave for a couple of days and wasn’t even in the expected landing zones.  Of those 150,000 troops in the armada, an estimated 4400 were killed during the first day and several times that number in subsequent allied actions until Victory.  The landing of American forces was directed to the most difficult topography among which was Omaha Beach shown above.  Picture yourself exiting a small landing craft after a grueling trip across stormy skies and high waves for 20 miles with everyone experiencing nausea and then looking out at the image above just after the front gate dropped and you had to go ashore and face the enemy perched on the high ground in front of you.  I will never forget those chilling reports and Movie-Tone displays of valor and, I hope my family never does either.  As an aside, Dottie and I visited the graves of American soldiers’ never to come home as they lay in peace under white crosses and star of David markers on Normandy Peninsula during one of our visits to France in the 1970’s. It was very emotional. In February of 1945, Germany was beaten yet not officially surrendered.  All our attention was turned on defeating the Japanese empire and winning the War in the Pacific.  The news we received each day during the Fall and Winter of 1944 was gruesome but showed progress as we swept up the Mariana chain of Islands, Guam, Tinian, Iwo Jima, and Saipan. On Iwo Jima, the Japanese defenders were fanatic and fought to the death, which required the use of the flamethrower to dig them out of caves and 11 miles of connecting tunnels, refusing to surrender when given the chance when the battle was lost. U.S. Marines were taking huge casualties.  Of the 30,000 in the first day landings, followed by 40,000 over the period of the battle, 26,000 were casualties including 6,800 dead before the island was secured on March 29th.  The Japanese defenders numbered 23,000 of which 20,000 were casualties, 19,000 dead, 300 prisoners and 2700 continuing to exist living in the tunnels and caves, coming out at night to forage for food.  The last defenders were two soldiers who surrendered in 1949 four years after the last organized action.

In June of 1945, a small headline in the Los Angeles Times read: “U.S. tests a bomb with 25,000 lbs. of TNT explosive power”.  The story went on to explain “this new bomb developed by scientists at Los Alamos New Mexico was several times the force of any bomb used before and could make a major difference in the outcome of the war”.  At the time, I had no knowledge of what nuclear power was all about but, we were to learn soon what an extraordinary effect it would have on the ending of the Japanese resistance in the Pacific.  It also would lead to all the major nations of the world accelerating their efforts to develop the science necessary to produce an Atomic bomb and the even more powerful Hydrogen bomb.   Plans for the creation of a uranium bomb by the Allies were established as early as 1939, when Italian emigre physicist Enrico Fermi met with U.S. Navy department officials at Columbia University to discuss the use of fissionable materials for military purposes. That same year, Albert Einstein wrote to President Roosevelt supporting the theory that an uncontrolled nuclear chain reaction had great potential as a basis for a weapon of mass destruction. In February 1940, the federal government granted a total of $6,000 for research. But in early 1942, with the United States now at war with the Axis powers, and fear mounting that Germany was working on its own uranium bomb, the War Department took a more active interest, and limits on resources for the project were removed (eventually increased to $2 Billion).  The images of the damages done by one bomb changed most of the World’s civilizations to conclude, this form of warfare will be a cataclysmic consequence, not a tactical improvement.  But after the second bomb was dropped on Nagasaki, the Japanese did surrender and the war in which 60 Million people were killed ended, Thank God!

In the spring of 1945, while in my first year at North Hollywood High, I had a science teacher who caused my parents to consider changing my educational plan.  In open question time, this instructor gave what seemed crazy answers to many student questions of how the body worked.  I would mention this to my Mom and Dad and they shared a concern that due perhaps to the war, LA County High School District’ teachers might be reflecting the shortages of qualified personnel.  Among the things, I remember is the answer given to my question “Why does the hair on your head grow longer than the hair on your arm?”  His reply was “It is because it is closer to the bone.”  After telling my folks of the incident, I was launched on a path to enroll in“The Army and Navy Academy” in Carlsbad California the following semester.  This college preparatory school had small classes of 10-12 cadets in a military based academic environment that not only gave me the benefit of stronger challenges for learning, but a living and disciplinary environment that proved to be a solid foundation for my time in the Army’s basic training and Officer Candidate School during my years of service, 1951-1953.  At ANA, Cadets lived in cottages of four rooms, two to a room with shared bathroom facilities.  We lived by the Bugle.  Reveille: -6:30 AM, Students to Awaken and prepare for- First Call: Assemble for Roll Call. 7:00 AM, Mess Call: Students assemble in Formation March to Mess Hall. 8:15AM Assembly: Students to report to classes.  Other Bugle calls would announce afternoon duties, call to quarters, and finally Taps: Lights out. I attended the Academy from September 1945 until I graduated in June 1947.  The best and probably most underappreciated part of being a student at ANA is where the campus was located, right on one of So. California’s most beautiful beaches. During the first year, I observed how advancement in rank was determined and how discipline was rewarded so I found it relatively easy to fit in to the program and learn under a military discipline like approach.  The school granted the highest honor, an appointment as a “Silver A” Cadet, to those who had academic excellence, high grades for disciplinary behavior and those who embraced the spirit of the military model for the cadet.  I worked hard at all those qualification disciplines and at the end of my first year had been promoted to Sargent Major and designated a Silver A Cadet.  Being a small school, 200 students, this was easier than you might think but still I was proud of the accomplishment and although in my senior year, my Silver A designation was revoked for a month due to my being a principle in a discipline procedure, I was happy to graduate as a Lieutenant and Silver A student with plans for entering the University of California at Berkeley, where my sister was already an upper division student.

During the final days at ANA, while sitting with two other fellow cadets I thought: wouldn’t it be fun to drive across America during Summer vacation, see other parts of the country we loved and work at odd jobs to pay for gas and food etc.  Since many of our co-students lived in the places we wanted to visit and we each had relatives who were also located around the country, we figured we could plan our trip in such a way as require only $30-$40 each.  We could make money caddying at golf courses or doing odd jobs for people like wash their car, or run an errand. Since the War was just over and Europe and Asia were certainly not ideal travel destinations, getting out and seeing the USA seemed like a neat adventure and a lot of fun.  In my senior year, I talked my Dad into loaning me $300 so I could take $200 I had saved and buy a car.  The one we selected was a 1935 two-door sedan with a floor stick shift and bucket seats in the front and a small luggage trunk on the back.  It was black with white sidewall tires and of course over 12 years old but it was mine and served me well for several years.  I called it the B-19, a name given to one of the obsolete bombers used in the war and a plane that had many faults in design and operations.  The car was well named as it too was a bit flawed.  Two of my fellow cadets and I talked our folks into letting us drive off one day in June of 1947 (I was 16 years old) and begin what turned out to be one of the most extraordinary adventures I had ever experienced driving to Bar Harbor, New England, then down to Fort Benning Georgia and then winding back to So California with many stops in between on our 6-week journey.  We visited relatives who would feed and house us for a day or two and in some cities, we would just sleep in the car.  In Bar Harbor, Maine, we showed up unannounced at the Brewer Hardware store and I mentioned I was Merrill Brewer’s Grandson.  They were so excited to see us that they took us out for a real Maine Lobster dinner but afterwards, they just said good luck and so long.  We had nowhere to sleep but I got the idea that maybe we could go to the city jail and ask to sleep in one of the cells overnight.  That worked but the next morning when we woke up and asked to be released, a new crew was on duty and declared they knew nothing about the deal we make the night before.  It was a little rattling to think we might be kept there, but finally with a laugh and wish good luck we were released.  I can’t leave this part of our history without reporting something that was standard procedure during those times.  After spending a few days with my uncle at Fort Benning, we drove across Alabama and after working a couple of days shagging golf balls at a country club, we set out for Saint Louis where we planned to visit one of our fellow ANA Cadet’s home in Memphis, Tennessee.  We decided to drive all night trading off driving turns.  I was sleeping when my co-traveler Bill Campbell was at the wheel for his turn driving.  Bill had a weak bladder and we frequently had to stop so he could relieve himself.  After a few hours, deep in sleep, I was suddenly awakened with a start as I felt the car hit into a drainage ditch.  It was about 2:00 AM and we were stuck with the right wheel in the ditch so we couldn’t drive the car out.  Bill’s excuse was that he had to “go” and it looked like the roadside was flat.  I was furious as was my other cohort, Peter Denman.  What to do?  As we stood there I noticed a farm house back about a mile and told Bill since he created the problem, he had to run back and ask for help.  About ten minutes later, I saw a light come on in the house, then two and more.  I saw a vehicle’s headlights come on and it backed around and headed out toward us.  When it arrived at our car, I saw that it was a flatbed truck with a whole bunch of people on the back.  I was flabbergasted but for people living in these remote parts of the country, this was an adventure not to be missed.  The whole family had come out to see what was going on.  After a brief time connecting our car, the truck pulled us out and after many handshakes and thank you’ s, we were off again.  At the moment, I only had a five-single dollar bills in my pocket so I offered it to the Farmer but he refused to take it. It was what people did in those days, help their neighbor or anyone who needed a lift-up, even at 2:00 o’clock in the morning.

Next time, a Freshman at University of California at Berkeley.

One Man’s and his Wife’s Opinion

Bud Brewer and Dottie Brewer


The War


My sister, Barbara Henderson wrote a history of the World War II years in three chapters some number of years ago to have a record for her children and grandchildren so they would learn how things were during that time.  I have taken several excerpts from those files and added them in Italics to this edition of Life in the 20th Century.

 As soon as The Congress voted to declare War on Japan, Germany and Italy declared war on the United States forming what we called the Axis Powers. As confident as our government voiced statements that America would be able to defeat the Japanese, Germans, and Italian military, most of the news we received was not good.  Our Commanding General in the Pacific was General MacArthur. He directed the defensive battle of the South Pacific and Philippines for about three months until being evacuated from the fortress island of Corregidor under the cover of darkness March 12,1942.  General Wainwright took over high command of the defenses.  The persistence and valor of our marines, naval and army personnel on Corregidor was the one positive image we had during those terrible months of early 1942.  Further territory was invaded and overwhelmed in the months leading up to the fall of Corregidor.  But as long as we held out, we had something to cheer for. In May of 1942 General Wainwright sent two soldiers out with a white flag and surrendered to the Japanese.  The months following were grim as we heard of Japanese victories over more of the South Pacific.  But on August 4, 1942, the U.S Marines landed a small force on the Island of Guadalcanal in the Solomon Island Group.  The Guadalcanal campaign was a significant strategic offensive of combined arms effort l eading to eventual victory in the Pacific theater. Along with the Battle of Midway, it has been called a turning point in the war against Japan. As I was wrapping and loading my papers one morning in 1942, I looked at the headline which was, “Crossing the T”.  I was curious what that meant and read the article which described the Battle of Cape Esperance, the first United States night naval battle victory over the Japanese. A U.S. force of cruisers and destroyers under Admiral Norman Scott crossed the “T” of a cruiser–destroyer force under Aritomo Goto.  Gotō’s force was approaching Guadalcanal on October 11, 1942 to bombard Henderson Field in support of  a reinforcement mission when it was surprised and defeated by Scott’s force in a confused night battle. Goto died of his wounds shortly after the battle, and lost the cruiser Furutaka and 3 Destroyers.  I was so excited to learn finally of a victory over the ‘Japs‘ even though I didn’t entirely understand how this crossing of the T made it possible.

Our lives on the home front changed considerably regarding food and necessities.  No one argued that the armed forces did not need these items.  Those men were sacrificing their lives.  The most we had to do was rearrange our lives to use the amount of food and goods in the best way. The Office of Price Administration was formed in 1941 to control civilian supply of foods and materials. At first the concentration was on raw materials, but later Ration Boards were set up in every county and manned by vollunteers.  A ration book was issued to every man, woman, and child in the U.S.   The books had little stamps in them.  The first item that was rationed was sugar.  Every person was allowed 8-12 ounces per person per week.  Unless you did a lot of baking, this was enough for the average family.  If you took sugar in your coffee and tea, you had to change your habits.  Some people turned to substitutes like corn syrup.  By summer, it was necessary to ration coffee.  This amounted to 1 pound of coffee per person every five weeks.  Again, it was manageable if you were an average drinker but care needed to be taken not to waste the coffee. By 1943 the ration book contained rows of red and blue stamps marked A, B, C, D.  Blue stamps were for processed foods, Red stamps were for meats, cheese, and fats.  There was a point system to account for the discrepancy in price.   Housewives saved all the grease from cooking and turned it in to the butcher in exchange for red stamps.  Everyone who could had a” victory” garden.  The more vegetables grown at home the better meals you had because with the “Relocation” of the Japanese from California (who produced 40% of the vegetable crops), a vegetable shortage was created.  They were no longer available to do that at which they were the best.  Many people also had chickens in their back yard.

 In addition to raising certain vegetables in our victory Garden, I got my mother to buy 4 or 5 bantam baby chicks at a poultry feed store and I built a hutch in our back yard so that we would have some fresh eggs from time to time.  I was curious how the chicken would lay an egg and sometimes abandon it and other times sit on it for hours at a time.  I wanted to have them lay eggs for eating and to have the hen and rooster fertilize some of the eggs so we might increase the flock.  When one of the hens became broody, I fixed up a box in my bedroom and placed the hen in the box with a straw nest along with four or five eggs.  I covered the box and   placed a 60-watt light bulb through the top of the box to keep the eggs and the hen warm.  This was a very bad idea.  After a week or so when they hatched I continued sleeping next to this box and tending to the chicks.  I cleaned up the mess caused by droppings and other matter, but the next thing I knew was that I was in a hospital room with a nurse tending to me.  What had happened during the meantime was that I had contracted Spinal Meningitis, a very serious and death threatening disease.  I was in the Contagious Disease Ward at the LA County Hospital.  I felt terrible but due to the fast diagnosis by our family doctor. What he did to make the diagnosis was to place his hand under my neck and when he lifted my head, my whole body rose stiff as a board.  After a couple of brief telephone calls, he convinced one ambulance company that by wrapping me in sheets, they had no potential danger from the disease. There followed a speedy trip in the ambulance to LA County CD Ward.  After two or three days, I was awake after receiving huge injections of antibiotic sulfonamide (sulfa), a relative of penicillin discovered in 1928 but not commonly used until 1942.  For three days, I had been given massive injections of Sulfa, and was just coming out of a coma.  I was later transferred to a ward with 6-8 other patients in some stage of recovery.  The disease usually causes the loss or deficiency of some part of the cognitive, physical, or sensory capabilities.  I was one of the lucky ones who, perhaps questionably, had no ill effects after 45 days of care in the CD Ward. During my stay, every 3 days I was wheeled to a surgical room in which the doctor would tap my spinal fluid to check its condition.  Not a pleasant experience.  Upon release, the doctor advised my folks to not have me return to school but for the remaining months of the Spring school year and Summer to spend as much time as possible in the outdoors (sans chickens) especially participating in some sport.  As disappointing as that instruction was, my folks decided that Dad would take me to the Griffith Park golf course on the way to work and I would spend the day playing the unlimited number of holes allowed by the $5.00 monthly Green Fee.  He would then pick me up on the way home. It was a tough life as you can imagine.

One of the things we enjoyed doing at that time to get around during the period of gasoline rationing was a ride on the Pacific Electric Street-Car. Powered by overhead trolley pole riding along on an electric powerline, these trains ran on a vast network of tracks that went from San Bernardino, to San Pedro, to San Fernando connecting all the communities in between.  For ten cents, you could travel as far as you wanted within each fare zone. Each car had a motorman and a conductor.  After school, I would sometimes take this train down to Hollywood and hang around in my dad’s typewriter shop.  He had a young man who he was training to be a typewriter repair man.  Whenever he would speak to my dad, he would call him “coach”.  After a while I started to use the nickname also and for the rest of his life, I always addressed my dad as coach, a proper thing to do since he was my lifelong adviser in so many things.

 A little bit of history: In 1919, My grandfather, Merrill Brewer, who lived with his wife and son, my dad, in Bar Harbor Maine, accepted an offer to move to Southern California and open a franchised Corona office machine store.  With a pioneer spirit, he loaded his wife and son into a used touring sedan and began a 3-month journey driving across America in a used Franklin automobile eventually settling in Hollywood California. My Dad, 14 at the time learned a lot about how to deal with difficulties on that trip as it was made long before there were real highways connecting the east and west coast. Although a good student, he left high school after the 11th grade, and went to work in my grandfather’s typewriter shop on Hollywood Blvd.  In 1926, he and my mother got married and he began a new role in his father’s business as the principal outside salesman. In 1938, Merrill Brewer retired and my dad, the Coach, took over the shop. 

When the War started, Pop realized early on that with no new typewriters being manufactured, he would be out of business also.  However, he figured out that he could rent used typewriters from wholesalers at $5 per month per typewriter and re-rent them for $10 to the studios and the defense industries (The birth of the middleman). At one point, he had over 1000 machines out under lease. This not only made it possible for him to stay in business but enabled him to develop an active contract repair service and increase his related stationary and supplies business. It not only enabled him to stay in business but provided a platform for continuing the leasing of typewriters and adding machines business after the war. The studio relationships also led him to expand into the Art supply business and it became a fast-growing part of his gross sales after the end of the war (very high margins).  (But more on that in future chapters.)

 Dottie’ life in Kentucky during the early 1940s was pretty much the same as everywhere else.  Become more self-reliant by growing more of the food you ate, save everything useful in the war effort and pray a lot.  In fact, they got most of their news about what was going on in the war effort while attending social events at the church. Of course, there were a lot of rumors going around, most of them telling something not true about what was happening in the war. She lived most of the time at Mrs. Webb’s since it was closer to Saint Vincent Academy, the Catholic school she was attending.  The Nuns held Catechism classes every day but on Thursday the priest would come in and talk and ask us if anyone had any questions for him.  Since they were all in that middle teen-age area, and were sensitive to and curious about what the church said was consistent with the rules of proper behavior when dating a boy.  One of the serious questions was, “is it a sin to kiss a boy when he brings you home from a date?”  This brought numerous chuckles and a smile to the priest’s lips as he answered that it was not a sin unless it went too far.  He told them in clear words repeated by nuns and parents what too far was.  We really didn’t date like most kids do in today’s world. While popular music was enjoyed by all, Teenagers in our day would go to a popular youth club called “The Barn” each Saturday night and have nothing heavier than a Coca-Cola or a milk shake to drink with a hamburger or hot dog..  The Club was run by one of towns respected families and the rules were very strict. The popular activity was to dance what was called the “Jitterbug style.  Dottie took dancing lessons from the time she  was about 8 years old and she told me “even if I say so myself, I was a pretty good dancer, so I never had to sit waiting to be asked to dance”.


One of the amazing phenomena’s that occurred during the 1930s and 1940s was the growth in the card game of Contract Bridge. It became the central activity for socializing among couples and people unable to afford or attend other types of entertainment.  Mrs. Webb ran a bridge club at her home every Tuesday and Thursday.  Dottie told me “I suppose this is where I got the seed of motivation for learning how to play this game. When they had one of the ladies unable to attend, Mrs. Webb would sit me down on a book or two and with some help from others I slowly learned the fundamentals of the game. Being a small-town, Waverly or Morgantown didn’t have much entertainment for young people.  I mean it was a big day when we got to go over to a school chums home with elegant design and furnishings.  We rode bicycles all over the County and would spend hours dreaming about the outside world.  One day I just knew I would get the chance to travel to the state of California”.

Next time we will share some interesting times ending the World War II


One Man and his Wife’s opinions—

Bud and Dottie Brewer









The Story of Crude Oil’s Price Collapse?

December 12, 2015: In mid-2014, just over one year ago, the price of crude oil was trading at $103 per barrel and politicians and many consumers were clamoring for the President to approve the Keystone Pipeline program which would allow the reasonably safe transport of Canadian heavy crude to refineries in the Gulf Coast.  Today, with the price down to $35, I suppose he can claim he did the right thing, and as it has turned out his disapproval has apparently been right.  But before we throw the bouquet of roses at him, let’s see what has actually been behind this huge decline.  It is worth noting that few experts in this Administration voiced the opinion that the global price of oil had reached a level that made alternative sources for generating energy far more potentially profitable, nor did they assure the poor automobile drivers, airlines companies or other high users that there was any chance that the cost of fuel for such activity would decline sharply.  No, they promoted alternative sources of energy such as solar and wind which have a higher cost per unit of energy produced along with heavy front end capital costs.  So what happened and why were they so off the mark with their experts?

The answer to that is found in the power of the “quasi free market”.  Quasi because for fifty years the market for crude oil has not traded in a pure free market where demand and supply floated and the price was based on their equilibrium.  The demand was principally based on the real economic growth both in developed and developing economies but the supply was controlled by the Organization of Petroleum States (12 oil producing nations) headed by Saudi Arabia where huge oil reserves of light crude had been discovered over a period of several years and now represented the point at which the amount of daily production pretty much determined the marginal world supply and therefore whoever controlled it could affect the end price and profit from the product.  Prior to the formation of the OPEC organization, oil was being pumped out of Saudi wells and sold by the American companies and other European Drilling corporations that had developed the huge reserves in Saudi Arabia.  The Saudis were only receiving a relatively low fixed price set under long term agreements while the producers were pumping unlimited amounts and selling them at global market prices.  Then the Sheiks got wise and decided they wanted to participate in the growing demand for the product they had under their country.  So they formed OPEC for the purpose of controlling the volume of oil on the market at the margin and therefore gaining benefit from adjusting production up when demand rose but not quite at the same percentage and reducing production when demand fell thus maintaining equilibrium at the most advantaged level for them to gain huge profits.

So what changed that has caused the price of crude oil to fall over 60% in the past twelve months?  As explained in “One Man’s Opinion” published last October, when an artificial force meets an immovable object, something has to give and what gave was political.  The wealth created by OPEC countries which were in largely undeveloped areas of the world, was used to build infrastructure and provide services that their citizens came to expect and to continue to grow.  As a result, Saudi Arabia as the OPEC Member with the largest share of oil reserves not only experienced huge growth and modernization but also developed rising budgets for providing ongoing government services and infrastructure maintenance.  Every year they created a higher and higher level of need for government revenue to meet their budget.  Their solution was to lead OPEC Nations to increase or lower production at the margin and maintain a slow but steady increase in the price.   What has changed?

In the past several years, a new reasonable priced technology,”fracking”, has been developed to extract oil from the huge tar shale fields both here in the United States and in Canada.  Annual production of off shore oil wells has increased due to advanced technology allowing deeper wells and the growth in foreign corporations exploring new areas of the world.  While the average demand for crude by developing countries is growing, a larger percentage of requirements has been coming from increased production by nations not a member of OPEC thus reducing the ability of that organization to affect the price of oil by adjusting their production thus creating a false equilibrium price in world markets.  This fact has caused the Saudis to be caught between a rock and a hard place.  If they reduce production to effect the equilibrium price by trying to create a perceived shortage, some other source of oil supply will step in to fill that gap, then all they will have done is to lower revenue without lowering government expenses thus causing them to either reduce services or face sharply higher budget shortfall.  For this reason, OPEC is not lowering production thus contributing to a rising glut in the supply of the commodity.

So what happens then?  The price seeks equilibrium between Global demand and global supply which results in a collapse of the market price for crude oil.  The demand for crude is further dampened by the higher mileage available in new automobiles or more efficient aviation engines purchased to replace older models.  Sensitivity to the long period of rising prices, the individual and institutional consumers have changed their driving and general use of the fuel thereby reduced the general demand for crude oil.  Add to this the constant effort to improve efficiency leading to higher productivity and you have a steadily decline in the average use of crude oil based energy producing machinery in factories, cities and homes in the developed countries.

This is an explanation of why the price of crude is in free fall, but there is an offsetting benefit that is being created for the consumer of energy that results in rising excess and available cash flow.  This extra cash flow is being spent on other products, services or investments and having some positive effect upon the broader economy thus making general activity took like it is growing somewhat.  With the Federal Reserve’s Zero interest rate policy, the economy is awash in money seeking investment opportunity or a safe harbor for excess cash realized.

The question to be considered now is how this ongoing process will affect the world economies over longer time frames.  We will deal with that in future “Opinions”.

One Man’s Opinion, Bud Brewer

SEC Goes Political on CEO Pay

August 12, 2015: In an interesting article in the WSJ, Theya Knight writes about the recent ruling by the SEC that mandates a Public Corporation  disclose the ratio between its CEO compensation and the median or average compensation of its work force. But by mandating this information from companies like Walmart, Macy’s, MacDonald’s or the big box stores, the SEC is trying to embarrass companies about income inequality, but the agency is likely to be the one blushing

The SEC, drawing on concepts in its founding 1934 legislation, states on its website that its mission is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” Some disclosure rules—those that provide investors with material information that assists them in making decisions—seem justified under that mission statement.
There are two main arguments in favor of forcing companies to calculate and disclose this pay ratio. The first is that the ratio will help investors evaluate management by providing additional information about whether the CEO’s compensation is appropriate. The second is that the ratio will help address income inequality by telling the public—in the words of a form letter to the SEC in favor of the rule—“which corporations are fueling the yawning gap between rich and poor.” Neither argument is convincing.

So the question is: Should the SEC require public companies to disclose the ratio of CEO pay to that of the median or average employee salary? Will this enable shareholders to make better judgments regarding the market valu of the Corporation or efficiency in operations? enable shareholders to make a better determination of the Company’s market value or is it relative to judging valuation? Is it even material given the fact that Corporations are already required to disclose the CEO’, compensation. . Daniel M. Gallagher, a Republican, said “the new rule “hijacks” the SEC for political purposes”. Commissioner Luis A. Aguilar, a Democrat who voted for the requirement, admitted last week that it is “controversial.”. No wonder!. The rule is unrelated to the SEC’s mission, imposes significant costs on public companies and will do little to achieve its intended goals.

A company’s pay ratio is not material information. For one thing, executive pay is already included in companies’ disclosures to the SEC. For another, the ratio has no bearing on whether the CEO’s pay is appropriate. The value of a CEO’s contribution to a company can be measured by several metrics—the extent to which the company’s market share or value has increased, for example—none of which include how much more the CEO makes than the median employee.  Nor does the ratio provide insight into corporate culture and governance. It will be difficult to compare two companies’ ratios, because the calculations will vary widely by industry and business model. A technology company that employs many highly educated, and therefore highly compensated, engineers will tend to have a low number. A retail giant, which employs thousands of part-time cashiers, will tend to have a high number. The difference between the two simply reflects the difference in market wages between a software engineer and a cashier.

The argument that the disclosure will pressure companies to narrow the pay gap between executives and workers is irrelevant: Such matters are unrelated to the SEC’s mission, and the agency’s move to stretch its power beyond its intended scope is a dangerous precedent. Forcing companies to disclose pay ratios is unlikely to have the intended effect. Let’s suppose a company does report a wide gap in pay, which activists then try to use to embarrass it. What are the options? Assuming the company is paying a market rate for the CEO, if it cuts that compensation there is a risk the CEO will go elsewhere. More likely is that the company will try to goose the ratio from the other direction, by figuring out how to shed its lowest-paid employees. It might lay off full-time permanent staff, and replace them with a raft of contractors and “temps” provided by staffing companies, which are explicitly not included in the calculation of the ratio.  In this scenario, the CEO loses no pay, and the wage gap remains untouched. But the most vulnerable workers are shunted into contract positions with no job security. Further, the company suffers because it must pay a middleman to supply the temporary staff, and it loses whatever psychological benefit inures from employees “belonging” to the company instead of being merely contractors. Then there are the direct costs of implementing the rule: an estimated $1.3 billion up front, according to the SEC’s own calculations, for all listed companies to gather and crunch the relevant data, plus an estimated $526 million a year afterward.

The SEC might have written a slightly less terrible rule—for example, by excluding all temporary and part-time employees from the calculation—but the ultimate fault lies with Congress for the provision in Dodd-Frank that mandated disclosure of this ratio in the first place. It is difficult to think of another SEC rule with so little redeeming value and yet such potentially negative effect upon the middle and lower class workers.

One Man’s Opinion – Bud Brewer


January 30,2011: The uprising in Egypt these last few days has demonstrated the power of social media as an element of how rapidly a foreign relationship can deteriorate and how difficult it has become for the Obama Administration and its State Department to set policy or react to what is happening on the ground. President Obama and his advisors have fallen rapidly behind the curve of actions on the ground in Cairo due largely to the speed with which opinions and directions to the masses marching in the streets have been communicated. We used to learn from back channels of State Department contacts when something was about to happen or how serious an event was likely to become before having to make and set policy for our reaction to any incident. When I think back to the post war political battles that took place between the super powers and their satellite nations, I recall that we discovered major changes were occurring by the means of radio, newspapers, or the release of information from our Foreign Embassies. Today it is vastly different. On a recent Sunday news program, the producer created a large TV screen divided into four columns. On those columns there were displayed copies of Twitter messages and Facebook entries. The top one on the list would disappear when a new message was displayed on the bottom of each column. The speed with which transmissions and replies to communications were taking place in this real time demonstration was mind boggling. It was impossible to read one message and create a response and not have a follow up message make your answer to the first irrelevant. The consequences of this development are causing government Foreign Service analysts to become less effective and in some cases downright superfluous.

Supposedly, Egypt is one of our most important friends in the Muslim world. Located smack dab in the center of the Mid Eastern Muslim Nations, and a partner in the Israel peace agreement of 30 years ago, Egypt is considered a rock in our efforts for offsetting the potential rise in influence of Iran, and the Islamic terrorists working out of Afghanistan, Pakistan and Yemen. Mubarak has been gently nudged over the recent years of his increasingly totalitarian regime to begin to initiate a democratic means of choosing his successor. Like a simmering volcano, the citizens of Egypt have slowly built up public opinion in opposition to him and this weekend fueled by Social Media conversations at break neck speed and orders from the Mullahs in the Mosques, the country has exploded with tens of thousands of people marching in the streets battling the Government police forces and breaking in to shops looting and setting fire to government buildings.

In the meantime, caught like the deer in the headlights, the Obama Administration had no idea what to do about the situation. On the one hand Mubarak and Egypt have been one of our closest allies in the area, having participated in the Gulf War and maintaining peaceful relations with Israel. But if we continue to show preference and unconditional support for his troubled regime, our entire Mid East policy could come apart. While some might say Obama and Hillary Clinton are handling it just right, the President’s calls for supporting individual’s rights to demonstrate by expressing opposition to their government’s policies are putting America, the “Dark Vader” in the minds of some demonstrators, in a bad spot. We look on the one hand like we are throwing Mubarak under the bus and other islamic nations are going to be less likely to enter into agreements with us in support of out policies. The President and his State Departent have clearly lost the initiative and are clearly behind the curve in reacting to political changes in the area. The fact that the Sunday talk show guests on NBC and ABC are actually making statements that one acceptable alternative for a change in the Egyptian government would be to have the Muslim Brotherhood organization take control should make the Western Powers very uncomfortable. While this anti America organization is allegedly dedicated to peaceful political and non jihad methodology for exercising political power, their aim is to instill the Quran and Sharia Islamic law as the basis of a society they would govern. The situation appears to be getting worse and although our State Department and the President may be voicing words intended to calm the rhetoric, it appears we have found ourselves in a circumstance where instead of killing the messenger, we should have and should be listening to the message or at least ramping up our efforts to find a solution to this erupting volcano. If we continue to look weak and unresponsive to the dangers developing, the Iranian threat, the future of Israel and our access to the Mid East oil could be jeopardized Obama apologies notwithstanding.

One Man’s Opinion—Bud Brewer

Interesting Comments From The Left

This is a video from a women who simply does not get it!

The Arrogance of Power

The Triage of Arrogance

January 19, 2010: It seems when a politician is elected to office these days something takes over their common sense, if they ever had any. The attitude of President Obama and our Congressional Representatives and Senators that they deserve to be treated special just for being in office is patently absurd. Proper security, yes, but they are typically driven around in limousines, have special food services, enjoy a special form of health care, have large and excessive office staffs, many of which are there soley to work on their re-election. Watching or reading media coverage, one sees them being fawned over by the Washington Press corp. In the Obama Administration, it is even worse. Members of his Administration and the Congress charter Boeing 747s at government expense to fly to overseas junkets in first class style often with all members of their family. In some cases, they even command U.S. military planes to take them home for the weekend, all paid for by federal tax dollars

During Congressional hearings, they sit on a dais elevated two or three feet above any witness that is testifying voluntarily and typically show little if any respect for the individual or panel of witnesses. I’m not talking about when a Committee is investigating an actual or potential defendant in a criminal act, I’m talking about those meetings where a witness is educating the Congress and appearing voluntarily. No, there is something that happens to those that enter government service or run for and are first elected to office. The success in their campaigns seems to cause them to become even more narcissistic than they otherwise might be.

There is a quote from Lord John Emerick Acton (1834-1902) saying, “Power tends to corrupt and absolute power corrupts absolutely.” Well, Barack Obama and his fellow Democrats took office with absolute power one year ago and as we look back, not just at the lack of his governing through a two party system, but more at the effectiveness or lack thereof by his 60 seat Senate majority to get important legislation passed, it has become clear that he seeks to have legislation done behind closed doors with little or no debate or the transparency he campaigned on. This combined with attemps to posture the United States as a conciliatory power that has made terrible offensive mistakes and now wants to be more accomodating to countries like Iran, Yeman, North Korea, and other nations dominated by dusruptive forms of Islamic or totalitarian governments. His unsuccessful efforts to influence our foreign allies to join with America in the pursuit of stronger anti terrorist policies can explain why voter confidence in his ability to govern is cascading down from the high level present at his inaugural.

During my lifetime, perhaps with the exception of the Roosevelt era, every successful president has governed from the center of the political spectrum. It is true that this was usually required to get bi-partisan support for any proposed legislation simply because they could not get it passed without them. But in most cases there was genuine regard for the leaders of the other Party and many of its members. I can remember how Ronald Reagan and Tip O’Neil, the Speaker of the House at the time of Reagan’s election, would be able to have discussions on serious matters, laugh at each other’s jokes and slowly but surely gain respect or at least a modicum of appreciation for the other’s point of view.

In the current period, Americans are increasingly becoming polarized. Is that part of a plan or a consequence of Obama’s leadership? If a plan, we better watch out because the next step is a potential non reversal of government authority over our everyday life and a diminishment of freedom, liberty and our standard of living.

After listening to the Barney Frank crowd express their ideas for regulating the financial industry into a state of atrophy and steadily losing hope that our free enterprise system will endure, I was heartened as I watched and listened to Frank Blankfein (Goldman Sachs CEO) and Phil Angelides (former California State Treasurer and Chairman of the “Financial Crisis Inquiry Commission Committee”) exchange views on what roll Wall Street played in the near Collapse of the Global financial system in 2007-2008. The reason I was heartened was that there in front of the World, Blankfein laid out a clear explanation, with all its strengths and weaknesses, of what capitalism is, how it works and why it is so effective in fueling economic activity for the betterment of American society. He went through just how investment banking, capital markets, brokerage and financial asset trading works and how it fuels capitalism. He described the role of the investment banker serving one client’s need for raising capital and then serve the needs of another through other divisions of its own structure to distribute it. Usually the investment banker is joined by others to provide the means of distribution of that financial product, (i.e. stock, bonds, or other securities) to or through investment brokers or advisors responsible for managing the investments of institutions and individuals. He explained that in this process, the investment bank, acting alone or heading a group of other underwriters, assumes extreme risk related to the process of underwriting and distribution of financial products. During this time, its equity capital becomes increasingly leveraged as its ratio of equity to its liabilities could and does require effective risk management to protect its shareholder interests. He said the demand for financial instruments to fund the need for mortgage capital necessary to enable individuals to purchase homes did cause his firm and most firms to build liabilities to a risk related level of 40-50 or even higher multiples of its equity. Recognizing that increasingly those applying for loans to buy homes were not going to be able to service the debt called for (so called sub prime mortgages) the firm accelerated its effort to address its exposure to risk. But at the time there was a common belief that the underlying collateral (real estate properties)for these securities and their derivatives would continue to rise or at least hold its value. Nevertheless, since the inherent loss potential with such risk can and did threaten the equity value of Goldman Sach’s shareholders interests, they took appropriate steps to hedge those risks. Some of those steps involved the use of derivatives that effectively made the company’s position be a seller of comparable securities to those it was underwriting. It was at this moment that Phil Angelhides made his remark “It sounds to me a little bit like selling a car with faulty brakes, and then buying an insurance policy on the buyer of those cars.” In fact that isn’t far off the mark but it is no different than what any person, corporation, law firm or whoever would and should do when, attempting to manage potential liability risk exposure. They prudently transferred risk to counterparties.

Unfortunately, his comment was picked up by the media and headlined “Investigating panel rips Wall Street”. The question and the response is clear evidence that our current Administration along with most liberals in Congress and of course the fawning media does not understand or appreciate the process of free market capitalism and in fact assures that until a change occurs, we are doomed to the consequences of that ignorance,

One Man’s Opinion –Bud Brewer

The New Economic Superpowers

December 24, 2009: I know the Obamacare battle has probably been talked to death in most crowds but this past week’s legislative process is probably the worst exhibit of what has befallen the American People as any in modern times. When he was campaigning, Obama said he was going to open up the debate for legislation by having full disclosure on C-span and the Internet so everyone could see and listen to different points of view. But now that he has taken office, his strategy for open government has been trashed. Yet we still have the partisan majority creating law in ways some call horse trading while others call it bribery. In either case it smells and makes me want to go back to just not knowing how bad and less than honest these people really are. I must add that the record of the Republicans in recent years was not much better. Such a disgusting exercise as that we have just seen by the United States Congress makes people of integrity wonder whether this country can endure. If this isn’t enough, when you look at the world through economic bifocals, I am amazed how much our country has slipped in terms of its place of influence in the World.

Modern Beijing

Modern Beijing

China, India and Brazil are becoming such dynamic economies in the global markets that it will be a mistake by money managers to give only token consideration for investing more in them. While many of us have been enthusiastic about opportunities in these countries, investing more than a relatively small amount of capital carried perceived risks that could have seriously damaged a portfolio if they became manifest. The situation is changing now though and I think many more investors or their managers will ratchet up the percentages of their capital that they invest in these dynamic economies. To be a major investor in China, India and Brazil, the investor must have a significant understanding of the strengths and weaknesses of these countries. That means some professional advice or counsel by people who are associated with entities that have serious presence in those countries and a meaningful understanding of their politics and socio-economic conditions. Don’t be fooled by the images we see in western media of masses of people struggling to survive in these highly populated countries. While it is true that only 25-30% of the populations are well educated or enjoy comparable purchasing power adjusted life styles, these minorities are growing rapidly and in absolute terms represent more people than the United States, Japan and Europe combined. It is likely that within the next fifteen years, China will far surpass Japan’s gross domestic product and will begin to threaten the United States as the World’s largest economy. By 2025, China’s Gross Domestic Product should be approximately $12-15 Trillion (currently $4.5 Trillion). If the U.S. is lucky, its GDP could grow to $14-15 Trillion by that same time. The difference will be in the make up of that output. Faced with mammoth debt, confiscatory tax policies, some Federal Reserve manipulation of interest rates creating cross curents for deflation or potential price inflation, higher than normal unemployment and rising government mandates upon individual spending, the American consumer is not likely to be buying too much over their level of purchases in 2009 for some time. The Governments of most states will have faced enormous fiscal problems and many will have experienced some form of default.

While a majority of Americans will struggle through this period and be able to maintain most if not all of their present life style, many, due to their extended debt, little or no reserve savings, etc., will not be able to sustain theirs and will fall into that group supported by the our government welfare and unemployment benefit programs. Many traditiional American businesses will be turning to the government to help with their deteriorating financial situations. Some government help will be provided allegedly to save jobs in either what they call a bailout or by corporate reorganizations in which creditors and the government become owners of the enterprise.

Many in the finance industry (Wall Street) already entrenched in the Global markets administering their own capital or that of individuals, institutions and sovereign funds, etc., will begin accelerating the process of making a major adjustment to their strategy to become less dependent upon U.S. investment and more committed to the markets created by and serving the 2.5 Trillion people in China, India and Brazil. Their economies are growing at 8-10% per annum, they have huge trade surpluses, little or no consumer debt and more savings than they know what to do with. This means that their relatively more conservative consumer demand for many products and services, that we have always thought indigenous to the Western consumer life style, will be developing in these countries. While the United States will be mired in debt and struggling to produce enough GDP to service the interest and principal payments on it along with the requirement to pay for the explosion in entitlements, China, India, and Brazil citizens will shift some of their trade surplus and savings to increasing their standards of living. For example, did you know that this last year, the Chinese purchased more automobiles made in China than Americans did here in the U.S.A.? Did you ever believe that would happen in our lifetime? During this past year when the U.S. economy contracted 2.5% and Japan’s shrank 5.2%, China’s economy grew 8%, India’s 6% and Brazil ended up even or slightly in the black. China has emerged as the economic engine driving the global economy. Its economy is set to grow another 9-10% in 2010. In October, their industrial production rose 16%, fixed investment 33%, car sales 77% and consumer spending 16%. China has a small fiscal deficit and a large trade surplus. It has $2.3 Trillion of foreign reserves, a number that has grown $60 Billion per month during the 2008-09 crises. These reserves have given China the flexibility to stimulate its domestic economy without incurring mammoth debt like our Democrat friends in Washington.

The stories are much the same in India and Brazil. All the while Japan and the United States are competing to become the world’s largest debtor nation. Total U.S. Debt to Gross Domestic Product has risen to 358%, on a par with Japan’s bloated levels. This 350% level for both the U.S. and Japan is far above the 100% level for China, India and Brazil on average. The federal and state government’s fiscal positions are in a crisis. The federal deficit in the U.S. this year will be 11-12%, the worst since World War II. The Federal debt has expanded from $2 Trillion in 2000 to $12 Trillion this year. The American consumer debt has risen to 100% of GDP and the saving rate is still barely zero. Only the corporate sector of the U.S. economy is healthy, with high levels of cash and low leverage. A recent study done by Goldman Sachs predicts that China will eclipse the United States as the world’s biggest economy sometime in the 2020-2030 timeframe.

What does all of this mean relative to what we do with our investment capital? To me and I believe to many serious investors around the world, it means that we ignore these trends at our peril. We must reallocate more of our investment capital to the faster growing economies outlined above. We should maintain more modest investment in domestic companies and then only in those that have global presence and distibutive strength. Our investment in service companies should be conditioned upon their ability to exploit the opportunities from the expanding economies of China India and Brazil. My working number for investors with time horizons of 10-15 years is 50-75% of the equity segment and perhaps the same ratio of fixed investment. The next few years of such a strong shift will likely be volatile as transaction demand and supply temporarily distort fair market value but by 2020 such a shift in weighting should be and have been experiencing stable superior growth.

There likely will follow a shift in the political power and economic influence of the United States and that change will be a weakening one leading to negative forces upon stock and bond valuations. Don’t misjudge the pace of these changes. The U.S. economy will not fall off a cliff and the expanding role of government will mask the longer term consequences and rate of change in relative prices of business assets vis a vis the rest of the world, but the change will be real. Today there is little or no premium one has to pay to play so to speak. Tomorrow there will be! The WesternWorld will continue to be an important even if diminishing segment of Global economic activity, but we will be experiencing a rising pace in the rate of decline of our relative economic and political influence in the world.

One Man’s Opinion– Bud Brewer


October 17,2009: The following five paragraphs are excerpts from an article written by Kelly O’Connell and published in the October 17th issue of the American Thinker. It describes in cogent terms the background for and the most probable result of “Obamanism” here in the United States. I thought it worth including in this week’s Blog.

“Marxism is a violently revolutionary doctrine. Marx claimed capitalism’s Armageddon was inevitable, but followers should bear arms to hasten change. Since the rich will never give up their capital voluntarily, it must be taken by force. As Lenin in Russia, and Mao in China launched Communist revolts, the prophesied global apocalypse seemed imminent. But the staggering failure of Marxist theory to make productive societies, coupled with the West’s relentless growth forced an intellectual crisis.

Twentieth century leftist progressives developed a Neo-Marxism less warlike and more psychologically attractive approach by combining Marx with Freud, creating a highly sexualized socialism. The Frankfurt School Marxists who escaped Frankfurt, Germany to avoid Hitler’s wrath, relocated to the U.S. where they successfully infused Marxism into American universities. For example, “Political Correctness” is a Frankfurt movement, and the first modern use of this phrase is found in Chairman Mao’s “Little Red Book,” according to Geoffrey Hughes’ article, “Political Correctness: A History of Semantics.”

Neo-Marxist theories now dominate Western universities. Movements like Race Theory, Feminism, Gay Rights, Modern Art, Critical Theory, Animal Rights, Gender Studies, abortion advocacy, Deconstruction, penal reform, Hate Crimes legislation, etc. are all informed by Frankfurt scholarship. Redefined Marxism has produced spectacularly disruptive results. Some argue Obama’s election is a direct result of cultural Marxism’s success. Universal Health Care is another Marxist holy grail. The USSR had free medical treatment, notable for a staggering lack of basic supplies, horribly outdated methods, and horrifically filthy conditions.

Ominously, in 1966, Columbia University scholars Richard Cloward and Frances Piven published a theory outlining methods to destroy a healthy capitalist economy and force communist revolution. This eliminates capitalism by making impossible state budgetary demands, thereby bringing government insolvency.

Critics claim Obama’s budget is an example of the Cloward-Pivin model of planned economic destruction of a functioning capitalist economy via sabotage. Outlays are so gigantic, and so dreadfully misspent, that our financial infrastructure will soon collapse. A trillion dollar tax increase and spending rising by $10 trillion dollars over the next decade is probable. If so, government default will occur, only offset by mass currency printing, which will then bankrupt the general populace. The middle class will fall. Chronic inflation will result, causing America to lose its sterling credit rating. Global financial players must dump the dollar as it swan-dives. Then, hyperinflation will accelerate, and the era of superpower America will end.”

I have spent many hours during the last year trying to brace myself for the anticipated sharp move to the political left by the electorate of this country. Never, however, did I entertain serious consideration that the new liberal President and his Democrat majority in Congress would seek to address the serious financial deficiencies in our banking system and overleveraging by consumers and businesses with government deficit spending programs that are mega huge and not only threatening our very ability to recover economic and financial stability but also preserve the integrity of our currency. America has the highest Gross Domestic Product of any country in the World, but to continue to produce this output, we will need to depend on increasing domestic demand and rising global trade. This means trade agreements that bar placing tariffs on products from importers supposedly to protect less efficient domestic companies both here in the USA and in the foreign country from losing business. Unfortunately our President signed an executive order recently to slap tariffs on auto tires imported from China, for reasons I suspect that have root in the fact the U.S. Government is knee deep in the auto business now. The problem with exports is that to be competitive with developing countries with labor costs well below ours, we will have to devalue the U.S. Dollar, or increase the productivity of our labor force, or both. But how do we do this with a government whose policies appear to be designed to shift to a more command type economy and to redistribute wealth by bringing more regulation or government restrictions, tax rates and politically correct policies to our business community? I believe that the entrepreneur commits his savings or investor capital to economic or business risk as he gains expectations that he will be able to earn a satisfactory return thereon. Otherwise he is unwilling to take those risks that create businesses, employment and eventually a basis for government tax revenue. Our country’s political leaders don’t seem to understand the calculus that goes into creating economic growth from a free market system based on capitalism. Or as Kelly O’Connell suggests in the above extracts, maybe they do understand but they have a different agenda.

One Man’s Opinion- Bud Brewer