GUILTY AS CHARGED!

This morning I did not do enough home work before writing about Global Flooding. I read somewhere, can't find it now, that 300 to 400 people are killed each year by meteors. I have been called to account. At least one reader has found a source that says that there has been no recorded death by meteor. My only excuse for my error is that I don't really believe there will be global flooding as a crisis that must be attacked now lest we all die. I believe in the promise God made to Noah.

Humans are smaller than we think but we have great responsibilities. One of those responsibilities is for us to allow others to be free.


Passing laws to force some people to put corn oil in his car while forcing another people to go hungry is the among the worst of policies. By not doing my homework, I have pulled an "Al Gore". I have over stated my case in regard to Global Flooding. The truth is that there is more that we don't know about our universe than we do know.

GOOD NEWS

It appears that some of the worst parts of the pending energy bill has been defeated. Taxes will not be raised by significant amounts. It appears likely that the political compromise brewing will reduce the "damage being done to the environmental cause". Congress is likely to pass new mileage standards, once again, giving us all a good feeling about how we are helping to "save the planet" without making the hard choices, but power plants will not be forced to mis-allocate resources.

While the current crop of politicians seems to have little will power, the economic conditions are still ripe for the substitution of consumption taxes for income taxes. The AMT still has not been fixed or even patched. If it is not fixed, the US income tax system will automatically evolve into a flat tax. The pain of higher taxes on the middle class would be too great so close to the next election. It is still possible that a compromise will be reached within two weeks.

We are all guilty of changing our minds. It is my hope that the American Public will learn to demand the best service from our politicians. We do not need bridges to nowhere, subsides to not grow crops or ridiculous mandates.

It is important for investors to understand the basics. In a similar vein, we all need to know enough enough basic science such that we do not allow politicians to seed the country on wild goose chases. In the 1970's the USA wasted billions of dollars on synfuel project subsides. Thirty years later, we waste billions of dollars annually on corn alcohol. The science of economics tell us that if we let the free market work, alternatives will be automatically substituted for hydrocarbon fuels when the price is right. Yes, the total cost, including pollution costs must be factored-in. An independent commission should be established to determine the relative pollution costs of each source. The congress should get an up or down vote only. Powerful industry groups would lobby hard but the final result would be an open and above board answer for perhaps a five year term.

FLYING THROUGH THE MID CYCLE TURN

If you don't believe the turn is upon us, do a search for a zinc chart. The price of economically sensitive industrial metals is not the only sign of the turn. The big decline in long bond interest rates is the big daddy of signs. Inflation is dead, long live the inflation of stocks.