Fresh Ammunition

Recently, like a cat toying with a couple of mice, I have been playing with a couple liberals who have infected a northern VA Republican blog site and at the suggestion of others I have decided to dump a pile of that material for instructional purposes. Feel free to use and abuse.

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As the president said today, it is under an internal investigation that apparently will be under way for the next several years as multiple contempts of congress are cited and impeachment proceedings begin. Why the man apparently does not know enough about his own knowledge of what he knew, when he knew it and what he did about it may at first appear mystifying until you remember that he is unable to state anything until it has been vetted by focus groups, prepared by lawyers and properly fed to him on a teleprompter.

For a technical description of how this process works, I refer you to a promotional video by GM Aerospace early on in the Obama administration:

http://www.youtube.com/watch?v=9iou1cVP5Bo&feature=plcp

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The batting average on administrative “internal investigations” is about fifty when it comes to the American people learning the truth about what happened, from Watergate onward with administrations of both parties. The fox can not be trusted to tell us what is really going on in the hen house.

Only by having open hearings with testimony under oath will we find out what really happened, and even there, as with Fast & Furious, administrative stonewalling may easily prevent it. For example, after a year of internal investigations and suppressed testimony before Congress that includes an attorney general who lied to congress on multiple occasions and was even permitted to amend his lies and Nixonian abuse of executive privilege, basically claiming that the entire Justice Department need no longer answer to Congress or the People, we still do not know who authorized the disbursement of thousands of automatic weapons to Mexican criminals or what if anything was done about him or her.

The fact is that our President is either so stupid that he cannot recall what he knew, when he knew it and what he did or did not do about it unless the FBI interviews him and provides a report for his teleprompter, or he is up to this thing in his eyeballs and desperately trying to find a way out, preferably with some Republican at fault.

Nixon was actually winning his battle to suppress the truth at the time a little known, minor league functionary named Alexander Butterfield happened to mention that he had done the daily reloading of the tape machines… tape machines that nobody had previously known about and which contained “the rest of the story”, as the late Paul Harvey would say.

Without congressional hearings and administrative cooperation we will never know any more about who was responsible for the abandonment to their deaths of four fellow Americans in Libya than we do about our administration sponsored gun running program, which is nothing other than that it resulted in the deaths of at least one American and hundreds of Mexicans.

But there again, if you are a Democrat I suppose you don’t really care because you cannot find any way to blame it all on Republicans.

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Yesterday the President confirmed that Rice got her talking points from the White House, meaning him. You cannot blame her when in fact it is he who is talking out both ends of his alimentary canal, he and his moderator falsely claiming in the second debate that he told us on 9/12 in the Rose Garden that it was in fact a terrorist attack yet the following weekend winding her up and sending her out to tell us a completely contrary and false story.

Though there are many issues to be resolved, the two most important to me are:

1. What did the President know, when did he know it, what options was he presented with and what did he do or not do about it? For some reason he is not able to recall any of his own first hand knowledge without an investigation into himself.

2. Who asked or told Rice to appear on those programs and who gave her, Hillary and Max Headroom Carney the false and misleading story line to purvey over the following weeks?

I’ve been around long enough to have seen this all before… from Nixon letting his cabinet and all his supporters down when we finally heard the tape of him instructing his Capos to “cover it up” the day after the break-in, to Slick Willy having his entire cabinet go out and fall on their swords promulgating his lies shortly before we and they learned that the infamous blue dress still existed… and had not been dry cleaned.

Thus there is no question in my mind what we will learn if and when the full story is finally and truthfully told:

1. That due to the sensitive nature of the US mission in Libya it was decided that a heavy military or armed presence for the purposes of security would somehow be offensive to the Libyan people and radicals within them and would suggest they were not trusted at a time we were trying to win them over. On this I depart from most of my conservative brethren in that even if risky, ill advised or dangerous, especially as earlier attacks on us and others were known, it would at least be a strategy that can be argued rather than simply a case of incompetence. When Sadat and Begin, both at great risk of assassination and the former later successfully so, exchanged visits for the first time in history they did not do so behind a shield of tanks and air cover. Obviously our four compatriots knew they were at great risk, perhaps greater than they signed up for and certainly greater than the administration expected, but until we know all the facts about what their mission was and whether the lack of security was due to deliberation or incompetence I reserve judgement.

2. That there were multiple options for rescue action by extraction teams available, all which would have required a Presidential go-ahead just like the raid on Bin Laden, and the President froze… voted “present” instead of exercising that steely nerve Joe Biden was so fond of talking about.

3. The fact that there was no mob, spontaneous or otherwise, was known at the time and known at the highest levels, that they knew almost immediately as their people on the ground did, that it was some type of coordinated paramilitary attack and that terrorists were likely involved. Since the truth that it was indeed a terrorist and likely Al Qaeda supported attack on the anniversary of 9/11 interfered with the story line throughout the campaign, that Dirty Harry Obama walked right down the middle of that Pakistani street under withering cross fire, into the compound and blasted Bin Laden with his 44 Magnum and that ever since that heroic act Al Qaeda was running for their lives, they had to craft some kind of story that both hid the truth about the resurgence and success of Al Qaeda AND put the blame on somebody else because, as we should know by now, this President and his administration, like the probe “Nomad” from Star Trek, are perfect and incapable of error. Thus plucking some short video that had been on the web for months and obviously widely viewed throughout the mountains of Afghanistan on tribal iPads and then compounding its effect by drawing the attention of the entire Muslim world to it was the perfect distraction needed to hide the truth about their utterly failed Middle East policies.

I think the most telling thing Obama said to his fawning seals lobbing cupcakes at him in the press conference was that “now that the election is over” we could get to the bottom of it. I wouldn’t hold my breath waiting.

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“Anyways, I will continue to press ahead” … as well you should. The idea that conservatives should not be fighting a rear guard action as the rest of the Republicans retreat to some “middle” road to socialism and tyranny in a hopeless strategy to gain power without influencing the eventual outcome is contrary to the whole concept of American political discourse. Just cave in to or enthusiastically endorse the demands of those who did not vote for you… and never will, no matter how much they they beat you down? Nonsense.

Throughout history there have been many voices in the wilderness whose views have ultimately been vindicated, for example Churchill in the 30′s, and though politics has rarely rewarded them for their prescience or efforts, civilized mankind will forever be in their debt.

Good citizenship is not just about politics and saying or doing whatever you have to do to gain power. Sometimes it’s just making sure your fellow citizens are aware that there are other alternatives, things that have proved time and time again to be successful and illustrating to them how their decisions have been self destructive and foolish. Over the next four years there will be ample opportunity for you to be a good citizen, I can assure you, so keep it up.

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“what is being referred to as “tyranny”, “socialism”, etc. pales in comparison to the history of the United States.”

LoudinNC, can you give a few examples of tyranny and socialism that has occurred since our Constitution was adopted other than the slavery defended by force of arms by the Democrats in the south prior to the Republican abolition of same, the late 19th and early 20th century monopolies similarly broken up by Republicans, the socialist programs of FDR in the 30′s or his desert internment camps for our fellow Japanese citizens during WW2?

As to definitions or labels, I find tyranny, “the arbitrary or unrestrained exercise of power; despotic abuse of authority”, to be entirely in keeping when you have a legislature that changes its own rules and inflicts thousands of pages of unknown landmark legislation in the dead of night upon a deliberately misinformed public, or an Attorney General, supposedly the people’s lawyer, thumbing his nose in contempt at the people who want to know why he was distributing thousands of automatic weapons to criminals and murders and his boss abusing the doctrine of executive privilege to protect him… all and many more examples I could provide, to fit perfectly within the scope of that definition.

We’ll leave socialism for another chapter, but we’ll launch it with a President who says, “I believe at some point, you’ve made enough money” and, by the way, since “You didn’t build that”, if he wants to “Spread the wealth around, it’s good.”

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Most of the small business owners I know and provide services to have been in survival mode for the past four years, having already cut things back to the bone and bringing the wife back in to do the books the way she did when they first started out from nothing decades ago. Their boats have been up on blocks the past three years or more, they have not purchased or leased a new luxury car, do their own house cleaning and yard work, and many of them now, kids educated on on their own, will decide to shut down the business, divest their assets, sell their primary home and move to their vacation home in Vermont or Wyoming.

It will be a drain in entrepreneurial capital and experience that will take decades for our economy to recover from, if ever. At some point rational people simply decide it is better to be shooting the arrows at, instead of taking them from, their ungrateful fellow citizens who vilify them so, or avoiding them and their shooting range altogether.

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JoeBud, I think you are correct and I believe those unemployment numbers will be quite a bit elevated, though there is a limit due to the fact that companies are already running on skeleton staff. What will be different is the fact that few of them, unless they are somehow dependent upon government spending, will see any prospects for growth in the future regardless a resolution of the “financial cliff”, which doubtless will amount to nothing more than higher taxes now in exchange for future cuts that never materialize, as has always been the case in the past.

The real indicator will be what happens in January after all the temporary Christmas season jobs evaporate, and I believe even those will be limited this year due to depressed consumer sales as a result of lower disposable income due to higher energy costs as we get into the winter heating season, which will cost the average consumer about 30% more than last year despite a reduction in family income.

All the hidden taxes and compliance costs of Obamacare, including the new 3.8 percent increase in capital gains taxes will remain in place and as the twenty-somethings emerge from college with huge debts they will suddenly discover that over half the income from their new job (if they can get one) will be going to health insurance, debt service and taxes, making it impossible for them to save for their first home, accumulate wealth or even spend for the pleasures in life as we did when their age.

The result of all these bad policies will be four years that are much worse than the last four and wiping out at least 20% of the small businesses that employ 80% of the workers. The idea that new entrepreneurs can fill the vacuum created by the failure and retirement of millions of seasoned entrepreneurs is laughable because, thanks to current onerous banking regulations and the poor investment climate due to the open season attack on capital gains, it will be difficult or impossible for all those new replacement ventures to obtain the necessary capital and financing to start, let alone sustain operations in a miserable economic climate. That auto parts store owner already owns his house and put his kids through college… he has the equity to be able to sustain a few years where he sacrifices his own income to retain long term loyal employees, but he cannot do that indefinitely and many of them cannot do it for another four years. So what happens is they consolidate their assets at the point where they think they can live off their equity in retirement and that’s it. The new guy who wants to buy that business or start a new one to fill the vacuum does not have that capital and, if young has all kinds of other living expenses that demand he extract more from the business than can be maintained, which is why four out of five last less than ten years anyway even in the good times. The business model that fails with ample capital no debt load before cannot somehow survive as a new venture saddled with debt and expense. That’s why one should laugh off all those diners, groceries and delicatessens that both feed from and support the local economy going out of business and being replaced by corporate chain entities that largely feed but export the profits and production elsewhere.

So basically what you are looking at is a triple witching hour where all the forces against prosperity have been perfectly aligned… bad regulatory policy, bad spending priorities, bad tax policy and the vigorous attack on and punishment of any who mange to remain successful in such an environment. As I posted with stunning prescience in January, 2009 on my blog and reiterated several times over the past four years, there will be no economic recovery until this redistributionist radical and his henchmen in the Senate are out of power. No chance, no way, and with the departure of a large chunk of the entrepreneurial class that has resulted in our prosperity over the past century from participation due to both disgust and retirement and a younger generation raised on the idea that success is a “right” that need not be earned there will be little of the private sector wealth creation needed to sustain all those rights, such as those cell phones and free health care the half of this electorate riding in the wagon think they deserve to have at the expense of the rest of us who are pulling the wagon.

In a nutshell…. Barring enough punishment and misery to the point that even the takers start thinking about doing something for themselves, the great American experiment is over.

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JoeBud, they might be sheltered from the direct tax increases but they will not be protected from the consequences because eventually those increases are paid for by the consumer in the form of higher prices for everything. Corporations do not pay taxes, their customers and shareholders do in the form of higher prices and lower dividends respectively. High income individuals are generally in a position to control of their income, both in amount and manner, and more broadly are in control of how their tax burden is passed down to lower income consumers, which is why Warren Buffet pays himself less salary than his secretary and earns his money in the form of capital gains taxed at half the rate.

He can decide when he wants to realize those capital gains, for example if the tax on such gains triples after Jan 1st he won’t be selling any assets that would realize a gain because the risk he took buying those assets would jump in effective cost. The result is that capital gets frozen in place rather than being recycled into fresh risk and opportunity with innovation and growth in the economy suffering…. meaning the people who think they are escaping the tax burden are paying with lost opportunity and future prosperity. Other countries with more sensible policies attract the capital that yields the next energy, technology or market breakthrough.

Even the liberal wealthy cannot be relied upon to save those they purport to care about because these people to a far greater degree than conservatives try to evade paying their “fair share”. Why? Because they believe that since they “think” correctly on the issues it excuses them from the financial obligation, that those who disagree with them should be the ones penalized, which is why they are notorious cheapskates in every survey ever taken about charitable giving and why none of them have continued to voluntarily pay their beloved Clinton tax rates instead of the evil Bush tax rates over the past ten years.

Whenever I ask them (one being a very wealthy business partner of mine) why they take all those loopholes they despise and why they have not been paying the higher tax rates they say they should be paying I always get the same answers; “Everybody does it” or “If the fat cats (meaning people equally wealthy but politically conservative) are doing it I will too.”

What it really means is that they have absolutely no moral compass and their own selfishness and denial make them incapable of leading by example, like the evil Mitt Romney giving over a quarter of his income to charity. So the next time you hear one of these buffoons talk about how they should be paying more taxes just ask them why they haven’t been and see what amusing circumlocutions emanate from their pie-hole. Doubtless we’ll be treated right here to a post or two from such a fool in the coming days.

As to the explosion in independent contractor relationships, especially how it will be used to get around employer health care burdens under ObamaNoCare, I suspect the masterminds will not have enough fingers to plug all the holes in that dike, though they will resort to extra-Constitutional means in order to attempt it. Remember how Slick Willy Clinton (the guy who recently kept pointing that famous crooked finger at us and telling us why it is important that our President always tell us the truth) raised income taxes retroactively months after taking office instead of giving us that middle class tax break he promised? Well, I will not be surprised if King Obama orders Commissar Sebelius to force employers to pay a health care fine (oh, that’s right, it’s a tax) for any employees who USED to work for the employer over the past year or two if they are still unemployed as all this misery kicks in. So even leaning your workforce in advance of the punishment may not enable you to escape it.

They believe they can be as arbitrary and capricious as necessary to achieve their aims, and if you don’t like it you can take them to court. Only when they are (and they will be) faced with millions and millions of people actually losing the health care plans they liked instead of being able to keep them (like all those catastrophic HSA plans that will be fined or discontinued because they do not carry gold plated minimum Federal standards) and employers start dumping tens of millions of employees into the so-called “exchanges” where they are supposed to believe they are participating in a market based solution but where the government in fact is in control of the coverage and price for everything…. only then will you see the torches and pitchforks, and it will be very, very ugly. The collapse of a civilized society is never a pretty sight, and we are already far down the road toward incivility.

Bottom line is all these utopian goals and policies are unrealistic, unattainable, unworkable, unmanageable, unaffordable and will keep our economy and standard of living swirling in the toilet bowl until we either go down the drain or people who know the slightest thing about economic dynamics and human nature wrest control from the radical ideologues and the ignorant who buy into their message.


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As to Obamacare, on that one you are wrong. When the government in the form of an unelected HHS secretary can define what is to be covered, a minimum coverage that a citizen by birthright is compelled to purchase, which government proxy insurance company he can purchase it from and at what price, you in fact have a de-facto single payer system. The fact that the health insurance companies sold their American souls to feed off their fellow citizens and become yet another crony capitalist segment of the economy does not in any way make what they are doing “private sector” or market based.

One proof in plain sight but doubtless noticed by few is the fact that since Obamacare has been passed you have seen a dramatic increase in government advertising concomitant with the virtual disappearance of private health insurance advertising from the likes of Cigna, Aetna, etc. Why? Because now that you are compelled by law to purchase from them and there is little opportunity for them to differentiate between their government defined product offerings, there is no need to waste money talking to you. They are safely in the cartel and they’ve got you right where they want you, thus marketing is unnecessary.

It’s really that simple… where there is no marketing, there is no market, thus no supply and demand, no efficiency, quality, availability or affordability. So now, our fellow citizens who have so often falsely complained that there is no market in oil, that the big companies control everything, can for the first time experience what it is like being captive to a real, government endorsed monopoly.

As always, I will be laughing my ass off as those tens of millions of my fellow citizens who foolishly bought into this economic and logistical impossibility angrily come out of their stupor and discover they are in a health care prison cell. But even more amusing will be the creativity with which the Democrats struggle to find a way to blame the failure of their master plan on those who opposed it, rather than those who “first had to pass it… so they could find out what was in it.”

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Liz, you will be paying for it in both taxes AND payments to alleged “private” insurers, but the difference will now be, like when you pull up to an intersection and look at the signs, all the prices will be within a penny and only three choices of grade. But the worst thing is that even if you are riding a bicycle you will still be compelled to fill your canteen with gasoline.

Obamacare IS single payer because the government is entirely in control of what gets paid; the fact that insurance companies are acting as de-facto agencies of the government instead of actual agencies disbursing tax revenue is moot. You don’t pay your taxes? You get fined or imprisoned. You don’t pay for health insurance, you get taxed (thanks to Justice Roberts), and if you don’t pay that tax you get fined or imprisoned. There is no difference between your tax payments and your health insurance payments, nor any difference in how those receipts are disbursed… both are disbursed by masterminds based upon political analysis and not market analysis.

Just like single payer, there will be no cost/benefit market forces at work, only cost/benefit political forces, and it will be yet another way for the Democrats and Socialists to pit a growing group of Americans who consume the national wealth against a dwindling group of those who produce it.

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Liz, please do not compare health insurance mandates to car insurance… at least not until you and your friends decide that the cost of auto insurance is too high so everybody must buy it even if they do not own or drive a car.

Myself, I would prefer a world where the price and availability of medical services was determined by market forces and thus made insurance unnecessary. “But health care costs are so high, they are unaffordable!”, you cry. Now why is that… because there are too many market forces at work, or too few?

Since you bring up the automobile analogy, let’s for a moment compare the lifetime costs of auto acquisition and maintenance to the lifetime cost of health care services. Though I have not crunched the numbers, I feel very safe in predicting that you would find the average citizen pays at least an order of magnitude (that would be ten times, for the innumerate among us) more for cars and transportation over their lifetimes than they do healthcare… even if they were paying for everything out-of-pocket. If they are paying via insurance they are actually paying more for their health care because all those buildings up in Hartford were not built with money that was paid to doctors, meaning the collective cost of “the system” is far greater with the insurers laundering the money than without.

That being said, what is the fundamental problem with health care? No market. I have been in health care all my life as a technology entrepreneur and have known hundreds of physicians in all aspects of care. What I always tell them is, “The only problem you guys have is that nobody thinks what you are selling is worth a penny of their own money… what you are offering is only worth it if somebody else pays, which means it is essentially worthless to your customers unless you happen to be selling larger breasts, a flatter tummy, whiter teeth or perfect vision without glasses.”

Why is it that a high school graduate salesman in a dealer showroom can extract say, $40,000 from somebody who may not even be able to afford it, yet the guy with fifteen years of the finest education, residency and accreditation can’t convince somebody that the $10 co-pay for a wellness check-up is a good investment?

If I were one of Obamas un-vetted Czars and put in charge of tackling the “problem” of health care costs via the unconstitutional means he is so fond of utilizing, I would just make all third-party payment other than from friends and family illegal… and overnight you would have all these brilliant physicians trying to obtain a high school education in salesmanship, an education that they have never had because they have never had to deal with the price objection. Either it’s covered or it isn’t and the customer isn’t really paying… what a beautiful world when you’re trying to move a product.

I can see it now in the showroom:

“Let’s see… the Mercedes or the Yugo, which should I buy?”

“Well, sir, that depends upon your coverage.”

“What coverage?”

“Your replacement car insurance coverage defined and mandated by Liz, but administered via companies purported to be participating in a marketplace.”

“Oh, I see. But I just want to buy a car. How much do these two cost?”

“It depends upon your co-pay.”

“Are you telling me the price is not important?”

“No, we are all concerned about the rising price of cars, I am just saying that the price doesn’t matter in your decision.”

“But I don’t want to use insurance, I just want to pay cash.”

“Well, that’s against the law, just like spending your own money for health care services up in Canada, so if you want a car you are going to have to buy it through mandated insurance, and your choice of car will be determined by the coverage you elected in advance.”

“I see. So what’s your job, aren’t you supposed to be some kind of salesman?”

“No, ever since the LizCar Act was passed we have not needed any salesmen. I am what is called a pre-qualifier.”

“A pre-qualifier?”

“Yes, just like the faceless person in a cubical wearing a headset telling you which doctor, medicine or procedure you are allowed, my job is to tell you what car you can own depending upon your coverage, and report you to the IRS if you don’t have any.”

“Oh, that’s a relief. For a moment there I was beginning to feel like I was living in some type of socialist country, but I can now see that all these restrictions upon my personal liberty and market choices are for the common good.”

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Liz, you’re right, it doesn’t always happen when you are flush in the pocket, but there again it doesn’t “always happen”, either, the self-destructing twenty-something crushed to death in his new BMW and the spry old farmer who punches out riding the tractor in his nineties having never seen a doctor in his life being just two examples. I reject the notion that “everybody will need it” and that when they do they cannot or will not be able to pay their own way.

More importantly, there are lots of other things that cost as much or more than health care that people are even more likely to have to purchase in their lifetimes, like food, housing and transportation, all of which are affordable because market forces are at work, at least at the time of this writing. As I said before, when it comes to breasts, tummies and laser eye surgery, all subject to the same training and liability costs but instead participating in a vibrant market where there is no insurance and no government function other than license and accreditation, the price for all those products has steadily become more affordable at the same time the quality and availability has increased.

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RichmondDem, I am talking about market forces in play RELATIVE to health care. That the government is meddling in all aspects of the economy and our lives is, as you say, without question. The question is whether increasing the meddling in the health care market makes things better or worse for both our standard of living and our personal freedom, and over the next few years we will see that things will be dramatically worse.

Only a true Democrat like you feels that allowing people to keep more of the money they earn is somehow a “subsidy”, as if all wealth created is firstly the property of the government and it is the government that decides what you may spend as you please. There is a big difference between government telling you that if you bite the bullet to saddle yourself with debt to buy a home or take a risk by drilling for oil or yes, building a wind farm it will take less of your money away from you, verses giving away food stamps, cell phones or directly investing taxpayer dollars into a failing automobile manufacturer and a failed solar panel manufacturer.

After all, when the government tells you that unless you spend your money in the manner they please you will have to forfeit more, it’s not really your money to do with as you please, is it? For example, I have purchased major medical insurance for over 25 years, since a time when only two companies even offered it, and transitioned to HSA as soon as they became law, preferring the low premiums, high deductible and coverage tailored to my needs. I have saved a few hundred thousand in premiums while at the same time doing my small part to try to inject market forces into the health care system… when I would ask what something cost and get the usual “Your insurance will cover it”, I would explain that I was the insurance company for the first ten grand and to please give me the price.

Now under ObamaNoCare, policies like that will no longer meet minimum coverage requirements and despite the fact that I have appropriate coverage to my financial needs and have always paid my own way, I am going to be fined, excuse me, taxed an additional two grand or so for not spending my own money in a manner the masterminds deem to be correct.

According to your logic, therefore, if I instead were to spend $13,000 per year on a larded up policy containing things I don’t need, like contraceptive and fetal dismemberment and evacuation “care”, instead of the $6,000 I pay now, the retention of my current tax rate in exchange for paying more than double for my insurance would somehow be a “subsidy”. In that case, all the millions of people who already have and have had health insurance for years and who will not be fined/taxed additionally will now be the beneficiaries of a new "subsidy" in that they will not have to pay a new tax they otherwise would have had to pay.

Dare I suggest that all those who are not paying the top marginal rate of the "millionaires and billionaires" could thus similarly be deemed to be receiving a subsidy? No, of course not. After all, even though the top 1% pay 40% of the taxes we could be taking all of their money, so they are still by far the most "subsidized", huh?

But playing tricks with the lexicon is not new to your side, you’ve been doing it for years, for example the current tax rates that you have been calling “cuts” for the past ten years, as if the Clinton tax rates were not “increases” over the prior twelve years. Actually, the prior eleven because after promising a middle class tax cut throughout his campaign he instead retroactively increased the taxes on everybody for the year prior to him assuming office. And he’s the one who was recently telling us how important it is for the President to tell the truth… we’ll see at the lap dog press conference today:

“Mr. President, what was George W. Bush’s involvement in the murder of our Ambassador in Libya, what did he know and when did he know it?”

Anyway, after the rates go up in a few months and the economy continues to slow but at an accelerated rate, will we be able to call it the “Obama Tax Depression” for the next ten years? Of course not. Because the “Bush Tax Cuts” were terribly unfair despite the fact that every wealthy Democrat and liberal complained about them personally took advantage of them, the increases will now also be blamed on Bush, hence the “Bush tax increases.” That’s the great thing about being a Democrat… everything can always be blamed on somebody else.

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Liz, that is precisely correct, there are no market forces at work and that is why the cost of care has been going up by several times the rate of inflation since the sixties. Admissions to medical schools are restricted in order to keep the supply limited, licensing is designed to preserve the turf of regional monopolies and the dream of many of these physicians for decades has been to have a single payer system where they can continue to earn an above average standard of living through the compulsory payment of their “customers” through government mandate rather than pricing their services based upon quality, supply and demand. That is why they all, regardless of skill or outcomes, get paid the same for their services… it is a cartel, often incestuous and generational, where doctors marry doctors and are better positioned to get their children into medical school.

When I was a kid doctors made house calls and coordinated family care, two things we have not seen since, and that is because they had to package and price their product so that ordinary people could afford it, otherwise they would not have a job. We did not run to his office, let alone the emergency room to get a bottle of pills every time one of us had the sniffles. Those who could not afford care still got it either through doctors honoring their oaths or charities… in America there were no people dying in the streets due to lack of care like in some third world country, religious charity hospitals were numerous and fellow citizens looked after each other as best they could, perhaps because they had been through a war or two together.

With the introduction of Medicare and the gradual redefinition of health care as a “right” instead of a marketable service, those dynamics are virtually gone and with ObamaNoCare they will become extinct, thus health care financing and delivery will be decided politically instead of economically or medically, just like it is in all the other socialized economies where every election cycle centers around “reforming” their ever degrading national health systems, choosing winners and losers, raising taxes and lowering services.

The only difference is that where the ruling class in those countries used to have the option to come here for superior service they, as well as our own ruling masterminds, will instead be flying to exotic clinics in the Far East and Caribbean where they don’t have to swallow the same prescription they have shoved down our throats.

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[from "Liz" to another poster who defended me after she questioned my religious and ethical values]
I’m not using it as an argument for universal health care, I’m using it as an argument against the amazing and bitter anger TBP is exhibiting when asked to consider that any impoverished might want to see a doctor sometimes.

One can be against universal health care and not feel hatred for the people who want to be able to see a doctor when they are sick.

[my response]
Liz, when you start going down the character assassination route that is where fruitful debate ends. I challenge you to find anything in my writing where by even the most imaginative and perverted misunderstanding or interpretation I state that I “feel hatred for the people who want to be able to see a doctor when they are sick” or exhibit “bitter anger” when “asked to consider that any impoverished might want to see a doctor sometimes.”

You already tried using religion against me, now you’ve shifted into disingenuous lying mode, and the only thing left is for you to claim I am a racist because I disagree with the policies of a black man, so you might as well go knock yourself out, I really don’t care and it will not achieve your goal, which is to stifle opinions at odds with your most Righteous and morally immaculate views.

I’m going to hang up on you now, it’s been fun, pray for my salvation. Goodbye.

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Belated thanks to NovaGuy... I just noticed your post yesterday:

"Whoever the hell this T Doom guy is, he is delivering a serious beatdown on the local liberal talent. Keep up the good work."

I will.

Why There Will Never Be A Recovery

Refer to posts 3 & 4 below. Nothing has changed my outlook over the past two years or for the next four and now that the ObamaCare candy has all been distributed and the vinegar is about to be dispensed on an unsuspecting public, especially the foolish youth who will have half their payroll from their first job deducted just to pay for gold-plated health insurance they don't need and the top marginal individual tax rate, we will now see the final nail pounded into the coffin containing the cadaver of liberty and prosperity.

The wave of layoffs announced immediately after the election represent prudent planning by businesses and business owners who know they are in for accelerated punishment over the next four years as the Democrats try to blame all the worlds' ills on them and make them pay "their fair share". Where they have already been operating in survival mode they will now correctly conclude that survival is not possible or worth the effort and join the half of America who are takers rather than continue to try to be a a vilified innovator, producer and employer.

The bulk of primary care physicians ObamaCare is relying upon for all that access to affordable and wellness care are in their fifties, a plurality of them having only hung in the past four years on the chance that things might improve over the next four and now that those hopes are dashed they will be retiring, selling their homes and moving to the vacation home in Vermont or Wyoming. Further, where the "freeloaders" used to have to go to emergency rooms to get their free care they will now have the same access to private offices of physicians who last had to deal with dirty, smelly bums, winos and the mentally disturbed when they were going through their residency decades ago. That is not the type of practice they worked all these years to achieve and neither is it the place where ordinary patients will want to go. So, government clinics with dispassionate unionized health care workers immune from competition and dismissal are inevitably in the future for all of us but the wealthy and connected liberal elite. Your dad needs a new hip so he can keep golfing twice a week? Tough luck, take a pain pill or, better still, just wither away.

In the same manner many hundreds of thousands, perhaps millions of small businesses, businesses of two or three family members who if they just hire one employee for the kitchen or decide it is safe to start spending money on advertising again would result in millions of new hires, will similarly decide that enough is enough. The auto parts store owner who has kept his boat on blocks the past four seasons or cut his home cleaning service to once a week from three will keep those policies in place and most likely cut his already lean workforce more thanks to new healthcare taxes and regulations. As I posted years back, when you see these guys put their boats back in the water or lease a new luxury car you will know recovery is on the way, otherwise you can forget about it.

Though there will be great pain for countless unsuspecting millions who were sold the big lie, that you can have everything you want and somebody else will pay for it, for me and millions of others who, due to our individual resourcefulness and reliance upon ourselves rather than government, we will get by just fine no matter how the mendacious, demagogic political masterminds try to bring us down, it will be amusing to see them get so spanked by their own foolishness and ignorance.

Maybe they will learn their lesson, but I doubt it. It reminds me of a great line in the movie "15 Minutes", where a Russian criminal on a murderous rampage in New York watches a TV interview of a serial killer who got off by claiming insanity and comments, "That is what I love about America... nobody is responsible for anything", and that of course applies first and foremost to the blameless, finger-pointing Crybaby In Chief, King Obama.

Why Health Care Cannot Be a "Right"

Does a citizen have a right to the compulsory service of others? Most of us think that question was resolved with blood and treasure back during our Civil War but apparently there are many who have either forgotten that lesson or have always been clueless. While some of us know that we have the right to "life, liberty and the pursuit of happiness", fewer note the very important role of the inclusion of the word "pursuit" in that expression. Do we have the right to happiness regardless our effort to pursue it and does somebody suffering from depression have a right to force others to affect his good cheer? While there are at present many “rights” the clueless “deem” to exist that were previously considered by science to be impossible in the physical universe, for example “something for nothing”, relatively few of them are derived from the enslavement of others. After all, even the hard working taxpayer shouldering the yoke for the clueless still has the freedom to choose to become one of them himself.

One could similarly argue that a citizen, let alone a resident opportunist, does not have the "right" to good health but merely the right to the pursuit of good health, which can be achieved in many ways not least of which are good diet, habits and exercise, all within the realm of personal responsibility. There is a gigantic difference between rights endowed upon us by our Creator from the moment of our existence... life and liberty, and rights that by necessity could only be granted or fulfilled by mere mortals, for example psychotherapy for our hapless depressive, abortion "care" for the inconvenient fetus or medical procedures for members of the ailing population at large. What if there were no psychiatrists, fetal evacuators or physicians who were willing to work for free, or at all?

Perhaps until recently, whenever you looked about you probably did not conclude you were living in the former Soviet Union or China where at some point in high school or earlier individuals are told, "You are going to be a doctor, you here are going to be a machinist and you over there are going to be a farmer" and carted off to the appropriate educational or training facility to prepare for their service to the state. As of this writing we are still entitled to our right to "the pursuit of happiness" by proceeding along whatever paths are within our motivation or ability to navigate.

So how can you guarantee a right to health care services, Christian Scientists aside, necessarily delivered by man and not our Creator if you cannot compel others to provide such services without denying their own liberty? If a physician or for that matter anybody who can provide care the afflicted are unable to deliver unto themselves (such as open heart surgery) is unwilling for any reason to deliver those services or is unavailable what recourse is there other than conscription in one form or another?

Certainly states through their regulatory, licensing and police power can impose servitude requirements as a condition of granting permission to conduct commerce in or practice such services just as they may require a driver enjoying the privilege of public thoroughfares to be licensed and carry insurance coverage for potential harm they may inflict upon others. But the government can no more compel an individual to become a health care provider and deliver services than it can compel you to purchase a vehicle and operate it outside the domain of your private property. Therefore it follows that the state cannot, in its capacity and responsibility to fulfill its constitutional obligations, uphold any "right" that can only be protected or sustained by the services of otherwise free individuals.

Now, some are going to argue that our long history of involuntary military conscription in the constitutional role of providing "for the common defense" would be the precedent for the conscription of health care providers, but the argument would be non sequitur because while one is indeed granted the right to life by her Creator at the moment of conception she does not have the right to the preservation of her life by others, or even her own mother... as has apparently and exquisitely been upheld by the Supreme Court "Roe v Wade" decision. Thus with the possible exception of Moses and the Jews protection from enemies foreign and domestic is a service offered by man, with conscription being an occasional means to that end, not a right endowed by our Creator.

Others may argue that wrongful death tort offers ample legal precedent, but there is a difference between inflicting wrongful death and failing to preserve the life of another. Physicians who freely choose to become licensed professionals certainly can be held accountable for their inadequacies, but they have chosen to be in the life preservation business and thus tort exposure goes with the territory. A police officer who casually observes a homicidal beating has also chosen the life preservation business and is thus exposed to tort for his inaction, but the only obligation you would have in such circumstances would be to your sense of morals and valor, which would explain why so many news reporters and cameramen choose to keep shooting video instead of giving CPR, grabbing the suicide jumper or trying to stop the beating.

No, as we have learned with the latest thwarted crotch-bombing, the lone individual in the passenger cabin of life is ultimately responsible for the preservation of his own, and among those responsibilities are a healthy diet, physical exercise, the avoidance of dangerous behavior and the accumulation of the marketable skills or financial means to enable him to acquire other products and services necessary to his preservation like food, shelter and appendectomies.

Why There Will (Still) Be No Recovery

by T. Doom Pickens

So, what has happened in the ten months since last March to change my outlook for economic recovery? Nothing at all, in fact it has only been reinforced by subsequent actions of our lawless, irresponsible representatives and the administration in Washington. In all the current, secret proposed legislation, whether it be health care, stimulus, carbon tax or other "reforms" at every turn the small business employers and entrepreneurs can only see taxation, punishment, debt, regulation and corruption, so they will continue preserving their assets in "bunker mode" until people who actually know something about what it takes to generate jobs and economic revival gain control of the government and stop waging war on the private sector and American prosperity.

We see how the so-called "stimulus" packages have had zero effect except to put our grandchildren in debt and are nothing more than Democrat slush funds to be used to political advantage at taxpayer expense. We see how politically connected companies like Goldman Sachs can recover 100% on the dollar at taxpayer expense through government laundering operations like AIG, they see the government actually sanctioning false SEC filings to cover it up, and now that the so-called bankers have apparently decided they deserve gigantic paychecks for simply borrowing money from the Fed for free and loaning it risk-free to the government instead of the private sector, intelligent businessmen have already taken their haircuts and decided they will not participate in the corrupt financial sector even if the banks DO decide to become real bankers again.

We know the gaming table is rigged and we refuse to play. We will not borrow, we will not invest, we will not spend and we will not hire... thus there will be no recovery and my prediction is for another retraction this Spring and core unemployment, even by the government's padded numbers that do not include those who have given up looking for work, will be north of 12% by year's end.

See you this Fall...

Why There Will Be No Recovery

by T. Doom Pickens

The childish and irresponsible behavior of Congress and the Administration last week has disintegrated what little remaining trust any prudent, ambitious business owner or entrepreneur might have in the relationship between the government and the private sector. Within a matter of weeks a feckless House of Representatives first enacted a law specifically permitting bonus payments and subsequently, in response to torch-bearing mobs sanctioned by our President passed a measure to target and punish the recipients of the very same bonuses they themselves authorized. Regardless the form this legislation may take if ever enacted into law, the fact that it could have even been put to the floor for a vote is chilling to any who value their liberty or the free market.

While I join most others in questioning the competence of those at AIG who had a hand in its demise, I have even more serious doubts about the judgment of any who would choose to remain under the de facto directorship of 435 members of Congress who have little if any experience at managing any enterprise or even reading and comprehending their own legislation. The American people are now major, if not majority stakeholders in these gigantic failing institutions and no employees with the competence to rescue a return on our investment would submit to the indignity of rule under such an abusive, capricious employer. We should take no comfort in having our investment in the hold of a conservatorship crewed by those with “no place else to go”.

If I were a patriot like Mr. Liddy who came from retirement to toil at this endeavor for no pay and I was subjected to the same self righteous, opprobrious, prosecutorial examination at the feet of one of the principle architects of this financial disaster I would have considered it even more effective and patriotic on my part to have submitted my resignation to him personally and publicly on the spot. “Mr. Frank, with all due respect, take this job and shove it.” I suspect that many who remain after having the bulk or all of their incentive pay removed, confiscated or extorted from them under threat of personal exposure to public wrath by Mr. Cuomo will put most of their energy into tweaking their resumes, making sure the desk blotter is properly aligned and sharpening their pencils down to the eraser.

This unprecedented assault, this bill of attainder, an imperious government targeting it’s wrath upon a select group of law-abiding citizens, has doused the fire of ambition and is in danger of extinguishing what little glow remains in the coals of this entrepreneur and businessman, and it will have the same chilling effect upon countless thousands of others upon who the citizens at large and their economy will depend for 80% of employment opportunity and economic growth.

Once the government decides that individual compensation or wealth, whether deemed to be justifiably earned or not, is somehow the property of the state, there can be no distinction between employees of enterprises that receive more than a certain amount of TARP money and individuals of any description who merely reside or conduct business within its jurisdiction and who are unfortunate enough to enjoy success worth confiscating.

Where does it stop? Today’s tax break to stimulate growth is tomorrow’s raison d’être to punish any success that might inure to those who take advantage of it. In the insatiable appetite for what little taxable income or assets will remain after trillions in deficit spending, rampant inflation, lower taxable incomes and higher unemployment, almost any who are successful under such irresponsible governance will be deemed to have somehow unjustly benefitted at public expense and the fruits of their success will be returned to the people in a compulsory act of Mr. Biden’s “patriotic duty”.

For example the entrepreneur who raises the capital to develop a wind energy farm, the tenuous economics of which are affected to some degree by the Production Tax Credit and whatever other benefits archeologists may some day unearth from the stimulus package, could very well be targeted for retribution if the project is “unreasonably” successful and profitable in a few years. We already have a situation where it actually costs money for one to donate their entire income to charity, so how much further are we from a special 90% tax on capital gains from any investment that outperforms inflation over the next few years? And why should 90% or 100% taxation be considered the upper limit when there is so much more undeserved reward out there to be taxed? In light of current government rationale a 200% tax on the income of anybody with a net worth of more than, say five million dollars might seem perfectly reasonable, however people like me will always find it unreasonable because we have learned first hand what works and what doesn’t.

I have not been educated in the ivory towers of staid institutions; mine was obtained in the finest two American institutions, the workplace and the marketplace. When my financial statements bleed red ink it is not merely a theoretical or hypothetical result projected on a screen in the classroom, but rather it is a result that causes my banker or the spouse of a dismissed employee to pick up the telephone and project into my ear. After high school I worked for the son of Polish immigrants whose father died in a mining accident, and Frank quit school in seventh grade to work as a mechanic to support his mother and younger siblings. He was an under-educated genius who built a medical equipment sales and service enterprise employing over fifty people and with revenues in excess of $50 million. Every new challenge and evolution in the marketplace, some of his own invention, was ably mastered by his ingenuity, industry, uncanny vision and resolve.

In the seventies this icon of the American experience was under assault… newly formed OSHA inspectors unleashed upon him by striking union organizers attempting to disrupt the familial workplace and having the good fortune to be in the top marginal tax rate, 70% at the time, were enough. But wage and price controls and the rapid increase in federal intrusion, spending and stagflation were the tipping point for him and further industry or risk taking on his part was pointless in light of the meager marginal and emotional returns. After all, he already had everything a person of modest origins could need or want; the homes, the boat, the RV, grown and educated children… and now being an entrepreneur just wasn’t fun any more. He felt that society both needed and despised him.

So, at the vigorous age of fifty-three he sold his business to his largest competitor for what cash they could afford, purchased multiple RV lots around the country near his children and spent his remaining years roving about for months at a time and wintering in Florida. In other words, he “checked out” decades ahead of schedule while he was firing on all cylinders and had so much more to offer, and within a few short years the business he founded no longer existed, but the lesson I learned about the qualities and motivations of the entrepreneur remains.

Those who have read The Millionaire Next Door by Tom Stanley and Bill Danko will understand the value of citizens like Frank, and we need these people now more than ever, many who are boomers dangerously close to retirement and for who “checking out” is even more compelling. We are in grave danger of squandering this huge but seldom noticed or appreciated national resource, and there are far more of them providing a greater proportion of our collective prosperity today than there were in Frank’s time. I now find myself at the same age and facing remarkably similar times as Frank did back then, and like he I now ask myself, “Why should I risk my assets and energy if success is certain to be punished and not rewarded?”

The sensible strategy is to take a break, do some interesting or enlightening consulting for pocket money, sit on a board or two and perhaps write an editorial. I know many pondering the same; other seasoned empty-nesters actually finding the prospect of their businesses being pared back to their earlier romantic roots somewhat attractive… the “mom” half of a mom and pop dry-cleaner or restaurant, her wardrobe and decorating now timeless and complete, deciding to eliminate the bookkeeper or cashier and going back to keeping an eye on things… and him.

The bottom line is, little in the way of stimulus to economic activity or employment at the grass roots, where it is most needed and most permanent, is going to occur no matter how much paper the government throws at the problem, because countless family businesses will “keep it in the family” and others of all sizes as well as serial entrepreneurs like me will hold off financial or sweat equity investments until we see that a majority of our fellow citizens have returned to their senses and decided to be governed by rational people.

It’s not that banks won’t loan us all that fresh money the government is printing, we just don’t need it. This whole problem is very familiar to us and we understand that the solution to a crisis brought on by too much debt can never be even more debt. Many of us have tried that earlier in our own careers and know it doesn’t work, therefore when we see our government proclaim, “Drinks are on me!” we don’t want to be around at the end of the night when the bill comes due and party-goers discover who “me” is.

Am I predicting a doom and gloom scenario? Absolutely not. Unlike those in the political arena who assure us recovery is inevitable based upon history, hope and a professed optimism in America, I do so with much greater certainty thanks to confidence in myself and my brethren, the engine of America. What many seem to overlook is that the starters and producers are, after all, the starters and producers. We have never paid much attention to analysis and predictions based upon complex monetary or economic theory but rather our own nose for good or bad opportunity and when we decide to recover, America will recover. Sure we may be at a numerical disadvantage politically from time to time, but we will always have the upper hand in this game of chicken because it is within our power to live within our means and modulate our success, thus the degree to which we allow ourselves to be punished.

We won’t lose our $30 million homes in the Hamptons because our hedge fund collapsed, nor do we have resumes to polish as few of us have ever needed one. We have paid for our homes, autos and toys, have not forgotten how to do our own laundry and can find our way around the supermarket aisles. We’ll even look out for each other by patronizing our own establishments instead of chains and big box stores, doubling the frequency of our hair cuts, etc., and we can stay in this form of hibernation indefinitely. We’ll be just fine. Eventually, after our fellow citizens endure the “educational moment” they deserve over the next two to eight years and learn that government cannot save them at everybody else’s expense, they will restore an environment of trust within which we feel we can do business and those of us who have not “checked out” permanently will be back in the game, rested, reinvigorated and more successful than ever.

A letter to Speaker Nancy Pelosi

Dear Madam Speaker,

I think the effort to sneak in funding for ACORN and other groups by siphoning future revenues (if any) from the taxpayer purchase of all this toxic debt was underhanded and despicable. I guess there is never a crisis within which you can't try to pack in a little pork, huh? Even if that provision is dumped as it should be, I suspect that "plan B" will be the American taxpayer buying up all those junk mortgages so you can campaign on and pass legislation to forgive all those mortgages in exchange for votes down the line... mortgage amnesty should be a big vote-getter, huh?

But what I really find disgusting is the pathetic excuse that somehow House Republicans "blew up" a deal that they had no part in, and for which your colleagues in the house would not need a single Republican vote to pass if the "deal" you supposedly had with the Senate was such a great idea. After all, when up until now have you ever given a hoot what the Republicans in your House have had to say in the past... even going so far as to kill the lights and C-Span cameras during the August recess so as to prevent the American people from getting their message as well. So, if you guys really had a deal that was so good why didn't you just pass it in the House on a party-line vote? Wasn't the whole financial system supposed to collapse if we didn't get a bill by yesterday? Apparently a little CYA for your party is even more important than timely passage of the legislation, huh? The right thing to do is the right thing to do, so why do you need to hide behind minority coattails?

With all due respect, I think you and the rest of your House and Senate majority leadership are a bunch of pathetic, feckless cowards, and I'm tired of your lies and excuses. If I were the Republican leader, especially after the way you treated my members to this point, I wouldn't agree to anything and force you into a party-line vote no matter what. You want to blow a trillion bucks and raise taxes on the middles class, which you and I both know is the only place you can get real money, go ahead and get started without us.

T. Doom Pickens

On valuation, dilution and market capitalization

[Poster wanted to know what effect market cap and dilution had on CPTC, and claimed he needed to be "unedumicated"]

Inquiring poster - Better to be "unedumicated" than to be "misundereducated". What it means is that the market capitalization, that is the total value of the company based upon the share price, is very high, for example CTC would have a fully diluted market cap of a half billion bucks at $2 per share. What does that mean?

Let's first look at return on investment of a company's stock without regard to market pricing. If I decided I was going to invest in an ongoing privately held corporation or enterprise, I would probably expect to get two or three times conservative investment (mutual funds,time deposits, etc.) market returns on my money for the added but still minimal risk. So, if I expected the company to earn me dividends or profit distributions of 10% on my investment, and the company had a net profit after taxes of 10% of sales, I would expect every dollar I invested to be represented by a dollar or more in sales of product. Assuming the company becomes increasingly successful and doubles sales and/or profits after my investment, the valuation of the investment becomes greater in proportion because it is earning a higher return, so subsequent investments can command a higher price.

But that depends upon whether subsequent investments are in the marketplace or to raise capital. As to market activity, if the company was now paying out twice the dividends and I were to sell my appreciated stake to you, I could get double what I paid, yet your investment would still give you the 10% return I was originally getting, and down the road you could possibly do the same to another as I did to you, and everybody does fine as long as the company does... or as long as the market THINKS it is doing well, or the shareholders think they are doing well regardless the fortunes of the company, for that matter.

On the other hand, if you were to buy newly issued or treasury stock from the company instead of my stock from me, the proceeds from the sale would become working capital and the total outstanding shares upon which dividends are paid would increase, meaning that my percentage of the total profit distributions would be reduced, which reduces the rate of return on my investment and thus it's market value. But it's not that simple because if the company sold you the stock so it could put the capital to work expanding sales or developing new products for future sales, I may simply be getting a smaller percentage of a much bigger pie and I am not going to care, in fact I would likely encourage it.

So, it is important that when a company dilutes it's shareholders to raise capital or pay for "services rendered" that it does so in a manner that keeps the earnings rising faster than the rate of dilution so the shareholders enjoy either a favorable dilution-adjusted return or increased market (resale) valuation of their stake. The relative balance between the two, both combined representing the overall return on investment over time, will appeal to different classes of investor according to their investment goals, the most common two being retirees looking for dividend returns and youngsters in the work force looking for growth.

Now, how does this all relate to your investment in CTC? Well, CTC over the past year has roughly diluted a long stake-holder's interest by about a third, from 160 million shares to 240+ million shares, which means that if the company HAD been earning a profit your share of the distributions would have dropped by a third, meaning the return on your investment in the earlier example would now be 6.6% instead of 10% if all things were stagnant, and a buyer looking for a 10% ROI would only be willing to pay you 66% of your original price for your stock.

Of that dilution, roughly a quarter was for financing to keep the lights on last year and another quarter is keeping them on this year, BUT half of that dilution is represented by the EU merger deal which is capitalization toward increasing sales and hopefully profits as well. Capitalizing to sustain continuing losses in a going concern is a vicious downward spiral... the more you dilute to raise money the lower the valuation and the more you have to dilute to raise even less money. That's a toilet in operation.

But diluting for the EU merger, that's a different matter altogether. Now, if I were heading an investment group or VP business development for a large company and I were looking at EU last year as the wind market was picking up steam, I would probably have valued that package right around the forty million bucks CTC did, perhaps half that in a cash deal; They had an installed base of users, they had existing products and know-how, and they had operating losses of a couple million that could be sustained for a couple years if necessary, and a need for another fifty to hundred million or so to execute a two or three year business plan to get to several hundred million in sales. So, for a hundred to hundred-fifty million total investment, I could have a company that was spitting out ten or twenty million in profit in a couple years in an exponentially increasing market, and perhaps have a half billion to couple billion dollar company in five to ten years with a well executed plan.

But when you value a venture like that, you need to look at a reasonable snapshot of what you expect the company to be doing five or ten years down the road and work backwards to obtain a present-day market value, and then "discount" for risk. So if the company is doing a billion annually in sales in five years (a reasonable goal) and earning a hundred million, your initial investment of a hundred million would be paid off in that year alone and in multiples thereafter. But your hundred million if conservatively invested elsewhere (opportunity cost) would have probably been able to earn thirty-five million at 6%, so the true cost of your investment is greater than you at first think and as many CTC longs have painfully realized. Further, due to the risk of the investment, you have to expect a much higher rate of return than current market rates, like ten, twenty or even thirty times normal. Why? Because venture capitalization is a very risky business, with fewer than one in twenty ever paying off, so you have to make it really big on the seeds that sprout to cover all the duds, and though EU was not the type of start-up that would normally command a thirty to one return, a ten to one overall return (valuation plus earnings) after five years would be a conservative expectation on the part of those risking so much capital. And though it could be a bust, it also gives a chance of a twenty to one as well and, as they say, nothing ventured, nothing gained.

So, if the market valuation of the company with a billion dollars in sales five years from now is, say two billion on earnings of a hundred million (a P/E of 20) and the company is acquired or goes IPO, you would in fact get that twenty to one return on your hundred million invested, and if the company did half as well you might get your conservative ten to one return. There are further factors that are used to "discount" the net present day value of an opportunity (competitors, technology trends, politics, projected costs of working capital, inflation and interest rates, etc.) that would probably cut those numbers in half again in favor of the investor, but that's not important to the discussion. What IS important is how that "stand alone" evaluation of the EU opportunity differs from the real world post-acquisition opportunity presented to the investor by CTC.

We now have a situation where, by all accounts on this board and as a reasonable business assessment, the wind side of the company presents at least half, and probably significantly more, of the opportunity for CTC over the next five years, but even assuming half, that would place the expected valuation at two to four billion if I were wearing my green eye-shade and pulling the adding machine lever for GE, KKR or Toshiba, which would place the net present day valuation for the total investment (buying CTC AND dumping in a hundred to two-hundred million) at two to three hundred million, and if you strip out the hundred to hundred-fifty million in capital commitment I would have to make to finance the opportunity, that only leaves fifty to two hundred million left for acquiring CTC. [ed. That is the maximum "spread" possible under various combinations of total project costs and capital requirements] Because I am looking at this in the "stand alone" model without regard to the market price of the stock (because I want to buy the company to build the opportunity to increase earnings and not trade in the stock as a holding company), if I were to recommend a tender offer for all CTC shares it would fall in that range. If that offer were translated to a price per share for the fully diluted 240+ million in shares, it would be a maximum of $.82 per share and a minimum of $.20 per share... and that's for the whole company. In a spin-off of the wind division I might consider the present day valuation of that component to be a hundred million due to recent developments and be willing to offer the CTC shareholders $.40 per share in cash or maybe even $.80 per share in GE stock to get just the wind business. That's where "Mr. Valentine" gets his $.75 number.

I think that the present shareholders would not like any of those deals, and that's why I think a buy-out, or big capital investment at favorable dilution rates (as opposed to big players buying stock in the marketplace) is unlikely unless BW and the other controlling parties with zero-basis holdings decide to take their few millions and run. Further, since the going rate for financing dilution has been roughly double the market price of the stock (meaning that for every dollar in PIPE cash they get in, they issue shares and warrants amounting to around twice that in market value) it is not unreasonable to expect that by the time CTC does achieve that goal five years down the road and draws in another hundred to two hundred million in PIPE financing, the dilution would be two to three times what it already is today, and unless the company is at that time earning two to three times the dividends to offset that dilution, if in fact it is paying any at all, the net present day valuation of your investment will have been cut in half again.

That's why I posed the question several days ago about just what people expect from this company. If it is simply a playing field for the stock, where "intrinsic value" as perceived by somebody who wanted to acquire the company is not important and only the market valuation of the stock, and depending upon market perception, your stock could be worth five or ten times today's value in the marketplace or nothing at all. The company could execute the growth plan flawlessly and be pumping out all those dividends while the "market" has dumped wind holdings and jumped into a re-born nuclear industry or some new high-tech emergence like bionics, the "Outernet" or something, and in that case retirees like Saltator will scoop it all up for the dividend payout. On the other hand the company could still be sustaining losses and diluting away to cover them as true believers who don't need any income keep the the stock propped up by averaging down and refusing to sell at any price, ever hoping for that day that more of the same somehow leads to a different result.

That's the market. There are many stocks, like that spam dropped in here the other day and others that come in your email from "John says" or Sharpeyed, that have never produced or earned anything in their entire existence, and that people make and lose money with on the playing field every day. And then there are others (my favorite hunting expedition targets) that trade below their intrinsic or even their liquidation values with solid earnings that nobody cares about because there isn't any "action".

Right now, CTC is getting a lot of "action", but without big sustained capital commitments instead of just replacing the empty bag on the PIPE IV pole every six months, CTC will not achieve those intrinsic value goals, and that kind of big capital will have a real hard time investing without a huge amount of dilution in their favor. You're seeing some big players in the market for sure and that is always exciting for little players who know how to surf that type of action, but you're not seeing any big capital investment in the company that will lead to the fundamental valuation down the road that many of the longs who bought in on the vision are all about, and you won't see it because those types of investors would insist upon the type of real controls and transparency that BW won't give them, and the higher the current "playing field" price goes the less likely you are going to see it as well.

Being the old stick-in-the-mud guy that I am who remembers this stock at $4 and $6, I don't pay any attention to the playing field and I'm just looking for that $6 million down payment on the wind order, and then the "go ahead" $4 million payment in May.