I have a theory about what government should be.

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In the US today, there is a war between the principle of more government versus less government.

  • The main purpose of government is to provide an environment where lots of people can live together on a limited amount of territory without killing each other. 

  • A properly functioning government will end up producing a higher standard of living than the citizenry could do individually.  If not, why do you need government. 

  • In a capitalist society, the main purpose of a government is to provide an environment that allows for the harnessing of the citizens competitive nature.  Without competition, citizens become dependent on the government and the standard of living will be drop.

  • Socialist governments, by their nature, are unable to effectively harness human competitive nature. 

  • Capitalistic societies require "regulated competition", for maintaining a fair competitive environment.  Even streets have speed limits.

  • Capitalism and government are NOT mutually exclusive and must successfully work together in order to maximize their benefit to society. 

  • Under crony capitalism, for every corrupt company or individual trying to gain an unfair  advantage over its competition, there is one or more corrupt politicians.  It takes two to be corrupt.  Neither the company nor the government should be exempt from criticism.  (Conservatives blame the government and liberals blame the corporations.)


    Process vs Initiative

"Process destroys Initiative".

  • Ever notice that process persons dislike persons that take initiative.

  • Some employees will hide behind process in order to make themselves more important.

  • Employees with initiative are the ones that take the chance to advance the company.

  • Employees with initiative are the first ones to be blamed when things go wrong.

  • No one ever blames the process person since they haven't done anything that could go wrong. 

  • It's a chicken and the egg scenario.  Initiative may lead to success which can then be documented.  Process rarely leads to success except at keeping one's job.  Ironically, the job of the person who shows initiative is most likely at risk. 

    You know you're screwed...

You know you're screwed when the person you are talking to proposes the following:

  • A business person proposes a "partnership".

  • Politician pushing "comprehensive" reform.  (I don't know what's in it, but when it fails, it's not my fault.)

  • Anyone says to "do it for the children". 

   I have a theory on car mileage.




















I have a theory that American automobile drivers are willing to pay $.10 per mile to travel.  Americans begin to hurt when the price approaches $.15 per mile.

  • For example,  driving a 15MPG truck when gasoline was $1.50 per gallon ($.10 per mile) was not a problem.  Driving a 30MPG commuter car when gasoline is $3.00 per gallon ($.10 per mile) is not a problem.  However, a 30 MPG car when gasoline is $4.50 per gallon ($.15 per mile) is real problem.

  • I am totally shocked when I see people driving brand new, 6,000+ pound vehicles that get less than 20MPH.  Didn't they learn anything in the last 5 years!

  • With the new carbon regulations being enforced by the EPA and the California Air Resources Board, the price of gasoline has a much better chance of reaching $5.00 per gallon in the next couple years than $3.00 per gallon.

  • Based on $5.00 per gallon gasoline, logically, my next car has to achieve 50MPG in average driving for me to achieve my $.10 per mile criteria. 

  • Those politicians who have fought successfully against increasing mileage standards over the last 40 years should bare some responsibility for the financial challenge currently being faced by much of the American public.

  • Imagine if the federal government had enforced an increase of 1MPG per year for the last 40 years, America would be energy self-sufficient, and would be paying substantially less at the pump.

  • How to solve the problem:  Higher CAFE (mileage) standards for cars and trucks and additional registration costs for heavier vehicles (they really do cause more wear and tear on the highways), and higher insurance costs (they really do more damage in accidents).

  • Higher gas prices will also move people to buy more fuel efficient cars but higher gas prices do too much damage to the economy.  This is not a good thing. Don't make the solution worse than the problem.

  • I'm an unyielding proponent of a national automobile recycling program.  The US government would add an additional $.10 per gallon tax on all gasoline and diesel sales and use that money to purchase and junk older, low mileage vehicles.  This turns the US fleet more quickly providing a cash incentive to to those driving the least efficient vehicles.  They, in turn, would buy more efficient vehicles.  This would rejuvenate the used car market providing incentive to those at the top of the chain to purchase new vehicles more often.  Of course, those vehicles would also be more efficient, further reducing fuel consumption and creating jobs in the automobile manufacturing.  It's a win, win, win. 

    I have a theory on why the price of crude oil is so high.  (Part 1)   (Short term)

I have a theory that it is the banks, speculators, and hedge funds that are causing the price of oil to rise. Here's how I think it works:

  • As crude oil, gasoline, and diesel are highly volatile commodities, oil companies must hedge their inventory just like corn farmers hedge their corn crop before it is grown. 

  • As a result of hedging, there is a large pool of paper representing the longs and the shorts.  The company I work for maintains several hundred thousand barrels of physical gasoline in inventory most of the time. Our trader shorts the physical position so that if the price of gasoline drops, the loss on our physical inventory is covered by the financial gain on the short.  The result is that we get to stay in business!

  • As a result of the volatility, oil companies typically don't buy product on a fixed and flat basis.  They buy on a paper basis (futures).

  • Banks, speculators, and hedge funds buy this paper when they perceive market events (e.g. Iran) could move the market in an upward direction.  They'll typically "pile on" after someone like Goldman Sachs announces a price forecast at substantially higher prices. 

  • As a result, there are more buyers of paper than there are sellers of paper, causing the paper price to rise.  (As the price rises, there are always sellers at the higher prices.)

  • As real oil companies buy and sell their physical commodity based on paper, they may benefit from the higher price of paper.  Of course, they don't say anything which makes them look like the "bad guys" and take the heat off the players who are really causing the price of oil to rise. 

  • During the 1st quarter of 1012, over 70% of all oil commodity transactions were paper where no physical product changed hands.  Banks, speculators, and hedge funds don't want to take physical receipt of real physical product. 

  • How to solve the problem: Limit the amount of total, non-oil company ownership of crude oil, gasoline, and diesel fuel.  It's pretty easy but no politicians have enough spine to enact legislation.

  • Make it more expensive for a trader to purchase a paper contract.  A trader can purchase a 1,000 barrel, $105,000 futures contract for $6,750.  Raise the price to $50,000, and I'll bet the price of oil drops $20 per barrel in less than a day.

     I have a theory on why the price of crude oil is so high.  (Part 2)    (Long term)

I have a theory that it is the OPEC countries and other major oil producing countries that are causing the price of oil to rise. Here's how I think it works:

  • Iran receives 70% of its country's revenue from oil.  Every time the price of crude oil moves down to $90, Iran threatens war in the Gulf and the price of oil goes back up.

  • Saudi Arabia literally pays its citizens not to rebel.  This is a lot easier when oil is high.

  • Venezuela, like any other dictatorship, increasingly depends on the high price of oil to maintain a strong military in its own country, not to defend its country, but to control their own citizenry. 

  • Russia receives 50% of its country's revenue from oil.  Putin has just been reelected as President of Russia based on promises he has made which requires the price of oil to reach $150 per barrel. (NY Times) This is why Russia will do everything possible to maintain friction in the Middle East.



  • Irony: While we are concerned about Iran starting a war in the Middle East, many other countries around the world are dependent on the high price of oil to prevent or even control civil unrest in their own countries. Should the price of oil fall significantly for too long, a war in the Middle East will seem like amateur hour compared to what might happen between other larger countries.

  • China seems to side with countries that are in favor of the higher price of oil yet this is directly against their own best interest as a manufacturing economy.   

  • Solution:  I work in the oil industry and depend on the oil industry for most of my income, but I have finally come to the realization that, as a country, it is in our best interest to reduce our dependency on oil sooner rather than later. It's a world problem, not an American problem.


     I have a theory about limiting the influence of 501 (c)(3) s.

Imagine you can donate all the money you want to a political organization that can say any mis-interpretation of the facts that it wants to the public, no one will know your identity, and you get a tax deduction.  Wow, this goes way beyond freedom of speech. 


Some people want to add more regulations to limit this type of activity but there really is a simple solution:

  • Democracy requires transparency.  501 (c)(3) organizations must immediately post the name of the person (not company) donating the funds and the amount of the donation,  Yes, this is a principle.

  • Take away the deduction.  Freedom of speech does not include a tax deduction every time you express an opinion.  Please continue to express your opinions.

  • While you have the right to freedom of speech, you are still responsible for what you say (even if you get someone else to say it for you)  and could be sued if the 501 causes financial harm to another person, especially if the statements are based on knowingly incorrect information.  Donors to 501s should also be held ultimately liable for any incorrect statements being made by the 501 based on their pro-rata donation.  Just because you are paying someone else to say the things you're afraid to say, it doesn't mean that you should be free of all liability.  Let's stick with the true intent of freedom of speech.

The above benefits provided by current 501 (c)(3)s are a political manipulation of the democratic process.  None of these benefits has anything to do with freedom of speech.  Ironically, it looks like they were actually intended to circumvent freedom of speech. 

     I have a theory on how to change public behavior for the "good of America".

I have a theory that it is the only means to changing behavior in a capitalist society is to change the "demand" for a good or service.  Changing the "supply" has never worked and never will.  Here's how I think it works:







How to solve the problem:  xxx