While it is certainly legitimate to worry about “shipping jobs overseas” and staying competitive in the new world economy, we also need to think about the kind of jobs we want to maintain in our own country. The profit generated from an iPhone is a good example of what we should strive for. The primary profits when an iPhone is sold are divided between three countries; Korea, China, and The United States. At the low end of the totem pole is China. Chinese workers assemble the product, and their low-paid laborers receive a few dollars per phone. Samsung in Korea manufacturers the screen, and they receive approximately $15 per phone for this crucial piece of the device. And the rest of the profits all come back to the United States, where the product was conceived, designed, and marketed.

In these times of high unemployment we certainly need and want jobs, but I want the jobs Apple generates in the United States to expand, as opposed to the ones they generate in China or Korea. Intellectual capital and marketing expertise are much more valuable than a huge cheap workforce, and unfortunately there will always be an emerging economy ready and willing to work cheaper. China and Korea are primarily building their economy on their ability to act as a cost-effective factory to manufacture what we create and market. We are the best in the world at innovating, and our goal should be to continue to conceive, design, and market the world’s most innovative and needed products. It’s OK if the rest of the world builds the alternative energy devices designed in the US that help solve global warming. Our economy can still be robust if the world’s best autos and fashions and appliances are all developed here but manufactured abroad. The demand for innovation is so great that we should be able to support our entire population with a core group of “big brains” and “savvy marketers”.

But this vision requires a commitment to a few core beliefs that for some reason America is now hesitant to commit to. If we are going to be the smartest, most creative and innovative people in the world, we need to be the best educated. We need to embrace intellectual curiousity and foster creativity. But right now we are going in the opposite direction. As covered in this blog earlier, we are now turning out the first generation of Americans less educated than the last. As a result of our economic crisis, teachers are being fired, schools are lowering their standards, and fewer students can afford college. It is a recipe for disaster and a road to becoming a second-tier nation. Instead of regarding our educational system as sacred and protecting it at any cost, we quickly discard it as something we just can’t afford anymore.

We are in a bizarre period when intelligence is often ridiculed by a very vocal crowd that believes science is a theory, and would prefer to focus the national discourse on conservative religious issues, the antics of ratings-hungry talk show hosts, and the latest reality television stars.

We need visionary politicians that understand the absolute necessity of building a population that grows continually more enlightened and intelligent, instead of leaders that pander to any group that will donate to their campaign funds.

The Obama administration is currently backing a bill to give $250 to every Social Security recipient, since this is the first year retirees won’t get a cost of living increase. Two hundred and fifty bucks is not going to change anyone’s life – but in total it represents $13 billion dollars. $13 billion dollars pumped into our education system could change a lot of young lives and would represent a big investment in the country’s future.

Imagine if instead of invading Iraq we had pumped up our national education system and funded innovation. Why do we have people marching on Washington and into town halls complaining about healthcare, but there is little public outrage over our crumbling education standards and a population growing increasingly stupid?

Instead of putting governmental support behind failing companies with outdated products and/or Weasel management, lets pour some cash into our education system and new technology start-ups that will continue to keep us on the cutting edge.

It is certainly no accident that The Silicon Valley – the heartland of America’s technological and economic dominance over the last two decades – is just around the corner from Stanford University. Stanford graduates started Google, H-P, Cisco, Yahoo, and Sun Microsystems, just to name a few. The correlation between a smart population and economic prosperity and security in undeniable, and much easier to justify then pumping cash into dodgy financial institutions.

America needs more Apple Computers, Hewlett-Packards, and Googles, and the only way to keep building companies like this is if we have a culture that values education, intelligence, and innovation.

I was particularly suprised to learn how much water it takes to manufacture some of the common things we use and consume.  A few of examples:

• It takes 31 gallons of water to produce 1 glass of wine.
• It takes 36 gallons of water to produce 1 cup of coffee.
• It takes 118 gallons of water to produce 1 lb. of wheat.
• 237 gallons of water to produce 1 lb. of rice.
• 594 gallons of water to produce 1 lb of cheese.
• 1857 gallons of water to produce 1 lb. of beef.
• 1990 gallons of water to produce 1 lb. of leather.
• 2867 gallons of water to produce a pair of blue jeans.

So here’s a simple idea.  Give up buying bottled water, drink from the tap, and donate the few hundred dollars you save a year to The Freshwater Trust.

• Spot on Sunday Night Football – $339,700 (the most expensive slot on television)
• Spot on Grey’s Anatomy – $240,462
• Spot on Desperate Housewives – $228,851
• Spot on Two And A Half Men – $226,635
• Spot on The Family Guy – $214,740

The most expensive slot for a new show goes to ABC’s Flash Forward (one of my favorites of the new season), which goes for $175,724.  Perhaps the biggest bust of the new season is The Leno Show.  NBC was banking on the fact that they would come out dollars ahead by discontinuing the production of expensive dramas, and instead put the cheap to produce Leno show in the 10 pm slot.   However, the loss of advertising revenue will probably cancel out any savings given its dismal performance.  A slot in Leno now goes for anywhere from $48,000 to $65,ooo – significantly less than the nighttime dramas generate.  Leno is also causing major issues for NBC affiliates.  As viewership in the 10 pm slot has dropped, so has the viewership for local news programs that follow Leno, which really hurts affiliate profits.

The above numbers don’t include the cost of creative and production for the commercials.  The average production budget for a nationally-broadcast commercial is somewhere in the $400,000 range, but depending on the creative can easily run into the millions of dollars.  And those numbers don’t include the cost of talent, which can add several hundred of thousands to several million dollars a year.

• In 1972 36.2% of the workforce was comprised of women. Today it is 49.8%
• In 1972 women made 58 cents for every dollar a man made. Today they make 77 cents.
• In 1972 the median age a woman married was 21. Today it is 26.
• In 1972 12% of births were to unmarried mothers. Today it is 39%. (Must have been that Murphy Brown episode!)
• In 1972 43% of college students were women, as opposed to 57% today.
• In 1972 there were 900,000 couples in the US in which the woman was the sole earner. Today there are 3.3 million.
• In 1970 3% of lawyers were women, as compared to 32% today.
• In 1970 8% of doctors were women, as compared to 28% today.
• In 1971 there were no women FBI agents. Today there are 2396.
• There were also no women governors. Today there are 6.
• There were no women cabinet members. Today there are 7.
• A fact that surprised me. Since 1972 the rate of divorce has declined from 4.1 per 1000 population, to 3.5.
• A woman’s average lifespan has increased more than five years in the last 29 years.
• 70% of women say they are less financially dependent on their spouse than their mother was.

I was equally surprised to see how much men and women agree on many major issues. An identical percentage, 66%, describe their marriage as “very happy”, and at the opposite end of the spectrum 1% both describe their marriages as “not happy at all”.

Now you might be suprised that such a bill is even necessary.  First of all, what kind of company would stop their employees from taking action if they are sexually assaulted?  Actually, the bill is a result of actions by Halliburton, after they attempted to cover up the abduction, drugging, and gang rape of one of their employees.  Dick Cheney’s old company has some very unusual personel policies! 

Perhaps more importantly, why would any sane Senator vote against a bill that essentially tells companies that if they want to do business with the government they can’t support rape?  Well, there were lots of excuses for that one.  A few felt we were picking on poor old Haliburton, or that we would force people out of arbitration and into the courts (personally I think rapists should have to go to court). But just in case you were wondering how your Senator feels about rape, here is a list of the thirty that voted against the amendment and feel doing business with companies that support rape is OK:

• Alexander (R-TN)
• Barrasso (R-WY)
• Bond (R-MO)
• Brownback (R-KS)
• Bunning (R-KY)
• Burr (R-NC)
• Chambliss (R-GA)
• Coburn (R-OK)
• Cochran (R-MS)
• Corker (R-TN)
• Cornyn (R-TX)
• Crapo (R-ID)
• DeMint (R-SC)
• Ensign (R-NV)
• Enzi (R-WY)
• Graham (R-SC)
• Gregg (R-NH)
• Inhofe (R-OK)
• Isakson (R-GA)
• Johanns (R-NE)
• Kyl (R-AZ)
• McCain (R-AZ)
• McConnell (R-KY)
• Risch (R-ID)
• Roberts (R-KS)
• Sessions (R-AL)
• Shelby (R-AL)
• Thune (R-SD)
• Vitter (R-LA)
• Wicker (R-MS)

1. Amex Savings – 1.85%.  This is one of my favorite accounts.  A great interest rate, easy to set up, nice site to navigate, from a well-known name.
2. Everbank – 1.77%.  This is a new account for me.  It was a bit time consuming to set up, but the site is quite professional and was easy to use once it was set up.
3. Ally Bank – 1.7%.  The old GMAC Bank has a fresh coat of paint.  Nice, very easy to use site, a good rate (check their CD rates too), and professional to deal with.
4. Capital One – 1.6%.  Join this through Costco’s site for the bonus and interest bonus.  A great site, easy to use, with a good Quicken download.
5. WT Bank – 1.51%.  Another new one for me.  It was a bit difficult to set up, but once done is a OK site to use and navigate.

Those are the top five, and if you need even more choices that offer slightly lower rates take a look at FNBO, Zion, HSBC, and Emigrant.  Set up your online transfers and move money for safety and return.

1. Border Collie
2. Poodle
3. German Shepard
4. Golden Retriever
5. Doberman Pinscher
6. Shetland Sheepdog
7. Labrador Retrievor
8. Papillon
9. Rottweiler
10. Australian Cattle Dog

For the first time in the history of the United States we are producing a generation that is less educated than the last generation.

Well, perhaps we are becoming more stupid, and we are passing the stupidity down to future generations. From an educational perspective, including the percentage of our population that graduates from college, we have been slipping, and we are now a tier-two country. Our fear of taxes and big government has caused a shift away from funding towards education. American society is simply unwilling to pay to educate our population. This has dire consequences for the future of the United States. Educated populations build successful, healthy, affluent societies. America has traditionally led the world with great educational institutions, and core values that stressed the importance of education. We have a great history of ancestors that worked hard to make sure their children were better educated than they were. We should all fear a future where education is no longer valued.

So of course I decided to take advantage of both talents, and while sipping his booze, I asked his opinion on the next moves for the market. Unfortunately he was not upbeat. Dennis feels that the market could linger in its current range for awhile, perhaps even rise to the 10,000 mark, but ultimately we should expect it to fall again, this time to about 7500. There is just no compelling development or earnings to justify a more optimistic position.

Dennis is more upbeat about China. He explained that the Chinese economy has grown to the point that they can now service their own untapped market, end essentially shift their diminishing export capacity to instead sell to their now more affluent Chinese population. This all makes sense to me, and I’ve personally been shifting money into China over the last few months. I’ve had good luck with the Mathews China Fund (MCHFX).

Once again my caveat where investments are concerned. The market is illogical, often insane, partially controlled by Charlatans and outright crooks, and anyone who says they can accurately predict it is a lying Weasel. Don’t blame me or Dr. O’Donnell if you sell out your portfolio and the market goes to 13,000, or the Chinese market implodes due to tainted cat food and computer viruses. Caution, patience, diversification, and common sense all make for a solid portfolio.