Maybe talk radio was right about Mitt Romney, after all. With the economy slowly edging toward recession and few national leaders making sense when discussing how to turn things around, it just could be that the former Massachusetts governor was the right candidate at the right time.
A political cartoon I saw this morning puts everything into perspective. In the background, in big block letters, it says "IT'S THE ECONOMY STUPID!" In the foreground, a caricature of Barack Obama says "Is it hope?" A pant-suited Hillary Clinton asks "Is it experience?" And John McCain, with his arms drawn up slightly and fists clinched, wonders "Is it strength?"
It's a perfect illustration of our problem with Campaign 2008. None of the candidates who remain standing have a clue about how to fix the economy. Obama and Clinton want the government to spend more, as if we're not spending ourselves into oblivion already. McCain admits the economy is not his strong point, though he's cast himself as a deficit hawk in the past. His votes and statements demonstrate, however, that he really doesn't know how things work.
Romney has been a successful businessman who has turned around large and struggling enterprises. The Salt Lake City Olympics don't necessarily equate to the federal government, of course, but he more than those remaining would be best suited to tackle the problems of the day.
Hope, experience and strength are nice qualities, but economic smarts is what we need right now.
---
Ever since renting a Toyota Prius for a day last year (see post of 8/21/07), I have been interested in the development of electric and/or hybrid vehicles. As I mentioned in my observations while driving the Prius, I would consider purchasing one if the price were to drop about $5,000. That hasn't happened and likely won't, and I have yet to purchase a new car.
A lot has happened in electric car research and development since August, though. Tesla, a Silicon Valley firm, has developed an all-electric roadster. Aptera, of Carlsbad, has gone one better by giving it's two-seater a gallon of gas in case the battery wears out. The Tesla looks like a regular sports car. The Aptera looks like a space vehicle.
Between hybrids and all-electric vehicles, we're getting closer to the day where we can leave our gas guzzlers in the garage. The Prius, Honda Civic hybrid and Chevrolet Malibu hybrid can all be had for $22,000 and up, more than competitive with most new cars. Perhaps the only reason why they're not flooding the market is that buying new cars is not economically sensible, yet people might be reluctant to purchase a used hybrid -- just because of unfamiliarity.
Incremental steps, but important ones, are being made. The next big step is for the prices to become economical. I'm not being cheap when I balk at a $22,000 Prius because I know I can get a gently used Camry for $8,000 to $10,000 less. The Tesla will initially sell for $98,000. The Aptera for $30,000.
Other challenges are ahead besides price.
People still like big, comfortable and powerful vehicles and they want to be able to drive them a long way. While Aptera has done a good job in keeping the customer cost comparatively reasonable, the general public won't go for a glorified Mars Rover. People want a car. Tesla made a car, but they could barely get the price under a hundred grand. There has to be some kind of meeting in the middle.
Range is also critical. People drive their cars to see grandma in another town, or they take them on vacation. As mentioned above, you'll need hotels and gas stations to install charging stations. A smart restaurant can have a charging station so someone can get juiced up while eating, and have the tab right there on his bill.
Plus, while we'll use less refined gas, we'll use more electricity. That opens a whole new set of challenges. In San Diego County, San Diego Gas & Electric has for several years now been trying to install a new major electrical transmission line to give the county its third hookup to the nationwide electrical grid. Ever-increasing demand is already quite close to what SDG&E receives from the grid, and will surpass available capacity in a few years. Rural area property-owner and those same environmentalists who want us to start using alternative energy (like electric cars) are fighting the utility tooth-and-nail. Add thousands of cars plugged in to power outlets and demand for electricity will go through the roof. Will there be enough power on a hot day of peak demand for air conditioners? Big question.
The next issues are for the owners. If you live in an older pre-electrical revolution home, as I do, then you might need a major upgrade before you can plug in a car -- on top of the microwave, refrigerator, big-screen television, computer and X-box. When I had an addition built for my 1950 house, we had to add circuits to the electrical box to handle the additional load.
If you're already green living at home, say you're using solar power for a lot of your electrical needs, will you have enough juice to power a car. Those who hate the SDG&E transmission line want us to use solar or wind energy, but there simply is not enough.
So while electric and hybrid vehicles are enticing, and getting closer to mass-produced reality, there's a lot that needs to be overcome.
Monday, April 7, 2008
Sunday, March 30, 2008
Fed Madness, Gore, March Madness
It's pretty clear to anyone paying attention that our current regulatory setup for our financial system is greatly lacking, which is why the president's new plan to rework things is a good idea. The plan will likely get worked over pretty good in Congress and come out looking nothing like what Mr. Bush intended.
While I'm not an economist, as stated on the blog a few times, I can spot one flaw immediately. That's the increased power given to the Federal Reserve, according to analysis of the proposal in the media. The Fed, after all, is the chief enabler of the wrongdoers who got us in this mess in the first place, and it's policy of lower and lower interest rates is threatening to send us into a full scale recession -- not the pretend one we have now.
You know the score by now. Lower interest rates make more capital available for investment, which stimulates economic activity. Unfortunately, reduced interest rates also make the dollar less attractive for overseas investors, so the greenback continues to lose value against other currencies. The detrimental impact of dollar devaluation, like higher oil prices, has dominated the positives of improved capital liquidity.
Take oil, for example. The price of a barrel of oil is well over $100 now because of currency exchange rates more than anything being done by speculators, OPEC or the oil companies. That's hurting the trucking and airline businesses -- Aloha Airlines, the cheapest way to get to Hawaii, announced today its suspending operations Monday -- and crimping family finances. That's hurting us far more than lower interest rates are helping us.
The dollar, in the last three months of interest rate cutting, has slipped dramatically against both the euro and the Japanese yen.
The last cut, of .75 percent, sent the stock market soaring, but in a post that night I warned that by the end of this past week, the Dow Industrials would be lower. I was right. The night I posted, March 18, the Dow closed at 12,390. The index closed Friday at 12,216. Those gains didn't last too long.
So while changing our financial markets oversight system is good, providing more power to a terribly misguided Federal Reserve is not.
---
I almost posted something a week or two ago about a compromise Democratic presidential nominee Al Gore, and perhaps in the interest of displaying foresight, I should have. Everyone's talking about the idea now.
The way it works apparently is if the contest between Barack Obama and Hillary Clinton goes to Denver undecided, the superdelegates can withhold their votes in the first ballot, then offer Gore as a compromise candidate.
At first glance, I see very little downside to an Al Gore candidacy from the Democratic perspective. While blacks might still be unhappy if Obama doesn't capture the nomination, far less would boycott Gore in November than Clinton. And, by the time of the convention, the need for a compromise candidate might be obvious to all.
Gore lost in 2000, at least in the Electoral College, because he was tied much too closely to Clintonism, which the country was tired of at that point. That the voters would rather see the Clintons go away is pretty obvious, given Hillary's primary struggles against a half-term senator. However, Gore's increased popularity within the party in recent years shows that some sort of "Clinton Transference" is no long applicable in 2008.
His work to promote awareness of climate change and his early and unwavering opposition to the war in Iraq would help him keep most Democrat voters and pick up the vast majority of independents. Those who think he's overblown on global warming and wrong on Iraq are in the McCain camp already.
Three things could keep Gore out of the race. One, either Hillary or Obama falter and hand the race to their opponent. Second, as we've seen too many times with these political elites, his financial condition might be such that it would not stand up to campaign scrutiny. Nothing personal against Gore, but it's just how things are. Thirdly, he might find that he can better serve his pet cause more effectively if he remains outside electoral politics. He had eight years of hands-on experience of learning the limitations of the power of the presidency as Bill Clinton's understudy. Since leaving office, he's won an Academy Award and a Nobel Peace Prize. 'nuff said.
---
The NCAA men's basketball tournament finally found perfection. For the first time, all four top regional seeds reached the Final Four, and did so without the expense of the fun of the playoffs: upsets. We get to see the four best teams in San Antonio. We also were able to enjoy the wonderful run to the Midwest Regional championship game of tiny Davidson, two wins from Western Kentucky and, closer to my heart, the University of San Diego's opening-round upset conquest of mighty UConn.
The tournament can still get better, however. In need of tweaking is the selection committee's seeding of the so-called "mid-majors," schools outside the major football-playing conferences. Obviously, Davidson was very poorly seeded as the 10th of 16 teams in its regional. A number two -- where it ended up -- would be silly, but the Wildcats through the season displayed its talent, with the nation's longest winning streak and strong performances against power non-conference teams. The Wildcats played one of the Final Four teams, Memphis I think, in a scrimmage, and the opposing coach called it a wake-up call for his own team. If he knew how good Davidson was, why not the seeding committee? This team should have been given a 4 or 5 seed.
Last year, the same could be said for Nevada-Las Vegas (UNLV), which also went deep into the tournament. Fans of Mountain West Conference teams knew how good the Rebels were (much better than this season), so why did the seeding committee fail?
Of course, the gold standard for seeding misses was George Mason two years ago, which went to the Final Four despite being seeded 11th. In fairness to the selection committee, there wasn't nearly as much to recommend the Patriots as there was for Davidson and UNLV, but there was enough to make place them a couple spots higher.
There will never be a perfectly seeded tournament, and no one expects or wants one. The upsets are what makes it fun. I actually have paid very little attention to Final Four weekend the past decade or so. Means little to me. Most of the excitement is over by then. But the seeding committee has got to loosen up from its mindset of favoring power conference schools over the Davidsons, UNLVs and George Masons of the world.
While I'm not an economist, as stated on the blog a few times, I can spot one flaw immediately. That's the increased power given to the Federal Reserve, according to analysis of the proposal in the media. The Fed, after all, is the chief enabler of the wrongdoers who got us in this mess in the first place, and it's policy of lower and lower interest rates is threatening to send us into a full scale recession -- not the pretend one we have now.
You know the score by now. Lower interest rates make more capital available for investment, which stimulates economic activity. Unfortunately, reduced interest rates also make the dollar less attractive for overseas investors, so the greenback continues to lose value against other currencies. The detrimental impact of dollar devaluation, like higher oil prices, has dominated the positives of improved capital liquidity.
Take oil, for example. The price of a barrel of oil is well over $100 now because of currency exchange rates more than anything being done by speculators, OPEC or the oil companies. That's hurting the trucking and airline businesses -- Aloha Airlines, the cheapest way to get to Hawaii, announced today its suspending operations Monday -- and crimping family finances. That's hurting us far more than lower interest rates are helping us.
The dollar, in the last three months of interest rate cutting, has slipped dramatically against both the euro and the Japanese yen.
The last cut, of .75 percent, sent the stock market soaring, but in a post that night I warned that by the end of this past week, the Dow Industrials would be lower. I was right. The night I posted, March 18, the Dow closed at 12,390. The index closed Friday at 12,216. Those gains didn't last too long.
So while changing our financial markets oversight system is good, providing more power to a terribly misguided Federal Reserve is not.
---
I almost posted something a week or two ago about a compromise Democratic presidential nominee Al Gore, and perhaps in the interest of displaying foresight, I should have. Everyone's talking about the idea now.
The way it works apparently is if the contest between Barack Obama and Hillary Clinton goes to Denver undecided, the superdelegates can withhold their votes in the first ballot, then offer Gore as a compromise candidate.
At first glance, I see very little downside to an Al Gore candidacy from the Democratic perspective. While blacks might still be unhappy if Obama doesn't capture the nomination, far less would boycott Gore in November than Clinton. And, by the time of the convention, the need for a compromise candidate might be obvious to all.
Gore lost in 2000, at least in the Electoral College, because he was tied much too closely to Clintonism, which the country was tired of at that point. That the voters would rather see the Clintons go away is pretty obvious, given Hillary's primary struggles against a half-term senator. However, Gore's increased popularity within the party in recent years shows that some sort of "Clinton Transference" is no long applicable in 2008.
His work to promote awareness of climate change and his early and unwavering opposition to the war in Iraq would help him keep most Democrat voters and pick up the vast majority of independents. Those who think he's overblown on global warming and wrong on Iraq are in the McCain camp already.
Three things could keep Gore out of the race. One, either Hillary or Obama falter and hand the race to their opponent. Second, as we've seen too many times with these political elites, his financial condition might be such that it would not stand up to campaign scrutiny. Nothing personal against Gore, but it's just how things are. Thirdly, he might find that he can better serve his pet cause more effectively if he remains outside electoral politics. He had eight years of hands-on experience of learning the limitations of the power of the presidency as Bill Clinton's understudy. Since leaving office, he's won an Academy Award and a Nobel Peace Prize. 'nuff said.
---
The NCAA men's basketball tournament finally found perfection. For the first time, all four top regional seeds reached the Final Four, and did so without the expense of the fun of the playoffs: upsets. We get to see the four best teams in San Antonio. We also were able to enjoy the wonderful run to the Midwest Regional championship game of tiny Davidson, two wins from Western Kentucky and, closer to my heart, the University of San Diego's opening-round upset conquest of mighty UConn.
The tournament can still get better, however. In need of tweaking is the selection committee's seeding of the so-called "mid-majors," schools outside the major football-playing conferences. Obviously, Davidson was very poorly seeded as the 10th of 16 teams in its regional. A number two -- where it ended up -- would be silly, but the Wildcats through the season displayed its talent, with the nation's longest winning streak and strong performances against power non-conference teams. The Wildcats played one of the Final Four teams, Memphis I think, in a scrimmage, and the opposing coach called it a wake-up call for his own team. If he knew how good Davidson was, why not the seeding committee? This team should have been given a 4 or 5 seed.
Last year, the same could be said for Nevada-Las Vegas (UNLV), which also went deep into the tournament. Fans of Mountain West Conference teams knew how good the Rebels were (much better than this season), so why did the seeding committee fail?
Of course, the gold standard for seeding misses was George Mason two years ago, which went to the Final Four despite being seeded 11th. In fairness to the selection committee, there wasn't nearly as much to recommend the Patriots as there was for Davidson and UNLV, but there was enough to make place them a couple spots higher.
There will never be a perfectly seeded tournament, and no one expects or wants one. The upsets are what makes it fun. I actually have paid very little attention to Final Four weekend the past decade or so. Means little to me. Most of the excitement is over by then. But the seeding committee has got to loosen up from its mindset of favoring power conference schools over the Davidsons, UNLVs and George Masons of the world.
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