Sunday, May 31, 2009

The Natural Gas Fuel Alternative For Trucks


Last week, I wrote about the unreasonable and unattainable 30 mpg light truck mandate by the EPA. Using the example of the 2010 GMC Sierra hybrid light truck that gets about 20.5 mpg overall, it is obvious that the 30 mpg standard cannot be met by existing technology unless a lot of very small vehicles are classified light trucks to offset the shortfall from the full-sized light trucks... the volume leaders in that segment.

I also wrote that if the EPA gave each non-petroleum fueled vehicle an arbitrary rating of 150 mpg that the standard might be met with a full push toward compressed natural gas powered vehicles (CNG). There is precedent within the existing regulations... also cited in my earlier post.

How could this be done? Here is a portion of a 2004 MSNBC article:

Boost for natural gas cars: Home fueling

Honda, partner will sell unit in 2005, starting with California
Joe Marquette / AP file
Unveiled in 2002, the natural gas fueling system known as Phill, seen here attached to a wall, converts low pressure gas into the high pressure used in natural gas cars.
updated 10:25 a.m. ET, Fri., Sept . 10, 2004

After a year-long delay, Honda and a partner have announced they will sell a $2,000 home fueling station for natural gas cars starting in the spring of 2005.

I had also suggested a $5,000 tax credit for purchasing a light truck powered by CNG. That would be used to offset the higher vehicle cost and the home fueling station.

The real push would have to be in the rapid deployment of CNG commercial fueling stations. This is what it looks like now:
Natural Gas Fueling Station Locations

To find sites that currently offer compressed natural gas (CNG), select a state on the map below. The database will generate a detailed list of stations verified to offer CNG. If you are interested in liquefied natural gas (LNG) stations, go to the Alternative Fueling Station Locator. This locator will also enable you to map CNG and LNG stations near a specific address or city location.

Unlike proposed battery changing stations that would require:
  1. a new production technology for vehicles that has not been thoroughly tested
  2. a whole new infrastructure of changing stations
the CNG station technology is tested and can be expanded and the vehicles technology is tested and can be expanded... and there is plenty of natural gas.

And, as Rep. Nancy Pelosi herself stated:
I believe in natural gas as a clean, cheap alternative to fossil fuels,” she said at one point. Natural gas “is cheap, abundant and clean compared to fossil fuels,” she said at another.
The science is settled; the economics are settled; the way is clear; President Obama should lead the way for this change. All-electric or vastly improved hybrids may be a long term solution for meeting arbitrary EPA mandates, but they are not feasible for the arbitrarily short timeline established by the EPA.


Friday, May 29, 2009

Nationalizing Businesses On The Road From Prosperity


In March 2008, I published this:

In December, 2008 I asked if we were there yet?

Today in the Detroit Free Press, the answer was loudly confirmed... YES!

Devaluation of U.S. dollar global trend: Brazilian official 2009-05-29 09:22:46

RIO DE JANEIRO, May 28 (Xinhua) -- Brazil's Central Bank President Henrique Meirelles said on Thursday the devaluation of the U.S. dollar is a global phenomenon instead of an occurrence restricted to Brazil.

"There is a global devaluation of the U.S. dollar. It has got nothing to do with the (Brazilian) real," he said during a public audience in the Congress, reminding that the euro rose 2.7 percent compared to the dollar in the past two weeks, while the real rose 2.4 percent.

So, we have the Federal Government along with the UAW owning one of the largest manufacturers in the U.S. and the dollar sliding in value. Did I misunderstand what was happening a year ago?


UAW Conflict Of Interest


Chrysler bit the bullet and the UAW got about 55% of the ownership; bond holders got stiffed. General Motors is about to bite the bullet and the UAW will get about 20% ownership.

There has been speculation that the UAW would use its ownership position to squeeze excessive money or benefits from those companies. But the reality is that such an action would put the UAW's investment in jeopardy by making Chrysler and GM less competitive. But what's to stop the UAW workers at Ford who have no such ownership arrangement from taking actions to undermine that company with a tacit agreement that any Ford losses of jobs will be offset by hires at Chrysler and GM?

Not that I really think that the UAW would ever do anything untoward, but you do have the unusual situation of a union owning the competitors of a company for which they work. How would that work anyplace else?


Thursday, May 28, 2009

Declaring 30 MPG Or 35 MPG Makes Little Difference


I wrote this almost a year and a half ago. Nothing... nothing... nothing... has changed except the number which is 30 mpg... and 4 years earlier.

Tuesday, December 11, 2007

35 MPG Trucks

So here is my solution. The overriding issue is moving away from petroleum fuels to lessen our dependence on foreign oil. The red herring issue is eliminating CO2 production... which we would be wise to completely ignore. Back to the overriding issue....

For any vehicle using petroleum based fuel, use the actual miles per gallon against the politically declared standard... set by President Obama and the EPA without regard to Congress or requiring any legislative debate or even questioning if it was technologically and economically feasible.

Similarly, for any vehicle that does not use petroleum based fuel, use an arbitrary miles per gallon [no actual gallons used] of 150. So, if the vehicle runs on hydrogen fuel cells or natural gas or propane or just plugs into the wall, they get the manufacturer a credit of 150 mpg per vehicle against the mandated 30 mpg in 2016, 35 mpg in 2020, 40 mpg in 2025, 50 mpg in 2030, 100 mpg in 2050. You may not have heard about all of those mpg requirements, but they are coming in President Obama's second term.

CNG vehicles are a reality [that's compressed natural gas] and the U.S. has an abundance of natural gas available that Congress will make off-limits as soon as the automobile manufacturers invest in making higher volumes of vehicles using that fuel. Regardless, it would be relatively easy to gin up production of these vehicles and home owners could invest in already-tested home fueling stations that tap off their home's natural gas supplies. Filling stations could easily have natural gas lines hooked up to CNG pumps. The infrastructure is basically there.

All it takes is a declaration by the EPA that CNG vehicles get credited for 150 petroleum-based fuel mpgs. Hey, the EPA made a declaration that trucks had to get 30 mpg by 2016 without regard to facts, so why can't they do this?

And while the Federal Government is at it, they can declare a $5,000 per vehicle tax credit for the purchase of any CNG-powered truck.

Then we all can declare ourselves holier-than-thou.


For those who feel this suggestion is outrageous or unethical or giving credence to unreasonable EPA mileage mandates, here is a section from the site:

How are alternative fuel vehicles treated under CAFE?

The CAFE law provides for special treatment of vehicle fuel economy calculations for dedicated alternative fuel vehicles and dual-fuel vehicles. The fuel economy of a dedicated alternative fuel vehicle is determined by dividing its fuel economy in equivalent miles per gallon of gasoline or diesel fuel by 0.15. Thus a 15 mpg dedicated alternative fuel vehicle would be rated as 100 mpg. For dual-fuel vehicles (vehicles that can use the alternative fuel and gasoline or diesel interchangeably), the rating is the average of the fuel economy on gasoline or diesel and the fuel economy on the alternative fuel vehicle divided by .15. For example, this calculation procedure turns a dual fuel vehicle that averages 25 mpg on gasoline or diesel with the above 100 mpg alternative fuel to attain the 40 mpg value for CAFE purposes. Several limitations are established for CAFE credits for dual fuel vehicles. For MYs 1993-2004, the maximum CAFE increase attributable to dual fueled vehicles in a manufacturer’s passenger car or light truck fleet is 1.2 mpg.

I would simply eliminate the last sentence and change the denominator to 0.10. That makes sense given the state of current truck hybrid technology and the short timeframe of six years.


Wednesday, May 27, 2009

Supreme Confusion


Do the articles about President Obama's choice for a new Supreme Court justice seem a little surreal? To wit: “I [Obama] view that quality of empathy, of understanding and identifying with people’s hopes and struggles, as an essential ingredient for arriving at just decisions and outcomes.”

L.A. Latinos savor Supreme Court choice

It's about time, some say, as President Obama nominates federal Judge Sonia Sotomayor. She would be the court's first Latina.
By Alexandra Zavis and Hector Becerra
4:44 PM PDT, May 26, 2009
From a popular eatery in East L.A. to the corridors of political power, Latinos relished the nomination today of one of their own to the U.S. Supreme Court, a choice they said would bring fresh perspective to the nation's highest court.

If confirmed, federal Judge Sonia Sotomayor of New York would be the Supreme Court's first Latina.

"I think it's about time," said Antonio Hernandez, 37, who owns Teresitas Restaurant in East L.A. with his parents. "Latinos are making a prominent impact on all levels of government as we grow more into the American way of life."

Hernandez is acquainted with high-flying Latinas nominated by President Obama. Hilda Solis, who became his Labor secretary, was a regular customer.

"I think Obama is trying to include everybody," Hernandez said as he ate cereal at a counter this morning. "That's how he ran his campaign."

Latino and other civil rights advocates have long argued that the nation's highest court should better reflect the makeup of U.S. society. The court has one female justice, Ruth Bader Ginsburg, and one black justice, Clarence Thomas.
Let's try that again with just a very, very minor adjustment:
Texas white supremacists savor Supreme Court choice

It's about time, some say, as President Obama nominates Brody Joe Ghent. He would be the court's first white supremacist .
By Bo Davis and Hanl Barron
4:44 PM PDT, May 26, 2009
From a popular eatery in Lubbock to the corridors of political power, Texans relished the nomination today of one of their own to the U.S. Supreme Court, a choice they said would bring fresh perspective to the nation's highest court.

If confirmed, Brody Joe Ghent of Dimmitt would be the Supreme Court's first motorcycle riding white supremacist.

"I think it's about time," said Wil "Tiny" Hellracker, 37, who owns Devil's Vengeance Bar in Amarillo with his girl friend and three children and four great grandchildren. "Aryans are making a prominent impact on all levels of government as we grow more into the American way of life."

Hellracker is acquainted with low-rider Aryans nominated by President Obama. Rhett "Neck" Breaker, who became his model for education reform, was a regular customer.

"I think Obama is trying to include everybody," Hellracker said as he ate grits at a counter this morning. "That's how he ran his campaign."

Supremacists and other law minimizing advocates have long argued that the nation's highest court should better reflect the makeup of U.S. society. The court has no Supremacist Supremes, but does have a woman, Ruth Bader Ginsburg, and one black justice, Clarence Thomas.
You gotta have representation, dude. And Brody Joe can decide what's what with his personal experience and feelings, too. He doesn't need a lot of legal crap.


Tuesday, May 26, 2009

Convergence Of Ideas To Fix Detroit


What do these images have in common?


Hint: they all point to the reality that Detroit is geographically an untenable political entity.

The top graphic was first published here in 2005 and most recently here. The middle graphic was published in December, 2008 and the lower one on May 22, 2009... both in the Detroit Free Press.
  • The middle graphic simply reinforces the need for size reduction by comparing Detroit with other urban areas of similar or larger populations.
  • The top graphic argues for a break-up of the present city with some perimeter areas being annexed by adjacent communities and some forming newer, smaller communities.
  • The bottom graphic argues for rezoning Detroit into new land uses.
Detroit has shown, through the past 4 decades, that it is incapable of governing itself as an entity over the 138 square miles. The population is too small and scattered to allow for efficient government-provided services. The break-up and rezoning alternative address the need to redistribute population into smaller, more concentrated units. The difference lies in the ability of the present Detroit government to implement successfully the rezoning concept.

Detroit is broken and broke. It grew historically through annexation of perimeter areas. The growth was based on the emerging automotive industry. As that industry has dispersed, the basis for Detroit's wealth has dispersed. The city is now at the brink of collapse along with Chrysler and General Motors.

Rezoning will not address the basic problem. The city needs to be reconstituted by shrinking and allowing the some of the perimeter areas to become annexed by other communities, forming new communities, and placing areas under state management for development into new "greenfields" or park land.

Detroit is a metaphor for what has gone wrong in the U.S.
It is reliance on a large political entity to solve underlying economic and social issues caused by reliance on a large political entity that has benefited the governing at the expense of the governed....
Not that our national politicians suddenly become wealthy after being elected... or would think of creating huge economic or policy changes that might benefit them personally... ahem.


Monday, May 25, 2009

Memorial Day


We will celebrate Memorial Day on May 25 instead of the originally designated May 30. It is for the convenience of travelers to let them have an extra day tacked on the weekend. Most of those travelers will not even give a thought to why they have that day off.

They can't remember.

If you are interested, you can learn about Memorial Day... originally Decoration Day... here.

You might even learn about those little, fake, red poppies that people are selling in the middle of traffic.


Sunday, May 24, 2009

Interesting Use of Google Maps


I was given a tip about an interesting use of Google Maps for those who might be traveling to London, England for sight-seeing. I could have used this 15 years ago. However, I'll be staying in Michigan for most of this summer.

Saturday on the lake... sunny, upper 70s, light breeze. No need to go elsewhere.

These "Canadians" prefer Michigan to raise their family. Click images for larger views.


Saturday, May 23, 2009

Remembering Why Memorial


Here in Michigan, we have finally reached the blue season; the gray season was abnormally long. The Memorial Day weekend marks the mad rush toward the outdoor destination of choice. Here are my plans.

This is the weekend to remember those who made this possible... the brave people who served in our military and gave their lives so that we can enjoy the benefits of a society that values freedom from the oppression of any government... foreign or domestic... that would seek to control our individual destinies under the guise of allegiance to charismatic or tyrannical leaders.


Friday, May 22, 2009

No Sunspots And No Unusual Weather


This information from

Current conditions
Solar wind
speed: 334.9 km/sec
density: 1.0 protons/cm3
explanation | more data
Updated: Today at 1936 UT
X-ray Solar Flares
6-hr max: A0
1935 UT May21
24-hr: A0
1215 UT May21
explanation | more data
Updated: Today at: 1935 UT
Daily Sun: 21 May 09
The sun is blank--no sunspots. Credit: SOHO/MDI
Sunspot number: 0
What is the sunspot number?
Updated 21 May 2009

Spotless Days
Current Stretch: 1 days
2009 total: 115 days (83%)
Since 2004: 626 days
Typical Solar Min: 485 days
explanation | more info
Updated 21 May 2009

Far side of the Sun:
This holographic image reveals no sunspots on the far side of the sun. Image credit: SOHO/MDI
NOAA appears to have given up crying wolf about extreme weather.
(CNN) -- Forecasters predict the 2009 Atlantic hurricane season will be "near-normal," with four to seven hurricanes likely, the National Oceanic and Atmospheric Administration said Thursday, less than two weeks before the season begins.
The science is settled: earth has been cooling for a decade, the sun is abnormally quiet, and no extreme high temperature records are being set [see more at Icecap soon].

Therefore, now is the time for the government to enact onerous legislation around the misconception that man-made CO2 is driving climate change. Now is the time to create economic hardship and energy uncertainty. Now is the time to create expanded bureaucracies to mismanage the marketplace. Then when the noticeable effects of normal climate change... the cooling side... occur, the government can take credit for saving us from ourselves and justify why colder areas have such high heating bills.


Thursday, May 21, 2009

Toyota Not Perfect


There are many Americans who are convinced that U.S. automotive manufacturers would be viable and competitive if and only if they were like Toyota. The Toyota that makes small, perfect cars that are built by technicians in white lab coats. The Toyota that always make sound business decisions based on environmentally-friendly strategies. The Toyota that places social justice ahead of profits.

It is those Americans who should take notice of the following from Automotive News:

How Toyota fell so spectacularly

Exports backfire as yen rises; neglect of compact cars?

TOKYO — In six short months, Toyota Motor Corp. collapsed from the world's biggest, most profitable car company to the industry's top quarterly money loser.

The roughly $28 billion swing — from record operating profit to loss — was whiplash-fast, but the problems behind it had simmered for years.

After 50 years in the United States, Toyota still imports 45 percent of the vehicles it sells there.

A decade-long expansion drive added to the automaker's costs. A push to speed new models to market hurt quality, opening the door for rivals. Toyota neglected the compact cars that had made it great in favor of luxury models, large SUVs and pickups.

Then it all boiled over.

In January to March, Toyota's red ink outpaced the loss at General Motors, which is on the verge of bankruptcy. And Japan's No. 1 automaker warns that things will get worse.

Toyota tailspin
Globally, Toyota stumbled due to
• Neglect of small, affordable vehicles in favor of big, expensive ones
• Overreliance on Japan exports
• Large exposure to exchange rate shifts
• Rapid overseas expansion that added costs, strained resources
• Slipping quality ratings

Excess and waste

"In each area, we have excesses, waste and overextension," outgoing President Katsuaki Watanabe says.

Watanabe's remedy: Refocus on compact cars and hybrids.

That would reverse Toyota's drift from its roots in small, low-priced cars such as the Corolla. Over the past decade, Toyota favored full-sized pickups and SUVs, as well as luxury Lexus vehicles laden with expensive features.

"When the last new Corolla came out, they didn't put much effort into changing" what had been one of their most critical cars, says Kurt Sanger, an auto analyst with Deutsche Bank Securities. "Their focus was elsewhere."

That shift was ill-timed. In a U.S. market collapse of 37.4 percent so far this year, Toyota Motor Sales tumbled 38.4 percent. While the Corolla and its Matrix sibling held up relatively well by slipping just 21.5 percent, the rest of the lineup dragged the total down.

Imploding demand, as well as Honda Motor Co.'s low-price positioning of the Honda Fit, Civic and Insight hybrid, finally woke Toyota up.

"We are determined to reduce the cost basis of our compact and hybrid vehicles," Watanabe said.

Toyota priced the redesigned Prius below what analysts had expected, apparently in order to compete with the Insight. So it is already moving in that direction. But Toyota is limited in reigning in rising prices by a critical weakness.

As the biggest auto exporter from Japan to America, Toyota is vulnerable to the stronger yen. The company got burned as the yen suddenly soared as much as 14 percent against the dollar in the fiscal second half that ended March 31.

Toyota posted an operating loss of ¥461.01 billion, or $4.74 billion at current exchange rates, in the fiscal year. Toyota made money in the April to September 2008 fiscal first half; the losses came entirely since Oct. 1.

Import reliance

Automakers Nissan and Honda import from Japan 23 to 28 percent of the vehicles they sell in the United States. But Toyota sold 999,527 imports in the United States last year — or 45.1 percent of its total sales. A stronger yen trims profits from every dollar sale.

In 2007, when this year's cars were being developed, a dollar bought an average ¥118 so planners could figure each $1,000 in profit was worth ¥118,000 to Toyota. At today's rate, $1,000 is only ¥96,000.

Over time, that will pressure Toyota to raise U.S. sticker prices, particularly for vehicles built in Japan, such as the Prius and most Lexus models.

Toyota's reliance on exports and exposure to currency risk has soared. Last year, Toyota exported about 61.5 percent of all the vehicles it built in Japan. In 1996, it exported just 35.9 percent, says Chris Richter, an analyst with CLSA Asia-Pacific Markets. "It added to the pain," he says.

Moreover, Toyota expanded production at home. Toyota's capacity in Japan grew from 3.73 million units in 2001 to 4.32 million last year, says Ta-tsuo Yoshida, an auto analyst at UBS Investment Research. Industrywide sales in Japan have fallen for years so all of the extra capacity was exported.

Toyota expanded even faster abroad. Global capacity jumped to 9.3 million from 6.4 million in that same period, Yoshida says. Now Toyota faces a 3 million unit gap between what it plans to sell this year and what it can build.

"They weren't ready for the downside," Yoshida says. "They were expecting a 10-meter tsunami, and what they got was a 30-meter one."

A push for ever-quicker vehicle development hurt quality. Recalls are up. Rivals, including Hyundai Motor Co., have caught or passed Toyota in J.D. Power and Associates' Initial Quality Study in the United States.

"What Toyota really needs to be careful of is that the quality gap between it and other competitors is narrowing," says Dave Sargent, vice president of automotive research at J.D. Power. "A lot of people were attracted to Toyota because of the quality."


Toyota slashed global production 48.7 percent in the first quarter. In the United States, it has frozen wages, idled plants, cut hours and offered a voluntary exit program. Back home, it cut two-thirds of its 9,200 contract workers. It targets $8.22 billion in cost cuts this year.

Despite the yen-driven need to build more vehicles in North America, it has delayed opening a Mississippi plant to build the Prius.

Toyota says it will cancel some plants outright, but it hasn't said where. It so far has avoided drastic measures such as massive layoffs or plant closings. Even in the United States, it sidesteps forced layoffs of full-time workers.

Despite the red ink, no one is talking about bankruptcy. Toyota has an ample cash cushion. Says Deutsche Bank Securities' Sanger: "They're not on the verge of a GM sickness."

'Bold change'

Real change may come June 23, when Akio Toyoda, 53, takes over as president. Toyoda, the scion of the company's founding family, promises "bold change."

He is stacking the boardroom with confidants, including Yoshimi Inaba. Inaba, 63, left Toyota to run an airport but was called back to invigorate North American sales and manufacturing.

At his final earnings press conference, Watanabe said: "We are currently taking steps to give concrete form to our revival efforts, which include putting in place a new management structure. And with this team playing the central role, I believe a new Toyota will be born."

Kathy Jackson contributed to this report

Of course, not all Americans are surprised....


Wednesday, May 20, 2009

Has The Federal Government Gone Too Far?


It's a short, complicated, and fair question: has the federal government gone too far?

In the name of saving the planet from a natural, non-toxic, essential-to-life molecule, the federal government is enacting trillions of dollars in new regulations and laws that will result in economic hardship for hundreds of millions of people both in their day-to-day lives and in their attempts to save for their futures.

Federal spending is now so high that increased taxes are inevitable, as is a higher rate of inflation that will dramatically erode real buying power. Buyers of federal IOUs are increasingly reluctant to accept more. Higher inflation will inevitably lead the Federal Reserve to raising economy-suppressing interest rates.

Federal regulations are adding increasing costs to purchasing and operating automobiles. The next step will be energy regulations of buildings including retroactive standards. How long will it be before the trunk of every vehicle has an energy rating symbol... or the front door of every house?

Federal regulations are crippling the development of reliable energy sources for the 21st century in favor of niche energy sources that are subject to the whims of the weather and, in the case of wind turbines, the object of objections by those who are forced to live near those arrays.

Federal involvement in private enterprise has escalated to the point where the federal government now owns major players in finance and manufacturing and has an inherent conflict of interest between the economic role of such entities and the political aspirations of those running the federal government.

All of this is being done in the name of fairness and justice and the interest of the nation, but it is undermining the very economic foundations of this country. The federal government is practicing a form of economics that no economist can support. It is creating the basis for a long-term economic implosion by forcing economic decisions that are no longer based on market efficiency, but rather market manipulation.


New Mileage Standards


Barack Obama, Nancy Pelosi, Henry Waxman, Harry Reid. Remember those names when it comes time to vote in 2010, 2012, 2014 and 2016.

They are the driving forces behind legislation and regulations that have begun the process to create runaway inflation, significantly higher taxes, and a lower standard of living for most Americans.


From The New York Times:

The rules, which will begin to take effect in 2012, will put in place a federal standard for fuel efficiency that is as tough as the California program, while imposing the first-ever limits on climate-altering gases from cars and trucks.

The effect will be a single new national standard that will create a car and light truck fleet in the United States that is almost 40 percent cleaner and more fuel-efficient by 2016 than it is today, with an average of 35.5 miles per gallon.

There is no resistance to these standards from the American automotives manufacturers. Two of the three are dead in the water and puppets of the Obama administration. Ford Motor Company will go along to get along. But the real reason that the automotive manufacturers are not fighting is that they know that the American people will blame those politicians who set the standards the next time it comes to buying their $50,000 pickup truck that is so loaded with expensive batteries that it has 1/3 less payload than today's equivalent... and becomes a maintenance nightmare for business owners. They know that younger couples will be hard pressed to buy a vehicle that safely conveys their family and belongings. They know that insurers will jack up the rates as vehicles become smaller and less able to withstand lower speed collisions and protect the occupants. They know that they can deliver what the politicians demand... and what the American people will despise [h/t Anthony Watts]

This is just the beginning of everyone getting something for nothing... a lot more expense for no good reason. There is no real economic justification for what the Democratic Party is doing because of these less-than-stellar politicians. This is nothing more than a power grab by the federal government that should and will bite the Democratic Party in its collective ass.
Next comes Cap and Trade... billions for vaporware.
And then comes betting our entire future on unreliable "alternative energy." Or is that "alternative to energy...?"
This is the Democratic Party creating a federal bureaucracy beholden to the Democratic Party. This is the Democratic Party groveling at the feet of the most extreme "environmentalists" who in reality are anti-human-civilizationists.
They see humans as a plague upon the planet and will be satisfied only when human suffering exceeds the planet's suffering... as they perceive it.
Every economic stifling effort conceivable based on pseudo-science and horribly simplistic computer modeling is being pushed upon the citizens of this nation.

35 mpg light truck mileage standard, while technically feasible, is economically infeasible for most consumers and businesses. It is the first volley in the enviro-terrorists war against the U.S. economy... and it is being sponsored by the Democratic Party in the name of saving all of us from a non-existent problem. Cap and tax and scam is next.

The unwinding of the U.S. free-enterprise/personal choice economy is the ultimate aim of the enviro-terrorists and their compatriots in the Democratic Party. Remember this next time you vote... and have your vote cancelled by a dead or improperly registered voter.


Tuesday, May 19, 2009

American Clean Energy and Security Act Required Reading


On today's House of Representatives agenda:


Tuesday, May 19, 2009


ENERGY & COMMERCE------------------------------------------------------------10:00-Open

Full Committee. Markup of H.R. ___ – American Clean Energy and Security Act. 2123 RHOB.

.Any Congressman who votes for this bill without fully reading and comprehending it should be recalled. This legislation has the most ironic title in the history of the United States.


Monday, May 18, 2009

Energy And Climate Change Bill


C-SPAN 3 broadcast the House discussion about the Climate and Energy Change Bill that is in draft form of 932 pages and growing.

Democrats have been talking about CO2 pollution; Republicans have been talking about the economy.

There is little doubt that the bill, which was given to the representatives late Friday, will pass with enormous consequences and little understanding.

This is the beginning of the end of the Democratic Party. People will vote with their wallets.


Iran As A Cause


Yesterday, I listened to an interview with Amir Taheri, author of "Persian Night." He brought a perspective that Western leaders tend to overlook when examining the issue of Iran's relationship... or lack thereof... with the West, particularly the U.S.: the western, liberal leaders look at Iran as a nation which will respond to logic, reason, and incentives in a negotiation process, but they fail to recognize that there is Iran the Cause which goes beyond the dynamics of the nation.

In some respects, this mirrors... darkly... the history of the U.S. as both a nation and a cause. The concept of a republic comprised of individuals who determined their own destiny and controlled their own government for their own benefit was more than the founding principles of a nation; it was a philosophy, a gospel, to be spread among the nations of the world. Iran sees itself in a similar position today. The difference is the philosophy or cause being represented.

Last December, Mr. Taheri had another interview where he covered this concept with the New York Post:




"The Islamic Republic of Iran has three phobias," according to Iranian expatriate journalist Amir Taheri. "Women, Jews and America." Forget bombs. Maybe we should send in Barbra Streisand.

Iran is a standing challenge to Western liberal notions of "the intrinsic worth of the individual, freedom of conscience and the rule of law," not that any of that bothers the regime, Taheri says. He describes the activities of the Islamic Morality Brigades, the state-supported Holocaust denial movement, Iran's practice of executing dissidents and homosexuals - the rich tapestry of contemporary Iranian life that should make the country an international embarrassment but for the fact that the regime feels absolutely no shame.

The United States, a former Iranian ally, is viewed as the focus of evil in the world, and a hapless giant that "cannot do anything." Meanwhile, the United States' relationship with Iran has had its embarrassing moments, such as when former President Clinton said that Iran is "the only country where progressive ideas enjoy a vast constituency" or when US Ambassador to the United Nations Andrew Young called the Ayatollah Khomeini "a twentieth-century saint."

Mohammed Raza Pahlavi, the former Shah, who is usually dismissed by Western intellectuals as a brutal puppet, was the real progressive saint compared with his successor. Indeed, it is useful to remember that his liberal, pro-Western policies made Iran "the first Muslim nation to acknowledge women as citizens with equal rights." And the Shah's 1960s-era pro-women reforms were what drove the Ayatollah Khomeini over the edge. One of the first acts of Khomeini's revolution was to readjust the status of women in Iranian society, following the dictum of Iran's Chief Justice, "A woman's basic duty is to be a slave to her husband."

Now the hijab has become the most recognized symbol of the status of women in the new Iran, necessary because, according to Abol-Hassan Bani-Sadr, the first president of the Islamic Republic of Iran, women's hair gives off "dangerous rays that drive men crazy." The regime has raised the ideological value of the hijab to extraordinary heights; as one Iranian woman supporter of the headgear noted, "The superpowers know that the hijab is the foundation of Islamic government and that to conquer the Persian Gulf and plunder its oil resources, they must first eliminate hijab." Such comments would be laughable if they were not indicative of the sincere beliefs of a regime that is seeking nuclear weapons.

Taheri's "Persian Night" presents the true nature of the regime in Tehran, its motives, objectives and beliefs. Since the Obama administration seems to think that much can be gained from open dialogue, and Washington think tanks hum with talk of a "grand bargain" with Iran to settle the outstanding issues of the Middle East, we must appreciate the people with whom we are dealing. President Mahmoud Ahmadinejad, elected in June 2005 under the oddly familiar slogan "We Can!" has recently stated, "Our mission in the arena of foreign affairs is to present the idea of Pure Islam as the only path for the salvation of mankind to all nations. We have to smash the existing models in the world."

Taheri concludes that negotiation with the Iranian regime is a waste of time; it would encourage optimism in the West but leave the Khomeinist regime intact and its objectives unchanged. Real progress can only come from regime change from within. Iran is "a heaving volcano, ready to explode," from a variety of internal pressures, and the best role for the United States is to "use its immense bully pulpit" to publicize the cause of the oppressed people of Iran. Can this be effective? The Soviet Union fell, Taheri argues, "so why not Iran, and why not now?"

A nice thought, but given the effectiveness of Tehran's secret police and the general climate of fear in Iran, one wonders who can get the job done.

James S. Robbins is senior fellow for National Security Affairs at the American Foreign Policy Council.

The Persian Night

Iran Under the Khomeinist Revolution

by Amir Taheri

Encounter Books

The Western belief system insists that individual freedom, science, and reason are the natural states of mankind and that any other approach is inferior and destined to failure. Yet history has shown that is not always the case. When one considers the small fraction of the human population that live within the boundaries of nations embracing the ideals upon which the U.S. was founded, one would be foolish to belief that such conditions are either natural or inevitable.

Whether it is Iran, al Qaeda, or the Taliban, one does not reason with a hungry tiger... or those with the only truth and a true cause.


Sunday, May 17, 2009

What Happened To Obama's Change?


President Obama promise a clean break from the Bush administration. Well, in the area of spending, he has delivered. His domestic policies and plans are making drunken sailors look sober. In one area, he has proven to be a "Bushie" himself: actions aimed at "foreign interests against the U.S." I think most Bushies called them terrorists.

The candidate Obama roundly criticized the Bush administration for the way these foreign interests against the U.S. were detained without their Constitutional rights. Then candidate Obama indicated that he would deal with those foreign interests on a higher moral plane. Then candidate Obama said he would provide transparency in U.S. actions. Now President Obama has the responsibility. Now President Obama is backtracking.

Meanwhile, Speaker of the House Nancy Pelosi has made some claims about what she was told by the CIA and the Bush administration. She claims that she was never informed about the true nature of the interrogation techniques used against the foreign interests against the U.S. Or perhaps she was informed, but misled. Or perhaps she was informed, but not fully. Or perhaps she was informed, but it was the day she had a hair appointment.

Change is easy to talk about when you don't have the responsibility. Change is easy to talk about when you find the facts inconvenient. Change is not so easy to implement when it is more than political rhetoric. Change is not so easy to implement when you have to account for the results.


Saturday, May 16, 2009

Now Is The Time To Reorganize Detroit


If there was ever a time to re-shape, re-organize, re-model, re-vise, re-make Detroit; this is the time.

Detroit is a hollow city. It has lost most of its industrial base; it has lost most of its population; it has lost most of its economy. This comparison of Detroit to some other urban areas was done by the Detroit Free Press [cited from the City Farmer News]:

Acres of barren blocks offer chance to reinvent Detroit

The map above by Dan Pitera, a professor of architecture at University of Detroit Mercy. About 30% of Detroit is now vacant land — about 40 square miles, by one estimate — as the city’s population has shrunk from a peak of 2 million in the early 1950s to 900,000 today. Abandoned houses dot empty lots that were once blocks of homes and businesses. Farms, forests, hobby gardens and recreation areas are some suggestions urban planners are considering for using the space.

By John Gallagher
Detroit Free Press
December 15, 2008

Compare this to a proposal that I have made several times in the past:
Sunday, April 05, 2009
Detroit Needs Bankruptcy And Reorganization

Sunday, October 26, 2008

Detroit - Same Old Same Old

Thursday, February 17, 2005

Ethnic Divisiveness - Unintended Consequences
The gist was this:
Another radical approach would be to reduce Detroit to a 5 mile radius from the foot of Woodward Ave and then create several new cities along the outer ring or let existing cities annex adjacent areas. This would create a more manageable central area that could focus on high-end businesses and more affluent residents. The outer areas would be more traditional smaller cities that could focus on small business and the needs of its residents.

Do I hear any rational objections?


Friday, May 15, 2009

Trucks And Highway Damage


The issue of extra heavy trucks and the rapid deterioration of Michigan highways comes up now and then. It probably will surface once more now that additional taxes are proposed to upgrade and maintain highways that are in terrible condition.

As the Detroit Free Press reports:

Higher gas tax may pave way for better Mich. roads



Michigan motorists should pay more in gas taxes and car registration fees to fix the state’s roads, creating jobs and making the state more attrac­tive for new business, an influential co­alition said Thursday, as it unveiled a plan to overhaul road funding.

It would replace the state’s 19- cents-per-gallon gas tax with a 16% tax on the wholesale price of gas, capped at 34 cents per gallon.

Also, annual car registration fees would nearly double in five years to pay for better roads. Owners of older cars would pay less. The changes would cost the aver­age Michigan driver $13 more monthly by 2014, according to the group.

“The money’s got to come from somewhere,” but a big gas tax increase will hurt families, said Jeff Adams, a construction project manager from Harrison Township.

The House Transportation Com­mittee began hearings on the 13-bill plan Thursday.

Michigan is the only state I am aware of that allows 11-axle trucks to routinely operate on its highways. The argument is that these trucks are more economical to operate versus the standard semi-tractor-trailer combination and save highway damage by spreading the load across more axles... although they do more damage to bridges from the greater absolute weight.

A Michigan State University study showed that these extra-heavy trucks caused more rutting of the surface, but less cracking.

While there is no doubt that heavy trucks, regardless of the number of axles, do more damage than passenger cars... about 10,000:1... the issue of road deterioration seems more related to the climate which sees frequent thawing and freezing during the winter. Furthermore, it is likely that the past low-cost bidding approach has contributed to sub-standard design and construction.

The State does now require warranties, but it is for materials and workmanship... not design which is the responsibility of the state. Strangely, design seems to be set in concrete... so to speak. And like the old saw says: If you do what you always did, you'll get what you always got.

So, it appears that Michigan can expect higher taxes for roads and roads that continue to deteriorate at remarkably fast rates when compared with other states' experiences... and every summer the same freeways will be shut down for road rehabilitation.


Thursday, May 14, 2009

Obama Demands Cheaper Health Care

Oh, Canada, we love your health care ways. Everyone is covered. You just wait for hundreds of days.

Oh, Canada we think your ways are great. The only nit we'll pick. You will die... while you wait.

President Obama loves the Canadian system of health care and is working diligently to implement it in the United States. Now the president who is hard pressed to come up with $17 billion in "savings" from a federal budget he has expanded by a thousand billion or so is demanding that the private health care system cut its costs by $2,000 billion.

Tax hikes may pay for health care

Senators discuss increasing fees on alcohol, tobacco, soda


Associated Press

Washington — Senators are con­sidering limiting — but not eliminat­ing — the tax-free status of employer­provided health benefits to help pay for President Barack Obama’s plan to provide coverage to 50 million unin­sured Americans.

Finance Committee Chairman Max Baucus, D-Mont., said Tuesday that there are no easy options. Sen­ators began grappling with how to fi­nance guaranteed coverage, a corner­stone of Obama’s plan to overhaul the health care system. Independent ex­perts put the costs at $1.5 trillion over 10 years.

Obama sees a world in which doc­tors and hospitals compete to offer quality service at lower costs, and the savings help cover the uninsured. Turning that vision into reality re- mains the biggest challenge for the president and his backers, because hard cash — not just ideas — is re­quired to cover upfront costs of ex­panding coverage. The president put health care in­dustry leaders on notice Tuesday that he expects them to fulfill their dra­matic offer of $2 trillion in savings over 10 years. “I will hold you to your pledge to get this done,” Obama said in a letter released by the White House that went to groups representing in­surers, hospitals, doctors, drug mak­ers and others.

But those savings — even if the in­dustry delivers every penny — won’t all accrue to the government. So the fi­nancing package for Obama’s plan is likely to include a mix of tax increases and spending cuts in federal health programs.

Among the possibilities: tax in­creases on alcoholic beverages, tobac­co products and sugary soft drinks, and restrictions on other health care­related tax breaks, such as flexible spending accounts.

But some taxes don’t seem to be on the table, such as a federal sales levy to pay for health care or a new payroll tax.

Congressional leaders say they want to pass legislation in the Senate and House this summer.

On the controversial question of taxing health benefits, Baucus is stak­ing out a position that could put him at odds with Obama.

The president adamantly opposed such taxes during the campaign, argu­ing they would undermine job-based coverage. Obama’s aides now say he’s open to suggestions from Congress, even if he criticized Republican presi­dential rival John Mc Cain for propos­ing a sweeping version of the same ba­sic idea.

Baucus said he wants to modify the tax break, not abolish it.
“We are not going to repeal it,” he said.

Baucus suggested that the benefit could be limited by taxing health in­surance provided to high-income in­dividuals, although he did not specify at what income levels. He also said that plans offering rich benefits — for example, no co-payments or deducti­bles — might be taxed once their value exceeded a yet-to-be-determined threshold.

Employer-provided health insur­ance is considered part of workers’ compensation, but unlike wages, it is not taxed. The forgone revenue to the federal government amounts to about $250 billion a year.

President Obama, to health care industry on offer to save $2trillion

Pablo Martinez Monsivais /Associated Press

Senate Finance Committee chairman Sen. Max Baucus, D-Mont., center, and Sen. Charles Grassley, R-Iowa, right, discuss overhauling the health care system.
So, let's get this straight... the president who has never actually run anything is telling the world's most dynamic health care system that it should destroy itself because he thinks it should be run his way... and we'll be taxed for that benefit.
IDIOCY: something notably stupid or foolish
That pretty much sums it up.


Wednesday, May 13, 2009

You Won In Iraq, But You Are Fired


The New York Times just can't get itself to admit that the U.S. military campaign in Iraq was a success and that the Obama administration's anti-military bent is setting up the U.S. for serious military problems in the future. In case you didn't notice, a large target of President Obama's so-called "cost savings" has been the development of military systems. Now, Obama's Secretary of Defense is targeting top military men as they seek to convert the U.S. military to a United Nations squadron of "peace keepers."

In Personnel Moves, Gates Sets Direction of Pentagon

Published: May 12, 2009

WASHINGTON — The ouster of Gen. David D. McKiernan from his post as senior American military commander in Afghanistan is just the latest high-level firing by Robert M. Gates, a defense secretary who has shown little tolerance for missteps by the Pentagon’s civilian and military brass.

Mr. Gates had previously shown impatience for generals in charge of failing military strategies in both Iraq and Afghanistan. During the summer of 2007, Mr. Gates chose not to recommend reappointment of either Gen. Peter Pace as chairman of the Joint Chiefs of Staff or Gen. John P. Abizaid as head of Central Command.

Both men were closely associated with an Iraq campaign that had experienced years of military failures.

Read more....

The biggest military "failures" were trying to follow the dictates of the U.S. Congress. Still, you can't fire congressmen/women, so....


Tuesday, May 12, 2009

General Motors Now Approaching Zero


Get out your straightedge and do a projection all by yourself. Note that this is logarithmic scale.

This is what it looks like to investors wallets...

You're right. It is hard to tell the difference.


Economic Reality Check


Just some observations:

  • Unemployment has not peaked and the "hunker down" mentality is increasing which will have a suppressing effect on the economy
  • The economy has yet to feel the impact of General Motors and Chrysler declaring bankruptcy... and the bankruptcy court decisions that will ripple through the supplier base and have a suppressing effect on the economy
  • Oil prices have gone up over $15 per barrel from their lows and that will have a suppressing effect on the economy
  • The federal government's deficit spending increases will lead to either or both tax increases and higher inflation which will prompt the Federal Reserve to raise interest rates... all of which will have a suppressing effect on the economy
  • Federal energy policies are being pushed by Energy and Commerce Chairman Henry Waxman that will dramatically increase the cost of energy and create burdens on domestic manufacturers which will have a suppressing effect on the economy
I'm still not sure what hope I am to have from all of this change. But don't worry; China will buy our debt and continue to subsidize us... or will they?


Monday, May 11, 2009

Automotive Lemonade Or Connecting Strangely Different Dots


It's all over the news, U.S. automotive manufacturers are going to force thousands of dealerships out of business. As this article states:

Dealer demise an economic tsunami for communities


ore than 3,000 Chrys­ler LLC and General Motors Corp. dealers could be forced to close or merge with competing showrooms in the next few months — triggering economic aftershocks in com­munities across the United States.

... What’s more, closed dealerships change the landscape of communities, leaving behind thousands of empty stores and sprawling parking lots in an already struggling real estate market.

Michigan governor Jennifer Granholm has been looking for something... anything... to hold up as a beacon of hope and change in this state. She has pinned her hopes on renewable energy as this states in her official site:
Granholm Says Windspire Manufacturing Facility is Creating Jobs as Part of Comprehensive Plan to Grow State's Renewable Energy Sector

Contact: Liz Boyd 517-335-6397

April 20, 2009
Mariah Power, MasTech Manufacturing to make revolutionary turbine in Manistee
LANSING - Governor Jennifer M. Granholm today said the $4 million Windspire manufacturing facility in Manistee that will create up to 140 jobs is in keeping with Michigan's plan to grow the renewable energy sector, create jobs and reduce the nation's dependence on foreign oil in the process. The partnership between Nevada-based Mariah Power and Michigan-based MasTech puts an underused auto plant to work as a factory for the Windspire, a wind-power system for homes and businesses.

"Michigan is proud to be the place where these two companies are partnering to create jobs making these easy-to-use turbines that can generate energy at a home or business," said Granholm during grand opening ceremonies at the facility. "Demand for wind-energy products will continue to grow as federal initiatives to reduce our nation's dependence on foreign oil advance. The Windspire, manufactured by Michigan workers using Michigan materials, will help Americans rely on energy made, literally, in our own backyards."
That's about 1/10%... more or less... of the automotive jobs exiting the state, but it's a little better than nothing.

But how is this for "out of the box" thinking? The governor has been advancing the plan to build "wind turbine farms" on expensive and fertile agricultural land along Lake Huron. Rather than that, why not convert some of those "empty stores and sprawling parking lots" into mini "wind farms" with two or three turbines connected to the local power grids? Or, if there simply is not enough wind in the area, how about mini "solar farms?"
Michigan has to have 10% of its electric power from alternative energy in about 5 years... and there is no way to do that unless the power is generated locally. Otherwise, an expensive and time-consuming effort will be required to create new transmission facilities from the "wind farms" to the electrical grid.

This could be accomplished by 1) quick action by local government to rezone these properties, 2) quick action by the state government to assist in the development of these facilities and connecting them to the local grid, and 3) accessing the federal funds available for alternative energy projects.
Or maybe the answer is simply not blowing in the wind.


Sunday, May 10, 2009

Automotive $ Sign Of The Times


This was an ad run in the Sunday edition of the Detroit newspapers:

That's just a hair better than a 75% discount off list price... a red tag sale if there ever was one. Note that includes a voucher from the buyout program.

General Motors is in trouble. Hummer is going the way of the Edsel. GM employees are going that way, too. Combine all of that and you get 75% discounts. But what if $9,500 is too much? Not to worry.

Price does not equal quality; price equals what the seller can get for the product... in this case, very little.

It's a shame to see General Motors... and Chrysler... fall on these hard times. Without the housing credit mess that led to the banking mess, the likelihood was that both General Motors and Chrysler would have survived a recession without government intervention. But it is what it is. And now Hummers are selling for less than $8,000.

Wait a few weeks and you may be able to pick one up and get $1,000 for your troubles. Still, I suspect that those GM employees may select something other than these Hummers... especially if they are concerned about insurance and operating costs... and their own uncertain financial futures.


Saturday, May 09, 2009

Fear Of Flying Or No Place To Go


Friday morning around 8:00 am, I dropped off my wife at the Detroit Metropolitan Airport. This is usually prime time for travelers. Consequently, I was stunned at the scene.

Perhaps no one is leaving because they are afraid that there will be nothing left when they return.


Friday, May 08, 2009

GMAC, Make It So


Make it so!
Make it so!
Make it so!

Feds Order GMAC to Raise $13.1 Billion to Shore Up Finances Washington Post Staff Writers
Thursday, May 7, 2009; 4:21 PM

The federal government has ordered the financing arm of General Motors to raise $13.1 billion in new capital to ensure the firm's stability in the face of heavy losses in mortgage and auto lending and costs related to taking over new loans for Chrysler dealers and customers, said sources familiar with talks between government and industry officials.

The sum is among the biggest required for any U.S. financial institution, and could prove difficult for GMAC to raise because of the limited nature of its business and poor quality of its loans. The firm has struggled in the past to raise money from private investors and has already received $5 billion in federal assistance. It is likely that the federal government would end up providing much, if not all, of the needed capital, but it remained unclear where that money would come from.

About $4 billion of the total would be needed to cover the cost of assuming Chrysler Financial's dealer and retail auto loans, said one senior financial industry executive.

The bulk of the new capital needed -- $9.1 billion -- would be designed to bolster the existing GMAC against the adverse scenario included in the federal government's recent "stress test" of major financial institutions. The government is expected to release the official results of the stress tests today after the markets close.

Regulators said that GMAC faced substantial risks of new defaults, particularly in mortgage and consumer automobile lending. GMAC's focus on those areas of business has made the firm more vulnerable to losses during the economic downturn than more diversified banks, said the executive.

The restructuring of GM would also result in substantial losses for the closing of hundreds of dealerships and lower values for repossessed, leased or trade-in vehicles. GMAC is a separate company from GM.

GMAC is critical to the success of both GM and Chrysler because it provides money to dealers to acquire inventory and to consumers purchasing vehicles. Part of Chrysler's restructuring plan was that GMAC would assume the role of Chrysler's financial arm.

Indeed! Make it so! Your Federation Government has spoken.


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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)