Saturday, October 23, 2004

Environmental Extremism: Fear... Not!

Just wishing and hoping
and thinking and praying
and planning and dreaming...
- Dusty Springfield


There is a line between hope and false hope that is not always clear. Is the U.S. on the verge of strong economic recovery or on the verge of a new recession? Are jobs being created faster than lost or are lost jobs gone forever? Are the forces in Iraq opposing the U.S. finally being exposed and eliminated or are they simply increasing? If there is a line between hope and false hope that isn't clear... there is also a line between fear and false fears that isn't clear.

Is our country investing in its future security by spending billions of dollars in the Middle East or are we pouring money down a rat hole? That seems to be the central issue in this coming election. Heads or tails. No matter what you call, it is still a coin... but you have only one chance in two of being right.

Early on I said that:

  • Nothing is ever as simple as it first seems
The issues facing the U.S. regarding the Middle East are more than just about terrorism. Like it or not, there is a dependency on the Middle East for our economic well-being. It is a dependency based on years of neglect of ... no, outright opposition to... developing reliable sources of energy within our own territory. It is a combination of always seeking the "cheapest" (immediate) solution and those who fear spoiling our environment.

We have alternatives to the Middle East for our energy needs, but we have some strong forces in our country that believe we can significantly reduce our dependency on Middle East oil if only the automobile manufacturers will produce vehicles that run on alternate fuels. Well, duh! But they also don't want to be bothered with the details about the technology necessary to create a new infrastructure and the time that will take.

Yet those same "rational" conservationists and anti-oil interests refuse to accept that there are safe, existing technologies that could free up enormous amounts of oil and natural gas... the most obvious being nuclear power. Not in my back yard! This "environmentalists" would really rather that we all heat our homes with woolen blankets and use bicycles as a primary means of transportation (hook up about 100 bicycles to pull that semi-trailer down the highway). What they don't want to acknowledge is that there is safe, nuclear power that could eventually reduce or eliminate their dependency on the Middle East oil nuts.

So, we will keep "protecting our interests" in the Middle East because we allow our irrational fear of nuclear power to keep us dependent on a region of the world where irrational hatreds abound. What those opposed to using nuclear energy (or new generation coal plants) lack is a viable alternative. They know what they don't want... they just can't provide a better answer... other than don't use energy or advocating a technology like solar or wind power which would cover the landscape with voltaic cells and large wind turbines (to which Sen. Edward Kennedy and friends say..."not in my back yard".)

By the way, there is a safe, reliable nuclear power plant "in my back yard" along the shoreline of Lake Erie. I go fishing only a few miles offshore from the plant... and none of the fish I have caught and eaten have three eyes and glow in the dark.

It is not about resources... it is about fear. There are plenty of energy sources. It is all about using our resources in the most constructive way possible. We have a world full of coal, but we fear it because we remember the soot scattered over the white snow 50 years ago and refuse to accept that it can be burned cleanly today. We have a world full of nuclear materials and safe designs for power plants, but we fear it because we remember the shoddy way it was handled in Chernobyl. We have an abundance of oil in North America, but we are slow to develop it because importing it is politically easier (but may not be cheaper very soon).

We fear the future... because we cling to the fears of the past.

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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)