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Wednesday, February 07, 2007

State of the State

SEARCH BLOG: STATE OF MICHIGAN

Last night, Governor Granholm gave a stirring speech in which she emphasized for nearly an hour how she was not going to let the state fall apart, but was going to "invest" in its future with many new or expanded programs meant to stimulate better education and repair the cities.

Some of the sound bites seemed appealing, if you accepted the rhetoric. Others made you wonder what she was focused on the first four years of her administration. The "new" programs sounded vaguely like her original campaign stumping. Some sounded a little pollyannic such as her plan to widely expand the scope of alternative fuels programs and availability by 2008... which is now less than a year away. Some were good business such as combining city/county purchasing to get volume discounts.

She appealed to our sense of family by saying that she wanted to expand child protection services and add many more workers in that area. She appealed to our idea of rising from the ashes by offering free education for the next 3 years to displaced workers.

We might be in a recession in Michigan and businesses may be folding and homes may be unsalable... but Michigan government was going to fix things.

I waited for the "hammer" and it fell oh so softly near the end when she spoke of the need to make up the lost revenue and how the "naysayers" had to step up [with the money]. She never said "raise taxes," but it was obvious that 2 plus 2 was equalling 7 until that point.

So it boiled down to this: the State is in trouble because, despite her best efforts for 4 years, the economy is a mess and the people need to be bailed out. In order to achieve this bailout, the Governor is simply asking for more of our money which will be redistributed to make this state "miraculously pleasant and healthy" once again.

"Trust me."

Brrrrrilliant!


-1°F
Clear
Wind: SW at 9 mph
Humidity: 83%
Today
Mostly Sunny
16° | 5°

Tuesday, February 06, 2007

Is Warming Bad?

SEARCH BLOG: GLOBAL WARMING

We were greeted by minus 25 degree (F) windchills as we stepped out of the Detroit airport terminal yesterday afternoon. Quite a change from the spring-like conditions of Florida. Fortunately, we had enough layers of outerwear to keep out the cold until we made it back to our vehicle.

But that got me to thinking about the consequences of climate change. Suppose for a second that there were no controversy about anthropogenic CO2 global warming and that the earth, for whatever reason, was warming. Would that necessarily be a bad thing?

It seems that for every bad scenario, there is an offset, or maybe even more than an offset, on the favorable side.

Certainly, milder winters that require less fuel for heating would be favorable... and even reduce the further growth in CO2 production from both heating and automobiles which are less fuel efficient in very cold temperatures. Certainly, longer growing seasons in North America, Europe and Russia would enable a greater diversification of crops and better support a growing population. Certainly, older people would be far less susceptible to deaths related to cold (which would at least offset deaths related to heat). Certainly, wild animals would have a greater survival rate in less severe winter conditions.
The doomsday scenario of all of the polar ice caps melting and flooding coastal areas is a remote possibility in the next millennium, but there will still be a coastline. And Greenland could once again support agriculture and cities as it did with the Vikings a millennium ago.

So, yes, there might be change... but I'm not convinced that the change would be... by and large... unfavorable.

By the way, the actual temperature was -4 (F) this morning when I trudged out to get the newspaper... and my natural gas furnace is doing its best to warm the house, if not the environment. It may get all the way up to the low 20s by this weekend. This is the most prolonged cold period around here in years.

Come on global warming... or at least Michigan warming.

p.s.; some others asking this and other questions

Sunday, February 04, 2007

Super Bowl XLI

Congratulations, Colts.

Back in Michigan tomorrow.

Saturday, February 03, 2007

Like A Freight Train

We'll be winding up our trip in a couple of days and heading back to 0 degrees and 20 mph winds. It won't be pleasant, but it won't compare with the weather that hit very close the other night. We had pretty high winds and horizontal rain, but a few miles away they came like freight trains in the night, tornadoes cut a path of destruction that was impressive and awful.

Apparently a massive arctic cold front that has brought record or near-record cold to the midwest and northeast, mixed with warm air rushing in from the south and cut a straight line through the middle of Florida. Quite a few people were killed and a lot more are homeless. Strangely, while this seems to have attracted a lot national attention, here in Florida it seems like this is so commonplace with summer hurricanes and winter tornadoes that the situation was quickly under control and cleanup started. Insurance companies and volunteers have made sure everyone who lost a home is taken care of.

And no one has pointed the finger of blame at anyone for perceived or real issues regarding the actions after the tornadoes in order to get political gain. That may be the most amazing part.

Friday, February 02, 2007

Global Warming Considerations

SEARCH BLOG: GLOBAL WARMING

With the giant pronouncement that the IPCC has declared the certainty of human-caused global warming, it might be of interest to see some of the issues swept under the rug.

I suggest reading the articles from January 31 and February 1 at Climate Science. What might be of particular interest are the comments of Hendrik Tennekes, retired Director of Research, Royal Netherlands Meteorological Institute since some of his work from the 1970s is, apparently, still part of the modeling foundation for the IPCC statements.

Of course, I expect certain modelers, like Gavin Schmidt, to react with words like, "Those comments are just crap."

Wednesday, January 31, 2007

Tyranny, Like Hell, Is Not Easily Conquered

" THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as freedom should not be highly rated."

The American Crisis
Common Sense
December 23, 1776
Thomas Paine
http://www.constitution.org/tp/amercrisis01.htm
This will be the first time some have ever read this. The conflict was the American Revolution.

The debate is the one going on now. Remember this the next time CNN shows a car bomb's devastation or recounts the deaths of our soldiers. Remember this the next time you see a video of radical Muslims chanting "Death to America." Remember this if you have ever seen the videos of Iraqis celebrating the downfall of Saddam Hussein and cheering Americans. Remember this when you hear reports about Syrian and Iranian and Palestinian and Egyptian mercenaries being behind violence in Iraq. Remember when you hear Hollywood "stars" saying "It's not our problem."

Mixed Messages

Things that are catching my attention while traveling:

  • Someone told the police to let protesters spray-paint the Capitol Building... was it the Republicans who didn't want to be called "neo-Nazis" or the Democrats who wanted to show how much Americans hate the war in Iraq? Or maybe it was just some bureaucratic idiot who should be fired.
  • The U.S. may be facing the same future as Europe (especially Britain) by being excessively tolerant toward people whose goal is to kill those who don't believe as they do. The pendulum has a way of swinging too far the other way in an attempt to correct an imbalance.
  • Traffic in all cities seems out of control... literally. At this (unidentified) location, signal progression is obviously not a consideration as minor two-lane streets will stop normal signal progression on 6 or 8-lane thoroughfares. I'll repeat: if you are really concerned about CO2 increases and pollution, contact your department of transportation and demand that they do their jobs... fix traffic signal progression. (see my recent post about reducing CO2 now).
  • We seem to be raising a generation of illiterates. My sister-in-law teaches at a high school and said that about 10% of her students have both the aptitude and attitude to succeed academically. She mentioned about how excited one of her students was to receive a "D" on a recent major project... "was it a high D?" the student wanted to know.
  • Back home, students at the University of Michigan, Ann Arbor, displayed their intellect and class by walking out of a large lecture hall where three people who claimed to be former terrorists were denouncing their former ways. It's good to see that our best and brightest have all of the answers they need... and can automatically reject anyone who might challenge their pre-determined positions... but, then, life hasn't happened to them, yet.
More later.

Tuesday, January 30, 2007

Cold Is An Anomaly

SEARCH BLOG: GLOBAL WARMING

I was going to write about this, but Lubos Motl already did, so read what he wrote. While you are there, check out his strangely poetic Battle of Antarctica... try to get past the "Stargate" references and remember that Lubos is a professor of physics at Harvard.

Before you go, I'll just add:

  • Freezing temperatures in Los Angeles (bye-bye California oranges) ... a really rare event
  • Freezing temperatures in Florida (bye-bye Florida oranges) ... an uncommon event
  • Massive ice storms throughout the south central and midwest (dozens of people died in these)
  • Colorado buried with snow... biggest avalanches some have ever seen
  • Anchorage buried with snow... 74" and counting
  • Europe suffering with winter storms
I haven't really checked into Russia, but everything's an anomaly there.

Maybe we can add no major hurricanes hit the U.S. in 2006... no that's not cold related.
..

Monday, January 29, 2007

Jane's Way... Or The Right Way

SEARCH BLOG: IRAQ

While Jane Fonda reprised her role of hippie war protester, others have recognized that there is a difference between actions that give encouragement to Iraqi insurgents and, ultimately, harm our soldiers... and those who understand that you can protest with your votes and letters to your congressmen while still being responsible toward our soldiers... for example, this.

Whether or not the war was/is based on a direct or indirect threat to the U.S. is a matter for historians to debate. Our soldiers have no say in that. Those who use their "free speech" in a manner like Ms. Fonda are not traitors, they are simply victims of their own history. They believe that any U.S. involvement in any war is morally unjustified and must be publicly protested... even to the extent of providing encouragement to the enemy.

They are our version of the Islamic fundamentalists who have only one goal: conversion of the unbelievers... by any means. They will equate the standard operating procedures of the criminal elements of Iraq who routinely torture and execute civilians and soldiers to the "humiliation" of criminal elements who were photographed naked. They ignore the fact that they were not tortured and executed. They ignore the fact that they were well fed and housed. Yes, a few soldiers are pushed over the brink into murder... and they are removed and punished. But there is a difference between individuals acting against a code of conduct and an entire "army" based on fear, torture and execution.

Jane and her followers just don't get the difference.

Saturday, January 27, 2007

She Doth Protest Too Much

SEARCH BLOG: IRAQ

A brief slice of the American pie was shown to me during my travels the other day.

The Orlando Magic professional basketball team had a "Seats for Soldiers" day where season ticket holders offered up their seats for a game dedicated to soldiers from the area. My nephew is a marine sergeant and his parents, my sister-in-law and her husband, are active in the local support group which is how I became aware of this effort.

Here is a city that celebrates the soldiers from their area and offers up a special night to show them their feelings.

And then there is Jane Fonda, the professional war protester who is stuck in the 1960s, trying to garner as much publicity as possible for her favorite cause... making life more difficult for our soldiers. She was personally responsible for showing the North Vietnamese that Americans "approved" of the criminal treatment afforded to Americans who were prisoners of war. While she didn't give away secrets or betray individual soldiers, her presence did give the North Vietnamese a sense that Americans would not do anything about the torture the American soldiers suffered. Now she wants to encourage the Iraqi criminal elements by saying that their actions have been successful in taking support from American soldiers in Iraq. What do you suppose that will lead to?

In related news, four American soldiers were executed after they were captured, handcuffed, and driven away to a location miles from the attack. Meanwhile, an army Lt. Colonel is being court-martialed on charges of cruelty for having prisoners stripped and photographed in "humiliating" poses. I wonder how "humiliating" the poses of those executed American soldiers were?. The criminals in Iraq must really be laughing at the U.S. now. What kind of fight can they expect out of a country that glorifies Jane Fonda and court-martials its men for "humiliating" those who would execute our soldiers?

It is Vietnam all over again. Too many Americans... including some prominent politicians... really don't deserve the sacrifice of the soldiers who protect them. Maybe they would be more comfortable in Cuba or Venezuela. They can say it is about the war and not the soldiers... but they are wrong. It is about the soldiers.

Thursday, January 25, 2007

Blogger Lite

I have temporarily fled the massive Arctic system enveloping Canada and the northern U.S., so posts may be a little lighter.

Meanwhile, you might find some of the links on the right side of the page interesting and informative... especially those regarding climate change... which is what I was seeking with this trip.

Wednesday, January 24, 2007

More On Michigan Service Tax Proposal

SEARCH BLOG: TAXES

Also see:

Michigan Service Tax Concerns

Michigan Service Tax

The day after newspapers' headlines announced the consideration by the State of Michigan for a new tax on services, Pfizer, a huge pharmaceutical firm, announced that it was closing its Michigan research facility in Ann Arbor. 2,400 employees would be either laid off or moved to other Pfizer locations outside of Michigan.

This was stunningly bad news on the heels of massive job losses in the automotive industry. The tax base was taking yet another hit.

I had written to the Citizens Research Council of Michigan that had been involved in the budget crisis analysis and had been part of the process that came up with the notion of the service tax.
A simpler and more manageable approach would be a one-time, two-year increase in the sales and income taxes by one percentage point each. The sales tax increase could be effective by July 1 and the income tax increase effective January 1, 2008. While these might not be popular, they could be implemented with no additional staffing or changes in business burdens.

This two-year period would give the State sufficient time to develop and implement a restructuring plan similar to the efforts by General Motors and Ford Motor Company. The State cannot afford to be a generous "sugar daddy" under current conditions; especially when it does nothing except redistribute incomes while incomes in total are declining.
I'm not a fan of increased taxes, but the economic downward spiral has left the state budget in disarray... primarily because the state government has not been willing to take the measures to "resize" in the way that businesses have had to.

I received a reasonable and measured response:
There is no question that, if a sales tax on services were adopted, certain firms would experience an increase in administrative costs associated with reporting and collecting such a tax. Many businesses that primarily sell services, however, also sell goods, so their increased costs would be negligible because they are already set up to collect a sales tax. The state would also experience marginal increases in administration, but it would be a tiny fraction of the revenue involved.

There is no such thing as a perfect tax system and any tax will create economic problems. The best a state can do is to attempt to maintain a tax system that treats all sectors of the economy equitably, so that each sector pulls its weight in supporting public services.

With respect to your specific proposal regarding temporary increases in the sales tax and the income tax, I have a couple of comments. First, the Michigan Constitution would have to be amended for the current sales tax on tangible personal property to be increased. It is capped at a 6 percent rate and it could not be increased until the voters approved such an increase and voter approval of tax increases has been rare. Even Proposal A in 1994, which produced the current 6 percent rate, brought about a large decrease in the property tax in exchange.
I'm not so sure that adding a new tax system would have "negligible" impact on business, but given that the state has certain limits with regard to raising taxes on sales and property, I can only say this:
It's time for the state to do the same with less or simply do less. Increasing taxes will only exacerbate a bad economic situation for residents and businesses. Options will vary depending on the expenditures. They include:
  1. reducing operating and staffing budgets
  2. eliminating operating and staffing budgets
  3. eliminating new projects
  4. extending timelines for existing projects (such as road construction)
  5. privatizing some functions where feasible
The usual response is "we can't" and the appropriate response is "you must."
The state cannot continue to pretend that there is this vast reservoir of potential tax revenue in a state where businesses are retrenching or relocating elsewhere, where unemployment levels are high while employment opportunities are dwindling, and where housing values are falling rapidly and many owners are facing the loss of their homes.

My oldest son commented that if you put Michigan's conditions into one of those "Sim" games, you get a collapse. Hopefully, the reality won't end up being that dire.

It is time for the state to recognize that "business as usual" in no longer feasible.

Tuesday, January 23, 2007

Climate Rubbish

SEARCH BLOG: GLOBAL WARMING CORRECT

In a discussion about Climate Modelling at Real Climate (titled "The Physics of Climate Modelling"), here is my post regarding the Chinese paper (by Chinese physicists) of the strong possibility of global cooling and the reply by Real Climate's Gavin Schmidt.

Those darn Chinese are trying to use crude modeling to say that the next 20 years brings cooling instead of warming and that CO2 increases will not be that relevant.

Multi-scale analysis of global temperature changes
and trend of a drop in temperature in the next 20 years

http://www.springerlink.com/content/g28u12g2617j5021/fulltext.pdf

Obviously a Communist plot.

[Response: No, just rubbish. -gavin]

Comment by Bruce Hall — 22 Jan 2007 @ 7:25 pm

You have to hand it to Real Climate. They won't take rubbish from anyone... even the Chinese. Of course, they won't take a different point of view from anyone. Especially if it might endanger the anthropogenic-based-CO2-global-warming gravy train that seems to be arriving at government stations near you.

(Thanks to Dr. John Ray, Brisbane, Australia for source)

ALSO CHECK THIS OUT ... NEWS FROM THE RUSSIAN FRONT

Addendum

A further offline email exchange has convinced me that Gavin Schmidt, while an extremely intelligent and knowledgeable scientist, is not inclined to consider the perspective of those who don't align themselves with him, to wit:
I would actually expect the contrary. Dr. ABC is using well worn
talking points that have been dismissed in the mainstream for years.
This is not a genuine disagreement about anything substantial in
science. It is 'cuckoo' science - designed only to push real analysis
out of the nest and fool the onlookers (which it appears to have done).

If you are genuinely interested in what paleo-climate can and cannot say
about the present day situation, follow up on the links and let me know.
But Dr. ABC's arguments are just crap.
Obviously, I changed the name.
..

Monday, January 22, 2007

Departments of Transportation

SEARCH BLOG: TRAFFIC SIGNALS

Tired of traffic signals that work against you?

Contact your state's Department of Transportation and put some pressure on the system to get this problem fixed! If you live in an urban area, contact your county's DOT as well. And call your City Hall.

Do the "Search Blog" I recommended above. You'll see how much your government "cares" about you after you've paid your taxes. They really don't mind wasting your money or time... and damaging the environment to boot. After all, it's not "high visibility."

The Cost of "Fighting" Global Warming

SEARCH BLOG: GLOBAL WARMING

From Lubos Motl, physicist from Cambridge... this.

Ouch!

Australian Climate Views

SEARCH BLOG: ENVIRONMENT

Dr. John Ray posted this tomorrow... I'm just having a little fun with the date conventions.

There are several interesting items collected under this one link. (You may have to scroll to the top of the linked articles) Be sure to read the Chinese study on the coming GLOBAL COOLING... yup.

Over-Population

SEARCH BLOG: ENVIRONMENT

At what point is enough too much?

China decided some time ago that one child per family was enough... because they already had enough people. India has not yet come to that conclusion although its population is almost the same as China's.

Are we emptying the larder
as some think? This question has come up many times in the past and each time the answer by concerned scientists was that the world's ecosystem was about to collapse because of human pressure. The reality has always been that humans have either figured out how to obtain more food in a smarter way... for example fish farming... or have regulated local populations with famine and/or war.

India and China have shown that geographic constraints have not necessarily meant that the land could not support larger populations. And in the U.S., the population has grown to 300 million fairly obese citizens (and some thinner illegals) despite concerns of fewer individuals working in farming. We continue to hear reports of starvation in East Africa, but that's religious and political in origin.

So do we have a problem with over-population or not? Globally... no. Some areas... maybe. Some climatologists would like to see human population growth curtailed because they believe humans are going to cause the world to get warmer and some prime oceanfront property to disappear. But that is a debatable excuse for controlling human population. Besides, if that did happen, there would be more productive land for farming as the northern hemisphere experienced longer growing seasons. Moreover, in some nations, there is a trend toward declining population as greater life expectancy and greater wealth has refocused the population away from large families to pursue life's other pleasures. This is especially true in western Europe.

Still, there may actually come a time when enough is too much. We're just not there yet.

Al-Sadr Must Go

SEARCH BLOG: AL SADR

A week ago, I stated the obvious: it was time to eliminate Muqtada al-Sadr BAMN - by any means necessary.

It looks as if Iraq's Prime Minister Nouri al-Maliki has decided to face hard reality and withdraw his dubious support of al Sadr. Al Sadr is widely known to be the primary force behind sectarian violence in Iraq. It appears that the Bush administration has finally quit the pretense of simply providing "support" role to the Iraqi government. The can be no doubt that the administration's diplomatic, PR, image-conscious nonsense has been set aside and al-Maliki has been given an ultimatum: play ball or you're out. He is now playing ball.

Too little too late? We'll have to wait to see. Meanwhile, al-Sadr is probably twitching wildly trying to figure out how to save his butt and his power base. I've got a suspicion he may be able to do the former, but not the latter.
..

Sunday, January 21, 2007

Michigan Service Tax

SEARCH BLOG: TAXES

Also see:

Michigan Service Tax Concerns

More On Michigan Service Tax Proposal

Michigan Taxpayers To Receive More... Taxes [10/1/07 update]

Michigan is one of the few states that has not shared in the good economy of the past 3 or 4 years. The failing domestic automobile manufacturers have created failing automobile suppliers which have created failing ancillary support businesses which have created failing governmental budgets.

So how have governments responded? Well, the State of Michigan is looking to increase taxes. Gee, what a surprise!

The idea is to now tax services in addition to sales. Get a haircut and pay a service tax. Get a leak repaired and pay a service tax. Will we have to pay a tax to have our taxes prepared? That would be a real kick in the head.

Just a couple of questions:
  1. Is the administrative cost of collecting, reporting and submitting these new taxes going to be absorbed by businesses?
  2. Is the additional tax paid by consumers going to be absorbed by their budgets?
My guess is that the answer to both of these questions is "no." The results will be higher prices and lower volumes... and more companies that are struggling to survive shutting down.

The State believes it will not have to adjust its spending habits simply by putting more economic pressure on an already depressed economy. But that is pretty much the way government doesn't work all of the time.

Hey, I have an idea. How about a 6% sales tax on home sales. Oh, wait. Home sales are pretty much non-existent in Michigan, too. But in case a home is sold, how about a 6% sales tax and a 6% service tax (for agent services). That will fix the budget problems! After all, who could be a loser in that situation?

Rather than creating a whole new tax structure with whole new administrative burdens for both businesses and the state (don't you think there will be a whole new department just to administer this new tax?), perhaps a simple way is this:
Implement a two-year special, non-renewable, 1% increase in both the sales tax and income taxes. The government would have two years to work out a new budget and structure based on significant reductions in revenue (if the economy doesn't recover).
Otherwise, last one out, turn off the lights.

Can"t Find It?

Use the SEARCH BLOG feature at the upper left. For example, try "Global Warming".

You can also use the "LABELS" below or at the end of each post to find related posts.

Blog Archive

Cost of Gasoline - Enter Your Zipcode or Click on Map

CO2 Cap and Trade

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

FEDERAL RESERVE & HOUSING

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."
November 28, 2007 FED VICE CHAIRMAN DONALD KOHN
"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."
http://www.reuters.com/

December 11, 2007 Somehow the Fed misses the obvious.
fed_rate_moves_425_small.gif
[Image from: CNNMoney.com]
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 Economy.com. "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

My photo
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)