Seeking Alpha

Bill James'  Instablog

Bill James
Send Message
Bill received a BS in 1972 from West Point with concentrations in math, physics, chemistry, and engineering. He was an NCAA All American Wrestler and captain of the wrestling team. He is an eight-year infantry veteran, Airborne, Ranger, Arctic Light and Mechanized Infantry in the United States... More
My company:
JPods, Inc.
My blog:
View Bill James' Instablogs on:
  • Debt, a Function of Peak Oil
    With all good intent, in the mobilization to fight World War I, the Federal Government monopolized communications and socialized power and transport infrastructures as "natural monopolies."

    The unintended consequences are a century of rotary telephones, ever more dependence on the centralized electrical grid, we still have the gas mileage of the Model-T, and oil was made the lifeblood of the US economy.

    Because the highway networks are a government monopoly, subsidies to highways and oil undercut commercial railroads. Despite freight railroads averaging over 400 ton-miles per gallon efficiency, thousands of miles of railroads were abandoned. Oil Imports and Debt

    Because the highway networks are a government monopoly, and consistency is primary objective of such institutions, as costs climbed after US oil production peaked in 1970, costs that could not be capitalized into the price of a gallon of gas were socialized into national debt.

    Graph illustrates US Peak Oil in 1970 (light blue), US National Debt (dark blue) and US National Debt (gold). World crude oil production peaked in 2004 at 74 million barrels per day, so these socialized costs will continue to add to sovereign debt.

    Economic recovery will only occur after power and transport are returned to free market so economic lifeblood can be changed from oil to ingenuity.

    Investments in railroads and Personal Rapid Transit networks will boom after transportation is returned free market.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Author is founder and investor in JPods, Inc., a Personal Rapid Transit manufacturer.
    Tags: CSX, KSU, NSC, UNP
    Sep 29 11:57 AM | Link | Comment!
  • Re-tool America's Manufacturing
    The Council on Competitiveness ( hosted a manufacturing summit at Duke University Sept 20-21.  This linked YouTube presentation outlines how returning power and transportation to free markets would repeat the success of returning communications to free markets in 1984 and drive a re-tooling of America's manufacturing.

    Basic points:
    • It takes a 10x leap in benefits to drive a paradigm shift. Railroads cut transportation costs between New York and San Francisco in 1869 from $1,000 to $67 (15x). The Internet and cell nets were 10x shifts in the 1990's.
    • Communications, power and transport infrastructures were monopolized/socialized in the mobilization to fight Word War I.
    • The great innovations of Ford, Edison, Bell and the Wright Brothers were institutionalized.
    • Institutions' only capacity is for consistency. Competitors are selected based on their ability to improve "know-how." We had a century of rotary telephones, increased dependence on central power generation and have the same gas mileage of the Model-T. The highway became the answer to all transportation needs. Thousands of miles of railroads were lost as efficiency was removed as a market force by government subsidized oil and highways.
    • Innovations are disruptive changes in "know-what." They are studied, even invented under central planners, but never commercialized.
    • After 1984, communications competitors in a free market had to differentiate their offerings to attract customers. Some competed on better service, lower prices and some tinker with innovations. Interaction between innovators and customers polishes, kills and commercializes innovations.
    • Life requires energy. Less affordable energy, less life, metric of Disposable Energy.
    Millions of jobs, vast innovations and better service at lower costs resulted after communications was returned to a free market in 1984.

    There is a 10x payback in powering urban transportation within a solar budget. It costs 56 cents a vehicle-mile to operate a car. It costs 4 cents a vehicle-mile to operate a JPods vehicle (14x). JPods are the combination of computer networks with ultra-light, personal railroads. JPods networks automate repetitive commuter range transport of people, cargo and trash in payloads less than 1200 pounds.

    Solar collectors mounted over the rails gather 5,000 to 30,000 vehicle-miles of power per mile of rail per day. This large commercial demand for solar collectors will allow that industry to scale. Using solar collectors as a primary power source makes the transportation network durable against blackouts.

    In an energy constrained economy, railraods will be the logistical arteries and JPods will be the logistical capillaries.

    JPods and other PodCar or Personal Rapid Transit (PRT) companies are privately held. As the networks deploy they will significantly affect the stock values of railroads, solar panel manufacturers and real estate companies can connect their properties.  Oddly, they will also increase the value of oil companies; reduced dependence on oil for fuel will allow the price per barrel to increase toward the true value of about $400 a barrel without stiffling the economy.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Author is founder and major shareholder in JPods, Inc.
    Sep 27 9:09 AM | Link | Comment!
  • Irene, the High Cost Central Planning
    In 2006 the linked document was provided to the Levee-RescueCommanding General of the Army Corps of Engineers (a West Point classmate). This outlines how hurricane defenses could be incrementally build, paid for by the shift of urban transportation from oil-powered to solar-powered. Here is link to talking points from an April 2011 meeting with the Deputy Commanding General.

    Everyone I have met at the Corps of Engineers is a dedicated professional. The problem is that central planners are constrained by their institution's primary objective of consistency, better "know-how." Innovation is disruptive, a consistency aberration, a change in "know-what." This results in innovations being studied, but not allowed to disrupt.

    The Weather Channel's "It Could Happen Tomorrow" gives a clear warning of why preparation is essential.

    Free markets reward disruptive behavior that create a 10x, ten times productivity gain (link to 10x: A Transportation and Power Infrastructure Economic Boom). Giants of the mainframe computers were wiped out by disruptive startups of Apple and Microsoft. Government control of the means of production in power and transportation infrastructure, consistency as a primary objective, has created civilization killers of debt, Peak Oil and Climate Change.

    Given a free market, companies will accomplish what Thomas Edison noted as practical in 1910 (full quote):
    "Sunshine is spread out thin and so is electricity. Perhaps they are the same, Sunshine is a form of energy, and the winds and the tides are manifestations of energy.”

    “Do we use them? Oh, no! We burn up wood and coal, as renters burn up the front fence for fuel. We live like squatters, not as if we owned the property.

    “There must surely come a time when heat and power will be stored in unlimited quantities in every community, all gathered by natural forces. Electricity ought to be as cheap as oxygen...."
    Investments in communications after a free market was returned in 1984 had many boom and bust returns.  But, in general, massive wealth was created. The same will be true when power and transportation are returned to free markets.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Author is founder of JPods, Distributed Grid and co-founder of Soleil Micro. These companies intend to disrupt central planning of power and transportation infrastructure.
    Aug 26 10:39 AM | Link | Comment!
Full index of posts »
Latest Followers


  • bill james
    Sep 9, 2012
  • Oil less than $90 a barrel will destabilize Mexico faster. Oil is a great buy at this price.
    Aug 8, 2011
More »

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.